BUSINESS POLICY AND

STRATEGY

UNIT 1
 BUSINESS POLICY

• They are the guidelines develop by an organization to governs its

action. They redefines the limits within which decisions must be made,
it also deals with accusations of resources with which organizational
goals can be achieved. It also study of roles and responsibilities of top
level management. The significant issues affecting organization
success and the decisions affecting organization in the long term.
 BUSINESS STRATEGY

• It’s the tactical course of action which is design to achieve long term
objectives. It’s the art and science of planning and material resources
for the most efficient and effective use in changing environment.
• Strategy of a business enterprise consists of what mgt decides about
the future directions and scope of the business it entails managerial
choice among alternative action programs, competitive move and
different approaches to achieve enterprise objectives.
• It also has long term implications it framed by top mgt in an
organization and other levels of mgt as well.
• In short it may be called as the game plan of the mgt.
 FEATURES
BUSINESS STRATEGY
BUSINESS POLICY i. Allocate resources
i. Specific ii. Long term-short term orientation
ii. Clear iii. Single use plan
iii. Reliable/uniform iv. Pervasive
iv. Appropriate v. Coordinate internal/external
v. Simple environment of organization.
vi. Inclusive or comprehensive vi. Future oriented
vii. Flexible vii. Helps to achieve pre determined
objectives.
viii. Stable
viii. It has direction & scope
ix. On going projects
x. Specific
 FORECASTING

• It’s the process of making prediction of future based on past and

present data and most commonly by analysis of trends. Risk and
uncertainty are central are central to forecast it is generally considered
as a good practice to indicate the degree of uncertainty attaching to
forecast the data must be up-to-date for the forecast to be as accurate
as possible. It can be short term (less than 3 months),intermittent (form
3 months to 2 years) or long term (greater than or equal to 2 years).
 FEATURES

i. It is concerned with future events.

ii. It is necessary for planning process.
iii. It is guessing of future events.
iv. Personal observation also helps forecasting.
v. Forecasting has errors
 LONG RANGE PLANNING

• It’s the process of developing a long run plan that is to be accomplish

over a period of several years. It assumes that that current knowledge
about future condition is sufficiently reliable.
• For instance it involves major capital expenditure such as purchasing
equipment and facilities etc.
• Long term planning begins with current status and lays down a path to
meet the estimated future needs.
 STRATEGIC PLANNING

• Its a systematic process of envisioning a desired future and translating

this vision into broadly defines goals or objectives and a sequence of
step to achieve them.
• Therefore it defines the organizational where it wants to go and how
its going to be there, it also provide clarity internally/externally and
supports accountability it also serves to guide day-to-day activities
now it begins with the desired end and works backward to the current
status.
 IMPORTANCE OF BP

i. It acts as a reference material for all the employees.

ii. It helps in finding out a balance btw companies need & needs of
their employees.
iii. Better image of roles and responsibilities.
iv. It’s the blue print which defines the performance level from the
employees.
v. It also defines liability and responsibility structure.
vi. It also defines company’s objectives.
vii. It also states the amount of authority, it acts as the main foundation
for evaluation and determines the quality of actions and decisions to
be taken by executives.
STRATEGIC MGT PROCESS (SMP)
 STEP 1 STRATEGIC INTENT

i. Vision- Vision is the statement that express organization’s

ultimate long-run objectives.
ii. Mission- It tells who we are and what we do as well as what
we’d like to become.
iii. Objectives- These are the end results of planned activity that
state what is to be accomplished by when. Objectives state
specifically how the goals shall be achieved.
 STEP 2 STRATEGY FORMULATION

• Strategy formulation refers to the process of choosing the most

appropriate course of action, appraisal of organization and
environmental is done with the help of SWOT analysis.
i. Environmental Appraisal- The environment of any organization is
dynamic and consists of External & Internal Environment. The
external environment includes all the factor outside the organization
which provide opportunities or pose threat to the organization. The
internal environment refers to all the factor within an organization
which impart strengths or cause weaknesses of a strategic nature.
ii. Organizational Appraisal- It is the process of observing an
organizational internal environment to identify the strength &
weaknesses that may influence the organization’s ability to achieve
goals.
 STEP 3 STRATEGY IMPLIMENTATION

• Strategy implementation is the action stage of strategic management.

i. Designing structure, process & system- It includes the making of
decisions with regard to organizational structure, developing
budgets, programs etc.
ii. Functional Implementation- It carried functional plan & policies in
five areas- marketing, finance, operation, personnel, and information
management.
iii. Behavioral Implementation- It denotes organizing employees and
managers to put and formulate strategies into action.
iv. Operationalizing strategy- It includes establishing annual objectives,
policies and allocating resources.
 STEP 4 EVALUATION CONTROL

i. Strategy Evaluation- It make sure that the organizational

strategy as well as it’s implementation meets the organizational
objectives means What they have planned, how they have
implemented, weather it is in the right direction or not ?
ii. Strategic Control- In this step the organizations set control
standards, measure performance to take corrective actions and
review the policies if needed.
THANK YOU