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Business Policy & Strategic Management

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Unit-I

1) Introduction to business policy and strategic management.

2) Evolution of business policy as a discipline.

3) Nature, Importance, Purpose and objectives of business policy.

4) Conceptual foundation of business policy: understanding strategy, defining strategy, levels at which strategy operates.

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Unit-I

5) An overview of strategic management.

6) Nature of strategic decision making.

7) Approaches to strategic decision making

8) Patterns of strategic behaviour.

9) Process of strategic management.

10) Strategist and their role in strategic management.

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1)Introduction to business policy & strategic management.• The terms Business Policy and Strategic

Management are often used interchangeably.

• Business Policy is a term traditionally associated with the course in business schools devoted to integrating the educational program of these schools and understanding what today is called strategic management.

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• Business Policy as a course began to be included in the curriculum of the business Schools in the U.S. in the 1950s following the Gordon- Howell research sponsored by the Ford Foundation and Carnegie Corporation.

• Objective:- To provide an integrated approach by binding together appropriately the various courses like, marketing, finance, organisational behaviour, and operations management which the students learn in their earlier semesters.

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2) Evolution of business policy as a discipline. The origins 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. This course was based on case studies which had been in the use at the school for instructional purpose since 1908.

However, the real impetus for introducing business policy in the curriculum of business schools came with Ford Foundations in 1950’s.

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2) Evolution of business policy as a discipline. Evolution based on Managerial Practices:- Glueck has viewed the development in

business policy as arising from the use of planning techniques by managers.

Starting from day to day planning in earlier times, managers, till recently tried to anticipate the future through the preparation of budgets and by using control systems like capital budgeting and MBO.

Strategic management forms the theoretical framework for business policy courses today.

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3) Nature, Importance, Purpose and objectives of business policy.

“ Business policy is the study of the function and responsibilities of senior management, the crucial problems that affect success in the total enterprise, & the decisions that determine the direction of the organisation and shape its future. The problems of policy in business, like those of policy in public affairs, have to do with the choice of purposes, the moulding of organisational identity and character, the continuous definition of what needs to be done, and the mobilisation of resources for the attainment of goals in the face of competition or adverse circumstances.”

-- -------- Christensen

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Importance of Business Policy.• For Learning the course:- Business policy seeks to integrating the

knowledge & experience gained in various functional areas of management.

Business policy deals with the constraints and complexities of real-life business.

It develop a theoretical structure of its own. It makes the study and practice of management

more meaningful.

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Importance of Business Policy.• For understanding the Business

Environment:-It helps to create an understanding of how

polices are formulated.Managers become receptive to the ideas

and suggestions of the senior management.

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Importance of Business Policy.• For understanding the organisation:-It presents a basic framework for

understanding strategic decision-making.It brings the benefit of years of distilled

experience in strategic decision-making to the organisation.

It leads to an improvement in job performance.

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The purpose of business policy:-• To integrate the knowledge gained in various

functional areas of management.• To adopt a generalist approach to problem-

solving.• To understand the complex inter linkages

operating within an organisation through the use of a systems approach to decision-making and relating these to changes taking place in the external environment.

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Objectives of Business Policy:-

OBJECTIVES

In terms of knowledge

In terms of skills

In terms ofAttitude

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4)Conceptual foundation of business policy: understanding strategy, defining strategy, levels at which strategy operates.

• Understanding Strategy:- The term ‘strategy’ is derived from the Greek word

strategos, which means generalship- the actual direction of military force, as distinct from the policy governing its deployment.

Therefore, the word ‘strategy’ literally means the art of the general. In business parlance, there is no definite meaning assigned to strategy. It is often used loosely to mean a number of things.

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Defining Strategy

• “The determination of the basic long-term goals and objectives of an enterprise and the adoption of the courses of action and the allocation of resources necessary for carrying out these goals.”

-----------------Alferd D Chandler