Evolution of Business Policy and Strategy

1. CHAPTER 1

2.  Set of rules that guides the decisions and
actions of the members.
 Set of rules that guides the conduct of
the business in pursuit for profit and
other objectives.
 More often, its coming from the minds of
the founders, leaders and managers.

3.  It maybe informal or in writing in the form of:
a. Operational manual
b. Personnel handbook
c. Memoranda issued from time to time and
as the need arises
d. Minutes of the meetings
e. Documentation – workshops, year-end
activities

4.  The top management’s plan to attain the
outcomes consistent with the organization’s
mission and goals. (Wright, Kroll & Parnell
<1996>)
 Categories of Strategy:
a. Intended Strategy – Original Strategy that
management plans and intends to implement
b. Realized Strategy – Actual/Eventual Strategy
that management actually implements

5.  A set of competitive moves and business
approaches that management is employing to
run the company. (Thompson & Strickland
<1999>)
 Management’s Game Plan:
a. Attract and please the customer
b. Stake out a market position
c. Conduct operations
d. Compete successfully

6. Strategy – originated from the greek word
stratego referring to a general w/c traces its
root from the words army & lead.
Stratego – means to plan a distruction of one’s
enemies through effective use of resources
In Management: Business strategy could mean
the application of Military
strategy

7.  Business policies exist amidst absence of
strategy – Business strategies may exist w/o
established policy
 Business policies generally directional in
nature – strategy more operational in
context
 Business policies – formal/written –
Strategies maybe informal, not necessary in
written and often confidential

9. Strategic Management – strategic decision-making
that relates to its environment,
guides internal activities & determines long-term
performance of the organization. (Stahl
& Grigsby <1992>)

10. Strategic Management- Set of managerial
decisions and actions that determine the
long-run performance. It includes
environmental scanning, strategy formulation
& implementation, evaluation and control.
(Wheelen & Hunger <2004>

11. Strategic Management- framework that evolves
around the idea of shaping the destiny of an
organization. (Williamson, Jenkins, et al <2004>)
Answer the questions:
a. Where is the organization going?
b. What options are open to the organization?
c. What is the best way forward for the
organization?
d. How can this be done?

12. Strategic Management- determining the
mission and goals of an organization w/in the
context of external & internal environment.
Wright, Kroll & Parnell <1996>
- It involves continuous and dynamic process
that is externally-oriented and driven by
macro & micro environmental conditions.

13. 1. Clearer sense of strategic vision for the
firm;
2. Sharper focus on what is strategically
important; and
3. Improved understanding of a rapidly
changing environment.

14. 1. Defenders-companies w/ limited product
line that focus on improving the effeciency
of their existing operations.
2. Prospectors-firms with fairly broad product
lines that focus on product innovation and
market opportunities.
3. Analyzers-Business operates in at least two
different type product-market areas, one
stable & one variable.
4. Reactors-companies lack of consistent
strategy-structure-culture relationship.

15. Tactics-more operational and done in context
with or as a support activity or operation to
achieve a strategy.

17. 1. Legal Mandate – statutory, articles of
incorporation, by-laws of the organization
2. Vision and mission statement- direction of
the organization
3. Specific Objectives – desire of the
organization
4. Programs and policies – activities and
targets to achieve its short & long-term
goals

18. 1. Classical Approach – rational planning
method - supreme goal is profitability
2. Evolutionary – law of the jungle – only the
best performers survive
3. Processual – imperfect nature of all human
life – accept the world as it is
4. Systemic – relativistic – strategies are linked
to cultures and powers of the local
systems which it takes place.

19. 1. Top-bottom approach
2. Bottom-top approach
3. Top-bottom-top

21. 1. Rare – unusual & typically have no
precedent to follow
2. Consequential- top management commit
substantial resources & demand a great deal
of commitment from people at all levels
3. Directive – set precedents for lesser
decisions and future actions

22. 1. Entrepreneurial mode-strategy is focus on
opportunities, problems are secondary
2. Adaptive Mode-reactive to problems rather
than proactive to search for opportunities
3. Planning mode-rational selection of
strategy;both proactive (opportunities) &
reactive to problems
4. Logical mode-synthesis of all the mode of
strategy

23. 1. Monitor
2. Evaluate and influence
3. Initiate and determine