business policy specific.ppt

8/10/2019 business policy specific.ppt

1/42

Business Policy


2/42

Business Policy

A Policy is a Statement, verbal, written or Implied, of

those principles and rules that are set by ManagerialLeadership as guidelines & constraints for theorganizations Thoughts and actions

The purpose of the policy is to enable the management

to relate properly the organizations work to itsobjectives

The existence of practical and comprehensive policiestends to increase efficiency

Decisions made within a policy framework have ahigher probability of being synchronized with otherdecisions within the company


3/42

Business Policy

Nature of Business policy:

Determines future course of action.

Setting Long-Term objectives of an enterprise

Study of functions & responsibilities of senior

management concerning crucial problems

Provides direction to the organization and

shape of future

Guiding Framework for repetitive decisions

Top Management to Lower Management

Involvement


4/42

Business PolicyDefines the character and identity of an

organization.

Concerned with mobilization of resources to help anorganization achieve its goals.

Continuous process in nature

Identification of opportunities & choosing the right

strategy

Adaptation to the Changing Environment


5/42

Policies are set at different levels of

Management concerning different

responsibilities:

Dividend Policy: Board of Directors

Capital Allocation for Expansion: Top

Management

Revenue Matters/ Sales Administration

Middle Management

Routine Actions: Lower Management


6/42

6

Business Policy as a Field of Study:

1. It integrates knowledge & experience gained in various

functional areas of management.2. It deals with constraints and complexities of real-life

business.

3. It helps to bring long-term view of the environment.

4. It helps to understand the linkage within sub-systems ofthe organization.

5. It is the study of Top Mgmt. & Responsibilities &decision making process

6. It is the conceptualization of Key Business processes

7. A preparation for performance as a General manager andbroadening of perspective of specialist

8. Understanding & Implementation of StrategicManagement Process


7/42

Business Policy as a Field of Study9.Objectives in Attitudes:

Generalist rather Specialist

View of Practitioner

Orientation of Professional Businessman

More Value to Creativity & Innovation than to maintenance of

Status quo

10.Objectives in Knowledge:

Knowledge of concepts

Knowledge of situations

11.Objectives in Skills:

Analytical Ability

Strategic Analysis Ability


8/42

SILKY JANGLANI 8

Business Policy:

Importance of Business policy:1. For learning purpose: It integrates the knowledge &experience. It cuts the narrow financial boundaries. Itmakes the study of management more meaningful.

2. For understanding business environment:To understand

how policies are formulated. It makes the task of policyimplementation simpler.

3. For Understanding the organization: It presents a basicframework for understanding strategic decision-making.

4. For personal development:To understand the impact ofpolicies on position. To understand the senior managersviewpoint. To identify growth areas for development..


9/42


10/42

Simple-A policy should be simple and easily understood

by all in the organization.

Inclusive/Comprehensive- In order to have a widescope, a policy must be comprehensive.

Flexible- Policy should be flexible inoperation/application. This does not imply that a policy

should be altered always, but it should be wide in scope so

as to ensure that the line managers use them in

repetitive/routine scenarios.

Stable- Policy should be stable else it will lead toindecisiveness and uncertainty in minds of those who look

into it for guidance.


11/42

Strategy

Strategy is defining & achieving an organization's

objectives & implementing its missions

Large scale, future oriented plans for interacting with

competitive environment to optimize achievement of an

organizationsobjectives Pattern of an organization's responses to its environment

over time

Long Term objectives or Purposes of an organization

Different from Operating decisions I.e day to day related

activities


12/42

12

STRATEGY:

Strategy (Strategos= direction of military force).

What is strategy?

1. Determination of basic long-term goals & objectives of anenterprise and adoption of course of action and allocation of

resources to carry out these goals.Alfred Chandler (1962)

2.Pattern of objectives, purpose, goals and major policies &plans to achieve these goals to define the current and desiredpolicies of the organization. Andrews (1965)

3.It is the common thread among the organizations activitiesand product-markets that defines the nature of business.Igor Ansoff (1965)..


13/42

13

What is Strategy?

4. Itis a unified, comprehensive and integrated plan designed toassure that the basic objectives of enterprise are achieved.

William Glueck (1972)

5. Itis a pattern in a stream of decision and actions.Henry Mintzberg (1987)

6. Developing and communicating the companys uniqueposition, making trade-offs and creating a fit amongactivities. Michael E. Porter (1996)..


