Business Policy and Strategic

Management
 Evolution of Strategy and Business
Policy
• Harvard Business School introducing
integrative course
• Gordon and Howell Report
• Pierson report
• Association to Advance Collegiate School of
Business (AACSB) initiative
Evolutionary Phases of Business Policy

• Adhocism Policy -1930

• Planned Policy- 1940
• Concept of Strategy-1960
• Strategic management -current
 Nature of Business Policy
• Study of Responsibilities and Function of
Senior Management
• Determination of future course of action
• Statement of Purpose (SOP) and Identification
of Need
• Mobilization of resource
 Importance of Business Policy
• Business environment
• Organizational Environment
• Personal Development
 Purpose of Business Policy
• Integration of Functional Knowledge
• Adoption of generalist approach for problem
solving
• Understanding the intra-oragnisational
linkages
 Objective of Business Policy
• Knowledge
– Environment
– Implementation
– Experience
Skills
 Evolution of strategy

• Greek word-Strategos: art of generalship

• Art of war by SunTzu
• HBS model elucidates "strategy" as a systematic
roadmap of purposes and policies defining the
company and its business.
• Bruce Henderson, founder of Boston Consulting
Group, wrote that Strategy was a deliberate
search for a plan of action to develop a business’s
competitive advantage and compound it
(Henderson, 1989)
 Evolution of strategy
contd…
• Quinn,1980 and Davies,2000 paint strategy as
a design and plan of activities taken up by
company to achieve set target. It is a design or
plan to define policy of company and sets the
parameters within which it intends to achieve
its purpose. It is also the pattern that
integrates an organisation’s major goals,
policies, and action sequences into a cohesive
whole (Quinn, 1980).
 Strategic Management
• A Stream of decisions and action which leads to
the development of an effective strategy to
achieve objectives,( Glueck)
• Harrison and John- the process through which
organization analyze and learn from their internal
and external environments, establishes strategic
direction, create strategies that are intended to
achieve goals , and execute strategies , all in an
effort to satisfy key organizational stakeholders
Elements of Strategic Management
• Decision Making
• Formulation of Strategy
• Pronunciation of Managerial responsibilities
 Phases in strategic Management
• Strategic Intent
– Painting Vision
– Fashioning Mission
– Defining business
– Setting objectives

• Formulation of Strategies
– Environment appraisal
– Organisational appraisal
– Mooting corporate and business strategy
– Strategic analysis
– Strategic choice
– Formulating strategies
– Preparing strategic plan
 Phases in strategic Management
contd…
• Implementation of strategies
– Activating strategy
• Project
• Procedural implementation
• Resource Allocation
– Structural Implementation
– Behavioural Implementation
• Leadership
• Corporate culture
• Politics and Power
• CSR
– Functional and Operational Implementation
• Strategic Evaluation
• Strategic control
Strategic Management Model
 Scope of strategy
• product-market scope : Product and market
• growth vector: direction
• competitive advantage : How to better than
rival
• Synergy creation: common string
 Mintzberg’s view
1. Strategy as a Plan:- this is regarded as a
consciously intended course of action.
2. Strategy as a Ploy:- this is regarded as a specific
maneuver intended to outwit a competitor.
3. Strategy as a Pattern:- this is regarded as
consistency in behaviour whether intended or not.
4. Strategy as a Position:- this is regarded as a
means of locating an organisation in an
environment.
5. Strategy as a Perspective:- this is regarded as an
ingrained way of perceiving the world.
 Deliberate versus Emergent Strategies

Sustained
Realized Superior
Unrealized Strategy Performance
Strategy

Emergent Strategy

Adapted from: Mintzberg, H. “The Strategy Concept I: Five Ps for Strategy” California Management Review. Volume 30
Number1, Fall 1987.
Strategy formulation as a left-brain,
right-brain, or group process

Is (or should) the process of strategy

formation (be) essentially analytical
and rational or intuitive and synthetic?
Strategy formulation seldom involves a
single actor, to what extent do group
dynamics and politics play a role in
real-life strategy formulation?
 Andrews’ Strategy Framework
Environmental
Conditions Distinctive
and Trends Competence

Economic Capabilities:
Technical Financial
Physical Managerial
Political Consideration of Functional
Social all combinations Organizational
Reputation
Community History
Nation
World Corporate
Evaluation to determine Resources
best match of
opportunity and resources
As extending or
constraining
Opportunities opportunity
and Risks
Choice of Products Identification of
Identification and Markets strengths and
Inquiry weaknesses
Assessment of Risk Economic Strategy
Programs for
increasing
capability

Source: Kenneth R. Andrews, The Concept of Corporate Strategy, 1971

Rajesh Tripathi 19
McKinsey’s 7s Model
 Levels of strategy
• Corporate
• SBU
• Functional
Level of strategy contd.
Corpor
ate

SBU SBU SBU

Marketi Operati Person

Finance
ng ons nel
Issues in Strategic decision making
• Criteria
– Maximization
– Satisficing
– Incrementalism
• Rationality
• Creativity
• Variability
• Personal impact
• Individual versus group
 Schools of thoughts on strategy
• Design: process of conception
• Planning: intended plan divided into sub strategies
• Positioning: Analytical
• Entrepreneurial: Visionary
• Cognitive: mental
• Learning : Pattern learned through informal ways
• Power: Negotiation
• Cultural: Collective
• Environmental: Reactive
• Configuration : Transformative
 Pitfalls in Strategy
• Prior Hypothesis
• Representativeness
• Illusion of Control
• Escalating Commitment
 Techniques to improve strategy
decision making
• Devil’s Advocate
• Dialectic Inquiry