1. Discuss the concept of policy as distinguished from strategy.

Policy is a type of plan which involves a set of specific rules or

guidelines which directs the decision making of the organization. It is
usually formal or written. Meanwhile, strategy can be compared as the
management’s “game plan” which can be often confidential due to
competition in the business world. It implies actions, guides decision
making and provides the directions to be taken. Policies are
formulated by top level management while strategies are made by top
level management and middle level management. A policy is
developed in coherent with the duties and responsibilities of a certain
group or individual. For instance, students must abide the policies
that are solely applicable to them since it is not reasonable if they will
be forced to follow policies orginially implemented for the professors
in a university. However, strategies involves the organization as a
whole.

2. Briefly describe the context of strategic management.

Strategic Management involves a set of decisions and actions to be

taken by the management using the available resources of the
organization. This will direct the organization to a clearer vision in the
future. Moreover, it includes the formulation, implementation,
evaluation and control of strategies to achieve the mission and vision
of the firm. Due to the rapidly changing environment, it is also
important to note the analyzation of internal and external
environment of the organization to identify the possibility of threats
and opportunities for the firm.

*Mission and vision statement must be in the form of SMART –

Specific, Measurable, Attainable, Realistic and Resource-bound, Time-
bound.

3. Differentiate tactics from strategy.

Strategy Tactics
Purpose The purpose of the The purpose of
strategy is to provide tactics is to utilize
broader goals that the resources
will give a clearer available in the
future for the company to achieve
organization. the sub-goals which
support the
mission.
Duration Long-term in nature Short-term, flexibility
depends on the
circumstances
Level of Conduct Developed by top More related to lower
level management level of management
Regularity Formulation of Tactics are
strategy is both determined on a
continuous and periodic cycle with
irregular. fixed time schedule
(e. g., budget).

Subjective Values Strategic decision Tactical decisions are

making is more less important for
heavily weighted with managers.
subjective values of
managers.
Range of Alternatives Possible range of Tactical decision
alternatives from making involves
which management lesser range of
must choose is alternatives as
greater for strategic compared to
decision making. strategic.
Uncertainty More uncertainty in There’s less
the formulation and uncertainty than
implementation of strategic.
strategies.
Nature of Problems Unstructured Structured problems
problems and repetitive in
nature
Information needs Requires large Information needs
amount of depends heavily on
information for internally generated
formulation data
Detail Broad and few details More specific
Ease of Evaluation It may be hard to Measurement of
measure the effectiveness and
effectiveness of efficiency is much
strategies. easier for tactics.
Point of view Formulated from Developed from
corporate viewpoint functional point of
view
Importance Strategies are of the Tactics are
highest importance to considered less
an organization significant
4. Discuss the nature of strategic decisions.

Decisions that deals with long run future of the organization are
called strategic decisions. These are the decisions which involves the
firm’s strategy. Strategic decisions have a major impact on the
organization’s future. It can be an essential indicator of the success or
failure of the company. It has impacts on the future direction, scope
of activities and boundaries of the firm.

Strategic decisions must have the three essential characteristics

namely:

1. Rare. Strategic decisions are unusual and typically have no

precedent to follow
2. Consequential. Strategic decision should commit substantial
resources and demand a great deal of commitment from people
at all levels.
3. Directive. Strategic decisions set precedents for lesser decisions
and future actions throughout the organization.