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Strategy and Policy

Strategic Management

Anthology 2014 37 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Contents

Business policy and strategy

The three schools of strategy

Personality and learning styles

Project proposal –case study 1

Personality types

Budgeting approaches

DAMAIC Cycle

Organizational structure

Strategic choices

Journal task-case study 2

Human resources challenges

Business policy and strategy

All successful business ventures are based on pre-determined mission, vision and other policy statements. Most companies have got clearly outlined business strategies and policies. The strategies and policies are incorporated into business plans. The means by which the strategies and policies are developed vary from company to company. The case study of Corning has identified how some organizations craft their policies and strategies. This discussion focuses on the difference between a policy and strategy; then go on to look at how these can be crafted.

There is a strong link between a policy and a strategy. In general terms, a strategy is broader than a policy. A strategy is a broad policy framework which deals with what the business wants to achieve and how to achieve that. In strategic the document, such as a business plan, a number of strategic options are identified. A policy, on the other hand, spells how to achieve a strategic choice. The policy spells out what needs to be done, when and how. With a clear policy statement, standard operating procedures and standards are identified and explained.

The business strategy is created by the top executive of an organization. What constitutes the top executive varies from company to company depending on the size and organizational structure of the firm. In some cases the top executive is made by people such as the chief executive officer, the marketing manager, the chief operating officer, the financial controller and the human resources executive, among others. These people meet during a specified period of time and do the planning. Below these top executives are other senior personnel who give their inputs during the strategic planning sessions. Managing directors, general managers and other senior managers are also involved. The middle managers write their proposals to the top executives. The top management sits down and identify the best strategies for doing business. In the case of Corning, the top executives are the ones that make up the Growth and Strategy Council. In the Growth and Strategy Council of Corning there are people such as chief operating officer, chief technology officer, and the chief executive officer. These people come together and meeting the lower managers in their prolonged discussions; it is in these meetings that the strategy for the business is identified and mapped out. The lower managers give out their presentations on the various strategic issues, strategic challenges and opportunities that the business has. After the deliberations with the lower management echelon, the executive identifies the strategies to adopt. The strategic choices are identified after long process of analysis, starting from the environmental analysis. The strategy choices available are vetted through rigorous process. They may use questions to analyze the strategic options. They may use some evaluation criteria to identify the strategy choices. The strategic choices may be vetted out by finding how each of these can help the firm to acquire competitive advantage, how each can lead to achievement of the business goals, how each of these fits into the organizational culture and feasibility issues. Some organizations use aspects of the balanced score board to assess the strategies available. They assess these on how they would enhance the financial performance of the firm, how it could assist in meeting customer expectations, how it could assist in meeting the needs of the internal customers and how that could foster the learning and growth of individuals, groups and teams.

The same means of identifying the policy and strategy at Corning is the one which most companies use. When I was working at Zimuti Pvt, this is the method that had been applied. All section managers could meet during certain periods of the year and map out these plans. Since Zimpost is a national organization, some committees are introduced at provincial level. They map out their strategies which are then evaluated by a national strategy committee. The involvement of provincial strategy committees is done to source various ideas and possibilities. The committees would then forward their drafts to the board of directors who approve them, with or without amendments. With State Enterprises in Zimbabwe, the heads of each provincial unit meet and map out their strategies at a central platform. It is the responsibility of individual unit heads, to first consult with their staff.

What is similar in the various means of identifying the policy and strategic choice is the wide consultation platform that is created. The lower and middle managers put their ideas in the planning process; the top management sifts the information and gets the best ideas. Drafts of the business plan may be circulated to lower management members to seek additions and subtractions before the final policy and strategy document is finalized and adopted. It is clear from the example of Corning that policy committees that are made of senior people can be used effectively in strategic planning. There should be wide consultations if the best strategies and policies are to be put in place and be adopted.

Reference

1. Strategic Choice - Management Class http://management-class.com/courseware/strategios/mb102/ch11.ppt
2. Chapter 1 The Nature of Strategic Management http://www.csun.edu/~hcmgt004/chap06.ppt
3. BS2232 – BUSINESS POLICY http://www.aston.ac.uk/EasySiteWeb/GatewayLink.aspx%3FalId%3D
4. Business Policy and Strategic Management - SlideShare http://www.slideshare.net/prashantmehta371/chapter-2-business-policy-and-strategic-manageme
5. Global Business Policy Council: Scenario-Based Strategic Planning ... https://www.atkearney.com/en_GB/gbpc/issue-papers-and-perspectives/article/-/asset_publishe...

The three schools of strategy

In order for a business venture to thrive it needs to have a clear strategy that supports the vision of the organization. A strategy is an action plan. Some people say that a strategy is a broad intent. It spells out what the business needs to do in order to survive. There are various ways in which strategy can be crafted and implemented. This discussion will concentrate on three schools of strategy making namely: the planning school, the positional school and the resources based one. Some examples shall be given on each of the schools. There is no school of thought, as far as strategy is concerned, which is superior to the other. The type of strategy which a firm adopts depends on the company’s aspiration, its management and the environment. In some cases people make a strategy that is based on views of these three schools of thought.

