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1.introduction To Business Policy

The document discusses the evolution and importance of business policy as an academic discipline and managerial practice. It outlines the historical development of business policy from the introduction of integrative management courses in 1911 to its requirement for business school accreditation in 1969. Business policy aims to integrate knowledge across functional areas, adopt a generalist problem-solving approach, and take a systems view of decision-making. The importance of business policy includes helping understand the business environment, the organization, and aiding personal development.

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Kunal Bawane
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464 views

1.introduction To Business Policy

The document discusses the evolution and importance of business policy as an academic discipline and managerial practice. It outlines the historical development of business policy from the introduction of integrative management courses in 1911 to its requirement for business school accreditation in 1969. Business policy aims to integrate knowledge across functional areas, adopt a generalist problem-solving approach, and take a systems view of decision-making. The importance of business policy includes helping understand the business environment, the organization, and aiding personal development.

Uploaded by

Kunal Bawane
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Introduction to Business Policy.

A. Evolution of business policy as discipline.


The genesis of business policy.
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1911, Harvard business school introduced integrative course in management. 1959, Gorden & Howell report recommended business policy as course. 1969, American assembly of collegiate schools of business (Regulatory body) made business policy as mandatory for school recognition.

Evolution based on managerial practices.


o o o o o Planning Budgets Capital budgeting. Management by objective. Long range planning. Strategic planning. Strategic management.

Historical perspective.
o 1930, ad hoc policy Reasons American firms Single product Unique set of customers Limited geographical area. 19301940 Due to environmental changes planned policy formulation replaced ad hoc policy making. 1960 Complexity & accelerated changes in environment Policy formulation got replaced with strategy. Strategic management.

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Definitions of Business Policy.

a. Terry. A business policy is an implied overall guide setting up boundaries that supply the general limits & direction in which managerial action will takes place. b. Peter & Wotrube. A business policy is nothing more than well developed statement of directions & goals. Goals involve the definition of precisely what the business is or should be & the particular kind of company it should be. Direction guides the action of the firm to accomplish these goals.

c. Rodgers. A business policy is one which focuses attention on the strategic allocation of scarce resources, human, financial, physical or intangible. Conceptually speaking strategy is the direction of such resource allocation while planning is timing of allocation.

Feature of Business Policy.


o o o o o o o o o Principles for attainment of the objectives. Policies have an hierarchy. Delimit the area within which decision is to be made. It is meant for mutual application by subordinates. Policies tend to pre decide issues, avoid repeated analysis. Policies are found in all functional areas. Provide clear cut guideline at all levels. Life blood for successful functioning of business. Translates goals into selected routs.

Essentials of effective Business Policy.


o o o o o o o o o o o o Relationship to organization objectives. Simple & easily understandable. Written policies. Stable but not rigid. Comprehensiveness. Complimentary to one another. Consistent with public policy. Fair, just & reasonable. Supplementary to overall corporate policies. Ethical standards. Planned development. Individuality.

The importance of Business Policy.

A. For learning the course.


o It integrate the knowledge & experience in various functional areas. It cuts across the narrow functional boundaries. It deals with constraints & complexities of real life business. It makes the study & practice of management more meaningful.

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B. For understanding business environment.


o It helps to create an understanding of how policies are formulated. Managers become more receptive to the ideas & suggestions of the senior management. Managers feel themselves to be part of greater design.

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C. For understanding the organization.


o It presents a basic framework for understanding strategic decision making. It brings the benefits of years of the distilled experience in strategic decision making. It leads to improvement in job performance.

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D. For personal development.


o It is beneficial for an executive to understand the impact of policy shifts on the status of ones department & on the position one occupies. It enables executives to avail an opportunity or avoid a risk with regard to carrier planning & development. It provides an adequate grounding for understanding the macro factors & their impact on micro level. It offers a unique perspective to executives to understand the senior managements view point. It is the theoretical framework provided in the form of strategic management model.

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The purpose of Business Policy.


To integrate knowledge in various functional areas. To adopt generalist approach to problem solving. System approach decision.

Objectives of Business Policy. A. Objectives in terms of knowledge.


o o o o o o To understand the various concepts involved. Knowledge about environment External & Internal. Determining of the mission, objectives & strategy. Implementation of strategy. Generalized approach to deal with various situation. To survey literature & learn about researches.

B. Objectives in terms of skills.


o o o o Skills to apply what in learnt. To develop analytical ability. Skill to identify factors relevant in decision making. Link theory with practice.

C. Objectives in terms of attitude.


o o o o To inculcation of appropriate attitude. Receptive to new ideas, information & suggestion. Function under conditions of partial ignorance by using judgment & intuition. Developing a creative & innovative attitude.

Limitations.
o Policies will be ineffective, if they are not understood properly by executives. o When policies are incorrectly stated or are unsound in concept they impede the achievement of company objectives. o If business environment is changed, correspondingly change is not made suitable to situation. o Old policies are likely to misled the company in respect of planning & action that are mainly future oriented. o Many a time the company may not be able to translate policies into action due to paucity of funds.

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