BUSINESS POLICY &

STRATEGIC MANAGEMENT

Chapter 1
Introduction to Business
Policy & Strategic
Management

A Presentation
by
Why is the study of Strategic
Management as a separate
discipline necessary ??
 Learning Objectives
 Highlight the historical development of
strategic management and business
policy in the world and in India
 Discuss the likely future developments in
the field of strategic management and
business policy
 Explain the concept of strategy and its
limitations
 Describe the process of strategic
decision making
 Describe the strategic management
process
Evolution of strategic management
and business policy
 The genesis of strategic
management and business policy
 Evolution based on management
practices
 Historical perspective
 Pointers to the future
Hambrick and Fredrickson model of
strategic management
Internal and
External Strategic
Analysis
Internal and External
Strategic Analysis

Strategy:

Vision and Goals and Strategy: Implementation

Arenas
Arenas
Mission Vision and Objectives Vehicles
Vehicles Levers and
Implementation Levers
Goals and
Mission Objectives Differentiators
Differentiators Strategic
and Strategic
Staging
Staging
Economic logic
Leadership
Leadership

Economic logic

D. C. Hambrick & J. W. Fredrickson: “Are you sure you have a strategy?” (2001). Academy
of Management Executive Vol. 15, No. 4, pp. 48-59
 Definition of Business Policy
 Business policy, as defined by Christensen and others,
is "the study of the function and responsibilities of
senior management, the crucial problems that affect
success in the total enterprise, and the decisions that
determine the direction of the organisation and shape its
future. The problems of policy in business, like those of
policy in public affairs, have to do with the choice of
purposes, the moulding of organisational identity and
character, the continuous definition of what needs to be
done, and the mobilisation of resources for the
attainment of goals in the face of competition or adverse
circumstance”.
 “The concept of Strategy”
A strategy could be:
 plan or course of action or a set of decision rules making a
pattern or creating a common thread;
 the pattern or common thread related to the organisation's
activities which are derived from the policies, objectives
and goals;
 related to pursuing those activities which move an
organisation from its current position to a desired future
state;
 concerned with the resources necessary for implementing
a plan or following a course of action; and
 connected to the strategic positioning of a firm, making
trade-offs between its different activities, and creating a fit
among these activities.
 the planned or actual coordination of the firm's major
goals and actions, in time and space that continuously co-
align the firm with its environment.
 Levels at which strategy
operates
LEVELS OF MANAGEMENT LEVELS OF STRATEGY

Corporate
CORPORATE Office CORPORATE-LEVEL

SBU SBU SBU

SBU A B C BUSINESS-LEVEL

FUNCTIONAL

Finance Marketing Operations HRM Information

 Strategic decision-making
 Objectives to be achieved are
determined;
 Alternative ways of achieving the
objectives are identified;
 Each alternative is evaluated in
terms of its objective-achieving
ability; and
 The best alternative is chosen.
 Issues in strategic decision-
making
 Criteria for decision-making
 Rationality in decision-making
 Creativity in decision-making
 Variability in decision-making
 Person-related factors in decision-
making
 Individual versus group decision-
making.
Schools of thought on strategy
formation
 The prescriptive schools
 The descriptive schools
 The integrative school
 Definition of Strategic
management

“ Strategic management is
defined as the dynamic process
of formulation, implementation,
evaluation and control of
strategies to realise the
organization’s strategic intent.”
 Four phases in strategic
management

Establishment of
strategic Formulation of Implementation of Strategic
intent strategies strategies evaluation

Strategic Control
 Comprehensive model of
Strategic Management

Strategic Intent Strategy Formulation Strategy Strategic

Implementation
Evaluation
Vision Environmental
Mission Organisational Project
Appraisal Procedural
Business definition Resource allocation
Appraisal
Business model SWOT Analysis Structural
Objectives Corporate-level Strategies Behavioural
Business-level Strategies Functional &
Strategic analysis and choice Operational
Strategic plan

Strategic
Control
 Suggested Books

Strategic Management AC Hax & Majluf ,

PHI
Strategic Management & Business Policy
William F Glueck Tata McGraw Hill
Strategic Management & Business Policy
Azhar Kazmi Tata McGraw Hill