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Developing a useful approach to policy and strategy formulat

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mara valmera

on 4 August 2015

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Transcript of Developing a useful approach to policy and strategy formulat

Advocating Business Policy Proposals
What is “
Policy
”?
Process of Policy Formulation
USEFUL QUESTIONS IN STRATEGY FORMULATION
OUTLINE for MEDIUM-LENGTH REPORT
3. Marshalling the Evidence
- Selecting the facts, reasons, opinions, and assumptions to use in support of the major contentions
I. Introduction
a. Purpose of Report
b. Present Policy
c. Summary of Findings

OUTLINE for a COMPREHENSIVE BUSINESS POLICY REPORT
OUTLINE for SINGLE-PAGE REPORT
1. Proposal
2. Policy problem exist.
3. Cause has been diagnosed.
4. Proposal will remove cause.
5. Proposal is practicable.

Developing a Useful Approach to Policy and Strategy Formulation and Advocacy
• Approach to the formulation business policy and strategy
• John Dewey’s (1933) concept on how people think provide
a useful rationale for the approach as a whole;
• The process of policy and strategy formulation may be viewed as a form of reflective thinking, where one progresses step by step from recognition of a problem to solution.

Introduction
- A definite course or method of action selected (by government, institution, group or individual) from among alternatives and in the light of given conditions to guide and, usually, to determine present and future decisions.
- A specific decision or set of decisions designed to carry out such a course of action.
- Such a specific decision or set of decisions together with the related actions designed to implement them.
- A projected programme consisting of desired objectives and the means to achieve them.
- Thus, it would be incumbent for us to have our preferred definition, that is:
- “Policy is a decision-making framework or course of action to achieve a desired effect or change.” In the context of the public sector, policies support political purposes by Government or administrative directions by organizations in response to the changing world around them.

1. Record Present Policy
- This step is formulation for subsequent steps.
- Managing in accordance with well-defined policies
- In some instances management has policies clearly in mind, and these can be readily recorded.
- In other cases, however, organizations still operate with ill-defined strategies, organizational structures, and procedures.
- It is important to clarify the criteria that top management want to use
- It will be expressed in terms of values. (If they want to operate)
- It will be expressed in terms of their concepts of social responsibility. (If they ought to operate)

2. Identify Policy Problems
- The present policy is reappraised to determine whether policy problems exist.
- A policy problem is a major problem that may have a significant influence on the future success of the business organization as a whole.
- For short, one needs to establish premises about the environment on which analysis of business organization operations can be based.
- As under the old size approach, a useful next step is to analyze the financial and operating picture.
- Many tools are available for this, including ration analysis, percentage and index-number analysis, and basic rule-of-thumb relationships in the business organization’s financial data.
- Policy problems may take the form of threats or opportunities in the environment; failure to meet plans; signs of organizational strife; adverse trends with respect to share of market, competitive advantage; or financial results or conditions, or other indications of loss of health or vigor. These policy problems may be thought of as a symptoms of a
more deep-seated difficulty.


3. Diagnose the Cause
- An inadequate strategy: the business organization may
not be aiming at the most attractive opportunities open to
it; it may be attempting more than its resources will permit; it may be threatened by environmental developments.

- Inappropriate implemental approach: the organizational structure may not be providing for effective organizational processes.

- Ineffective management: there may be poor leadership; the managers of the major functional areas may be ineffective.

- Basically, effective prescription of a cure requires identifying the cause.

4. Formulate Alternative Policies
- When the cause is already identified, the next approach calls for the formulation of alternative ways of removing the cause.
- The first step is to consider all alternatives that appear to offer some possibility of providing a solution.
- No possible alternative be overlooked.
- This is the place for innovation rather than for logic.

5. Evaluate Alternative Policies
- Requires analysis and comparison with respect to relevant factors
6. Choose a New Policy
- Decision making
- “ruling considerations” in business policy and “governing factors”
- The choice of a new policy marks the end of the basic six-step procedure.

