The Evolution of Corporate Strategy From Budgeting in The 1950’s

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Learning all about how strategy in corporate is impacted by the budget vision, balance scorecards, goal weights, and such actions, is critical to succeeding in a highly competitive corporate environment. Such learnings should be explored about modern corporate ecosystems and are best achieved in the classroom mode of learning.

There are a number of factors that affect corporate strategy. In this article, we shall discuss the bare essentials of vision, budgets, the BSC and goal weights and how they impact competitive strategy.

Corporate Vision:

Most corporate strategies do have a vision. Look at the functioning of Southwest Airline’s Herb Kelleher who had the foresight to bring flight prices on par with road travel. Working on his intuition and corporate strategy, the airlines evolved as the leading low-cost carrier. However, blinding vision can also overlook realities in the market place. Like the Enron case study where Jeffrey Skilling’s vision was to make it unstoppable because of its quantitative processes and securitization.

However, the concept was blinded to endemic problems and led to a significant financial drain. Similar to this was the idea of Jack Welch in corporate strategy that every business should either be number one or two in its category or be disbanded. The vision had a short life and was found faulty as success evaluation was very different from slotted classes.

Corporate strategy has evolved since the 1950s:

Great strategists in Indian history, since the first budget in the 1950s, were those leaders who personified the timeless corporate principles and could gauge the game a few moves ahead of the others. To them, there is no winning. Rather it is about finding newer challenges, gaining better skill sets and the resources to handle them all. In corporate strategy and especially in India, the corporate strategy since independence has been closely linked to the budget and its vision.

Competitive corporate strategy and Goal-weights:
Citing from a 2002- book by Professors Gary Latham and Edwin Locke who wrote extensively on corporate goal-setting based on their combined 70years of experience, competitive strategy goals should be defined as below.

Better performance comes from setting challenging goals.
More significant effort is generated from higher goals.
Rapid work is possible with tighter deadlines.
Personal commitments made public enhances the probability of succeeding.
Goal achievement is not impacted by who and how the goals are set.
Though this strategy seems simple and perfect many organizations follow policies that are in total opposition. Like strategies that indicate goals relatively as in cascading goals, the SMART goals and using percentage goal weights.

A SMART goal is ‘Specific’ and ‘Measurable’ while being ‘Attainable’ to the doer, ‘Realistic’ in quantitative terms and ‘Time-bound’ with specific deadlines. This method shows results when looking if goals are set and are specifically well-stated.

Cascading goals from the top downwards should never be limiting and rigid. They need to be in line with the goals of the executive team and individual goal setting.

The use of goal weights often proves counter-productive when one uses percentages. Instead, the best way is to indicate low, medium and high goals as the priority base.

Having looked at the various methods involved in goal-setting let us reiterate that while goal setting is of prime importance, there is no one way or technique to achieve goal success. Research by Latham and Locke point out that investing thought, effort and time into goal setting does payoff. One needs to be cautious with cascading management goals, avoid numerical and percentage weights and not blindly following the SMART test.

The Balanced Scorecard:
The BSC helps manage and implement corporate strategy within a time framework. The BSC is a useful tool which links strategic objectives to the vision, measures initiatives, and targets, and balances financial measures with KPI indices. It applies across the organization and improves business performance. The technique was first advocated by Dr. David Norton and Dr. Robert Kaplan in the early 1990s and is accepted as being the theory.


Concepts like the balanced scorecard, cascading goals, SMART goals and using percentage goal weights in goal setting are an integral part of corporate strategy. If this field interests you Imarticus Learning has some excellent courses in corporate strategy.

At Imarticus, it is essential to learn the best positive approach and test all theories. The assignments, case studies, and project portfolio are all practically oriented. The Investment Banking Courses also have modules in honing soft-skills and personality development coupled with assured placements and a well-accepted certification. So why wait any longer? Join today!

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