[StratBus] 1 - Concepts of Business Policy

Business Policy

This generally refers to a set of rules that guides the conduct of the business in pursuit of profit and other objectives of the business organization

Strategy

This refers to top management’s plan to attain the outcomes consistent with the organization’s mission and goals

Strategy

It is the management’s “game plan” to achieve the following:

1. Attract and please customers

2. Stake out a market position

3. Conduct operations, and

4. Compete successfully

Strategy

It forms a comprehensive master plan stating how the corporation will achieve its mission and objectives

Corporate Strategy

Overall direction in terms of its general attitude toward growth and the management of its various business and product lines

Business Strategy

Usually occurs at the business unit or product level and it emphasizes improvement of the competitive position of the corporation’s product or services in the specific industry or market segment served by that business unit

Functional Strategy

Approach taken by the functional area to achieve corporate and business unit objectives and strategies by maximizing resource productivity

Hierarchy of Strategy

It is the grouping of strategy types by level in the organization

Hierarchy of Strategy

This is a nesting of one strategy by level in the organization

Strategic Management

It is a set of managerial decisions and actions that determines the long-run performance of a corporation

Strategic Management

This emphasizes the monitoring and evaluation of external opportunities and threats considering a corporation’s strengths and weaknesses

Strategic Management

This incorporates such topics as long-range planning and strategy

Strategic Management Process

Situation Analysis

This includes environmental scanning, this is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the corporations.

SWOT Analysis

It is an acronym used to describe those particular Strengths, Weaknesses, Opportunities and Threats that are strategic factors for a specific company

External Environment

Variables that are outside the organization and not typically with the short-run control of top management

Internal Environment

Variables that are within the organization itself and are not usually within the short-run control of top management

Strategy Formulation

It is the development of long-range plans for the effective management of environmental opportunities and threats, considering corporate strengths and weaknesses

Strategy Formulation

It includes defining the corporate mission, specifying achievable objectives, developing strategies and setting policy guidelines

Operational Level

Short-term and are associated with the various operational departments of the company

Competitive Level

Related to the technique in competing in a certain industry. This strategy deals with establishing competitive strength against competitors.

Corporate Level

To be able to improve both operational and competitive strategies. these strategies are long term and are involved in providing direction for the organization

Competitive Advantage

• Looks at quality

• It is tantamount to superior quality wherein a customer would pick out a particular brand that provides excellent performance.

• It is also achieved when the company always anticipates what the customers need and want

• It responds to customers’ suggestions and attends, analyzes and monitors customer complaints

Strategy Implementation

It is the process by which strategies and policies are put into action through the development of programs, budgets and procedures.

Strategy Implementation

This process might involve changes within the overall culture, structure and/or management system of the entire organization.

Strategy Evaluation and Control

It is the process in which corporate activities and performance results are monitored so that actual performance can be compared with desired performance

Concept of Strategy

Benefits of Strategic Management

• Clearer sense of strategic vision for the firm

• Sharper focus on what is strategically important

• Improved understanding of a rapidly changing environment

Globalization

The internalization of markets and corporations has changed the way modern corporations do business

Electronic Commerce

This refers to the use of the Internet to conduct business transactions

Theories of Organizational Adaptation

• Globalization and Electronic Commerce

• Population Ecology

• Institution Theory

• Strategic Choice Perspective

• Organizational Learning Theory

Population Ecology

Proposes that once an organization is successfully established in a particular environment niche, it is unable to adapt to changing conditions

Institution Theory

Proposes that organization can and do adapt to changing conditions by imitating other successful organizations

Strategic Choice Perspective

Proposing that not only do organizations adapt to a changing environment but also have the opportunity and power to reshape their environment

Organizational Learning Theory

Organizations adjust defensively to a changing environment and use knowledge offensively to improve the fit between the organization and its environment

Creating a Learning Organization