BUSINESS POLICY AND STRATEGIC MANAGEMENT
Business Policy as Discipline
The origin of business policy can be traced back to 1911, when Harvard Business School introduced an integrative course in management aimed at the creation of general management capability. This course was based on interactive case studies which had been in use at the school for instructional purposes since 1908. The course was intended to enhance general managerial capability of students, the introduction of business policy in the curriculum of business schools/management institutes came much later. In 1969, the American Assembly of Collegiate School of Business, a regulatory body for Business, a regulatory body for business schools, made the course of business policy, a mandatory requirement for purposes of recognition. Basically business policy is considered as a capstone, integrative course offered to students who have previously been through a set of core functional area courses. The term “business Policy” has been traditionally used though new titles for the course have begun to be introduced in recent years. According to William F. Glueck, development in business policy arose from the development in the use of planning techniques by managers. Starting from day-to-day planning in earlier times, management tried to anticipate the future through preparation of budgets and using control system like capital budgeting and management by objectives. With the inability of these techniques to adequately emphasize the role of future, long-range planning came to be used. Soon, long range planning was replaced b y strategic planning, and later by strategic management, a term that is currently used to describe the process of strategic decision making.
Business policy, as defined by Christensen and others, is “the study of the functions and responsibilities of senior management, the crucial problems that affect success in the total enterprise, and the decisions that determine the direction of the organization and shape its future”. The problem of policy in business, like those of policy in public affairs, have to do with the choice of purposes, the moulding of organizational identity and character, the continuous definition of what needs to be done, and the mobilization of resources for the attainment of goals in the face of competition or adverse circumstances. Business policy tends to emphasize on the rational-analytical aspect of strategic management. It presents a framework for understanding strategic decision making. Such a framework enables a person to make preparations for handling general management responsibilities.
Meaning and the Nature of Management
To understand strategic management. We need to have a basic understanding of the term management. The term management can be used in two major contexts. A) It is used with reference to a key group in an organization in-charge of its affairs. In relation to an organization, management is the chief organ entrusted with the task of making it a purposeful and productive entity, by undertaking the task of bringing together and integrating the disorganized resources of manpower, money, materials, and technology into a functioning whole.
An organization becomes a unified functioning system when management systematically mobilizes and utilizes the diverse resources. The survival and success of an organization depend to a large extent on the competence and character of its management. Management has to also facilitate organizational change and adaptation. B) The term is also used with reference to a set of interrelated functions and processes, to a field of study of discipline in social science and to a vocation or profession. The functions and processes of management are wide-ranging but closely related.
They range all the way from design of the organization, determination of the goals and activities, mobilization and acquisition of resources, allocation of tasks and resources among the personnel and activity units. They also include adoption of certain techniques, tools and methods for carrying on activities, through articulation of skills and efforts of organizational personnel in a unified manner and installation of communication and control system to ensure that what is planned is achieved. A wide range of definition of management exist in the literature on management. Here we shall cite the definition of a few theories:
Peter Drucker: Management is a function, a discipline, a task to be done, and managers practice this discipline, carry out the function and discharge these tasks.
Dalton McFarland : Management is the process by which managers create, direct, maintain and operate purposive organizations through systematic, co-ordinated an co-operative human effort.
Management is an influence process to make things happen, to gain command over phenomina, to induce and direct events and people in a particular manner. Influence is backed by power, competence, knowledge and resources. Managers formulate their goals, values and strtegies, to cope with, to adapt and to adjust themselves with the behaviour and changes of the environment.