chapter1 strama

business policies

the set of rules that guides the decisions and actions of the members of the organization is generally called

Inward looking

Business policy is also looked upon as general management orientation traditionally viewed as largely. as well as more biased with guiding how personnel in the organization would act or what to follow for as long as one is a part or employee of the organization. It provides the fundamental framework for plans and also provides middle managers a basis

Defenders

This type includes companies with a limited product line that focus on improving the efficiency of their existing operations. This cost orientation makes

Prospectors

. This type of companies includes firms with fairly broad product lines that focus on product innovation and market opportunities. The sales orientation makes them somewhat inefficient. They tend to emphasize creativity over efficiency.

Analyzers

. This type includes business organizations that operate in at least two different product-market areas, one stable and one variable. In the stable areas, efficiency is emphasized. In the variable areas, innovation is emphasized.

Reactors

. This type includes companies that lack a consistent strategy-structure-culture relationship. Their (often ineffective) responses to environmental pressures tend to be piecemeal strategic changes.

tactics

and its role in concretizing the intents and purposes of business policy and strategic management is equally important

Tactics

are more operational and done in context with or as a support activity or operation to achieve a strategy. Strategy and tactics are differentiated in many ways as follows:

Vision and mission statement

. This essentially refers to the leadership bias as well as sense of direction and mission for which the organization was conceived or established. The vision and mission statement of a business organization emanates from its founders and the previous or incumbent leaders or managers of the organization.

Specific objectives

. These are the corporate objectives purposely developed for the organization and for its members or employees at large to pursue. Stated objectives of the business organization may be a product of a desire to be competitive of the kind of image and culture the company would like to project

Programs and policies

. These are specific programs and policies set forth by the organization's policymakers (i.e., Board of Directors and top management) in pursuit of short and long-term goals given certain considerations at hand.

Policy/strategy profile

. This approach involves a systematic examination of present company policy/strategy- implicit and explicit. This is a sort of self-examination, audit, and introspection. This is more of an internal approach whereby existing policies and operational strategies are examined by the officers and employees of the firm aided by an external consultant as may be necessary.

Legal mandate

. This refers to formulating policies on the basis of the provisions of the charter or legal basis

gap analysis

examination of whether an end that has been established is likely to be achieved. If not, the question becomes "What strategies and policies must be adopted to reach the sought ends?" It means asking what is missing in to non-attainment of objectives. More

Competitive strategy analysis

. This involves a thorough analysis of the competitive forces operating in a firm's environment and searching for an alternative option. This also calls for finding the niche where the firm is deemed competitive.

Classical approach

. The oldest of the four approaches and still the most influential, it relies on the rational planning methods dominant in the textbooks. As such, this approach follows a pattern of analyzing, planning and commanding or directing. Profitability is the supreme goal and rational planning the means to achieve it.

Evolutionary

. It draws on the fatalistic metaphor of biological evolution but substitutes the discipline of the market for the law of the jungle. This approach is conscious on keeping costs or expenses low with open options. Whittington believed that evolutionary theorists do not necessarily prescribe rational planning methods. Rather, they argue that whatever methods managers adopt, it will only be the best performers that survive.

Processual

. It emphasizes the sticky imperfect nature of all human life, pragmatically accommodating strategy to the fallible processes of both organizations and markets. This approach is more adaptive to situation by playing by the local rules

Systemic

. This approach is relativistic, regarding the ends and means of strategy and inescapably linked to the cultures and powers of the local social systems in which it takes place. This approach is more cautious

Top-bottom approach

. In this approach, initiatives a) in developing policies and strategies come from the top management with rank and file tasked to implementing or following the policies and strategies.

bottom-top approach

. In this approach, policy and strategy initiatives emanate from the bottom or rank-and-file from which top management develops concrete policies and strategies for the lower-ranked employees to observe or follow.

Top-bottom-top

. In this approach, policy and strategy initiatives are taken by the top management then filtered down to lower-ranked personnel for consultations then returned back to the top management for refinements.

Rare

. Strategic decisions are unusual and typically have no precedent to follow.

Consequential

. Strategic decisions should commit substantial resources and demand a great deal of commitment from people at all levels.

Directive

. Strategic decisions set precedents for lesser decisions and future actions throughout the organization

Entrepreneurial mode

. In this mode, strategy is made by one powerful individual and the focus is on opportunities; problems are secondary. Strategy is guided by the founder's own vision of direction and exemplified by large, bold decisions. The dominant goal is growth of the corporation.

Adaptive mode

. Sometimes referred to as "muddling through," this mode is characterized by reactive solutions to existing problems, rather than proactive search for new opportunities. Much bargaining goes on concerning priorities of objectives. Strategy is fragmented and is developed to move the corporation forward incrementally

Planning mode

, This decision-making mode involves the systematic gathering of appropriate information for situation analysis, the generation of feasible alternative strategies, and the rational selection of the most appropriate strategy. In includes both the proactive search for new opportunities and the reactive solution of existing problems

Logical mode

. It can be viewed as a synthesis of planning, adaptive, and, to a lesser extent, the entrepreneurial modes. In this mode, top management has a reasonably clear idea of the corporation's mission and objectives, but, in its development of strategies, it chooses to use "an interactive process in which the organization probes the future, experiments, and learns from a series of partial (incremental) commitments rather than through global formulation of total strategies."

Monitor

. By acting through its committees or being a part of the management team, the board can keep abreast of developments inside and outside the corporation, bringing to management's attention development it might have overlooked. A board should at least carry out this task.

Evaluate and influence

. A board can examine management's proposals, decisions, and actions; agree or disagree with them; give advice and offer suggestions; and

Initiate and determine

. A board can delineate a corporation's mission and specify strategic options to its management. Only the most active boards take on this task in addition to the two previous ones.