SUBJECT : BUSINESS POLICY

THE ROLE OF THE TOP MANAGEMENT AND THE IMPORTANCE OF COMPANY POLICY

TOP MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING POLICIES, GUIDELINES AND STRATEGIC

OBJECTIVES, AS WELL AS FOR PROVIDING LEADERSHIP AND DIRECTION FOR QUALITY MANAGEMENT
WITHIN THE ORGANIZATION. IT SHOULD ALSO ESTABLISH THOSE RESPONSIBLE AND HOLD THEM
ACCOUNTABLE FOR A WIDE VARIETY OF MANAGEMENT SYSTEM PROCESSES
The total environment of the firm
• Definition of Business Environment is sum or collection of all internal and external factors such as
employees, customers needs and expectations, supply and demand, management, clients,
suppliers, owners, activities by government, innovation in technology, social trends, market trends,
economic changes
Industry analysis – positioning the firm in a specific environment
• Industry analysis reviews the economic, political and market factors that influence the way the
industry develops. Major factors can include the power manipulated by suppliers and buyers,
the condition of competitors, and the possibility of new market entrants.
Strategic Leadership And The Industry Environment Analysis

1. Reading trade journals.

2. Attending trade shows.

3. Attending industry networking functions.

4. Open conversations with your. Customers and their competitors. Suppliers and their competitors.
Participation on industry boards. Research on the internet.
Value chain
• Value chain analysis is a means of evaluating each of the activities in a company's value chain to
understand where opportunities for improvement lie. Conducting a value chain analysis prompts
you to consider how each step adds or subtracts value from your final product or service
Corporate strategy and long-range planning
• Long-range planning is usually considered to assume present knowledge about future conditions.
Strategic planning, however, assumes that your organization must be quick to
Key aspects of corporate organization, operating policies and control
• The major characteristics of a corporation are separate legal existence, limited liability of
stockholders, transferable ownership rights, ability to acquire capital, continuous life,
corporation management, government regulations, and additional taxes.
Operating Policies

 promote delegation of authority.

 promote consistency and reduce arbitrary bases for decisions.

 support continuity.

 increase the ability of the different levels of management to better cooperate with each other.
Elements of a good Control System

 1) Feedback.
 2) Control must be objective.
 3) Prompt reporting of deviations.
 4) Control should be forward-looking.
 5) Flexible controls.
 6) Hierarchical suitability.
 7) Economical control.
 8) Strategic control points.
General policies of administration (International resistance Company Philadelphia, Pennsylvania)
• Administrative policies inform employees of the office's rules, the business's expectations and
values, and HR-related issues such as paid time off and health insurance eligibility.
Administrative policies must cover a wide array of needs within the business and serve as a
guide for how it operates.
Categories of functional operating policies
• Functional Policies are prepared for different functions such as production, marketing, finance,
personnel etc. Functional policies are decided keeping in view the organizational policies. These
policies help in coordination of efforts of different people. These are those policies which are
initiated by the managers.
1. The strategy of using foreign investors and licensees: A Philippine perspective
• POTENTIAL BENEFITS THAT CAN BE DERIVED FROM COOPERATION WITH A FOREIGN FIRM

Company Goals: POTENTIAL BENEFITS Access to the patent rights or manufacturing rights
Trademark Technical service agreement Management contract Access to foreign marketing
channels Additional capital investment Protection from nationalization Invest in a foreign joint
venture.
• Access to the patent rights or manufacturing rights The Philippine company may want access to
the patent rights or manufacturing rights for certain types of product.
A PROFILE OF PHILIPPINE MANAGEMENT
• Management style tends towards the paternalistic as is often found in strongly hierarchical cultures.
• However, managers need to be aware of certain strong Filipino characteristics, which underpin personal relationships within the
country.
• Firstly, people are extremely careful to ensure that others do not suffer embarrassment or any sense of shame (hiya) as a result of
their own actions or their inability to meet the expectations of others. It is considered to be very bad behaviour to criticise another in
public, as this is the greatest insult that can be given. To be openly criticised in public results in a loss of self-esteem and personal
dignity. Any attack on an individual’s self-esteem may have to be revenged.
• Therefore, managers are keen to treat subordinates with respect whilst, at the same time, maintaining the dignity of the position of
boss. Instructions will be given clearly and precisely and subordinates will be expected to follow those instructions with little or no
discussion.
• Secondly, relationship bonds run deep in Filipino culture and the manager expects loyalty. In return for this loyalty the boss will look
after the interests of those subordinates. It is very much a reciprocal arrangement.
Corporate Strategy

• Corporate strategy is a unique plan or framework that is long-term in nature, designed with an
objective to gain a competitive advantage over other market participants while delivering both on
customer/client and stakeholder promises (i.e. shareholder value).
 CASE STUDY 1: GENEROSO PHARMACEUTICALS & CHEMICALS,
INC.
I. Summary

