“Business policy is one which focuses attention on strategic allocation of scarce resources – human, financial, physical and intangible. Conceptually speaking strategy is the direction of such resource allocation and policy is the time of allocation.”-Rodgers
“It is a unified, comprehensive and integrated planning designed to assure that the objectives of the organization are achieved.”In simple words strategy is a package of measures to attain the objectives. –Glueck
A common sense definition of both policy and strategy is “the pattern of an organization response to its internal and external environment over a period of time.” But “Policy” and “Strategy” are different only in definition. Thereafter throughout the subject they are used interchangeably.
“The study of the function and responsibilities of senior management , the crucial problems that affect success in the total enterprise, the decisions that determine the direction of the organization and shape its future. The problems of policy in business , like those of policies in public affairs, have to do with the choice of purposes , the moulding of organizational identity and character , the continuous definition of what needs to be done , and the mobilization of resources for the attainment of goals in the face of competition or adverse circumstance” -Christensen
Nature and Scope of the Subject:
•It deals with organization responses to changes. Sometimes organization responds after the change has taken place (reactive).But good organization anticipate change plan ahead and excel (proactive). •It is top management view point.
•Broad perspective and comprehensive approach
•Long range impact
•Involves huge resources and large segments of the organization •Multi-disciplinary approach-involving production,personnel,marketing,finance,O.R.,etc •It should conform to legal standards and ethical standards •It should lead to clear action by showing clear direction •It should be relevant to the objectives of business
•Should be within general principles of management
•Should provide stability and at the same time dynamism
•Growth of the organization and shouldn’t lead to stagnation
The subject originated in 1911 – Harvard School of Business introduced this as a subject in their management programmes.During 1950-60 Ford and Carnegie Foundation sponsored expert studies to improve management courses. Both the study emphasized on BP concepts –slowly the subject started spreading. Historically the growth of the subject is divided into 4 paradigms (important phases) •Evolution upto 1930 – paradigm of adhoc policy – the subject was yet to gain acceptance •1930-40 paradigm of planned policy – efforts were taken to make this subject organized and systematic •1940-60 paradigm of strategy – the rapid phase of industrialization forced the organization and the business society to define the business scope and interest with reference to societies interest •1960 onwards paradigm of strategic management to initiate and practice strategies for its existence and growth
The importance of Business policy
1.for learning the course
•To integrate the knowledge and experience gained in various functional areas of management •To deal with the constraints and complexities of real life business •To develop theoretical structure of its own , business policy cuts across the narrow functional boundaries and draws upon a variety of sources – other courses in management curriculum and a wide variety of disciplines like economics , psychology , political science & so on •Business policy makes the study and practice of management more meaningful, as one can view business decision making in its proper perspective
2. for understanding the business environment:...