Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
S4 MBA
Business Policy
The origin of Business policy can be traced back to 1911 when the Harvard Business School introduced an integrative course in Management aimed at providing general management capability.
The term Business policy has been used traditionally though new titles such as Strategic Management, Corporate Strategy and Policy and so on are now used extensively for the course
Definition
The practical adaptation of the means at a general's disposal to the attainment of the object in view.
Strategy
The term strategy is derived from the Greek word Strategia which means generalship. In the military , strategy is often refers to the branch of military science dealing with military command and the planning and conduct of war.
Definition
The art of the employment of battles as a means to gain the object of war
Cont.
Strategy represents a pattern in actions over time; for example, a company regularly markets very expensive products is using a high end strategy Strategy represents position: it reflects decisions to offer particular products or services in particular markets Strategy represents perspective like vision and direction of the company
Characteristics
Strategies are specific actions suggested to achieve the objectives Strategies are action oriented Everyone is empowered to implement the strategy Strategies are means to an end Strategies are concerned with uncertainties Strategy is deployed to mobilize the available resources in the best interest of the company
Policies
Policies are statement or a commonly accepted understanding for decision making. Policies are thought oriented. Policies are in general concerned with course of action to fulfill the set of objective, policy is governs and control the managerial action of the organization.
On the basis of Management On the basis of functional areas On the basis of expression On the basis of nature of origin On the basis of scope of organization On the basis of nature of management function
Top Management Policies Middle level Management policies Lower level Management policies Operating forces Policies
Production policies Marketing and sales policies Financial policies Human resource development policy
Oral Policies Written Policies Implied Policies Originated Policies Appealed Policies
Implied Policies
These are policies which are implied from the code of conduct or from mode of behaviour of business executive: but they are not stated orally Eg. Smoking & Drinking
Originated Policies
Originated policies emanate from the company objectives which are determined by the top management, who are primarily responsible for shaping business policies to guide and direst them and the subordinate in the attainment of organizations objectives these are framed by the board of directors, the president and the general manager etc.. And passes on to the executives in hierarchy for implementation
Appealed Policies
Appealed policies are often known as suggested policies. Because they are framed on the suggestions of the subordinates or those who implement the policies
The term policy should not be considered as synonymous to the term strategy.
1. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. While strategy is concerned with those organizational decisions which have not been dealt/faced before in same form.
2. Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle level management.
Cont.
Cont.
3. Policy deals with routine/daily activities essential for effective and efficient running of an organization. While strategy deals with strategic decisions. 4. Policy is concerned with both thought and actions. While strategy is concerned mostly with action. 5. A policy is what is, or what is not done. While a strategy is the methodology used to achieve a target as prescribed by a policy.
Strategic Management
Peter Drucker Strategic management is not a box of tricks or a bundle of techniques. It is analytical thinking and commitment of resources to actions Joel Ross and Michael Kami Without a strategy the organization is like a ship without a rudder
Meaning
Strategic management is the stream of instructions, guidance, directions and actions with view to develop effective long-term planning of the organization
Elements
Strategic management is a part of every successful business. The process of outlining a strategy involves: Vision Goals Plan of Action Implementing the Plan Evaluating Progress.
Vision
By way of a Mission Statement Once you have outlined your mission you have defined what your company or organization is about. This often includes statements such as "increase the wealth of shareholders." If the mission statement is too limiting, it will limit the vision of the company.
Goals
Setting Long and Short Term Objectives The next step is to set specific goals through a process of written "Objectives." These are more targeted than a mission statement. Objectives are subject to change as goals are met. They are your short and long term goals.
Plan of Action
Developing Strategy is a plan of action. It is a way of reaching the objectives. This is where operations often take the lead. Think of it as a task analysis. When you analyze a task, even mentally, you define the work, where the work will be done, and the steps to accomplish the work. This is Strategic Management.
First and foremost is a good line of communication not only from top to bottom of management hierarchy, but laterally and from bottom to top. This type of communication helps aid in the best exchange of ideas and concerns.
Evaluating Progress
Evaluating progress and the effectiveness of your strategy is the next important step in the cycle. Now is when you will find the bottlenecks, what works, and what needs to be changed. There are a number of different evaluation styles. Often the style used by the company is determined by its size, and layout. Some companies bring in outside analysts to observe and report what they see.
Define organization or company mission Analysis of business environment Identifying the present strategies and objectives Evaluating the present strategy Analysis strategic choice Development of strategy Formulation strategy Implementation of the strategy Control, monitor, guide and evaluate the strategy
Strategic Management model provides three major functions It provides a visual representation of the major components of the entire strategic management process. This model also shows how the components are related and how they are related throughout the process. This model provides the general overview of the strategic management process of the organization This model recommends the strategy formulation, implementation and control, monitor, guide and evaluation of the organizational objectives
Company Mission Company Profile Environment analysis Strategic analysis and choice Long-term objectives Grand Strategies Annual Objectives Functional Strategies Policies Institutionalizing Strategy Control and evaluation strategy
Organization/Company Mission
Organization /company mission statement is the basic issue point of the strategic management. It will guide future execution policies and objectives.
Company Profile
Company profile is to determine strength , weakness, opportunity and threats of the business. It involves to the internal environment of the organization and its functions like marketing, production, accounting, finance, research and development, human resource management and customer relationship.
Environment analysis
It is the analysis of the organization external environment. External environment consists of all conditions and forces are typically beyond the control of organization. The strategic management component shows the external environment which consists of the operating/micro and macro environment.
Long-term objectives
Long term objectives typically seek five year or more period of time. Long term objectives are typically involved the following areas of the organization
Profitability Return on investment Competitive position Technological leadership Productivity Employee relations Public responsibility Employee development To be greatest each objective must be measurable & achievable
Annual Objectives
Annual/short term objectives typically seek results of the organization within a period are annual/short term objectives.
Functional Strategies
Business functions strategies are marketing, finance, accounting, production, R&D and human resource strategy. These are specific and integrative plan of action. Most strategic managers attempt to develop an operating strategy for each related to set of annual/ short term objectives.
Policies
Policies are directives which are designed to board guidelines of the organization. It concerned with thinking, decisions, actions and responsibilities of managers and their subordinates for implementing the organizations strategy.
Institutionalizing Strategy
Institutionalizing Strategy is the combination of the structure, leadership and culture of the organization.
An implementation of strategy must be monitored and controlled to determine the extent to which objectives, mission, vision, philosophy and goals are to be achieved.