Welcome!

Business Policy Class

Business Policy
Session 1

Course Orientation
1. Syllabus - Course description, objectives,

course methodology
2. Course requirements - Midterms & finals,

quizzes, cases, book review & a paper

3. Basis for grades - 40% - 40% - 20% 4. Required text & reference materials, cases, etc 5. Course Timeframe & Schedule 6. Absences & Tardiness

Course Orientation
Cases -will be pre-assigned -one week to prepare -everyone submits a type written report - group needs to present & discuss

Course Orientation
Case Report Format
(3 pages maximum) 1. 2. 3. 4. 5. Point of View Problem Areas of Consideration Alternative Courses of Action Recommendation Total 1 point 3 points 2 points 2 points 2 points ---------10 points

Course Orientation
Paper - An evaluation of a Corporate Plan
Topics that must be included in the paper: 1. Firm Background 2. Present the Strategic Plan 3. Present systems & structure supporting implementation of the Strategic Plan 4. Analysis/Evaluation/Recommendation

Deadline for submission: Feb 21 Maximum 20 pages

Course Overview
Business Policy or Strategic Management?

Course design is for each one to function as a CEO or the owner of the organization

it is an integration course!

Course Overview
Major task is to make strategic decisions or justify those decision orally or in written communication Strategic decisions accomplish 2 things: 1) determines future direction 2) determines competitive position of a firm in the long term

Course Overview

Course competencies? Big picture and system thinking, planning & forecasting. Doing the right thing (effectiveness) as against doing things right (efficiency). You need to make a stand strategically & defend your position using different tools. The rationale for your decision is more important than the actual decision!

The Nature of Strategic Management

What is Strategic Management? Art & science of formulating, implementing and evaluating cross-functional decision that enable an organization to achieve its objectives.

The Nature of Strategic Management

What is Strategic Management?

Formal Systematic Pervasive Managerial process Organized by time, responsibility & information Goal is to direct & control the firms future

The Nature of Strategic Management

What is Strategic Management?
Purpose - to exploit & create new & different opportunities for tomorrow (as against optimizing for tomorrow the trends of today).

It is the companys game plan!

The Nature of Strategic Management

What is Strategic Management?
Started in the 50s, became popular in the 60s & 70s , was cast aside in the 80s and was widely used again in the 90s up to now

The Nature of Strategic Management

Stages of Strategic Management
1. Strategy formulation, 2. Strategy implementation 3. Strategy evaluation

The Nature of Strategic Management

Stages of Strategic Management - Strategy Formulation

Formulation - developing a vision & mission,

identifying firms external opportunities & threats, determining internal strengths & weaknesses, establishing long term objectives, generating alternative strategies & choosing strategies to pursue

The Nature of Strategic Management

Stages of Strategic Management - Strategy Formulation

Strategy Formulation decisions commit an organization to specific products, markets, resources and technologies over time

Strategies determine long term competitiveness Planning, forecasting, analytical and creative skills critical in choosing right strategies

The Nature of Strategic Management

Stages of Strategic Management - Strategy Implementation Implementation - requires the establishment of annual
objectives, devise policies, motivate employees & allocate resources to execute strategies

Includes creating an effective organizational structure,

redirecting marketing efforts, preparing budgets, developing & using information systems & linking compensation to organizational performance

The Nature of Strategic Management

Stages of Strategic Management - Strategy Implementation

Implementation - requires personal discipline,

commitment & sacrifice.

Interpersonal skills, leadership and motivational skills

are critical to strategy implementation

The Nature of Strategic Management

Stages of Strategic Management - Strategy Evaluation

Evaluation is primary means for getting information. 3 activities - review external & internal factors that are
bases for current strategy, measuring performance, taking corrective action Requires objectivity, critical thinking and the maturity to accept what is wrong or what need to be changed

The Nature of Strategic Management

Stages of Strategic Management

Occurs at 3 hierarchical levels:

- Corporate - Business unit level - Functional

All aligned & working as one team towards achieving the

firms goals.

The Nature of Strategic Management

The Strategic Management Model

The Nature of Strategic Management

Benefits of Strategic Management- Financial & Non-financial
1. Initiates & influences ( rather than just respond to) activities, thus exerting control over its own destiny 2. Helps formulate better strategies using a more systematic, logical & rational approach 3. Can achieve greater understanding & commitment from all managers & employees

The Nature of Strategic Management

Benefits of Strategic Management- Financial & Non-financial
4. Produces more effective decisions 5. Increases profitability & success 6. Enhances awareness of external factors such as competitors strengths, productivity, resistance to change etc.

The Nature of Strategic Management

Pitfalls in Strategic Management

Using strategic planning to gain control over decisions & resources Doing strategic planning only to satisfy accreditation or regulatory requirements Too hastily moving from mission development to strategy formulation

The Nature of Strategic Management

Pitfalls in Strategic Management

Failing to communicate the plans Top managers making intuitive decisions that conflict w/ formal plan Top managers not actively supporting the strat planning process Failing to use plans as a standard for measuring performance

The Nature of Strategic Management

Pitfalls in Strategic Management

Delegating planning to a planner rather than involving all managers Failing to involve key employees in all phases of planning Failing to create a collaborative climate supportive of change

The Nature of Strategic Management

Pitfalls in Strategic Management

Viewing planning as unnecessary or unimportant Becoming so engrossed in in current problems that insufficient time or no planning is done Being so formal in planning that flexibility and creativity are stifled.

The Nature of Strategic Management

Why not plan?
Poor reward structures, firefighting, waste of time, too expensive, laziness, content w/ success, fear of failure, overconfidence, prior bad experience, self interest, fear of the unknown, honest difference in opinion, suspicion

The Nature of Strategic Management

Guidelines for Effective Strat Management
Evaluate the quality of the strat management process Keep it simple and as non-routine as possible Eliminate jargon & arcane planning language Stimulate thinking & action that challenge the assumptions underlying current strategy

The Nature of Strategic Management

Guidelines for Effective Strat Management
Welcome bad news Build a corporate culture where strat management is central & its purposes are understood Do not permit technicians to co-opt the process It is a process for learning & action

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The Nature of Strategic Management

Business Ethics & Strategic Management ? Business Strategy & Military Strategy?

The Nature of Strategic Management

Q&A

The Nature of Strategic Management

Sample Case :

Malabon Marketing

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The Nature of Strategic Management

End of Session 1

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