STRATEGIES,POLICIES & PLANNING PREMISES

STRATEGY
Derived from greek word: startegos meaning general It deals with the determination of long term objectives,the course of action and the allocation of resources to achieve objectives.

POLICY
These are the general statements or guidelines which direct the manager in decision making They ensure that decisions fall within certain limits Essence of policy is discretion.

Corporate startegy:
Should the firm enter into strategic alliances How should the firm be structured what businesses should the firm be in? How should the firm allocate its resources among existing businesses? How diversified should the corporation's business be?

Business level strategy

Applicable to those org. which have different businesses & each business is separate entity.eg. Reliance Ltd. In textile,petrochemicals etc.

Functional level strategy

Applicable to single function or activities there in. Eg. Marketing function involving operational activities like sales promotion,advertisement etc.

STRATEGIC PLANNING PROCESS

INPUTS People Capital Managerial & Technical skills Goals of claimant Purpose &major obj of enterprize Top mgt. orientation Present External env Evaluation & Strategic Choice (risk,timing,competitor)
Medium & Short Range planning

Opportunity & threats Dev of Alternative startegies

Enterprize profile

Forecast Of future env

Implementation

control Resource audit Weakness & strengths

Contingency plan

feedback

MAXI-MAXI

MINI-MAX

MAXI-MINI

MINI-MIN

make products at low cost

ROLE OF STRATEGY
It provides clarity in direction of activities Increases org. effectiveness Reduces role conflict & role ambiguity thus giving satisfaction Helps in gaining competitive advantage

Successful implementation of strategies

Communicating strategies to all key decision making managers Ensuring action plans contribute to and reflect major objectives & strategies Reviewing startegies regularly Develop contingency plans Make organization structure fit planning needs Creating company climate that forces planning Managers should be prepared for startegic planning Provide sufficient information for planning Link b/w planning and control is insufficient

PORTER GENERIC STARTEGY

OVERALL COST LEADERSHIP
Aims at reductions in cost Low cost structure compared to competitors 'cost advantage' is the focus

DIFFERENTIATION
Offer something unique allows companies to desensitize prices Innovations require investment & should be difficult to copy

FOCUSED STRATEGY
Concentrate on special group, product, specific region instead of focus on total industry

PREMISING & FORECASTING Planning premises is anticipated environment in which plans are expected to operate.These include assumptions or forecasts of the future and known conditions that will affect the operations of plans. Forecasting means making assumptions about future.
VALUES AND AREAS OF FORECASTING This compels thinking ahead, looking to the future, and providing for it. Discover areas where necessary control is lacking. Participation throughout the organization helps to unify and coordinate plans Areas for forecasting include economic, social, political/legal and technical.

Types of Premises
External premises: The external environment constituting of economic, political,legal, technological, sociocultural & competitive factors which are not under direct control of org & provide threats and oppertunities. Internal premises: It is related to the internal factors of the org like org. structure,mgt. systems which are the strengths or weakness of the org.

Tangible:
can be expressed in quantitative terms

Intangible premises:
cannot be expressed in quantity like company image Controlable & uncontrolable premises

Forecasting
Process of estimating the relevant events of the future based on the analysis of past and present
importance Promotion of org Essential for planning limitations Based on assumptions Merely trends based on past & present Timely & costly

Provides oppertinities for coordination & control Reduce risk

Techniques of forecasting