The major strategies and policies, for a business enterprise, that give an overall direction to operations are likely to be in which of the following areas? A. Growth B. Finance C. Needs D. Personnel E. Marketing Choose the correct answer from the options given below:
A, B, D and E Only
A, B, D and E only — option 3. “Needs” is the odd item out.
The classification being tested. Koontz and Weihrich list the areas in which the major strategies and policies of a business enterprise are likely to fall — the areas that give overall direction to operations :
| Area | The questions strategy must settle there |
|---|---|
| A — Growth | How much growth, how fast, where, and by what route — internal expansion, acquisition or alliance? It is the first question because it governs the size and shape of everything else |
| B — Finance | How the growth is to be financed — capital structure, the mix of debt and equity, retention versus dividend, and the return required |
| D — Personnel | The people the strategy needs — selection, development, compensation, union relations, and the whole climate of employee relations |
| E — Marketing | What is sold, to whom, and how it reaches the customer — products, markets, channels, pricing and promotion |
| C — Needs | Not one of the areas. Needs are what marketing studies; they are an input to strategy, not a domain in which strategies and policies are framed |
Why the four are the four. They correspond to the fundamental resource questions of any enterprise: how far shall we go (growth), with whose money (finance), with which people (personnel), and selling what to whom (marketing). Between them they commit the firm’s capital, its people and its market position — which is precisely what distinguishes a major strategy from a departmental plan.
Why “needs” is a plausible trap. The marketing concept insists that everything begins with customer needs, so the word feels like it belongs. But that is an argument about the orientation of marketing strategy, not about a separate strategic area. Recognising that C is a category error — an input rather than a domain — is enough to answer, since it appears in options 1, 2 and 4, leaving only option 3.
The hierarchy of strategy is worth carrying alongside: corporate strategy decides which businesses to be in; business strategy decides how to compete in each; and functional strategy — finance, marketing, personnel, production — supports the business strategy in each area.
Hence, the answer is A, B, D and E Only.
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