BAHAN KEBIJAKAN BISNIS (Defining Business Policy)

It is the aggregate of the policy guidelines of different functional areas viz production, marketing, finance etc. in a company.
It is the major policy guidelines drawn by the board of directors to regulate the overall direction in which company should move.
It is the process of study, process of decision and process of action leading to development of effective business strategy.

Glueck 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.

1. KEBIJAKAN BISNIS

2. Defining Business Policy
•Itistheaggregateofthepolicyguidelinesofdifferent
functionalareasvizproduction,marketing,financeetc.in
acompany.
•Itisthemajorpolicyguidelinesdrawnbytheboardof
directorstoregulatetheoveralldirectioninwhich
companyshouldmove.
•Itistheprocessofstudy,processofdecisionandprocess
ofactionleadingtodevelopmentofeffectivebusiness
strategy.

3. The genesisof business policy
Theoriginsofbusinesspolicycanbetracedbackto
1911whentheHarvardBusinessSchoolintroduced
anintegrativecourseinmanagementaimedat
providinggeneralmanagementcapability.
Thiscoursewasbasedoncasestudieswhichhad
beeninuseattheschoolforinstructionpurposes
since1908.However,therealimpetusfor
introducingbusinesspolicyinthecurriculumof
businessschoolscamewiththepublicationoftwo
reportsin1959.

4. EVOLUTION BASED ON
MANAGERIAL PRACTICES
Glueckhas 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.

5. 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.

6. HISTORICAL PERSPECTIVE
OF BUSINESS POLICY
•Hofer has viewed the evolution of business policy in
terms of four paradigm.
–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.
1.Ad hoc Policy
1.According to Hofer and others the first phase which can
be traced back to the mid 1930’s 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.
2.The firms which has originally commenced operations in
a single product line catering to a unique set of
customers in a limited geographical area expanded in
one or all of these three dimensions.

7. 2.Planned Policy formulation
–Due to the increasing environmental changes
in the 1930’s and 40’s 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.

8. 3.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 1960’s 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.

9. 4.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
definitelydo represent a powerful way of thinking to resolve
strategic issues.

10. •The resolution of strategic issues that affect
the future of a business firm has been a
continual endeavorin the subject of business
policy. The endeavor is based on the
development of strategic thinking.
•The general principles underlying strategic
thinking have been the focus of the efforts of
researchers and academicians in the field of
Business Policy.

11. Business Policy
•As defined by Christensen and others, Business Policy is
“The study of the function 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 problems of policy in business like those of policy in
public affairs have to do with :
–The choice of purposes.
–The moldingof 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.

12. Business Policy
•This comprehensive definition covers many aspects of
Business Policy :
–Firstly, it is considered as the study of the functions and
responsibilities of the senior management related to those
organizational problems which affects the success of the total
enterprise.
–Secondly, it deals with the determination of the future course of
action that an organization has to adopt.
–Thirdly, it involves a choosing the purpose and defining what
needs to be done in order to mould the character and identify of
an organization.
–Lastly, it is also concerned with the mobilization of resources,
which will help the organization to achieve its goals.

13. The purpose of Business Policy is three –fold –
1.To integrate the knowledge gained in various
functional areas of management.
2.To adopt a generalist approach to problem
solving.
3.To understand the complex inter-linkages
operating within an organization through the
use of a systems approach to decision-making
and relating these to the changes taking place in
the external environment.