Understanding Strategic Levels in an Organization:
Corporate-Level Strategy: Defines overall company direction, including mergers, acquisitions, and diversification.
Business-Level Strategy: Focuses on how the company competes in its industry (e.g., cost leadership, differentiation).
Functional-Level Strategy: Relates to specific departments (marketing, HR, IT) supporting business-level goals.
Why Option C (Business-Level Strategy) Is Correct?
The question " How does our organization compete? " directly relates to business-level strategy.
It focuses on competitive positioning within the industry, such as:
Cost leadership (competing on price)
Differentiation (unique product offerings)
IIA Standard 2110 – Governance requires auditors to evaluate strategic alignment with competitive positioning.
Why Other Options Are Incorrect?
Option A (Functional-Level Strategy):
Focuses on departmental decisions, not overall competition.
Option B (Corporate-Level Strategy):
Corporate strategy defines broad company direction, not specific competition strategies.
Option D (Department-Level Strategy):
Similar to functional strategy, it does not define how the company competes in the industry.
Business-level strategy answers " How does our organization compete? " by defining industry-specific competitive approaches.
IIA Standard 2110 supports governance over strategic positioning.
Final Justification:IIA References:
IPPF Standard 2110 – Governance (Strategic Planning & Competitive Advantage)
Porter’s Competitive Strategy Framework
COSO ERM – Strategic Risk Management
