Meaning
Power to make high-level decisions regarding the long term goals, resource allocation, hiring priorities and major partnerships of an organization. Command of the firm’s direction usually rests with the board of directors or the controlling shareholders. It governs the overall orientation of the venture rather than its daily tasks.
Decision Framework
This authority sits above the daily management of the firm and determines which markets to enter or products to prioritize over a multi-year horizon. It ensures that the firm remains aligned with its core mission even as market conditions fluctuate. Strategic authority ensures that the firm remains aligned with its core mission even as market conditions fluctuate.
Post Founder Equilibrium
After a founder leaves the chief executive seat, they often retain strategic authority as the chairperson. This allows them to influence the big picture without getting bogged down in the details of payroll or supply chains. The cost to the founder is the energy required to stay informed about industry trends without having a full staff at their disposal.
This diverts focus from new ventures.
Mandate Boundary
Conflict occurs when the person with this power oversteps into the operational domain of the current manager. Clearly defining where strategy ends and execution begins is essential for the health of the organization.
