Professional Documents
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Business Policy
Business Policy
BUSINESS POLICY AS A
DISCIPLINE
The genesis of business policy
The origins of business policy can be traced back
to 1911 when the Harvard Business School
introduced an integrative course in management
aimed at providing general management capability.
This course was based on case studies which had
been in use at the school for instruction purposes
since 1908. However, the real impetus for
introducing business policy in the curriculum of
business schools came with the publication of two
reports in 1959.
BUSINESS POLICY AS A
DISCIPLINE
The Gordon and Howell Report sponsored by Ford
Foundation had recommended a capstone course
of business policy which would give participants an
opportunity to pull together what they have
learned in the separate business fields and utilize
this knowledge in the analysis of complex business
problems.
In todays situation business policy is considered
as a integrative course offered to those who have
already been through a set of core functional
area courses.
BUSINESS POLICY AS A
DISCIPLINE
The term Business Policy has been used
traditionally though new titles such as Strategic
Management, Corporate Strategy and policy
and so on are now used extensively for the course.
The discussion has so far been related to the
academic status of the business policy course.
In practice however, the development has been
along different lines.
EVOLUTION BASED ON
MANAGERIAL PRACTICES
- Guleck has viewed the development in
business policy as arising from the use of
planning techniques by managers. Starting
from day-to-day planning in earlier times
managers till recently tried to anticipate
the future through the preparation of
budgets and by using control systems like
capital budgeting and management by
objectives.
EVOLUTION BASED ON
MANAGERIAL PRACTICES
However as these techniques were unable to
emphasis the role of the future adequately, long
range planning came into use. But soon, long range
planning was replaced by strategic planning and
later by strategic management A term that is
currently being used to describe the process of
strategic decision making. Strategic Management
forms the theoretical framework for business
policy courses today.
HISTORICAL PERSPECTIVE OF
BUSINESS POLICY
Hofer has viewed the evolution of business policy in
terms of four paradigm.
For the sake of convenience, these shifts may be
considered as four overlapping phases in the
development of the subject of Business Policy. It is
interesting to note that the development of business
policy as a field of study has closely followed the
demands of real life business.
Ad hoc Policy According to Hofer and others the
first phase which can be traced back to the mid
1930s rested on the paradigm of Ad Hoc Policy
making. The need for policy making arose due to the
nature of the American business firms of that period.
Planned Policy
formulation
Due to the increasing environmental
changes in the 1930s and 40s in the
U.S. planned policy formulation
replaced Ad Hoc policy making.
Based on this second paradigm the
emphasis shifted to the integration
of functional areas in a rapidly
changing environment.
Strategy Paradigm
Increasing complexity and accelerating changes in
the environment made the planned policy paradigm
irrelevant since the needs of a business could no
longer be served by policy making and functional
area integration only. By the 1960s there was a
demand for a critical look at the basic concept of
business and its relationship to the environment.
The concept of strategy satisfied this
requirement and the third phase based on a
strategy paradigm emerged in the early sixties.
Strategic Management
The current thinking which emerged in the eighties is
based on the fourth paradigm of strategic
management. The initial focus of strategic
management was on the intersection of two board
fields enquiry : The strategic processes of business
firms and the responsibilities of general management.
Thompson and Strickland say The approaches and
methods of analysis of strategic management have not
yet coalesced into theory of how to manage an
enterprise. But they very definitely do represent a
powerful way of thinking to resolve strategic issues.
Business Policy
Business Policy
This comprehensive definition covers many aspects of
Business Policy
THE IMPORTANCE OF
BUSINESS POLICY
Business Policy is important as a course in the
Management curriculum and as a component of
executive development programs for middlelevel managers who are preparing to move up
to the senior management level. A study of
Business Policy fulfills the needs of
management students as well as those middlelevel managers. We shall consider four areas
where this course proves to be beneficial
For learning the course.
For understanding the business environment.
For understanding the organization.
For personal development.