strategies policies
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STRATEGIES,POLICIES
&
PLANNING PREMISES
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STRATEGY
Derived from greek word: startegos meaning general
It deals with the determination of long term objectives,thecourse of action and the allocation of resources to
achieve objectives.
POLICY
These are the general statements or guidelines which
direct the manager in decision making
They ensure that decisions fall within certain limits
Essence of policy is discretion.
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Corporate startegy:Should the firm enter into strategic alliances
How should the firm be structured
what businesses should the firm be in?How should the firm allocate its resources among
existing businesses?
How diversified should the corporation's business
be?
Business level strategyApplicable to those org. which have different businesses & each business
is separate entity.eg. Reliance Ltd. In textile,petrochemicals etc.
Functional level strategyApplicable to single function or activities there in.
Eg. Marketing function involving operational activities like sales
promotion,advertisement etc.
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STRATEGIC PLANNING PROCESS
INPUTSPeople
Capital
Managerial
&
Technical
skills
Goals of
claimant
PresentExternal
env
Purpose
&major
obj of
enterprize
Topmgt.
orientation Opportunity
&
threats
Dev ofAlternative
startegies
Forecast
Of futureenv
Weakness
&strengths
Resourceaudit
Enterprizeprofile
control
Evaluation
&
Strategic
Choice
(risk,timing,competitor)
Medium
&
Short
Range
planning
Implem-
entation
Contingency
plan
feedback
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MAXI-MAXI
MAXI-MINI
MINI-MAX
MINI-MIN
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make products at low cost
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ROLE OF STRATEGYIt provides clarity in direction of activitiesIncreases org. effectiveness
Reduces role conflict & role ambiguity thus
giving satisfaction
Helps in gaining competitive advantage
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Successful implementation of
strategies Communicating strategies to all key decision makingmanagers
Ensuring action plans contribute to and reflect majorobjectives & strategies
Reviewing startegies regularly
Develop contingency plans
Make organization structure fit planning needs
Creating company climate that forces planning
Managers should be prepared for startegic planning
Provide sufficient information for planning
Link b/w planning and control is insufficient
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PORTER GENERIC STARTEGY
OVERALL COST LEADERSHIP
Aims at reductions in cost
Low cost structure compared to
competitors
'cost advantage' is the focus
DIFFERENTIATIONOffer something unique
allows companies to desensitizeprices
Innovations require investment
& should be difficult to copy
FOCUSED STRATEGY
Concentrate on special group, product,specific region instead of
focus on total industry
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PREMISING & FORECASTING
Planning premises is anticipated environment in whichplans are expected to operate.These include
assumptions or forecasts of the future and known
conditions that will affect the operations of plans.
Forecasting means making assumptions about future.
VALUES AND AREAS OF FORECASTING
This compels thinking ahead, looking to the future, and providing for it.
Discover areas where necessary control is lacking.Participation throughout the organization helps to unify and coordinate
plans
Areas for forecasting include economic, social, political/legal and
technical.
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Types of Premises
External premises:
The external environment constituting of economic,political,legal, technological, sociocultural & competitive
factors which are not under direct control of org & provide
threats and oppertunities.
Internal premises:It is related to the internal factors of the org like org.
structure,mgt. systems which are the strengths or weakness of
the org.
Tangible:can be expressed in quantitative terms
Intangible premises:cannot be expressed in quantity like company image
C
ontrolable & uncontrolable premises
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ForecastingProcess of estimating the relevant events of the future
based on the analysis of past and present
importance limitations
Promotion of org Based on assumptions
Essential for planning Merely trends based on past &
present
Provides oppertinities for coordination
& control
Timely & costly
Reduce risk
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Techniques of forecasting