Definition of Strategic Management & Business Policy
By Dimitrios Shistohilis
Businesses need to be run with clear direction and a focus on the ultimate goal of generating profit. To accomplish this, companies use strategic management and business policies to effectively organize and provide expectations for business results and employee performance.
Strategic management and business policies complement each other in the goal of leading an organization to success.
Strategic Management
Strategic management entails running a department or business with a specific purpose in mind. This particular management style is proactive and focused on attaining pre-established company goals. Strategic managers focus on implementing quality by design (QBS) systems and promoting a culture of continual improvement. Tools like Lean Manufacturing ( focuses on getting the highest throughput with the least inventory) or Six Sigma (Six Sigma is a long-term, forward-thinking initiative designed to fundamentally change the way corporations do business . While traditional quality programs have focused on detecting and correcting defects, Six Sigma encompasses something broader: It provides specific methods to re-create the process itself so that defects are never produced in the first place) are us ed by this managerial system to eliminate waste and create efficient processes.
Strategy formulation and implementation are important parts of management, but evaluation is needed to show if the systems are effective.
Business Policy
o Business policies are guidelines used to dictate the culture of a company and create expectations for employees and management.
o Policies can spell out specific behaviors that are deemed unacceptable and outline the disciplinary actions that will occur when they happen.
o Business policy is also used to establish organization in a company. Creating a chain of command is a vital business function for allowing all parties to know which employees are responsible for which departments and duties.
How They Relate
o Strategic management and business policies are strongly connected. Strategic managers use business policy to lay out the foundations for their visions of success. When these leaders implement their policies, it creates structure and direction for the department or entire organization. Existing policies can help a new manager develop strategies that are in line with current company direction. This serves to ease the transition and provide cohesion from an old managerial system to a new one.
Benefits
o Using strategic management provides a clear direction for the company or department. With this kind of management, it is easy to establish metrics that enable company leadership to see progress and assess the performance of particular programs. Recorded metrics can be compared with predefined standards and this shows strengths or weaknesses in both the planning and execution stages of business plans. Companies also benefit by having established business policies that give backbone to a strategic management system. This ensures that employees get "on board" with management's vision
By Dimitrios Shistohilis
Businesses need to be run with clear direction and a focus on the ultimate goal of generating profit. To accomplish this, companies use strategic management and business policies to effectively organize and provide expectations for business results and employee performance.
Strategic management and business policies complement each other in the goal of leading an organization to success.
Strategic Management
Strategic management entails running a department or business with a specific purpose in mind. This particular management style is proactive and focused on attaining pre-established company goals. Strategic managers focus on implementing quality by design (QBS) systems and promoting a culture of continual improvement. Tools like Lean Manufacturing ( focuses on getting the highest throughput with the least inventory) or Six Sigma (Six Sigma is a long-term, forward-thinking initiative designed to fundamentally change the way corporations do business . While traditional quality programs have focused on detecting and correcting defects, Six Sigma encompasses something broader: It provides specific methods to re-create the process itself so that defects are never produced in the first place) are us ed by this managerial system to eliminate waste and create efficient processes.
Strategy formulation and implementation are important parts of management, but evaluation is needed to show if the systems are effective.
Business Policy
o Business policies are guidelines used to dictate the culture of a company and create expectations for employees and management.
o Policies can spell out specific behaviors that are deemed unacceptable and outline the disciplinary actions that will occur when they happen.
o Business policy is also used to establish organization in a company. Creating a chain of command is a vital business function for allowing all parties to know which employees are responsible for which departments and duties.
How They Relate
o Strategic management and business policies are strongly connected. Strategic managers use business policy to lay out the foundations for their visions of success. When these leaders implement their policies, it creates structure and direction for the department or entire organization. Existing policies can help a new manager develop strategies that are in line with current company direction. This serves to ease the transition and provide cohesion from an old managerial system to a new one.
Benefits
o Using strategic management provides a clear direction for the company or department. With this kind of management, it is easy to establish metrics that enable company leadership to see progress and assess the performance of particular programs. Recorded metrics can be compared with predefined standards and this shows strengths or weaknesses in both the planning and execution stages of business plans. Companies also benefit by having established business policies that give backbone to a strategic management system. This ensures that employees get "on board" with management's vision
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