BASIC CONCEPTS

IN BUSINESS
POLICY STRATEGY
OBJECTIVES:

▪ DIFFERENTIATE THE DIFFERENCE BETWEEN BUSINESS POLICY

AND STRATEGY
▪ DISCUSS THE STRATEGIC PLANNING PHASES
▪ DEFINE GLOBALIZATION
▪ DISCUSS AND UNDERSTAND THE PERIOD OF ELECTRONIC AGE
▪ ENUMERATE AND DISCUSS THE DIFFFERENT THEORIES IN
ORGANIZATIONAL

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BUSINESS POLICIES
- A set of rules that guides the decisions and actions of the
members of the organization.

- These policies may be informal or in writing coming in the

form of operational manual, personnel handbook, and
memoranda composed or issued from time to time and as
the need arises.
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COMPANY POLICIES
COMPANY POLICIES EXAMPLE:

▪ Intel – cannibalize your product line with better products

before a competitor does it to you .
▪ General Electric – GE must be number one or two wherever
it competes.
▪ 3M – researchers should spend 15% of their time working
on something other than their primary project.
▪ Maytag Company – will not approve any cost reduction
proposal if it reduces product quality in any way.
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STRATEGY CONCEPTS
STRATEGY
- It refers to the top management’s plan to attain the outcomes
consistent with the organization’s mission and goals. (Wright, Kroll,
Parnell 1996)
- It is management’s game plan to achieve the ff:
a. attract and please customers
b. stake out a market position
c. conduct operations
d. compete successfully
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TYPES OF STRATEGY

▪ Corporate Strategy – a company’s overall direction in terms of

general attitude toward growth and the management of its
various businesses and product lines.
▪ Business Strategy– emphasizes improvement of the competitive
position of a corporations products or services.
▪ Functional Strategy – approach taken by a functional area to
achieve corporate and business unit objectives and strategies by
maximizing resource productivity.
Hierarchy of Strategy - grouping of strategy types by level in
the organization.
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STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
- Set of managerial decisions and actions that determines the long-
run performance of a corporation.

- It includes all the decisions and actions set by the managers and
provides a gauge on the performance of a particular organization.

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STRATEGIC MANAGEMENT PROCESS

▪ Situation Analysis – includes Environmental Scanning, the

monitoring, evaluating and dissemination of information from the
external and internal environments to key people within the
corporation.

▪ SWOT ANALYSIS - simplest way to conduct environmental

scanning.
▪ Internal Environment – Strengths and Weaknesses
▪ External Environment – Opportunities and Threats
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 STRATEGIC MANAGEMENT
PROCESS

SITUATION ANALYSIS
(Environmental Scanning)

STRATEGY FORMULATION
Mission/Vision Strategies/Policies

STRATEGY IMPLEMENTATION
Programs/Activities Budgets/Procedures

STRATEGY FORMULATION
Actual Results 12
Performance
STRATEGIC MANAGEMENT PROCESS
 Strategic Formulation – development of long-range plans for the effective
management of environmental opportunities and threats, in light of corporate strengths
and weaknesses.
 Operational Strategies – short-term and are associated with the various operational
departments of the company such as human resources, finance, marketing and
production.
 Competitive Strategies – related to the techniques in competing in a certain industry.
 Competitive Advantage – a tantamount to superior quality wherein a customer would
pick out a particular brand and no other because of the belief that a particular brand
provides excellent performance.

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STRATEGIC MANAGEMENT PROCESS
 Strategic Implementation – the process which strategies and policies are put into
action through the development of programs, budgets, and procedures.

 Strategy Evaluation and Control – the process which corporate activities and
performance results are monitored so that actual performance can be compared with
desired performance.

 Performance – end result of activities, the actual outcomes of the strategic

management process.

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STRATEGIC MANAGEMENT: PHASES
 Phase 1: Planning and Financial Aspects

 Phase 2: Forecast – based planning

 Phase 3: Externally oriented planning

 Phase 4: Strategic Management

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BENEFITS OF STRATEGIC MANAGEMENT

 Clearer sense of strategic vision for the firm

 Sharper focus on what is strategically important
 Improved understanding of a rapidly changing environment

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GLOBALIZATION
GLOBALIZATION

- It is the internalization of markets and corporations, has

change the way modern corporations do business.

Electronic Commerce – the use of the Internet to

conduct business transactions.

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THEORIES OF ORGANIZATIONAL ADAPTATION

▪ Population Ecology Theory

- Proposes that once an organization is
successfully established in a particular
environment niche, it is unable to adapt to
changing conditions.

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THEORIES OF ORGANIZATIONAL ADAPTATION

▪ Institution Theory
- Proposes that organizations can and do
adapt to changing conditions by imitating
other successful organizations.

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THEORIES OF ORGANIZATIONAL ADAPTATION

▪ Organizational Learning Theory

- Organizations adjust defensively to a
changing environment and use knowledge
offensively to improve the fit between the
organization and its environment.

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THANKS!
Any questions?

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