Corporate Strategies and Policies:

 Strategy is meant to achieve a company's mission and objectives.  Strategy also means adoption of various and different courses of action with proper allocation of resources in order to achieve a company`s objectives.

 Policies are general statements that help guide a manager's thought process in decision making.  Policies are guidelines and help the company to achieve its goals.

Nature and purpose of Strategies and Policies:

• Direction: Directing the employees at all levels to achieve company's goals and objectives;
• Frame-work for Plans: Clear and broad guidelines should be formulated for employees to understand how to reach the objectives;
• Need for Operational Planning: The top management lays down the strategy plans in consultation with the middle and lower level managers.
• All Perspective: The top managements sets the objectives based on the requirements at all managerial levels.

Strategies and Policies: The three levels of strategies are based on the organizational hierarchy:

• Corporate Level Strategy,
• Business Level Strategy,
• Functional Level Strategy.

Corporate level strategy:

There are two approaches in the formulation of company strategy:

• Value based approach,
• Corporate portfolio approach.

Value based approach is based on individual`s belief and values and accordingly the company objectives are set down.  These objectives act as guide to the company and enables it to do business ethically.

Corporate portfolio approach:  In this,  the top management evaluates each business unit according to its market needs and organizational structure, and an appropriate strategy is evolved for each unit to perform well within the organization.

Business level strategy:  Business strategy concentrates on the company`s competitiveness in the market place.  The strategies are designed in relation to the changing environment and competition.

Functional level strategy:  Research and Development, manufacturing, finances, etc. are the functional competencies of the company.  Strategies developed by the functional heads are approved by the top management to help the company gain competitive edge.

There are also other areas to look into Strategies and Policies: These are: -

• Strategic Planning (Mission Statement/Objectives/Strategy Formulations/Strategy implementation/Monitoring and adopting strategic plans),
• Competitive Analysis in Strategic Formulation,
• Types of Strategies and Policies (Growth-Stability-Defensive)
• Effective Implementation of Strategies,
• Planning Premisses.

Questions:

• What are the three levels of strategies in an organization and explain?
• Define 'Strategy' and 'Policy'.