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QUESTION ANSWERS BANK FOR SEMESTER 3RD YEAR STUDENTS BUSINESS POLICY AND STRATEGIC MANAGEMENT Q. 1 What is Business Policy? How does Business Policy make the Study of Management more meaningful? Ans. The term Business Policy may be used interchangeably with Strategic Management, corporate planning etc. Primarily the term Business Policy means a longterm planning for the total business ± ³as a whole. Business Policy Corporate/overall functioning planning/formulation of strategies Thus Business
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  QUESTION ANSWERS BANK FOR SEMESTER 3 RD YEAR STUDENTSBUSINESS POLICY AND STRATEGIC MANAGEMENTQ. 1 What is Business Policy? How does Business Policy make the Study of Managementmore meaningful?Ans. The term Business Policy may be used interchangeably with StrategicManagement, corporate planning etc. Primarily the term Business Policy means a long-term planning for the total business ± ³as a whole.Business Corporate/overall functioningPolicy planning/formulation of strategiesThus Business policy means a long-term planning of any Organization for the purpose of its ± ³GROWTH, SURVIVAL, EXPANSION, DIVERSIFICATION ETC . The planning of the overall Business is done by the top-level managers who have therelevant skills experience and knowledge to take a strategic decision for the overallcorporate. According to Christensen:- ³Business Policy is the study of the functions andresponsibilities of Senior Management, the crucial problems that affect success in thetotal enterprise, and the decision that determine the direction of the Organization andshape its future.´From the above definition it may be understood that Business Policy attempts to studywhat path the Organization is going to take in future. According to Edmond and Gray ³A business policy is nothing more than a welldeveloped statement of directions and goals. Goals involve definitions of precisely whatthe business is or should be and the particular kind of company it should be. Directionguides the action of the firm to accomplish these goals´.According to Miller and Earnest ³A policy is a statement or a commonly acceptedunderstanding of decision making criteria or formulate prepared or evolved to achieveeconomy in operations by making decision; relatively routine or frequently occurring problems and consequently facilitating the delegation of such decisions to lower managerial levels.´  Nature of Business Policy:   1. Business Policy is a Study:- It is a study of what the top level Managers do and what guides their activities. 2. Top-Management:- Business Policy deals with the long term perspective of the Organization. These decisionare taken by the managers at the senior level of management. Therefore, Business Policyattempts to Study the functions and responsibilities of the senior management which primarily concerns itself to the crucial problems or decisions of the organization. 3. Future ±Oriented:- As the Study of Business Policy entails what should be done to take a desired futurecourse of position it is future-oriented. The senior level managers anticipate and predictthe future and take a policy decision in the present. 4. Choice of a Position:- The study of a Business Policy involves evaluating Various courses of action and variousdesired future positions and ultimately choosing one of the best suitable future position. 5. Choice of a Strategy: It also involves an evaluation and choice of a Strategy to reach upto the desired future position. 6. Mobilization of Resources:- The study of Business Policy is also concerned with the optimum and mobilization of theavailable and the required resources in an organisatio9n for the achievement of the : Objectives of Business Policy:In terms of knowledge.    The learner of business policy have to understand the various concepts involvedlike strategy, policies, plans and programmes are encountered in the functionalarea courses too.    A knowledge of the internal and external environment and how it affects thefunctioning of an organization is vital to an understanding of business policy.     Information about environment helps in the determination of the mission,objectives, and strategies of a firm.    The implementation of strategy is complex issue and through the knowledgegained business policy enable the learner to visualize how the implementation of strategic management can take place In terms of skills    Attainment of knowledge should lead to the development of skills. Analysis of case studies and interpretation and analysis of the business events.    The study of BP should enable a student to develop analytical ability and use it tounderstand the situation in a given case or incident.    The study of business policy should lead to the skills of identifying the factorsrelevant in decision making.    It increase the mental ability to the learners and enables them to link theory with practice.    Case analysis leads to the development of oral as well as written communicationskills. In terms of attitude    The attainment of the knowledge and skill objective should lead to the inculcationof an appropriate attitude among the learners.    It developed a generalist attitude. The generalist attitude enables the learners toapproach and assess a situation fro all possible angles. Evaluation of Business Policy:- In the Initial days managers used to do with day to day planning methods. The first phasein mid 1930  s was the premise of ad-hoc policy-making mainly due to the nature of the business of that period. The second phase in 1930  s and 1940  s was marked by theincreasing environmental changes. Planned Policy formulation replaced ad-hoc policy  making, which led to the emphasis shift to the integration of functional areas. The third phase during 1960  s was based on strategy paradigm. It was the effect and relationship of the business with the environment, which guided the process of policy making. In theearly eighties, the patterns changed again companies went global and competitionincreased Japanese Companies unleashed a force across the world along with other Asiancompanies and posed threats for the U.S. and European Companies. Importance of Business Policy:  The study of Business Policy makes the study of management more meaningful. Itcompletes the study of management for the students, as it puts together the information of all the functional areas and gives a complete picture of the organization for determining acomprehensive future policy of an organization. For Students:- a) Business Policy seeks to integrate the knowledge gained in various functional areas of management i.e. Finance, Production, Marketing, and Human Relations etc. b) All the constraints and complexities of the real life business are studied in the subjectof Business Policy.c) The study & practice of management becomes more meaning with the integration of all the functional sub-systems. For Executives:- d) Business Policy helps to create an understanding of how policies are formulatede) The study makes the executives more receptive to the developments in theenvironment to pick ideas and suggestion for implementation purpose.f) Business Policy prepares the executives at middle-level of management for theunderstanding of strategic decision ± making.g) It offers a unique perspective to executives to understand the senior management¶sviewpoint.The purpose of business policy:1.   To integrate the knowledge gained in various functional areas of management.2.   To adopt a generalist approach to problem-solving .
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