• Mr. David Generoso is the President of Generoso Pharmaceuticals and Chemicals Inc. He married Elizabeth Reyes, a nurse and a certified
world accountant and they have been blessed with 5 children. After 5 years of combing the Central Luzon region, in 1978, David established a
company called Generoso Pharmaceuticals and Chemicals (GPC) with Elizabeth and a business associate Mr. Rafael Buenaventura, the team
do up shop at the Generoso residence in Tarlac. An initial capitalization of P300 started the business with a dozen bottles from the
pharmaceutical firms which they had been machine accessible with before. David initial success in his attempt on manufacturing chemicals
on veterinary medicine encouraged him to start his own specify of pharmaceutical in 1983. There is a fast turnover of participants in the
industry. It is very difficult to expand. Small companies always constantly struggle the stigma of being a local company with inferior quality.
Small manufacturers tend to cost cut in production costs in the absence of economies of scale. GPC suffers in their costly promotion expense
with buyers including doctors, pharmacists and hospitals. In 1988, the American principal offered his plans to David of GPC engaging in the
contract manufacturing of pharmaceutical products for both the domestic and export markets. The proposed project was to compound
locally all products that it will manufacture and sell, importing only the active ingredients and bulk materials that it is unable to produce
locally. The American principal dropped his plans to David which came in time with the Generics bill. The only thing that made David sad is
that they need to hire a German expatriate to oversee the problem and the additional budget for the project. No Filipino chemist who
specialize the technology of the project could qualify for GPC to remain competitive. That is why they need to hire German expatriate to
oversee the project. The lack of qualified chemists is an industry problem for which GPC has not been spared. The company was now a going
concern valued at P40 million. The proposed project would cost approximately P135 million.
II. Statement of the Problem
The problem on this case study is on how the Generoso Pharmaceuticals & Chemicals, Inc. (GPC), determine the possible actions
should take in order to stay in competition, where to find additional capital, on how to hire German emigrant to oversee the project
and how to produce such amounts of products needed in the local and international market at the minimum of cost.

III. Alternative Courses of Action

• In the local market, the project will position itself as a specialty pharmaceutical manufacturer which can manufacture products not currently available from the industry’s contract manufacturers.

• The need to hire a German expatriate to oversee the problem and the additional budget for the project. No Filipino chemist who specialize the technology of the project could qualify for GPC to
remain competitive

• The company was now a going concern valued at P40 million. The proposed project would cost approximately P135 million.
• SWOT Analysis

Strength
• Liquidity of the Company A wide supply for raw materials Ready for expansion Optimal and
better product quality A good leader A conservative cash management Reputation of good
customer service A good relationship of partnerships with suppliers and marketing allies.
Weakness
• Less quality of their products Expansions are too expensive Lack of additional capital and
financial stability Poor management Capital constraints to finance future projects
• SWOT Analysis
Opportunities
• American principal proposed project to GPC
• Generic Bill Act advantage to the firm
• Business expansion
• Ability to grow rapidly in the business industry
• Opening to exploit emerging new technologies
Threats
• Risky project because it’s too costly
• Fast turnover of participants and competitors in the industry
• Entry and increasing rivalry of new competitors
• Costly regulatory requirements
• Stability of the economy
• IV. Recommendation

• We, therefore recommend that the best solution of this case study is to accept the proposal of
American principal of the project for Generoso Pharmaceuticals & Chemicals, Inc. in order for them
to stay in competition and reputation and to be able to stand and grow in the business industry.
The company can borrow financial from creditors or other financial intermediaries that will provide
the needed budget. The company will hire experienced German Chemists, who can make the
company stays in the competition and can achieved high quality of products.
CASE II: BUSINESS WORLD INDUSTRY REPORT:
PHARMACEUTICALS

