Territory Stories

9.1 The Board’s Strategic Directions 2016-2020 May 2016



9.1 The Board’s Strategic Directions 2016-2020 May 2016

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Tabled paper 1883


Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT






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Box 5.1: Levels of corporation strategy A fundamental responsibility of the Board of Directors is to ensure that strategies are in place between the internal and external environment as are necessary to produce the results required by the Corporation's shareholder and other stakeholders. Corporate Strategy I Business Business Business Strategy Strategy Strategy lit Functional Strategy HR IT Operations Finance Etc. The term strategy is used at three levels of a corporation, namely: corporate level strategy; business level strategy; and functional level strategy. The best way to introduce these concepts is by way of the following diagram: What businesses should we be in and how should we manage those businesses? How do we compete? How do we drive effectiveness and efficiency at a function level? Parenting Advantaga 1 Compatithn Advantage T Function Advantage ) Australian Institute of Company Directors. 2012 All businesses have a corporate level strategy. This level of strategy is particularly important when a number of businesses are held under one corporate umbrella, as is the case for Power and Water. Corporate level strategy is the way a corporation creates value through the configuration and coordination of its multi-market activities. The focus of corporate level strategy is on where the Corporation will compete, on what businesses it is in, and how the corporate centre manages those businesses. Good corporate level strategy delivers a parenting advantage whereby the corporate parent is able to create more value from its business units than any alternative owner. Corporate parents add value to their business units by applying specific management skills, by establishing linkages between business units that lead to economies of scope and by reducing costs through the elimination of duplication in functions or services. Financial synergies between business units are an external sign of parenting advantage. Business level strategy focuses on how a corporation competes in the various markets in which it operates, and so how it establishes and maintains competitive advantage over rivals in those markets. The external sign of competitive advantage is superior financial performance relative to competitors over the longer term. A variation on the concept of competitive advantage that is relevant to government business enterprises is 'institutional advantage'. This exists when a corporation performs its tasks more effectively than other comparable corporations in the same or similar businesses. In defining its 'institutional advantage', a government owned corporation needs to 'operationalise' its mission in terms of key tasks or activities, measure its effectiveness in performing these tasks or activities, and then compare these measures against benchmarks from similar corporations. The third level of strategy is functional strategy. Functional strategy can be thought about as the various functions or disciplines that comprise any business. While there are several definitions of functions, the major functions for Power and Water are: finance and accounting; human resource management; and information technology. The challenge from both the corporate and business strategy perspective is to ensure strong integration between the functional level strategies and the business and corporate level strategies. THE BOARD'S STRATEGIC DIRECTIONS 2016-2020 24

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