Performance Hierarchy

Question 1

What are the 3 tiers to decision making?

Answer 1

Strategic
Tactical
Operational

Question 2

What is the strategic level?

Answer 2

High levels of management (such as the board)

Measured over longer periods 3-10 years

Externally focused - uses competitors and markets which can be benchmarked against

Information will be used for planning rather than controlling

Forecasts and broad targets will be prepared for lower levels of management

Mostly qualitative data - customers needs and wants (attitudes)

Question 3

What is the tactical level?

Answer 3

Middle layer of management
Business unit level

Shorter-term (over a quarter or a year)

More detailed objectives

Internally generated information - combined with the targets set from senior management at strategic level

E.g. reporting quarterly about changes in order book which can then be used at strategic level to forecast future revenue levels

Question 4

What is operational level?

Answer 4

Day-to-day activities of the business

Information is detailed and task specific

Prepared on a regular basis (daily or weekly)

Aimed at management to control the business in order to achieve short-term plans

Very little external information needed