business policy 3.ppt

8/10/2019 Business policy 3.ppt

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SILKY JANGLANI2

MBA (IV) Sem

STRATEGIC

MANAGEMENT

SILKY JANGLANI


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BUSINESS POLICY:

Business policy is the study of functions andresponsibilities of management, the problems anddecisions that determine the direction of the organization.

Christensen.

Historical evolution of Business policy

1930s

Ad Hoc

Policy

making

1940s

Planned

Policyformulation

1960s

Strategy

1980sStrategic

management


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Business Policy:

Strategic Management in India:

Pre-liberalization

Strategic managementin Govt. control

Transition Phase

1990s

Post-liberalization

2000-2010Mergers &

Acquisitions


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Business Policy:

Nature of Business policy:

1. It is the study of functions and responsibilities of seniormanagement related to organizational problems.

2. It determines future course of action.

3. It defines the character and identity of an organization.

4. It is concerned with mobilization of resources to help anorganization achieve its goals..


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Business Policy:

Purpose of Business policy:

1. It integrates knowledge & experience gained in variousfunctional areas of management.

2. It deals with constraints and complexities of real-lifebusiness.

3. It helps to bring long-term view of the environment.

4. It helps to understand the linkage within sub-systemsof the organization..


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Business Policy:

Importance of Business policy:

1. For learning purpose: It integrates the knowledge &experience. It cuts the narrow financial boundaries. Itmakes the study of management more meaningful.

2. For understanding business environment: To understand

how policies are formulated. It makes the task of policyimplementation simpler.

3. For Understanding the organization: It presents a basicframework for understanding strategic decision-making.

4. For personal development: To understand the impact ofpolicies on position. To understand the senior managersviewpoint. To identify growth areas for development..


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What is Strategy?

4. It is a unified, comprehensive and integrated plan designed toassure that the basic objectives of enterprise are achieved.William Glueck (1972)

5. Itis a pattern in a stream of decision and actions.Henry Mintzberg (1987)

6. Developingand communicating the companysunique position,making trade-offs and creating a fit among activities.

Michael E. Porter (1996)..


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Levels of Strategy:

CORPORATE OFFICE

Strategic Business Unit

A

SBU

B

SBU

C

HRM Marketing Finance Production Systems

Corporate level

strategy

Business

level

strategy

Functional

level

strategy

SBU is a business unit within the overall corporate identity which is

distinguishable from other business.

When companies become large, they are composed of a number of

businesses (or SBUs). Eg


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STRATEGIC MANAGEMENT:

What is strategic management?

1. It is a stream of decisions and actions which leads to strategydevelopment to achieve corporate objectives.

William Glueck

2.It is the formulation and implementation of plans and carrying

out of activities relating to important matters of theorganization. Sharplin.

3. It is a process through which organizations analyze and learnfrom their internal & external environment, establish strategicdirection, create strategies to help achieve goals and executethem. Harrison & St. John..


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Process of Strategic management:

Phases of Strategic Management:

Establishstrategic

Intent

Formulate

strategies

Implement

strategies

Strategic

evaluation

Strategic

control

Establish

strategicIntent

SWOT

analysis

Strategic

alternatives

Strategic

evaluation

Strategic

Analysis& choice

Strategic

implement-ation

Strategic control

Working model of Strategic Management:


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Model of Strategic Management Process:

Establish strategic intent:

Vision, Mission, objectives,

Business definition

Formulate strategies:

Environmental appraisal,

organizational appraisal, SWOT analysis,

Corporate & business level strategies,

Strategic choice, strategic plan.

Implement strategies:

Project, procedure, resource allocation,

Structural, behavioral, functional

and operational implementation.

Strategic evaluation

strategiccontrol


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VISION:1stlevel of Strategic Intent

VISION: It is a position that a company would like to

achieve in the distant future (10-15 years). It is a powerfulmotivator to action.

Vision of Walt Disney: To make others happy

It is a category of intentions that are broad, all-inclusive andforeward-thinking.

Why vision is needed?

a. Good visions are inspiring.

b. Good visions help in creation of a common identity and ashared sense of purpose.

c. Good visions are competitive, original and unique.

d. It promotes risk-taking and experimentation.

e. It promotes long-term thinking IO


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MISSION:

2ndlevel of Strategic Intent

Vision is a foreward-thinking view of what an organizationwants to be. Mission is what an organization is and why itexists.

Mission is a statement that defines the role an organizationplays in a society.

Eg: A newspaper & TV news editor: mission- information.

It is the purpose or reason for the organizationsexistence..


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MISSION:

2ndlevel of Strategic Intent

Characteristics of Mission:

1. It should be feasible.

2. It should be precise; not too narrow & broad.

3. It should be clear.4. It should be motivating.

5. It should be distinctive; unique from competitors.

6. It should indicate how objectives are to be achieved...


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Goals & Objectives:

Goals & Objectives represent a future state or an outcome of

efforts put at present. Objectives are the ends that state how goalswill be achieved.

Goals are generalized & qualitative. Objectives are concrete,measurable and specific.

Objectives make the goals operational.

Roles of Objectives:

1. Objectives define the organizations relation withenvironment.

2. It helps an organization to achieve its vision & mission.

3. It provides the basis for strategic decision-making.

4. It provides the standards of performance appraisal


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Goals & Objectives:

Characteristics of objectives:

1. It should be understandable.

2. It should be concrete and specific.

3. It should be related to a time-frame.4. It should be measurable.

5. It should be challenging.

6. It should be set within limits..


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Role of Top Management in Strategic Management

Role of CEO/ GM/ MD/ President:Prime responsibility for strategic management.

1. He is the chief architect, strategist, organization builderand coordinator.

2. He sets the mission of organization.

3. He decides organization objectives and goals.

4. He formulates and implements strategy.

5. He manages external environmental and relationships.

6. He is communicator of organizational purpose,motivator and mentor.

7. He checks progress to avoid deviation from path..


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Role of Top Management in Strategic Management

Role of Board of Directors:

Board of Directors include owners, shareholders,controllers, MD, Govt., financial institutions, employeerepresentatives etc. Role:

1. They set the vision and strategic direction.

2. They establish objectives and strategy.

3. They guide the senior managers in setting and achievingobjectives, reviewing organizational performance andevaluation.

4. They monitor the progress.5. They take corrective action when required..

business policy 3.ppt

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