Azhar Kazmi: Strategic Management and Business Policy

2008

Chapter 1: Introduction to Strategic Management and Business Policy

Short-answer Questions* 1. Business Policy is a capstone, integrative course. Explain the statement. By capstone course is meant a course that comes at the end of the delivery of a curriculum in an educational programme. Business Policy course is taught at the end of a management education programme so it is a capstone course. By being an integrative course, Business Policy attempts to bring together knowledge gained in various functional areas of management. 2. What are the four paradigm shifts Business Policy has moved through in the course of its historical evolution? Hofer and others view the evolution of Business Policy in terms of four paradigm shifts that are as below. a. Ad hoc policy making b. Planned policy formulation c. Strategy d. Strategic management 3. State some pointers to the future directions of strategic management. Some pointers to the development of strategic management can be: a. Refinement of general principles underlying strategic thinking b. Continual review of the model of strategic management c. Emergence of a comprehensive approach to strategic management d. Development of several courses in the repertoire of specialisation in business policy e. Growth of research methodologies aimed at synthesis 4. Can we characterise the development of strategic management in India as promising? Why? Yes, we can characterise the development of strategic management in India as promising. Some of the reasons could be as below. a. Proliferation of business schools requiring strategic management and business policy to be included in the curriculum

Prof. Azhar Kazmi

Azhar Kazmi: Strategic Management and Business Policy

2008

b. The management education regulatory bodies require strategic management and business policy to be included in the curriculum c. Increasing number of India-focussed international research d. Growing body of strategic management literature in India e. Setting up of professional association of Strategic Management Forum of India f. Increasing coverage of strategic issues in popular press g. Heightened awareness within organisations of the significance of strategic management 5. What is the scope of Business Policy? This comprehensive definition by Christensen and others covers many aspects of business policy. a. The study of functions and responsibilities of the senior management related to those organisational problems which affect the success of the enterprise as a whole. b. The determination of the future course of action by the organisation. c. Involves a choice of purpose and defining what needs to be done in order to mould the character and identify of the organisation. d. The mobilisation of resources by the help of which the organisation can achieve its goals. 6. What is the concept of strategy? In simplified terms, a strategy is the means to achieve objectives. In complex terms, it may possess several characteristics as below. a plan or course of action or a set of decision rules making a pattern or creating a common thread; the pattern or common thread related to the organisation's activities which are derived from the policies, objectives and goals; related to pursuing those activities which move an organisation from its current position to a desired future state; concerned with the resources necessary for implementing a plan or following a course of action; and connected to the strategic positioning of a firm, making trade-offs between its different activities, and creating a fit among these activities. the planned or actual coordination of the firm's major goals and actions, in time and space that continuously co-align the firm with its environment. 7. Point out two limitations of the concept of strategy.

The two limitations of the concept of strategy are:

Azhar Kazmi: Strategic Management and Business Policy

2008

a. The application of the concept of strategy to real-life situation may tend to oversimplify things. Actual situations are complex and contain several variables that are not amenable to structuring. The concept of strategy tends to distort reality and, as an abstraction of reality. b. The application of the concept of strategy commits an organisation to a predetermined course of action that may cause development of rigidity with regard to outcomes. 8. What are the different levels at which strategy operates? Strategy generally operates at three levels: corporate, business, and functional levels. Besides these three, there might be two others levels of societal and operational levels. 9. What is strategic decision-making? Strategic decision-making is the primary task of the senior management. While decisionmaking pertains to all managerial functions, strategic decision-making largely relates to the responsibilities of the senior management. 10. Enumerate the major issues in strategic decision-making. The different dimensions of the process of strategic decision making are encapsulated in the six issues related to it: criteria for decision-making, rationality in decision-making, creativity in decision-making, variability in decision-making, person-related factors in decisionmaking, and individual versus group decision-making. 11. List the ten schools of thought on strategy formation. There are ten schools of thought on strategy formation divided into three groups. The prescriptive school consists of the design, planning, and positioning schools. The descriptive school consists of the entrepreneurial, cognitive, learning, power, cultural, and environment process schools. The integrative school has just the configuration school where the strategy formation is a process of transformation. 12. Define strategic management. Strategic management is defined in this book as the dynamic process of formulation, implementation, evaluation and control of strategies to realise the organizations strategic intent. 13. Enumerate the elements in the strategic management process. There could as many as twenty different elements of strategic management process that are arranged in four phases of establishing the strategic intent, formulation of strategies, implementation of strategies, and strategic evaluation and control.