1- Strategy & Policy and Tactics

The word strategy comes from Greek strategos, which refers to generalship. The concept and
practice of strategy and planning started in the military, and overtime, was applied to business and
management. The key objectives of both business strategy and military strategy are the same, i.e. to
secure competitive advantage over the rivals.
A term often confused with strategy is ‘Policy’; however, it is a different concept from strategy.

Strategy: “A company’s strategy consists of the combination of competitive moves and business
approaches that managers employ to please customers, compete successfully, and achieve
organizational objectives.”

Policy: ‘Policy’ is derived from a Greek work Politeia meaning ‘polity’ i.e. the state and the citizens.
The dictionary meaning of policy is the art or manner of governing a nation or the principles on
which any measure or course of action is based. Therefore, policy is the prescribed guidelines for
governing actions of an organization with respect to given objectives.

 While comparing Strategy and Policy, it is derived that

a) Policy is a broader or more general concept in the form of guidelines or principles; however,
Strategy is more specific as it relates to a particular situation, objective or target.
b) Policy generally comes first; and strategies are considered as element of policy.

Strategy & Tactics

Another term tactics is also at times confused with strategy, however, from an overall strategy, a
number of sub-strategies follow. These sub-strategies are referred as tactics.

 Tactics are the specific activities which deliver and implement the strategies in order to fulfil
objectives and pursue the mission. Often short term; they can be changed frequently if
necessary.
Now, while comparing policy, tactics and strategy it is clear that policy comes before strategy and
strategy comes before tactics. However, all these concepts are closely interrelated and play crucial
roles in the management of a company.

1- Strategy:
 A strategy is the means to ends for an organization.
 It is a plan or course of action.
 It is related to the organization’s activities which are drawn from the policies, objectives and
goals.
 Strategy is mostly about the long-term actions, moulded by overall purpose & mission of the
organizations.
 Strategy should lead to competitive advantage and help win market battles against
competition.
 It must be backed by resources & skill-sets.
3- Strategic Management
Strategic management is an art as well as science of formulating, implementing and evaluating
decisions across functional areas to help an organization in achieving its objectives. It focuses on
integrating management, marketing, finance, production, R&D and IT to achieve organizational
success.

4- Benefits of Strategic Management

The major advantage of strategic management is to help organizations to formulate better strategies
by following a methodical, rational approach while making strategic choice.
Greenly stated the below mentioned benefits of strategic management:
1. Permits organizations to identify, priorities and exploit opportunities.
2. Gives an unbiased and real picture of management problems.
3. Provides guidelines to stimulate coordination and control of activities.
4. Reduces the impact of adverse conditions and changes in the business environment.
5. Helps in taking good decisions to support established objectives.
6. Allows effective allocation of time and resources to identified opportunities.
7. Helps in reducing the wastage of resources and time.
8. Encourages internal communication.
9. Integrates the behaviour of individuals into total effort.
10. Defines clear individual responsibilities.
113. Stimulates a favourable attitude toward change.
14. Creates discipline in the management of a business.1. Promotes forward thinking.

5- Levels of Strategy

 Corporate level:
strategy could be at corporate level, the SBU level and at functional level. Corporate level strategy is
the overall action plan including all the functions executed by different SBUs. The plan relates to
objectives of the company, resource allocation and coordination of the SBUs for best possible
results.
 SBU (strategy business level):
An SBU, as defined by Sharplin, is “any part of a business organization which is treated separately
for strategic management purpose.”
SBU level strategy is a complete plan relating to the objectives of SBUs, resources allocated to
different functional divisions and coordinate so as to achieve corporate level objectives.
 Functional level:
Functional level strategy deals with defining objectives of one specific function, allocating resources
among different operations within a function and coordinating between them in order to achieve the
SBU and corporate-level objectives.
6- Schools of Thought or approaches on Strategy Formulation:
These schools of thought are classified in three groups.
The Prescriptive School
1. The Design School
2. The Planning School
3. The Positioning School
The Descriptive School
4. The Entrepreneurial School
5. The Cognitive School
6. The Learning School
7. The Power School
8. The Cultural School
9. The Environmental School
The Integrative School
10. The Configuration School

7- Phases in Strategic Management Process (SMP)

“Strategic management is the dynamic process of formulation, implementation, evaluation and
control of strategies to achieve the organization’s strategic intent.”
This definition emphasizes on four stages of the strategic management process namely formulation,
implementation, evaluation and control.

 Strategic intent is the list of objectives that an organization creates for itself. This includes
defining its vision, mission, objectives and business.
 In the second stage a single strategy or few strategies are formulated, the stage is also called
strategic planning. Essentially, this is an analytical phase in which strategists think, analyze
and plan strategies.
 The third phase of implementation is the ‘putting into action’ phase. The strategies
formulated in the previous stages are implemented through a number of executive and
managerial actions.
 Lastly, the fourth stage of evaluation and control involves assessing whether the formulated
strategies were apt and whether the same were implemented effectively.
 8- Elements of SMP
Each phase of the strategic management process consists of a number of elements, which are discrete
and identifiable activities performed in logical and sequential steps. The following are considered as
essential elements of SMP –
A. Establishing the hierarchy of strategic intent –
 Creating and communicating a vision
 Designing a mission statement
 Defining the business
 Adopting the business model
 Setting objectives
B. Formulation of strategies –
 Performing environmental appraisal
 Doing organizational appraisal
 Formulating corporate-level strategies
 Formulating business-level strategies
 Undertaking strategic analysis
 Exercising strategic choice
 Preparing strategic plan
C. Implementation of strategies –
 Activating strategies
 Designing the structure, systems and processes
 Managing behavioral implementation
 Managing functional implementation
 Operationalizing strategies
D. Performing strategic evaluation and control –
 Performing strategic evaluation
 Exercising strategic control
 Reformulating strategies

