DRIVE SUMMER 2014

ASSIGNMENT
PROGRAM- BBA
SEMESTER- 2
SUBJECT CODE & NAME
BBA 202
BUISNESS STRATEGY
BK ID- B1519
CREDITS 2
MARKS 30

NAME-SAGAR SINGH
ROLL-1308002677


Q1.Define business policy? Explain the importance of business policy?Differentiate
between business policy and strategy.
Answer:
Business Policy
Business Policy defines the scope or spheres within which decisions can be taken by the subordinates in
an organization. It permits the lower level management to deal with the problems and issues without
consulting top level management every time for decisions. Business policies are the guidelines developed
by an organization to govern its actions. They define the limits within which decisions must be made.
Business policy also deals with acquisition of resources with which organizational goals can be achieved.
Business policy is the study of the roles and responsibilities of top level management, the significant
issues affecting organizational success and the decisions affecting organization in long-run.
Importance of Business Policy
An effective business policy must have following features-
1. Specific- Policy should be specific/definite. If it is uncertain, then the implementation will become
difficult.
2. Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There
should be no misunderstandings in following the policy.
3. Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the
subordinates.
4. Appropriate- Policy should be appropriate to the present organizational goal.
5. Simple- A policy should be simple and easily understood by all in the organization.
6. Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive.


7. Flexible- Policy should be flexible in operation/application. This does not imply that a policy
should be altered always, but it should be wide in scope so as to ensure that the line managers
use them in repetitive/routine scenarios.
8. Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of
those who look into it for guidance.

Difference between Policy and Strategy
The term policy should not be considered as synonymous to the term strategy. The difference
between policy and strategy can be summarized as follows-
1. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. While
strategy is concerned with those organizational decisions which have not been dealt/faced before
in same form.
2. Policy formulation is responsibility of top level management. While strategy formulation is
basically done by middle level management.
3. Policy deals with routine/daily activities essential for effective and efficient running of an
organization. While strategy deals with strategic decisions.
4. Policy is concerned with both thought and actions. While strategy is concerned mostly with action.
5. A policy is what is, or what is not done. While a strategy is the methodology used to achieve a
target as prescribed by a policy.


Q2. What are the objectives of strategic management.? What are the causes for failure of
Strategic Management?
Answer: Objectives of strategic management
A broadly defined objective that an organization must achieve to make its strategy
succeed.
Strategic objectives are, in general, externally focused and (according to the management
guru Peter Drucker) fall into eight major classifications:
(1) Market standing: desired share of the present and new markets;
(2)Innovation: development of new goods and services, and of skills and methods required
to supply them;
(3) Human resources: selection and development of employees;
(4) Financial resources: identification of the sources of capital and their use;


(5) Physical resources: equipment and facilities and their use;
(6) Productivity: efficient use of the resources relative to the output;
(7) Social responsibility: awareness and responsiveness to the effects on the wider
community of the stakeholders;
(8) Profit requirements: achievement of measurable financial well-being and growth.

Causes for failure of Strategic Management

1 Having a plan simply for plans sake. Some organizations go through the
motions of developing a plan simply because common sense says every good
organization must have a plan
2. Not understanding the environment or focusing on results. Planning
teams must pay attention to changes in the business environment, set meaningful
priorities, and understand the need to pursue results.
3. Partial commitment Without this knowledge, its tough to stay committed to
the process.
4. Not having the right people involved. Those charged with executing the
plan should be involved from the onset. Those involved in creating the plan will be
committed to seeing it through execution.
5. Writing the plan and putting it on the shelf. If a plan is to be an effective
management tool, it must be used and reviewed continually. Unlike Twinkies or a
fine vino, strategic plans dont have a good shelf life.
6. Unwillingness or inability to change. Your company and your strategic
plan must be nimble and able to adapt as market conditions change.
7. Having the wrong people in leadership positions The right individuals
include those who will advocate for and champion the strategic plan and keep the
company on track.

8. Ignoring marketplace reality, facts, and assumptions. Plan in advance
and youll be ready when the tide comes in.


9. No accountability or follow through. Be tough once the plan is developed
and resources are committed and ensure there are consequences for not delivering
on the strategy.
10. Unrealistic goals or lack of focus and resources. Strategic plans must be
focused and include a manageable number of goals, objectives, and programs.


Q3. Write brief notes on the following:
a) Core competencies and their importance
b) Strategic leadership.
Answer: Core Competencies and their Importance in Strategy Formulation
In their 1990 article entitled, The Core Competence of the Corporation, C.K.
Prahalad and Gary Hamel coined the term core competencies, or the collective
learning and coordination skills behind the firm's product lines. They made the case
that core competencies are the source of competitive advantage and enable the firm
to introduce an array of new products and services.
According to Prahalad and Hamel, core competencies lead to the development of
core products. Core products are not directly sold to end users; rather, they are
used to build a larger number of end-user products. For example, motors are a core
product that can be used in wide array of end products. The business units of the
corporation each tap into the relatively few core products to develop a larger
number of end user products based on the core product technology. This flow from
core competencies to end products

Strategic leadership:

While there are many different definitions of strategic leadership, we define it as the ability to influence
others in your organization to voluntarily make day-to-day decisions that lead to the organizations long-
term growth and survival, and maintain its short-term financial health.
The most important aspects of strategic leadership are shared values and a clear vision, both of which
will enable and allow employees to make decisions with minimal formal monitoring or control


mechanisms. With this accomplished, a leader will have more time and a greater capacity to focus on
other, ad hoc issues, such as adapting the vision to a changing business environment. In addition,
strategic leadership will incorporate visionary and managerial leadership by simultaneously allowing for
risk-taking and rationality.
An examination of the characteristics of managerial and visionary leadership styles will help understand
strategic leadership better.
In short, managerial leaders need order and stability, and to be able to control the details of the work
being performed. Mostly, these leaders have no personal attachment towards setting and using goals as
motivational tools, and they may have difficulty showing empathy when dealing with employees. They will
attempt to gain control through systems of rewards, punishment, and other forms of coercion. These
leader managers will be focused on the cost-benefit analysis of everyday actions and will therefore be
mostly linked to the short-term financial health of the organization, as reflected in its day-to-day stock
price. It is important to note that short-term gains are often a result of a least-cost approach, which might
not be good for long-term viability.