Question

Ivan is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Ivan favors a top-down strategic planning approach in which he exerts strong control over all aspects of the business, from product development and design to manufacturing and marketing. What is wrong with this scenario?

A. The top-down approach leaves other employees uncertain about their roles in the company.
B. The top-down approach can only be applied to specific business functions.
C. The top-down approach is expensive to maintain, leaving the company at a competitive disadvantage.
D. The self-driving vehicle industry is changing too much for the top-down approach to be effective.

Answer 1

What is wrong with this scenario?

A. The top-down approach leaves other employees uncertain about their roles in the company.

Step-by-step explanation:

Strategic planning can be defined as the process of idealizing and directing a business in such a way that the business is operated towards organizational goals. A strategic plan should be documented for future reference. Such a plan can play a major role in organizational growth and success since it gives a road map on how to run the organization. There are different approaches to a strategic plan as shown;

1. Top-down approach

A top-down approach can be done in two ways depending on the organization structure. In a centralized structure, all directions come from the Chief Executive Officer down to other departments heads. In a decentralized structure, the CEO requests for proposals from department heads then he/she makes the final decision.

2. Bottom-up approach

The plans are submitted by the subordinates following direction from the top management.

Each approach has it's disadvantages and advantages depending on the organization structure. One disadvantage of the Top-down approach is that it leaves other employees uncertain about their roles in the company since decision making is centralized.