RESPONSIBILITIES OF THE CHIEF EXECUTIVE

The chief executive of the firm is concerned primarily with six categories
of action.
1. He, is working closely with the board of directors, must elaborate the
major policies of the firm.
2. He, working closely with the board of directors and his top managers
must define the objectives of the firm.
3. He, working closely with his top managers must develop strategies and
long-range plan for achieving these objectives.
4. He must develop an organization which most efficiently carries out the
company’s strategic plan.
5. He, working closely with his top managers, must develop the operating
policies which ease the burden of decision-making to carry out the
plan.
6. He, depending upon his philosophy of management (degree of
decentralization of authority and responsibility), will also be involved in
controlling the operations of the firm and in problem solving.

DEFINITIONS
Major Policies – major policies (or “company” policies) deal with the
fundamental nature of the firm, with its identity and with the direction in which it is
expected to move. They provide a framework within which the objectives can be
established.
Objectives – the objectives or goals (these two terms are used
interchangeably) of a firm specify usually in quantitative terms (such as Peso,
percentages or time periods) where the firm is expected to be at some time in the
future.
Strategy – business strategy is the approach developed to achieve the
objectives, which have been defined.
Operating policies – policies are guide for decision –making. The
operating policies of the firm flow out of its objectives, its strategy and its
organization. The objectives plus policies define the character or personality of
the firm. They provide a framework within which management can make
decisions which are in themselves and are consistent with carrying out the
strategic plan and achieving the goals.

THE MAJOR POLICIES OF AN ENTERPRISE

Major policies deal with the fundamental nature of the firm, with its identity
and the direction in which it is expected to move.
1. Major policies are often in the form of a “statements of purpose”.
2. Another major policies of the company would be stated in terms of
“the products and (or) services the company will produce and
sell.”
3. A usual type of major policy is stated in terms of anticipated “position
within the firm’s industry.”
4. Another type of policy will concern the “geographic market” for the
product or service.
5. Major policies would also indicate the “product quality” for which the
company will be known.
6. Other policy involves “ownership.”