Importance of Business Policies and Strategies

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BBA- 302 Business Policy & Strategy (I. P.University).

Unit – I:
Introduction – Nature, Scope & Importance of the course of Business Policy ; Evolution of the course – Forecasting , Long range planning, Strategic planning & Strategic management. Strategic Management Process – Formulation phase – vision, mission, environmental scanning, Objectives & Strategy ; Implementation phase – Strategic activities, Evaluation & Control.

Business is an important requirement in society for : • Supply of goods & services.
• Creation of employment opportunities.
• Offer better quality of life & higher standard of living. • Contribution to economic growth of a country, etc. As such society cannot do without business & business needs society as well. Therefore, Business may be summarized as :

• Business is an economic activity
• Business firm is an economic unit
• Business decision making is an economic process

Nature & Scope :
The business policy is based on the experience of corporate enterprises and the history of success & failure of business over time. Business policy is the outcome of top management decisions bearing on the future of the ongoing enterprise. A formal approach to such policy making requires conceptualization and systematic application of knowledge & skill. These include top management responsibilities of defining business mission & objectives, formulation of strategic alternatives, choice of strategy and its implementation. Business policy study enables development of skills required to identify, analyze & solve all the problems of the organization in totality irrespective of the nature of problem like marketing, finance, production or maintenance. Knowledge of strategies & policies set at higher levels of management and the underlying reasons thereof enable lower-level managers to interpret the same more accurately ensuring more effective implementation. Besides with the awareness of strategies, policies & values of top management, managers feel more confident in functioning with minimum communication gap. In other words, Business Policy provides an integrated view of management broadly based on business mission & objectives, goals, ethics, social responsibility, knowledge & experience.

This may be specified as the guidance, outlines, direction & rules framed and circulated by the management for information & adherence by the employees attached to the organization. This is dynamic & should be flexible depending on both internal & external environment.

Importance :

1. It provides an integrated view of management based on knowledge & experience gained in various functional areas of management. 2. The complexities & the constraints of managing business in a competitive & dynamic environment are identified, analyzed & solved by understanding the complex inter-linkages operating within an organization and the external environment. 3. It provides a broader perspective in totality without considering boundaries of functional management i.e. adopt a generalist approach to problem solving. 4. With a transparent culture of business policy, the mangers function more efficiently, effectively & with higher level of confidence.

Objectives :

In Terms of Knowledge:
1. In business policy various concepts like strategy, policies, plans & programs are explained. 2. Knowledge of external & internal environment and how it affects the functioning of the organization. Information about the environment helps in determination of the mission, objectives & strategies of the firm. 3. To visualize implementation of strategy. The confidence level of problem solving & decision-making is elevated. 4. To survey the literature & keep up-dated about the latest development. In Terms of Skills:

1. The attainment of knowledge lead to development of skills for application. 2. The...
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