• An efficient distribution is the lifeblood of a business, it can radically bolster a vendor financial performance and stand
between success and marginalization. It can be achieved only by promoting inclusive leadership, cross-functional
collaboration, lateral thinking and data-driven decision making. The corporate culture is still one of the core predictors of
a successful transformation initiative. For this reason, we need to foster an environment where all stakeholders are
incentivized to bring new ideas, develop sound business judgment, take risks (especially on reversible decisions), adopt a
robust and action-oriented decision-making approach and privilege speed to bureaucracy. Opinions might differ on
several topics but the organization should be perfectly aligned on values, vision and business goals. The goal, let’s not
forget, is to create an environment where suppliers and their value-chain partners can thrive, where a win-win approach
can create prospects for growth and profitability for all parties. Well managed Distribution Channels not only improve
the short-term financial performance, by reducing costs and increasing sales but also play a crucial role in shaping a
dynamic and well-functioning ecosystem. They lead to an enhanced competitive position, an effective execution of the
go-to-market plan, an efficient allocation and use of resources and more enlightened and engaged teams.
CASE STUDY 2: SAN MIGUEL CORPORATION AND A.
SORIANO CORPORATION
• San Miguel Corporation and A. Soriano Corporation Background of the Study In the early 1980 the San
Miguel Corporation (SMC) and A. Soriano Corporation (ANSCOR) Group of Companies, under the leadership
of Andres Soriano, Jr. addressed a long felt need for an effective formal planning system for the two
companies. According to Soriano, the companies had developed their budgeting and long-ranged planning
systems several years earlier but, despite the many advantages these gave them they still were not satisfied
with their ability to respond to the rapid changes in the environment around them. The therefore, search
for a process that would enable them to upgrade their planning capability. In November 1982, Dr. Lorange
addressed a joint dinner-meeting of SMC and ANSCOR Group and shares his insights on the implementation
of the strategic planning of the two companies. Following are excerpts from an article prepared by Lorange
during the meeting. Time Frame 1982 The time of Marcos regime. In which the control of the ownership
has been turned political. Rapid changes to environment merely occurred.
• Viewpoint
• A. Andres Soriano He has fully supported the Strategic Plan and encourages employees to
participate in the implementation of the plan. He was convinced and believed that the Strategic
Plan to be implemented will largely help the company to solve its problem regarding
environmental changes and the competition.
• B. Dr. Peter Lorange Dr. Peter Lorange was glad about how the company responds to the
Strategic Plan he proposed. The Strategic Plan became successful according to him because it
gathered support not only from the Top Management but also from the lower level of
management. Statement of the Problem The company implemented a new strategic planning
to answer the problem. The problem is how the company asses the success of the strategic plan
in order to develop the implemented system.
CASE STUDY 3: HENRY SY AND JOHN GOKONGWEI

 A case study about Henry Sys and John Koenig ay Danna-palatal A case study about Henry Sys and John Seignior’s success. Case
Background Henry Sys and John Koenig were both born very poor. This situation, one may conclude, served as a blessing for the
two most celebrated entrepreneurs in the Philippines on their Journey to wealth. Shoeless and with only clothes on his back,
Henry Sys started his entrepreneurial career by tending at his father’s sari-sari store n Cube. But Henry dreamed of something big
for his future.

 Headed of having his own business to provide him enough money.

 In 1945, he put up a small shoe store in Carried, Quip. From then on, that humble shoe store became Shoemaker Commonly
known as”SW). Since there was a constant pouring of capital back into this venture, he then expanded into textiles household
goods and was then opening outlets to selected parts of the country, centering at thunderstorms. On the other hand, John Go
(“kingwood” meaning “bright” was suffixed later to his name later)started his road to success by hawking wares in Cube. This led
to his dream of building his own retailing kingdom.
 He first started by trading and manufacturing Ron starch in 1955 and has soon expanded into supplying groceries and animal
foodstuffs in bulk. Later, he ventured also in textiles, banking and realest, hotels and shopping complex developments. The
abrupt expansion of the enterprises of the two business tycoons marked the start off period of transition for the business
empire built over the past three decades by these two businessmen. Since then, Henry Sys has always been proud that his SMS
outlets had been gradually upgrading larger commercial complexes without drawing on bank credits.

 John kingies also managed to put projects without having major borrowings. He had only relied to the big sums of cash
Universal Reapportioning and Commonwealth s Corporation were generating and from the support of his relatives associates.

 Strengths 30th Henry Sys and John Koenig are health conscious. They value health more than they value their ventures. Henry
engaged not in any forms of vices while John has already quitted smoking. Being Filipino-Chinese, both have good business
strategies (I. E. , no major borrowing), as one may identify this particular characteristic f their race.
 This helped them put up projects without relying to bank credits. It is important in a business to lesser your liabilities and increase
your assets. As for their businesses, the “innovation technique” they presented towards their shopping malls for example, attract
people and may somehow feel that they, the customers, are Just step behind their needs and wants. Koenig History Universal Robins
Corporation (ARC) traces its beginnings all the way back to 1954. Onion Koenig was doing very well then as a trader/importer.

 He had learned the read when his tanner died bettor the war, and and worked nard through the war and postwar years to prosper.
However, while he thrived, he took a long hard look at his company, and correctly predicted that trading would remain a low-margin
business. On the other hand, a successful manufacturer controlling its own production and distribution would command more
profitable margins. Mr.. John decided to construct a corn milling plant to produce glucose and cornstarch, Universal Corn Products
(CUP), the first linchpin of the company that would become he ARC we know today.

