The 'Strategic Hierarchy' lays the foundation for strategic management process. It is a pretty difficult and complex process to establish the hierarchy of strategic intent.
The company has to define its Vision Statement, Mission Statement, Business Definition, and Objectives to form the Strategic Hierarchy. A business strategy cannot be formulated unless the strategic hierarchy is clearly defined.
Hamed and Prahalad in Harvard Business Review 1989 laid down a few aspects of 'strategic hierarchy'.
'Vision' is what the organization wishes to achieve in the long run,
'Mission' relates an organization to the society,
'Business' explains the business of an organization in terms of its customers needs, customer groups or segments, and alternative technologies,
'Objectives' state what is to be achieved in a given time period.
'Vision' is at the top of the strategic hierarchy, rather the strategic intent of the organization. It is what the organization would ultimately like to become in the future.
It is a "category of intentions that are broad, all inclusive and forward thinking" (Miller & Dess).
Strat Cure says that strategic hierarchy has two distinct domains: Passive and Active.
The passive strategic elements in hierarchical order are: - Vision – Mission - Goals - Objectives.
The active elements or `how` to achieve are:- Strategy - Capability - Effectiveness measures.
Strategic Hierarchy is the highest level in a large organization. It is the broadest and all encompassing the various aspects of the organization. It gives direction to the organization’s values, culture, goals, objectives, and mission and vision statements.