busi policy

8/3/2019 Busi Policy

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BUSINESS POLICY

As defined by the Christensen and others, Business

Policy is the Study of the functions and

responsibilities of Senior Management, the crucialproblems that affect success in the total enterprise,

and the decisions that determine the direction of

the organization and shape its future.


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The problems of policy in business, like those ofpolicy in public affairs, have to do with the choice

of purposes, the moulding of organizationalidentity and character, the continuous definition ofwhat needs to be done, and the mobilization ofresources for the attainment of goals in the face of

competition and adverse circumstances .


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Firstly, it is considered as the study of functions

and responsibilities of the senior management

related to those organizational problems which

affect the success of the total enterprise.

Secondly, it deals with the determination of the

future course of action that an organization has toadopt .

This definition is very comprehensive and covers many aspects

of business policy


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Thirdly, it involves choosing the purpose and

defining what needs to be done in order to mould

the character and identity of the organization.

Lastly, it is also concerned with the mobilization of

resources, which will help the organization to

achieve its goals.


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Senior Management consists of those managers

who are primarily responsible for long term

decisions and who carry designations such as,

CEO , President , GM, ED. They are not

concerned with day to day problems but are

expected to devote their time and energy to

thinking and deciding about the future course of

action,evolving a business policy which results in a

long term plan to be followed by the organisation.


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While deciding the future course of action ,

senior management has a mental picture of the

type of the organization they want theircompany to become .

While deciding about a future course of action

sr. mgt. is confronted with a wide array of

possible decisions and actions.


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A choice has to be exercised on the basis of given

circumstances and which in the opinion of senior

management would lead the organization in a

specific direction. By moving in a predetermined

direction an organization can attain its planned

identity and character.


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Organizational decisions are not made in isolationand managerial actions cannot be taken without

providing the resources necessary for them.While

deciding about the future course of action, sr. mgt.,

concern themselves with the financial, material and

human resources that would be required for the

implementation of long term plans.

In these slides we have discussed Definition and

Nature of business Policy.


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The Importance of Business Policy

Business Policy is important as a course in the

management curriculum and as a component of

executive development programmes for middle

level managers who are preparing to move up to

Sr. Mgt. Level.

Study of business policy fulfills the needs ofmanagement students as well as those of middle

level managers.


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There are four areas where study of Business Policycan be very beneficial and thus establishes itsimportance:

For Learning the Course For Understanding the Business Environment

For Understanding the Organization For personal Development


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FOR LEARNING THE COURSE:

Business policy seeks to integrate the knowledge

and experience gained in various functional areas

of management.

It enables the learner to understand and make

some of the complex interaction that takes placebetween different functional areas.


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Business policy deals with the constraints and

complexities of real life businesses. In contrast the

functional area courses are based on a structured,specialised and well developed body of knowledge,

resulting from a simplification of the complex

overall tasks and responsibility of the management


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Business policy cuts across the narrow functional

boundaries and draws upon a variety of

resources-----other courses in managementcurriculam and a wide variety of disciplines, like

economics, sociology, psychology, political science

etc. In doing so,business policy offers a very broad

perspective to students.


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Business policy makes the study and practice ofmanagement more meaningfulas on can viewbusiness decision making in its proper perspective.Example of sacrificing short term gain to a sub unitin interest of long term gain to the organisation as awhole.


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FOR UNDERSTANDING THE BUSINESS

ENVIRONMENT: Business policy helps in creating an understanding of how

policies are formulated and helps managers at every level.

By gaining an understanding of the business environmentmanagers become more receptive to the ideas and suggestionsof sr. mgt. This makes the task of policy implementationsimpler.

When managers become capable of relating environmentalchanges to policy changes within an organization they feelthemselves to be part of greater design. It helps to reduce theirfeeling of isolation.


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Business policy presents a basic frame work forunderstanding strategic decision making while aperson is at the middle level of management. Such aframework combined with the experience gainedwhile working in a functional area enables a personto make preparations for handling generalmanagement responsibilities and the same is

beneficial for the organisation in a variety of ways.

FOR UNDERSTANDING THE ORGANISATION:


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Business policy, like other areas of management

brings the benefit of years of distilled experience in

strategic decision making to the organisation andalso to the managers.


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Understanding of business policy may also lead to animprovement in job performance. As a middle levelmanager , a person is enabled to understand thelinkages between the different sub-units of an orgn.And how a particular subunit fits into the overallpicture. It has far reaching implications formanagerial functions like co-ordination and

communication and also for the avoidance of inter-departmental conflicts.