• For a time, business was good. However, Mr.. John was still looking ahead, working with an eye towards the future. While the business
was doing ‘err well, it was producing essentially a commodity, which a customer could easily access elsewhere.
 To stay ahead in the game, Mr. John had to diversify by producing and marketing his own branded consumer foods, similar to the
multinational companies in the country like Nestle and Procter & Gamble. In a sense, he wanted to put up the first ‘local’ NC, borne out of
their best practices. Thus, in 1961, Consolidated Food Corporation was born.

 Their first ‘home run’ product was Blend 45, the first locally-manufactured coffee blend, dubbed as the “Piano coffee”. This became the
largest-selling coffee brand in the market, even beating market leaders Cafe© Purr and Unsafe. After coffee came chocolates. Nips, a
panned chocolate was staple of Filipino childhood. In 1963, Robins Farms started operations, beginning Ninth poultry products. This was
also the beginning of the vertical integration of the Koenig businesses, as the farms would be able to purchase feeds from CUP in he future.

 Later that decade, Robotics Laboratories would be put up, to cater to the determinate needs of the farms businesses. Robins Farms
expanded as it entered the hogs business in the latter part of the ass. 1966 saw the establishment of Universal Robins Corporation, which
pioneered the salty snacks industry through Chic Curls, Choppy, and Potato Chips, under the “Jack ‘n Jill” brand. Other snack products would
follow over the years, as the company successfully introduced market leaders like Pretzels, Opiates, and Max. The coming decades saw
more acquisitions and expansion.
 In the early sass, the family entered the commodities business through the formation of Continental Milling Corporation, for
flour milling and production. Rhea late sass brought the acquisition of three sugar mills and refineries, under ARC Sugar. These
two businesses provided stable cash flows, and allowed for further derelict integration in the supply chain, to help ARC weather
any volatility in the cyclical commodities markets. In line with this strategy, the late sass saw the entry of ARC into the plastics
business, through ARC Packaging.

 While the businesses became more diversified, the companies were slowly integrated in order to streamline and minimize costs.
In 2005, the present structure of the group was completed.

 All the different companies are now organized under the Universal Robins Corporation umbrella, divided into 3 focused groups:
the Branded Consumer Group, comprised of BAG Domestic (including packaging) and International the Agro-Industrial group,
comprised of Universal Corn Products, Robins Farms, and Robotics and the Commodities group, with the Sugar and Flour
divisions
CASE STUDY 4 : PHILIPPINE JOURNALISTS, INC.
• 1. Time Context – October 20, 1972 (History and start of the experience of the company under martial law)
• 2. View Point – Mr. Eduardo B. Olaguer (Chairman of the Board and CEO)
• 3. Major Policy Statement - The Philippine Journalist Inc., is a publishing company of group of journal such as People’s journal, Journal Tonight etc. it is
known for local and international standards in publishing journals, and aims to equal other company not only locally but also to other parts of the
world by the following years to come.
• 4. Current Operational Policies
• a. Management – As what the case shows, Poor management that resulted in many problems for the company especially in the event of the Martial
Law. b. Marketing – The PJI is a company known for publishing different kinds of journal, which is why advertising is not a big issue that need to be
discussed. Well in their case, because of the martial law perhaps this was the greatest hindrance to the future plans of the company. c. Finance – From
the history of the company, it has shown the poor level of stocks of the company. This is mainly because of the Martial law that resulted to much more
problems such as: unavailability of stocks, no transfer of book and no stock certificates were issued at that time. d. Operations – The operations of the
business was normal ever since the martial law started. Publishing different journals not only locally but also internationally. e. Human resources – The
company shows basic information about the structure of a business enterprise that compose the top, middle management and the rank and file. 5.
Statement of the Problem – How will the PIJ resolve the DBP loan exposure and what are the steps to be undertaken to prevent things like this to
happen again?
• 6. Statement of Objectives

• a. Short-term objectives

• i. To be able to balance the assets of the company that will suffice to its liabilities

• ii. To solve the negative book value of some particular

• PJI Point of view

• We analyzed this case based on the point of view of the chairman of the board and chief executive officer of PJI that the privatization of the
company from the standpoint of the government economic recovery should enjoy priority over the recovery of sequestered shares as ill-gotten
wealth.

• Time Context

• As of March 31, 1988, the capital deficiency has been reduced to 92.7 million resulting from profitable operations and with a much improved
liquidity position despite the heavy interest burden on the DBP loans.
Case analysis

• The privatization of PJI is one of the highest priorities or it will mean a substantial addition to the
government and a further boost to the economic recovery program of the country indeed, it is
more urgent and deserves greater priority and attention then the recovery of the alleged ill-gotten
wealth of Benjamin Romualdez, who received directly and indirectly cash funds from PJI and the
prosecution of the former DBP governors who approved the questionable PJI loans to the damage
and prejudice of DBP and the National Government, all in violation of the anti-graft and corrupt
practices act.