ADVANCED DIPLOMA IN MANAGEMENT STUDIES – (ADMS)

(2ND SEMESTER)

MODULE: MANAGEMENT, STRATEGY AND POLICY

UNIT I: AN OVERVIEW

1.0 MANAGEMENT IN THE TWENTY-FIRST CENTURY

In our increasingly complex and rapidly changing world, the need for
intelligent management is greater than ever before.

There has been a debate in management circles for some time over
whether management is a science or an art. Does successful
management require objective, scientific rationality and methodology, or
does it require subjective artistic feeling? A compromise is suggested,
because managers need to be either objective or subjective as the
situation requires.

Although the practice of management may be traced to the earliest

recorded history, the systematic study of management is relatively new.
As an area of academic study, management is essentially a product of the
twentieth century.

There are several approaches to the study of management science and

theory, including the Universal Process or Principles Approach, the
Behavioural Approach, the Contingency Approach, the Systems Approach
and the Operational Approach. We can safely state that there is no single
theory of management that is universally accepted. But understanding
these general approaches to the study of management helps one
appreciate how management thought has evolved, where it is today, and
where it appears to be headed in the future.

The overall goal of management in the twenty-first century is to ensure

that the organization and its sub-systems are working together in an
optimum fashion to achieve the desired results strategically.

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 Strategic management and strategic planning are at the heart of
today’s management. By definition, strategic planning is a process by
which an organization envisions its future and develops the necessary
procedures and operations to achieve that future. Essentially, strategic
planning deals with the management of the broad plan stressing on
strategies to be used to achieve planned objectives at minimum cost.

Developing a Strategic Plan is an essential aspect of corporate planning.

A well developed Strategic Plan aid management in:

 Clarifying the scope of the organization’s activities in terms of what it

will do and will not do;

 Matching the activities of the organization to the environment in which

it operates, so that it optimizes opportunities and minimizes threats;

 Matching the organization’s activities to its resource capacity (finance,

manpower, technology, or skill levels); and

 Setting objectives and developing strategies to meet the needs of the

different markets/programmes that they serve.

The top-level executives are responsible for formulating strategic plans

and making strategic decisions. This normally requires a heterogeneous
top management team with different functional experience, and
education. The more heterogeneous the team is, with varied expertise
and knowledge, the more capacity it has to provide effective strategic
leadership in formulating strategy. In turn, better strategic decisions
produce higher firm performance.

It is however important that the top management team members function

cohesively. A group of top executives with diverse back grounds may
inhibit the process of decision if it is not effectively managed.

Hoterogeneous top management teams are also associated with

innovation and strategic change. The heterogeneity may force the team
or some of the members to “think outside of the box” and thus be more
creative in making strategic decisions.

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 2.0 WHAT IS STRATEGY?

 Strategy is the organization’s long-term direction; at least in excess of

one year and probably several years;

 The scope of an organization’s activities; this will include the roles and
purposes of the organization and the roles it undertakes in pursuit of
them;

 Strategy is about gaining advantage over the competition (i.e.

Business, government, or NGO;)

 Adopting activities to fit the business environment, i.e. Adapting

products/services to gradually changing customer requirements;

 It is also about exploiting unique resources and the organization’s

special competences;

 It is also about changing the business environment;

 It is also affected by the values and expectations of stakeholders.

In strategy development one must be conscious, explicit, and proactive.

Finally, today’s manager has to think strategically about the adoption

and implementation of a policy.

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 3.0 WHAT IS POLICY?

There is no concensus about the meaning of policy. Policy may be

defined as:

 A guide to action that is intended to co-ordinate decision-making and

action-taking.

 An integrated set of decisions, rules and regulations, guidelines,

procedures and other mechanisms aimed at accomplishing some
purpose or goal.

 Course or line of action adopted by Government in running state

affairs.

 General statements or understandings which guide our thinking in

decision-making, ensuring that decisions fall within certain boundaries.

A business policy can be defined as:

 Management’s expressed or implied intent to govern action in the

achievement of a company’s aims.

3.1 General Characteristics of Policies

 Policies are generally considered to be guides to action or channels

to thinking. More specifically, policies are guides to carrying out an
action. They establish the universe in which action is to be taken.
This universe can be very broad if a policy deals, for example, with a
general statement of managerial intent, such as, a “it is our policy to
be a good corporate citizen.” The universe can be a much more
restricted area for action in such directive as, “it is our policy to retain
50 per cent of net earnings and to distribute the other half to
stockholders in the form of dividends”.

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  Policies may be thought of as codes that state the directions in which
action may take place. They set boundaries.

 Policies stand as ready guides to answering thousands of questions

that may arise in the operation of a business.

 Policies usually enjoy a long life. As a matter of fact there is too

much of a tendency in business for them to live too long without
review and revision. At any rate, policies are generally formulated
with the long view in mind.

 Policies direct action to the achievement of an objective or goal.

They explain how aims are to be reached by prescribing guideposts to
be followed. They are designed to secure a consistency of purpose
and to avoid decisions which are short-sighted and based on
expediency.

4.1 CONCLUDING COMMENT

As stated earlier, the overall goal of management today is to optimally

achieve the desired organizational results. This requires developing
strategies, and thinking strategically about the adoption and
implementation of a policy.

Policies have characteristics that distinguish them from strategies, but at

times the distinction is blurred. This will become clearer as we look at
each element in more detail in the subsequent unit (i.e., unit 2).

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