Final answer:
True. A hierarchy of strategy necessitates that corporate, business, and functional levels of strategy complement and support each other, ensuring organizational objectives are met and a competitive position is maintained.
Step-by-step explanation:
True, a hierarchy of strategy does indeed emphasize the need for the three levels of strategy to complement and support one another. This hierarchy usually consists of corporate-level strategy, business-level strategy, and functional-level strategy. Each level has a specific scope of activities and responsibilities that contribute to the organization's overall strategy.
Corporate-level strategy focuses on the overall scope and direction of the corporation, making decisions that affect the entire organization. Business-level strategy revolves around how a business intends to compete in a particular market. Functional-level strategy is concerned with the question of how to maximize resource productivity. The coherence among these strategies ensures effective alignment of an organization's actions and objectives, thus enhancing performance and competitive positioning.
To understand the necessity of complementing strategies in different environments, consider that Type I strategy is often seen in stable environments where predictability allows for a long-term perspective and detailed planning. In contrast, Type III strategy emerges in unstable environments, which necessitate a more flexible, responsive approach due to unpredictability and rapid changes. Organizations adapt their strategic plans to be more dynamic in order to quickly respond to market shifts, take advantage of new opportunities, and avoid potential threats.