ACCA Strategic Business Leader (SBL) Practice Exam

Why is a holistic perspective important in business strategy?

1. To maintain competitive advantage in only one area.

2. To ensure a balanced approach to long-term and short-term outcomes.

3. To comply with compliance regulations only.

4. To focus exclusively on financial gains.

The correct answer is: To ensure a balanced approach to long-term and short-term outcomes.

A holistic perspective in business strategy is crucial because it promotes a balanced approach that considers both long-term and short-term outcomes. This means that businesses can effectively align their immediate goals with their overarching vision, ensuring that day-to-day operations support sustainable growth rather than just short-lived successes. By integrating various aspects of the business—such as operations, finance, marketing, and human resources—a holistic view encourages strategic decisions that are not only beneficial in the present but also pave the way for future development and resilience against market fluctuations. In contrast, maintaining competitive advantage in only one area would likely lead to a lack of adaptability and an imbalanced strategy that could undermine other critical functions. Focusing exclusively on compliance regulations might result in overlooking growth opportunities or neglecting operational efficiency, while concentrating only on financial gains risks alienating stakeholders such as employees, customers, and the broader community. A holistic perspective helps in recognizing the interdependencies among various elements, ultimately contributing to a more robust and sustainable business model.