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FOR PERSONAL DEVELOPMENT:

Study of business policy offers considerable scope forpersonal development It is a fact of organisational life thatthe different subunits within an orgn., have a varying value

and importance at different times. A company which hasfollowed a production orientation as a matter of businesspolicy gradually shifts emphasis on marketing, may be dueto increasing competition and as a result executives inproduction department have fewer opportunities for careeradvancement as compared with their colleagues in

marketing department.In this case it is beneficial for anexecutive to understand the impact of policy shifts on thestatus of ones department and on the position oneoccupies .


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Special caution for executives working in multinationalcompanies:

While making a career choice, study of business policy providesan adequate grounding for understanding the macro factorsand their impact at the micro level.

By gaining an understanding of such an impact, an executive is

better placed to identify the growth area.

Business policy offers a unique perspective to executives tounderstand the sr. mgts viewpoint.


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An interesting by product of the business policy is

theoretical framework provided in the form of the

strategic management model. The model has wideaplicability and provides powerful insights for

dealing with policy making at the macro level as well

as at an individual level through self analysis.


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Importance of business policy stems from the factthat it offers advantages to an executive frommultiple sources. Apart from the intangiblebenefits, an executive gains an understanding of thebusiness environment.Such an understanding canhelp in career planning and development.


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PURPOSE OF BUSINESS POLICY:

Specialist in functional area Vs Generalist approach.

Case of declining sales volume in marketingdepartment--Views of functional manager and

general managers.


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Broadly the purpose of business policy is

three fold:

To integrate the knowledge gained in various functional

areas of management.

To adopt a generalist approach to problem solving

To understand the complex inter-linkages operating within

an organization through the use of systems approach to

decision making and relating these to the changes taking

place in the external environment.


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THE OBJECTIVES OF BUSINESS

POLICY

In order to make the study of business policy

purposeful specific objectives need to be defined.

The objectives of business policy have been stated

by Christensen and Steiner in terms of : KNOWLEDGE

SKILLS

ATTITUDES


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IN TERMS OF KNOWLEDGE:

Many concepts like strategy, policies, plans andprogrammes are encountered in functional areacourses but for the learners of business policy, it isimperative to understand these concepts specifically

in the context of business policy.


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Knowledge of the external and internal environment and how it

affects the functioning of an organization is vital to an

understanding of business policy. Through the tools of analysisand diagnosis a learner can understand the environment in

which a firm operates.

Information about the environment helps in determination ofthe mission , objectives and strategies of a firm. The learner

appreciates the manner in which strategy is formulated.


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To learn that the problems in real life business areunique and so are the solutions is an enlighteningexperience for the learners.

The implementation of strategy is a complex issue andis invariably the most difficult part of strategic

management. Knowledge gained from business policyenables the learner to visualize how theimplementation of strategic management can takeplace.


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The knowledge component of such an experience

stresses the general approach to be adopted in

problem solving and decision making.

To survey the literature and learn about the

research taking place in the field of business policy

is also an important knowledge objective.


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IN TERMS OF SKILLS:

The attainment of knowledge should lead to thedevelopment of skills so as to be able to apply that

which has been learnt. Such an application can

take place by the analysis of case studies and their

interpretation and by an analysis of business

events taking place around us.


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The study of BP should enable a learner to developanalytical ability and use it to understand thesituation in a given case or incident.

The study of BP should lead to the skill ofidentifying the factors relevant in decision making.SWOT analysis and the suggestions of appropriate

strategies, policies form the core content of generalmgt decision making


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The above objectives, in terms of skills increase the mental

ability of the learner and enables them to link theory and

practice. Such an ability is important in managerial

decision making where a large number of factors have to

be considered at once to suggest appropriate action.

As a part of business policy study, case analysis leads tothe development of oral as well as written communication

skills.


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IN TERMS OF ATTITUDE:

The attainment of knowledge and skill objectives shouldlead to inculcation of an appropriate attitude among thelearners.

The most important attitude developed through study ofBP is that of a generalist. The generalist attitude enablesthe learner to approach and assess a situation from allpossible angles.


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A generalist specially in the area of long range

planning has to work with incomplete information,

but he still goes ahead with whatever information isavailable whereas a functional specialist may post

pone the decision in the absence of complete

information.


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For a general manager information and

suggestions are important to possess a liberal

attitude and to be receptive to new ideas.Dogmatism with regard to techniques should be

replaced with a practical approach to decision

making for problem solving.In this way a general

mgr can act like a professional manager.


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It is important to have the attitude to go beyond

and think when faced with a problematic

situation. Developing a creative and innovativeattitude is the hall mark of a gen mgr who refuses

to be bound by precedents and stereo typed

decisions.

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