14/42

14

Levels of Strategy:

CORPORATE OFFICE

Strategic Business Unit

A

SBU

B

SBU

C

HRM Marketing Finance Production Systems

Corporate level

strategy

Business

level

strategy

Functional

level

strategySBU is a business unit within the overall corporate identity which is

distinguishable from other business.

When companies become large, they are composed of a number of

businesses (or SBUs). Eg


15/42

Difference between

Policy and Strategy Policy is a blueprint of the organizational activities which are

repetitive/routine in nature. While strategy is concerned with those

organizational decisions which have not been dealt/faced before in

same form. Policy formulation is responsibility of top level management. While

strategy formulation is basically done by middle level management.

Policy deals with routine/daily activities essential for effective and

efficient running of an organization. While strategy deals with strategic

decisions. Policy is concerned with both thought and actions. While strategy is

concerned mostly with action.

A policy is what is, or what is not done. While a strategy is the

methodology used to achieve a target as prescribed by a policy.


16/42

Strategic Management

Set of decisions & actions resulting informulation & implementation of strategies

designed to achieve the objectives

Requirement due to complexity &sophistication of Business decision Making

process

Effective dealing with environmentalchallenges with given orgn. Resources


17/42

17

STRATEGIC MANAGEMENT:

What is strategic management?

1. Itis a stream of decisions and actions which leads to strategy

development to achieve corporate objectives.William Glueck

2.Itis the formulation and implementation of plans and carrying

out of activities relating to important matters of theorganization. Sharplin.

3. Itis a process through which organizations analyze and learnfrom their internal & external environment, establish strategic

direction, create strategies to help achieve goals and executethem. Harrison & St. John..

Di i f St t i


18/42

Dimensions of Strategic

Management

Top Management Decisions Allocation of Large Amount of Companys

resources

Significant Impact on the Long Term Prosperityof the Firm

Future Oriented

Major Multifunctional or Multi businessconsequences

Consideration of factors corresponding toFirms external environment


19/42

SILKY JANGLANI 19

Process of Strategic management:

Phases of Strategic Management:

Establishstrategic

Intent

Formulate

strategies

Implement

strategies

Strategic

evaluation

Strategic

control

Establish

strategicIntent

SWOT

analysis

Strategic

alternatives

Strategic

evaluation

Strategic

Analysis& choice

Strategic

implement-ation

Strategic

controlWorking model of Strategic Management:


20/42

20

Model of Strategic Management Process:

Establish strategic intent:

Vision, Mission, objectives,

Business definition

Formulate strategies:

Environmental appraisal,

organizational appraisal, SWOT analysis,

Corporate & business level strategies,

Strategic choice, strategic plan.

Implement strategies:

Project, procedure, resource allocation,

Structural, behavioral, functional

and operational implementation.

Strategic evaluation

strategic

control


21/42

Ulhas D Wadivkar 21

Vision, Mission and Purpose,

A visionis more dreamt of than it is. Vision Statement is permanentstatement of a company. Vision is future aspirations that lead to an

inspiration. It defines the very purpose of existence of a company.

The vision of a company is a direction for action for employees. Theessence of a vision is forward looking view of what an organisation wishesto become.

Kotter(1990) defines Vision as a description of an enterprise. (anorganisation, corporate culture, a business, a technology, an activity) infuture.

El-namaki(1992) defines vision as a mental perception of the kind ofenvironment an individual, or an organisation, aspires to create within a

broad time horizon and underlying conditions for the actualisation of thisperception

Miller and Dess(1996) defines vision as category of intentions that arebroad, all inclusive, and forward thinking


22/42

Ulhas D Wadivkar 22

Strategic Vision

Strategic Vision is a road map showing the route a company intends to take

in developing and strengthening the business. It defines Companys

destination and provides rational for going there. It culminates in to a Mission

Statement. Strategic Vision points an Organisation in a particular direction,

charts a strategic path to follow for future and moulds the organisations

identity.

Strategic Vision is different from Mission Statement:Strategic Vision

deals with where we are going, where as Mission Statement deals with

Companys present business scope and purpose.

A company Mission is guided by the buyers needs it seeks to satisfy, the

customer groups and market segments it is endeavouring to serve, and theresources and technologies that it is deploying in trying to please customers

and achieve a Market and Industry position.


23/42

Ulhas D Wadivkar 23

Example of Strategic Vision

The San Antonio Express News developed this StrategicVision,

"EXPANDour customer base and enhance the franchise bypursuing multimedia opportunities.

DELIVERan award-winning level of journalisticexcellence, building public interest, trust and pride.

PROVIDEvigorous community leadership and support. INSTILL an environment of internal and external excellence

in customer service.

