STRATIGIC MANAGEMENT

Business Policy, Corporate Strategy and Basic concept of SM

Presented By: Nagendra Maurya

BUSINESS POLICY

• Business Policy defines the scope or spheres within which decisions can be taken by the subordinates in an organization. It permits the lower level management to deal with the problems and issues without consulting top level management every time for decisions. Business policies are the guidelines developed by an organization to govern its actions. They define the limits within which decisions must be made.

• Business policy also deals with acquisition of resources with which organizational goals can be achieved. Business policy is the study of the roles and responsibilities of top level management, the significant issues affecting organizational success and the decisions affecting organization in long-run.

Hierarchy of Business Policy

Corporate Strategy

• The overall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals.

• Corporate Strategy is concerned with how companies, like Disney, create value across different businesses. It takes as given the RC lessons on competitive strategy, and asks how the corporation can add value over and above that which a business unit creates by itself. This requires the corporation to invest in a valuable set of resources, craft the business portfolio, and design the organization structure, systems and corporate functions to share activities or transfer skills across businesses.

Basic Concept of SM

VISION It is at the top in the hierarchy of strategic intent. It is what the

firm would ultimately like to become. A few definitions are as follows:

• KOTTER description of something (an organization, corporate

culture, a business, a technology, an activity) in the future.

• MILLER and DESS defined vision as the “category of intentions that are broad, all inclusive and forward thinking”

Mision

• HYNGER and Wheelen “ purpose or reason for the organization’s existence.

• DAVID F. Harvey states “ A mission provides the basis of awareness of a sense of purpose, the competitive environment, degree to which the firm’s mission fits its capabilities and the opportunities which the government offers.

• Thompson states mission as the “ essential purpose of the organization, concerning particularly why it is in existence, the nature of the business it is in, and the customers it seeks to serve and satisfy.