You are on page 1of 17

Chapter 2: Developing a Useful Approach to Policy and Strategy Formulation and Advocacy

(Group to edit Master Click 1): Cabansag, Dalida, Fiecas, Panahon

subtitle style

Introduction
John Deweys (1993) concepts of how people think provide a useful rationale for the approach as a whole: the process of policy and strategy formulation may be viewed as a form of reflective, where one progresses step by step from recognition of the problem to solution.

Process of Policy Formulation


Record Present Policy This step is the formulation for subsequent steps. Basically, the policies of big business organizations are a matter of record. They are embodied in long-range plans, organizational structure and standard practice instructions and procedures. The task of recording present policy becomes much more difficult, but even here it is usually possible to infer from trends and executive behavior what policies are implicit in the organizations operations. However, if efforts to record present policy fail, one can fall back on the size-up approach for the next step. In recording present policy it is important to clarify the criteria that top management want to use as to the kind of company they want to operate and feel they ought to operate.
v

Identify Policy Problem The present policy is reappraised to determine whether policy problem exist. A policy problem is a major problem that may have a significant influence on the future success of the business organization as a whole. In reappraising present policy, one must first look at the organizations environment. In order to estimate the consequences of continuing present policies, one needs to study external trends and developments and to make assumptions about the economic outlook, the shape of future technology, and competitors action. One needs to establish premises about the environment on which analysis of business organization operations can be based. A useful next step is to analyze the financial and operating picture. Attention should be directed to evaluating margins, profits and returns on investment, cash flow, and availability of capital. Policy problems may take the form of threats or opportunities in the environment; failure to meet plans; signs of organizational strife; adverse trends with respect to share of market, competitive advantage; or financial results or conditions; or other indications of loss of health or vigor.
v

Diagnose the Cause The roots of the problem may lie in (1) an inadequate strategy, (2) inappropriate implemental approach, or (3) suffering from ineffective management.
v

Formulate Alternative Policies Whether the underlying cause has to do with strategy, implementation, or management, or a combination of these, it is characteristics of modern planning approaches that the first step is to consider all alternatives to offer some possibility of providing a solution. The important thing here is that no possible alternative be overlooked. This is the place for innovation rather than for logic.
v

Evaluate Alternative Policies This step requires analysis and comparison with respect to relevant factors. In business policy problems, factors involving subjective judgment are often more important and more determining than in operating problems. Evaluation of alternative solutions requires recognitions of the relevant considerations and evaluation of alternatives with respect to each. The product of this analysis is a ranking of every alternative with respect to each relevant consideration.
v

Choose a New Policy The choice of a new policy marks the end of the basic sixstep procedure.
v

Useful Questions in Strategy Formulation


v

Record Present Policy


a) b) c)

What is the present strategy? What kind of business does management want to operate? What kind of business does management feel they ought to operate? Are the significant trends discernable in the environment? Are attractive opportunities emerging? Are possible threats becoming evident? Are significant strengths, weaknesses, opportunities, and threats developing inside the company? Do these external trends and internal developments challenge the validity of the present strategy?

Identify Strategy Problems


a) b) c) d)

e)

Diagnose the Cause


a)

Does the strategy adequate exploit opportunities and/or meet threats in the environment? Is the strategy consistent with organizations competence and resources? What is the organizations distinctive competence? Does the strategy make full use of this competence? Is the strategy consistent with the kind of business management want to operate? Is the strategy consisted with the kind of business management feels it ought to operate? What is the substance of the strategy problem? What are the alternatives for solving the strategy problem? To what extent do the organizations competence and resources limit the number of alternatives that should be considered? What does the organization have to do well in order to succeed with each alternative? Can the business organization do it? To what extent do managements preferences limit the alternatives? To what extent does managements sense of social responsibility limit the alternatives?

b) c) d) e)

f)

g)

Formulate Alternative Strategies


a) b)

c)

d) e) f)

Evaluate Alternative Strategies


a) b)

c) d)

e)

Which alternative best solves the strategy problems? Which alternative offers the best match with the organizations competence and resources? Which alternative best satisfies managements preferences? Which alternative best meets managements sense of social responsibility? What is the relative importance of each of the preceding considerations? What should the new strategy be?

Choose a New Strategy


a)

Importance of Group Effort in Policy Formulation


According to R. H. Wagner and C. Arnold (1965), policy formulation can be approached as a group effort. Such effort should be facilitated through the use of group discussion techniques based on the problem-solving framework. One of the principal tools contributing to effective leadership is a carefully prepared plan for guiding the discussion. It is a constant challenge to the leader of such sessions to maintain that balance between freedom and control which makes for progress, yet does not stifle creative thinking.

Advocating Business Policy Proposals


Process of developing a presentation: v Phrasing the proposition stating the solution arrived by the process of formulation as a proposition policy. Three major kinds of proposition: a) Proposition of facts b) Proposition of values c) Proposition of policy A proposition is an expression of a judgment for which one seeks acceptance. Any proposition of policy must be expressed as a normative statement. A normative statement calls for some specific action to be performed and is characterized by the word should.

Discovering the issues and formulating the major contentions raising the vital questions on which the validity of the proposition hinges and formulating the affirmative answer to these questions. Support of a proposition of business policy will involve answering affirmatively questions relative to four issues: a) Do policy problems exist? b) Has the cause of the policy problems been diagnosed? c) Does the proposed policy remove the cause? d) Is the proposed policy practicable? Two important characteristics of issue: a) Issues are question on which the validity of the proposition hinges. b) Each issue is vital to the proposition
v

Marshaling the evidence selecting the facts, reasons, opinions, and assumptions to use in support of the major contentions. Four sources of evidence: a) Facts b) Generalizations c) Opinions d) Assumptions It is important that sufficient relevant evidence be presented in support of any contention. Evidence contradictory to the contention may often exist as well, and should not be ignored. Opposing arguments must be dealt with in developing support for a contention.
v

Outlining the report rearranging logical argument to include audience appeal. Two main factors in planning:
v
a)

The characteristics of the situation, the nature of the problem presented, the specific issues to be resolved, the facts available. The predisposition of the evidence, awareness of the problem, recognition of the need for action, initial receptivity to the predisposition to be offered.

b)

Writing the report preparing the presentation Three major areas to be checked:
v
a)

Organization the report should be structured logically and coherently. It should be unified, and every part should be related to the preceding and following parts. Contents it should be clear to the reader what problem is being discussed and what action is being proposed. The arguments should be sufficiently complete and developed, irrelevant material and repetition should be deleted to avoid distracting him from the thread of the argument. The evidence offered should be clear, applicable, and adequate to support conclusions. Style presentation should be edited for grammatical sentence structure, proper punctuation, accepted usage, accurate diction and so forth.

b)

c)

Briefing the argument organizing the major contentions and evidence into logical order. It is a preparation tool designed to organize the logic of the argument, and is valuable primarily as an aid in making the argument, complete and consistent. It is not intended to serve directly as an outline for the written report but provides the logical foundation for such an outline. Three parts of brief argument:
v
a)

b)

c)

Introduction include a statement of the proposition; the origin and history of the problem, including a definition of the present policy; the immediate cause for discussion; and a statement of the issues. It is designed to lead to the supporting statements of the analysts stand on the proposition, but not to set forth that support. Body present the major contention as the main points, each supported by reasons and evidence arranged in a logical order. Conclusion a summary of the essential points of the body of the brief. The closing should be a statement of the proposition.

Alternative Approach in Preparing Policy Report

Formulation Report

Brief

Outline

The End

You might also like