Strategic management and Business policy unit 1 ( BBA 3RD year 6th sem) Prepared by - Dipankar Dutta Faculty, Dev Bhoomi Group of Institution Saharanpur email- dipankarpharma1@gmail.com

1. Business Policy and
Strategic Management
BY
Dipankar Dutta

2. Business Policy
• Policies refer to a set of management decision oriented towards
enhancing and sustaining the firms competitive advantage based on a
system of intrinsic and extrinsic values.
• Business policy is the study and responsibilities of top level
management , the significance issues affecting organizational success
and the decisions affecting organization in long terms.
• It is a type of standing plan that guide subordinates in the execution of
their task.
• Policies are the guide of decision making.

3. Example of Business Policy
HR Policy
• Hiring / firing
• Training
• Transfer
• Incentives
• Organizational culture
Marketing Policy
• What to sell
• Whom to sell
• Marketing mix
• Promotions
• Advertising
Quality Policy
• Standard
• Check and
control
• Feedback
• Collective
measure

4. Nature of Business Policy
Objectivity
Relationship to
other Objectivity
Complementariness
Stability and
flexibility
Fairness and
honesty
Bring known
understand and
accepted
Policy should be in
writing
Simple and free
from ambiguity
Supplementary to
other policies
comprehensiveness
Consistent with
public policy
Ethical standard

5. Elements of business policy
Elements of
Business Policy
Policy control
Policy
Formulation
Dissemination of
the policy
Acceptance of
the policy
Policy
Implementation
Explanation of
the policy
Ascertaining the
problem

6. Objective of Business Policy
Relating organizations work
Facilitate pre determined objective
Linkage between physical and personal
Helpful to authorities
Provide communication
Describe the job

7. Classification of Business Policy
1. Policies based on Nature of
Origin
 Originated Policy
 Appealed Policy
 Imposed Policy
2. Based on Expression
• Oral policy
• Stated or written policy
• Implied policy
3. Policies based on
Functions
• Personal policies
• Marketing
• Finance
• Production
policies

8. 4. Policies based on levels of
organization
• Top management policy
• Middle management policy
• Operating management policy
5. Policies based on
scope of organization
• Basic policies
• General policies
• Specific policies
6. Policies based on
situation
• Normal policies
• Contingency policy
• Administrative policy
• Departmental or minor
policy

9. Mechanism of policy making
Identification of the situation
Development of the policy
Dissemination of the policy
Explanation of the policy
Acceptance of the policy
FEEDBACK

10. Importance of Business Policy
Solving business problems
Provide stability
Help managers to improve his managerial powers
Help in Administration
Optimum utilization of scare resources
Ensure consistency
Build up Goodwill

11. Limitations of Business policy
Limited area
Policies are static
Consistencies in policies
Limited area
Policies are not end
Policy provide only a set of rules.

12. Policies Procedures
1. Policy is a guide for thinking and action.
Procedures are guide for action. They show
the method of doing a task.
2. Policies are basis for procedures. Procedures follow the policies.
3. Policies are responsibilities of top
management.
Procedures are responsibilities of middle
level and lower level managers.
4. Policies are stable. Procedures can be changes in the short-run.
5. Policies give emphasis on general
approach.
Procedures give emphasis on stage-by-stage
details.
6. Policies are broad and comprehensive.
Procedures are more rigid and allow no
freedom.
7. Policies are applied in long-range
planning.
Procedures are applied in short range
planning.
8. Policies are directly related to goals. Procedures are indirectly related to goals.
9. Policy does not provide any method of
doing a work.
Procedure is a standard method of doing a
work.

13. STRATEGY
• The term “Strategy” derived from the Greek word
STRATRGOS. Which means- generalship ( the actual
direction of military force)
• Strategy is defined as the determination of the basic
long term objective and goals of the organization and
the formulation of plans and the acquisition, allocation
and utilization of resources necessary to accomplish
these goals.
• Strategy is the linkage between a business.

