Situation
An international rating agency operating in 23 countries, well known to investors as a leader in financial market information, compiler of credit ratings and corporate governance ratings, decided to expand the range of its services. In an increasingly complex business world, investors need more criteria to make decisions about participating in a business. In addition to the existing methods of assessing companies from different countries and industries, the agency needed a tool for a comparable analysis of the strategic management level of companies.
Approach
To be successfully applied in practice, the working tool should contain uniform and comparable criteria for assessing the level of strategic management in
- different countries
- various industries
- companies of different sizes
The application of such a tool should answer the question: "What is the level of strategic management in this company?" The answer to this question should be comparable with the assessment of other companies. To be able to get a comparable and reliable answer to such a question, it is necessary to analyze the schools of strategic thought that are most widespread today. In addition, it is necessary to collect and analyze information on the practical use of different methodologies and practices in the strategic management of companies from different countries and industries. The results of the analytical study make it possible to develop a classification of strategic management attributes.
Recommendations
A classification of the elements of strategic management was compiled, parameters of assessments and the degree of influence on the level of strategic management were determined for each attribute. Then, working tools were developed to collect, process and analyze information and calculate an integrated indicator of the strategic management level of the company. It was recommended to test the toolkit at trial companies in different industries and countries.
Outcomes
This toolkit has been successfully tested by three “pilot” projects in the BRIC countries and North Africa. The level of strategic management in banking, telecommunications and manufacturing companies was assessed. After trial projects, the new methodology was adopted as a working tool and added to the agency’s portfolio. It is used to determine the level of strategic management in companies. This rating is used to support decision-making by international investors.