9- Participants in SMP
Strategic planning is a team effort and involves all levels and functional units of an organization —
top executives, middle managers and supervisors, and employees.
The five participants are:
A- Board of Directors
B- Chief Executive Officer (CEO)
C- Corporate Planning Staff
D- Other managers
E- Consultants

10- Comprehensive Model of Strategic Management:

Explaining:
 strategic intent
 strategy formulation
 strategy implementation
 strategic evaluation

11- Wheelen and Hunger’s Model of Strategic Management:

Wheelen and Hunger’s Model of Strategic Management explaining:

  environmental scanning
 strategy formulation
 implementation
 evaluation and control
 feedback/ learning process.

12- BUSINESS POLICY

Every business organization makes 2 sets of decisions.

 Decision relates to functional areas such as production, marketing, finance, personal.

 Business policy is hence defined as the “study of the functions & responsibilities of Top
Management”. The crucial problems that effect success in the total enterprise and the
decisions that are determined the direction of the organization & shape its future.
 Business policy is also concerned with “The mobilization of resources for the attainment of
goals in the face of completion”.

13- CHARACTERISTICS OF BUSINESS POLICY

• It is concerned with goals & objectives which affect the success of total enterprise.
• It is concerned with the study of functions & responsibilities of senior management.
• It deals with future course of action.
• To realize its goals & objectives.
Business policy focuses on strategic planning & strategic management. Its elements are
• Mission, objectives, & goals
• Environmental Analysis
• Strategic alternatives
• Swot analysis
• Strategic analysis
• Strategic implementation
• Strategic evaluation

14- IMPORTANCE AND PURPOSE OF BUSINESS POLICY

IMPORTANCE
• Business policy is a course of study.
• Understanding & scanning of environment.
• Emphasis on social responsibilities & ethical aspects on the business.
• Understanding of interpersonal & intrapersonal & organisation level development.
PURPOSE
• Knowledge generation
• Skill creation
• Attitudinal changes to cope with business situations

15- SBU (Strategic Business Unit)

Definition: Strategic Business Unit (SBU) implies an independently managed division of a large
company, having its own vision, mission and objectives, whose planning is done separately from
other businesses of the company. The vision, mission and objectives of the division are both distinct
from the parent enterprise and elemental to the long-term performance of the enterprise.
Characteristics of Strategic Business Unit
• Separate business or a grouping of similar businesses, offering scope for autonomous
planning.
• Own set of competitors.
• A manager who is accountable for strategic planning, profitability and performance of the
division.

16- DIVISIONAL STRATEGY

• Sometimes called business strategy or business unit strategy, the second level of single
business strategy is concerned with directing the divisions within the organization.
• For example, your sales strategy may evaluate the activities of your competitors in
conjunction with market demand to set a strategic price point.
17- BUSINESS STRATEGY MODELS
1. Porters 5 forces Model-To analyze industries
2. Business Canvas
3. BCG Matrix- To analyze Product Portfolios
4. McKinsey 7 S Model-To analyze teams
5. Gernier Theory- To analyze growth of organization
6. Herzberg Hygiene Theory- To analyze soft aspects of individuals

18- BUSINESS ETHICS AND STRATEGIC MANAGEMENT

OBJECTIVES
• To understand the concept of ethical management.
• To understand the need for ethical management in business and profession.
• To compare and contrast between ethical management and strategic management.
• To understand the need and importance for ethical incorporation in strategic management
process and decision making.
• To suggest the model for Ethical Strategic Management Process.
• To suggest the model for Ethical Strategic Management Decision Making.

19- STRATEGY FORMULATION

• Strategy formulation refers to the process of choosing the most appropriate course of action
for the realization of organizational goals and objectives and thereby achieving the
organizational vision. The process of strategy formulation basically involves six main steps
1. Setting Organizations’ objectives –
2. Evaluating the Organizational Environment
3. Setting Quantitative Targets –
4. Aiming in context with the divisional plans –
5. Performance Analysis 
6. Choice of Strategy – 
20- ENVRONMENTAL ANALYSIS
 • Environmental analysis is a strategic tool. It is a process to identify all the external and
internal elements, which can affect the organization’s performance.
• PESTLE analysis consists of various factors that affect the business environment. Each letter
in the acronym signifies a set of factors. These factors can affect every industry directly or
indirectly.
The letters in PESTLE, also called PESTEL, denote the following things:
• Political factors
• Economic factors
• Social factors
• Technological factors
• Legal factors
• Environmental factor

21- SWOT ANALYSIS

SWOT analysis (strengths, weaknesses, opportunities and threats analysis) is a framework for
identifying and analyzing the internal and external factors that can have an impact on the viability of
a project, product, place or person.