The first school of thought is the planning one. The planning school is based on a number of factors and issues. One of the things to be considered according to this school is the past trends. During the planning process the team needs to look at what used to take place within the last three to four years. From there the team can now make a forecast of what is likely to happen in the future and then make a plan around that analysis. Another essential aspect of planning in this case is how stable the organizational structure is. The planning is based on a stable structure of the company and should relate to the firm’s environment. With this planning there is centralization. The plans are made by appointed people and needs to be approved by a group of people, for example the chief executive officer or the board of directors. In this planning there is need to align the needs of the firm with what is happening in the environment. This means that factors such as political, social, economic and legal must be considered during the planning process. This planning is detailed and once approved there won’t be leeway in its implementation. Some examples of this school of strategic planning is when the company is planning to expand its business by penetrating the existing market or when there is a new product that has been developed and which needs to be launched. This strategy can be used in market development and diversification process.

The next school of strategy is positional one. With this one there is need for being very analytical with the existing system and new intentions. This may need the use of tools such as PEST or PESTLE or SWOT analysis, which help the firm to get as much information as possible on the internal and external environment. There is need to have a strong understanding of various factors that affect the operation and viability of the firm. The firm must analyze the market critically and find out how best its products and services fit in that environment. There is need, as well, to base the planning on the performance of the organization. So there is need for performance measurement process. Examples of how this planning takes place include the use of Porter’s competitive advantage factors, the use of the Boston consulting Group matrix and the GE matrix. For example the BCG matrix analyses products such as cash cow, Star, Dog and the Problem child. These factors are used to show the extent of the market growth.

The third and last school of strategy to talk about is the resource based one. This school bases the planning process on what resources the company has. The resources would include financial, structural and human capital. The performance of the firm is dependent on these resources and these resources must be effectively and efficiently used. Hence, there is need for careful planning, centered mostly on how the company can use its internal resources. The premise of this school of thought is that the performance of the firm is based on how best it utilizes its own resources. However, this school of planning has got one problem; that of ignoring the external factors, such as political, social, legal and economic that affect the performance of the business. An example is how a company plans its budgets, use of performance management and then uses audits to ascertain the use of its resources.

This essay has looked at how the company makes its strategic plans in order to achieve competitive advantage. The three schools of thought are essential as they provide a theoretical framework or guidance on how to come up with a company strategy. Instead of sticking to one of these schools, it would be best to make use of the information from all the three schools of thoughts in regards to strategy making and implementation.

Reference

John Kay - Mastering Strategy: Resource Based Strategy http://www.johnkay.com/1999/09/27/mastering-strategy-resource-based-strategy

POSITION -BASED AND RESOURCE - BASED STRATEGIES http://www.chinaacc.com/upload/html/2013/06/27/lixingcunc7768147dbf94127a7dc66c77a7b7179.pd...

The Resource - Based View Within the Conversation of Strategic ... http://business.illinois.edu/josephm/BA545_Fall%25202011/S10/Mahoney%2520and%2520Pandian%25...

Section 2: Strategic Development Frameworks

http://faculty.fuqua.duke.edu/~moorman/GeneralMills/Section2/Section2.htm

Personality and learning styles

People have various mental makeups. This leads to people to behave, act and have differing life styles. People’s personalities affect how they learn and how they work. There are various types of personalities; examples of personality types include extrovert, introvert, sensing, thinking, perceiving, feeling and judging personalities. This essay will explore tow personality types namely, introvert and extrovert. Then the writer will focus on three learning styles.

Extroverts are different from introvert; the differences are based on their behaviour and mental disposition. Extroverts are action packed people who tend to focus on the outer world for their support and energy. They enjoy socializing a lot with various people. They like a lot of interaction, with people they know or new people. They like to talk a lot and like consulting other people if they have got some problems. Whenever they are doing other activities they like a lot of talking. In order for them to learn they require to mix with other people and discuss things. They are willing to be engaged in a lot of activities as a means of learning. Extroverts do not hide their emotions; if they are happy they show it and if they are sad they show it too. They however do some actions without taking a lot of considerations about the impacts of what they do.

The other opposite personality type is that of introverts. Introverts are quiet people. They like to think before they do whatever action. They do not rely on other people for their own strengths. They are intrinsically motivated to do whatever they feel like doing. They so much need time to meditate on things as well as reflecting on their experiences and actions. They concentrate on their memories of the past in order to decide what to do next. Although they can be sociable they need time to be own their own and to reflect on their lives.

As we have seen that there are various personality types, it equally shows that there various ways in which people learn. People do not learn in the same way. One way is the way extroverts learn; they have their own learning style. Extroverts depend on action, activities, experience and interaction to learn. They learn best through discussions with other people. They like group discussions. They require doing practical activities from which they learn. When they talk they form thoughts that last. Talking helps them to form mental images of things around them.

The other type of learning style is the one used by the introverts. Introverts like activities where they mostly use their imagination and thinking capacities. They prefer to work as individuals rather than in groups. They enjoy reading alone, as well as listening to lectures. They also enjoy writing some work that is mentally involving. Therefore their core ways of learning involve observations, written work and practical activities which they do as individuals.

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Details

Pages
37
Year
2014
ISBN (eBook)
9783656642220
ISBN (Book)
9783656642183
File size
617 KB
Language
English
Catalog Number
v271903
Institution / College
University of the People – Uopeople
Grade
B
Tags
strategy policy strategic management

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Title: Strategy and Policy