UNIT 1 Strategy:

It is derived from the Greek word Strategos which is used in military terms. Definition: Strategy is a course of action through which an organisation relates itself with environment so as to achieve its objectives. Strategic Management: Strategic management is defined as set of decisions and actions resulting in formulation & implementation of strategies design to achieve the objectives of an organisation. Phases of Strategic Management: hey are four phases in strategic management they are!!!. ". #efining the business mission purpose & objectives $. %ormulating of strategies &. Implementing of strategies '. (valuation of strategies hese four phases se)uentially to each other & each phase provides a feedback to previous phase.
#efining the business mission purpose & objectives

%ormulating of
strategies

Implementing of strategies

(valuation of strategies

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First Phase: he first phase consists of establishing the strategic intent for the organisation. Strategic intent is the hirerachy of the objectives of organisation. It consists of vision* mission* objectives & business definition. Secon! Phase: he second phase is the formulation of strategies is concerned with the dividing of the strategic. his phase is also called strategic planning. In these phase strategic think* analyse & plan strategies. Thir! Phase: he third phase of implementation is the +utting in to action phase. he strategies that are formulated are implemented to a series of administrative and managerial action. Fo"rth Phase: he fourth phase is evaluation & control involves assessing how the strategies are formulated & how effectively they are implementing. (,amples of strategic phases involved in financing of a business* pricing of a product* diversification of organisation* restructuring of organisation. Strategic Management Process: It consists of following activities. A# Esta$%ishing the hirerachy of strategic Intent: ". -reating & communicating a vision. $. #esigning a mission statement &. #efining the business '. .dopting the business model /. Setting objectives B# Form"%ating of Strategies:
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". +erforming environmental appraisal $. #oing organi0ational appraisal &. %ormulating corporate level strategies '. %ormulating business level strategies /. 1ndertaking strategic analysis 2. (,cersing strategic choice 3. +reparing strategic plan

C# Im&%ementing of strategies: ". .ctivating strategies $. #esigning the structure* system & process &. 4anaging behavioural implementation '. 4anaging function implementation /. 5perationalising strategies D# Performing strategic e'a%"ation ( contro%: ". +erforming strategic evaluation $. (,cersing strategic control reformulating strategies B"siness Po%icy: (very business organisation makes $ sets of decisions. ". #ecision relates to functional areas such as production* marketing* finance* personal. $. Integrated decision for the whole organisation after taking all the functional areas in to a count such as mergers* ac)uisitions etc. &. 6here as functional areas decisions may be both long term & short term but where as business policy decisions is always long term decisions. 7usiness policy decisions are usually taken by op management.
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'. 7usiness policy has also been used in the past for corporate planning* strategic planning* management planning & for strategic management. /. 7usiness policy is hence defined as the study of the functions & responsibilities of op 4anagement. he crucial problems that effect success in the total enterprise and the decisions that are determined the direction of the organisation & shape its future. 7usiness policy is also concerned with he mobili0ation of resources for the attainment of goals in the face of completion. Characteristics of B"siness Po%icy: ". It is concerned with goals & objectives which affect the success of total enterprise. $. It is concerned with the study of functions & responsibilities of senior management. &. It deals with future course of action. '. o reali0e its goals & objectives.

B"siness &o%icy An Integrate! a&&roach: 7usiness policy focuses on strategic planning & strategic management. Its elements are ". 4ission* objectives* & goals $. (nvironmental .nalysis &. Strategic alternatives '. Swot analysis /. Strategic analysis 2. Strategic implementation 3. Strategic evaluation Si, major operation are to be integrated into the business policy process. hey are ". +roduction
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$. 4arketing &. %inance '. +ersonal /. 8 & # 2. 9egal Pro!"ction: he production department will address the )uestions relating to si0e of production )uality of the product to consumer e,pectation. Mar)eting: he marketing department will highlight the capabilities & limitations of the product promotion. +hysical distribution & personal etc. Finance: he finance department is responsible for both short term & long term financers at competitive costs return on investments.

*esearch ( De'e%o&ment: 8&# is nerves system of the organisation. It plays vital role in translation vision in to reality. +ega%: he legal department should answer the )uestions relating to patent rights & liabilities. Persona%: +ersonal is most crucial component of the organisation. It is involved in all functional areas. It is concerned with selecting the best people. Satisfying them through motivation & training. Im&ortance :
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 7usiness policy is a course of study. 1nderstanding & scanning of environment. (mphasis on social responsibilities & ethical aspects on the business. 1nderstanding of interpersonal & intrapersonal & organisation level development. 7usiness policy course provides the knowledge and content based to people & enterprise. no,%e!ge: :nowledge is needed to decision in functional areas. (nvironment obtaining within or outside the organisation. It knows the strengths & weaknesses of organisation. Identifying the alternative e,pansion mergers etc. .naly0ing alternatives -hanges in the organi0ational structure. (valuation & control. Nat"re ( Sco&e: ;ature & Scope of business policy may be judge in relation to the following characteristics. It deals with future perspective of business. <ital role of top management. (mphasis on research & development. Greater involvement of e,perts. 7usiness policy is used to achieve long term goals & objectives once the goal has been indentified they are e,ecuted by operational mangers. 5perational managers puts additional responsibility on strategic manager to monitor and evaluate the performance in the reali0ation of goals. Goals & objectives are adjusted according to the changes in the environment. 7usiness policy is formulated by top management comprising of board of directors & managing directors. (,perts are back bone of effective business policy.
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(,perts are needed to advised & assessed top management to take important role at planning* e,ecution* evaluation & control levels. P"r&ose of $"siness &o%icy: he main purpose of business policy are :nowledge generation Skill creation .ttitudinal changes to cope with business situations (very business practicing business policy to achieve long term goals & objectives of the organisation which has to generate fresh knowledge through 8&# and with practice. 8esearch is going on in every functional area such as production* marketing* finance & personal. 9ot of research is under taken to improve operating efficiency of business enterprises. In these process lot of data & knowledge is generated. 6hich is not only useful to the organi0ation but also to the outside work. :nowledge is contributed by most functional department through investigations* group discussions* training programmes like sensitivity training* brain stroming sections etc. skills are re)uired through ake decisions

+erforming the jobs Improving the process .nd to make the organisation effective 7usiness policy helps in the development of analytical ability* the ability to apply theory in the practice improved mental ability & skill to find solutions for the comple, problems. Skills like technical skills* human skills* conceptual skills.

Benefits of $"siness &o%icy: 7usiness policy has created many benefits to the organisation in the modern times.
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 #etermine the corporate policies -o=ordination of finance* production and distribution 1ltimate control of e,ecutive Financia% Strengths: >igher performance firms resort to systematic planning to prepare them selves for future fluctuations in e,ternal & internal environment. 4ost of the business failures like li)uidation on be avoided through business policy planning. Non-financia% $enefits: It allows for identification e,ploitation of opportunities. It provides objectives view of management problems. 8epresents the frame work for improve coordination & control of activities. 4inimi0es the effect of adverse conditions. It allows major decisions to support established objectives. It allows effective allocation of time & resources. (ncouragement for forward planning. It encourages favourable attitude towards changes.

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