EMPOWERand recognize each employee's unique

contribution. ACHIEVE the highest standards of quality.

IMPROVE financial strength and profitability."


24/42

Ulhas D Wadivkar 24

Characteristics of a Vision Statement

Inspiring and exhilarating.

It represents, a discontinuity, a step, a jump ahead to dream what it is tobe.

Creation of common identity and share sense of purpose.

Competitive, original and unique and practical.

Foster risk taking and experimentation.

Foster long term thinking.

A vision is a statement about what your organization wants to become.

It should resonate with all members of the organization and help themfeel proud, excited, and part of something much bigger than themselves.

A vision should stretch the organizations capabilities and image ofitself. It gives shape and direction to the organizations future.

Visions range in length from a couple of words to several pages. Shorter vision statements is recommended because people will tend to

remember their shorter organizational vision.


25/42

Ulhas D Wadivkar 25

Vision Statement Vision Statement Samples:

"Year after year, Westin and its people will be regarded as the best andmost sought after hotel and resort management group in North America."(Westin Hotels)

"To be recognized and respected as one of the premier associations of HRProfessionals." (HR Association of Greater Detroit)

Vision Statement of TATA STEELTATA Steel enters the new millennium with the confidence of learning,knowledge based and happy organisation. We will establish ourselves as asupplier of choice by delighting our customers with our service and

products. In the coming decade, we will become the most cost competitivesteel plant and so serve the community and the nation.

Vision Statement of Farm Fresh Produce

We help the families of Main Town live happier and healthier lives byproviding the freshest, tastiest and most nutritious local produce: Fromlocal farms to your table in under 24 hours.


26/42

Ulhas D Wadivkar 26

Developing a Vision Statement

The vision statement includes vivid description of the organization as it

effectively carries out its operations.

Developing a vision statement can be quick culture-specific, i.e.,participants may use methods ranging from highly analytical and rational

to highly creative and divergent, e.g., focused discussions, divergent

experiences around daydreams, sharing stories, etc. Therefore, visit with

the participants how they might like to arrive at description of their

organizational vision. Developing the vision can be the most enjoyable part of planning, but

the part where time easily gets away from you

Note that originally, the vision was a compelling description of the state

and function of the organization once it had implemented the strategic

plan, i.e., a very attractive image toward which the organization wasattracted and guided by the strategic plan. Recently, the vision has

become more of a motivational tool, too often including highly idealistic

phrasing and activities which the organization cannot realistically aspire.


27/42

Ulhas D Wadivkar 27

Mission

Thompson(1997) definesMission as the essential purpose of the

organisation, concerning particularly, why it is in existence, the

nature of businesses it is in, and the customers it seeks to serve

and satisfy

Hunger and Wheelen(1999)say that mission is the purpose and

reason for the organisations existence Mission statements could be formulatedon the basis of vision

that an entrepreneur decides on in the initial stages.

A business mission helps to evolve an executive action.

Mission of organisation is what it is and why it exists. It represents

common purpose which the entire organisation shares and

pursues. It is a guiding principle.

Mi i S


28/42

Ulhas D Wadivkar 28

Mission Statement

Missionof a company is expressed it terms of products and

geographical scope. It includes a methodology of attaining the

desired goal in vision. It defines the competitive strength of a

company and it emanates from corporate vision and strategic

posture of a company.

Thus the mission of a business is a statement, a build-up philosophy

of its current and future expected position with regards to its

products, market leadership.

Mission is statement which defines the role of organisation plays in

a society.

The corporate mission is growth ambition of the firm.

Mi i


29/42

Ulhas D Wadivkar 29

Mission

Characteristics of a Mission Statement

1.It should be feasible, achievable & It should be precise.

2. It should be clear & It should be distinctive.

3. It should be motivating.

4. It should be indicative of major component of strategy & Objectives.

5. It should be indicative of how objectives are to be accomplished.

6. It should be indicative of how Policies will be achieved.

7. It should focus Market Rather than Product.


30/42


31/42

Ulhas D Wadivkar 31

Developing a Mission Statement

1. At is most basic; the mission statement describes the overallpurpose of the organization.

2. If the organization elects to develop a vision statement beforedeveloping the mission statement, ask Why does the image, thevision exist -- what is its purpose? This purpose is often thesame as the mission.

3. Developing a mission statement can be quick culture-specific,

i.e., participants may use methods ranging from highly analyticaland rational to highly creative and divergent, e.g., focuseddiscussions, divergent experiences around daydreams, sharingstories, etc. Therefore, visit with the participants how they mightlike to arrive at description of their organizational mission.