14. Igor Ansoff- “ Strategy is a common thread among the
organizations activities and product market that defines
the essential nature of the business that the organization
was planned to be in future”
George A. Steiner- “ Strategy means deciding the basic
mission of a company, the objective which it seeks to
achieve and the policies governing the use of resources
at the disposal of the firm to achieve its objective.”

15. Nature of Strategy
1. Provide overall framework
2. Unified direction
3. Contradictory actions
4. Major course of actions
5. Long term goals
6. Grand plan
7. Combination of actions
8. Blend of internal and external
factors
9. Future oriented
10. Comprehensive objective
11. Competitive
12. Pro active
13. Guide
14. Dependent on system

16. Dimension of strategy
Strategy process: It is the way a strategy is formulated, controlled and
implemented. This process deals with how a strategy is formulated, who is
involved in the process and when do the activities takes place.
Strategy Context: It refers to the conditions when strategy process and the
strategy context are formulated. Context ---the ambience and the enterprise.
Strategy Content: it is the outcome of a strategic process. It refers to what is
in hand today and for what will be the strategy for tomorrow for the whole
enterprise or its various department.

17. Hierarchy of Strategy

18. Corporate level strategy
Is the top management plan to run and direct the business as a whole. The
strategy outline the organizational activities and objectives in various area of
organization.
Business level strategy
It is the managerial plan for directing and running a business unit. A strategic
business unit is based on the idea of recognizing the separate market segments
created by the company. Business strategies are formulated differently for each
segment due to the difference in their environmental conditions. ( tactics to beat
the competition)
Functional level strategy
It denotes the operative divisions levels and dept. in an organization such as
marketing, finance, HR etc. functional level provides input to the higher strategies
and convert them to action plan for various dept. ( operational methods to
implements the tactics)

19. Strategy making modes
Rational mode
Command mode
Symbolic mode
Trans active mode
Generative mode

20. Mintzberg’s 5P’s of Strategy

21. Strategy as a Plan
Planning is the most obvious step and seems to happen instinctively. Each
and every manager relies on it when developing a business strategy. The basic
concept of this method is first brainstorming ideas and then planning how to
take advantage of them.
The following steps are most helpful when designing your plan
SWOT analysis ( strength / weakness / opportunities / threats)
PEST analysis ( political / economic / socio- cultural / technological)
Brainstorming – a session for generating the multiple ideas and selecting
the best.

22. Strategy as ploy
A ploy is usually a man in an competition or a game, one that is taken to
get the better of your competitor. A poly takes advantage of opportunities
that arise. Poly are usually undertaken to determine competitors from
entering the market, for example by building new facilities with plenty
capacity or lowering the price.
The following steps are most helpful when designing your ploy
Impact analysis- a methods for collecting the data and determining the
effect of a potential disruption to your business.
Future wheel- a way structured brainstorming which creates a model
about future base on the analysis of the effects of the events, trends,
problems.

23. Strategy as patterns
Strategy should be considered in terms of strategic outcomes. Strategies
can be planned, but the outcome many not be what as expected. In some
cases it may be possible to look back at what has happened and describe
a company’s strategy in terms of pattern that emerged.
The following steps are most helpful when designing your patterns
• Core competence analysis- a concept which revels the combination of
skills and resources which characterized the competitiveness of the
company.
• USP analysis- a method for identifying unique selling propositions.

24. Strategy as position
Strategy is intended to locate or fit a business within its environment and
deciding on what position to adopt. A position may be niche, providing law
cost or distinctive products.
The following steps are most helpful when designing your position
PEST analysis
Porters Diamond
Porters five forces- tools for analyzing 5 basic forces which are
fundamental : competition, new entries, power of suppliers, power of
customer, threat of substitute.

25. Strategy as perspective
Finally strategy can be defined in terms of corporate personality and
culture a company developed over time. Strategy is the way a company
views itself in the world, through the eyes of the management and
employees. This can refer to organizational culture.