4. When wording the mission statement, consider the organization'sproducts, services, markets, values, and concern for publicimage, and maybe priorities of activities for survival.


32/42


33/42

Ulhas D Wadivkar 33

Mission Statement of Ranabaxy

To become a $ 1 Billion research based global (International)pharmaceutical company

Mission Statement of Graphite India LimitedTo be within top three companies in the world by achieving1,00,000 MT Production of Graphite Electrodes before 2012

The mission statement of Farm Fresh Produce is:

To become the number one produce store in Main Street byselling the highest quality, freshest farm produce, from farm tocustomer in under 24 hours on 75% of our range and with 98%customer satisfaction.

"Our goal is simply stated. We want to be the best service

organization in the world." (IBM) "To give ordinary folk the chance to buy the same thing as rich

people." (Wal-Mart)
http://www.ibm.com/us/http://www.walmart.com/http://www.walmart.com/http://www.walmart.com/http://www.walmart.com/http://www.ibm.com/us/


34/42


35/42

Ulhas D Wadivkar 35

Values

Values are traits or qualities that are considered worthwhile;

they represent an individuals highest priorities and deeply helddriving forces. (Values are also known as core values and as

governing values; they all refer to the same sentiment.)

Value statements are grounded in values and define how people

want to behave with each other in the organization. They are

statements about how the organization will value customers,

suppliers, and the internal community. Value statements

describe actions which are the living enactment of the

fundamental values held by most individuals within the

organization.

V l


36/42

Ulhas D Wadivkar 36

Values

The values of each of the individuals in your workplace, along

with their experience, upbringing, and so on, held together to

form your corporate culture. The values of your senior leadersare especially important in the development of your culture.

These leaders have a lot of power in your organization to set the

course and environment and they have selected the staff for your

workplace. If you think about your own life, your values form the

cornerstones for all you do and accomplish. They define where

you spend your time, if you are truly living your values. Each of

you makes choices in life according to your most important top

ten values. It is necessary to take the time to identify what is

most important to you and to your organization.

Developing a Values Statement


37/42

Ulhas D Wadivkar 37


Values represent the core priorities in the organizations culture,including what drives members priorities and how they truly actin the organization, etc. Values are increasingly important in

strategic planning. They often drive the intent and direction fororganic planners.

Developing a values statement can be quick culture-specific, i.e.,participants may use methods ranging from highly analytical and

rational to highly creative and divergent, e.g., focused discussions,divergent experiences around daydreams, sharing stories, etc.Therefore, visit with the participants how they might like to arriveat description of their organizational values.

Establish four to six core values from which the organizationwould like to operate. Consider values of customers, shareholders,employees and the community.



38/42

Ulhas D Wadivkar 38

Developing a Values Statement Notice any differences between the organizations preferred

values and its true values (the values actually reflected bymembers behaviours in the organization). Record each preferred

value on a flash card, then have each member rank the valueswith 1, 2, or 3 in terms of the priority needed by the organizationwith 3 indicating the value is very important to the organizationand 1 is least important.

Then go through the cards again to rank how people think thevalues are actually being enacted in the organization with 3indicating the values are fully enacted and 1 indicating the valueis hardly reflected at all. Then address discrepancies where avalue is highly preferred (ranked with a 3), but hardly enacted

(ranked with a 1).

Incorporate into the strategic plan, actions to align actualbehaviours with preferred behaviours.


39/42


40/42

40

Goals & Objectives:

Goals & Objectives represent a future state or an outcome of

efforts put at present. Objectives are the ends that state how goalswill be achieved.

Goals are generalized & qualitative. Objectives are concrete,measurable and specific.

Objectives make the goals operational.

Roles of Objectives

1. Objectives define the organizations relation withenvironment.

2. It helps an organization to achieve its vision & mission.

3. It provides the basis for strategic decision-making.

4. It provides the standards of performance appraisal


41/42

41

Goals & Objectives:

Characteristics of objectives:

1. It should be understandable.

2. It should be concrete and specific.

3. It should be related to a time-frame.

4. It should be measurable.

5. It should be challenging.

6. It should be set within limits..

Areas of Objectives


42/42

Areas of Objectives

Objectives represent managerial commitment to achieve specific

results in specific period of time. Objectives could be

: Profitability : Markets

: Productivity

: Innovation

: Product

: Financial Resources

: Physical facilities

: Organisation Structure & Activities

: Manager Performance & Development

: Employee performance & Activities.

: Customer Service

business policy specific.ppt

Documents