I. Record Present Strategy
A. What is the present strategy?

B. What kind of business does management want to operate?

C. What kind of business does management feel they ought to operate?

II. Identify Strategy Problems
A. Are the significant trends discernible in the environment?

B. Are significant strengths, weaknesses, opportunities and threats developing inside the company?

C. Do these external trends and internal developments challenge the validity of the present strategy?

III. Diagnose the Causes
A. Does the strategy adequately exploit opportunities and/or most threats in the environment?
B. Is the strategy consistent with organization’s competence and resources?
C. Is the strategy consistent with the kind of business management wants to operate?
D. Is the strategy consisted with the kind of business management feels it ought to operate?
E. Are the various elements of the strategy internally consistent?
F. What is the substances of the strategy problems?

IV. Formulate Alternative Strategies
A. What are the alternatives for solving the strategy problem?

B. To what extent do the organization competence and resources limit the number of alternatives that should be considered?

C. To what extend do management’s preferences limit the alternatives?

D. To what extent does management’s sense of social responsibility limit the alternatives?

V. Evaluate Alternative Strategies
A. Which alternatives best solves the strategy problems?
B. Which alternatives offers the best match with the organization’s competence and resources?
C. Which alternatives best satisfies management’s preferences?
D. Which alternatives best meets management’s sense of social responsibility?
E. What is the relative importance of each of preceding considerations?

VI. Choose a new Strategy
What should the new strategy be?
Advocacy on formulation is fundamental to success in gaining acceptance of business policy proposals.
- Policy problems to exit
- The cause of the policy problems has been diagnosed
- The proposal will remove the cause
- The proposals practicable

1. Phrasing the Proposition
- Stating the solution arrived at by the process of formulation as a proposition of policy.
Three major kinds of propositions:
a. Propositions of facts
b. Propositions of values
c. Propositions of policy

- Primary concern
- For purposes of the present discussion, a proposition can be defined as an expression of a judgement for which one seeks acceptance.

• Any proposition of policy must be expressed as a normative statement.
• A normative statement is characterize
by the word should.


2. Discovering the Issues and Formulating the Major Contentions.
- Raising the vital questions on which the validity of the proposition hinges and formulating the alternative answers to these questions.



• Four questions that supports the proposition of business policy stated in very broad terms:

1. Do policy problems exist?
2. Has the cause of the policy problems been diagnosed?
3. Does the proposed policy remove the cause?
4. Is the proposed policy practicable?

• These four issues were phrased in very general terms, but in a particular case they can and should be stated much more explicitly. One might state the issue as:
1. Has the decline in rural population and the growth of suburban shopping centers/malls hurt mail-order sales? (Do policy problems exist?)
2. Will adherence to a strictly mail-order strategy mean continually declining sales and perhaps ultimate failure? (Has the cause of the policy problems been diagnosed?)
3. Will establishment of catalog-order office better enable the company to compete with other retailers? (Does the proposed policy remove the cause?
4. Can the company establish such offices quickly and without excessive investment and stiil retain many of the economies of mail-order operations? (Is the proposed policy practicable?


Two important characteristics of issues:
- First, issues are questions on which the validity of proposition hinges.
- Second, each issue is vital to the proposition, that is, an affirmative position must be taken to support the proposition.

• The major contentions derived from the four issues from the main line of reasoning of the argument.
Four sources of
Evidence
1. Facts
- First source is the body of facts in the situation.
- Data may be useful in its original form.
- Need to be arranged, correlated, or extended by further calculation.

2. Generalizations
- Second source is inductive reasoning giving rise to a generalization.
- Proceeds from the observation of certain related particular instances to a conclusion about all such instances.
- The value of an imperfect generalizations depends on:


a. Relative size of the unobserved portion of the relevant instances
b. On the extent on which the instances observed are representative.
c. On the degree of probability that such a generalization exists.

3. Opinions
- Evidence of Opinion
- Opinion as Evidence cannot be always taken as valid


4. Assumptions
- Evidence of Assumption
- Statement that is not, and usually cannot be derived from the specific data of the situation.
- It is important that sufficient relevant evidence be presented in support of any contention

4. Briefing the Argument
- Organizing the major contentions and evidence into logical order.
- Finding may be organized into a systematic form known as brief, complete and logical.
- The brief is made up of three points:

• Consists of statement of the proposition, the origin and history of the problem, including a definition of the present policy. The immediate cause for discussion and the statement of the issues.
• Designed to lead the supporting statements

• The body of the brief should present the major contention
• The relationships between points and sub-points in the brief are indicated by the proposition “for” “or” “because”, therefore the logic of the question “why” as one reads the interrelated arguments and evidence.


• Showing one level of evidence
I. First major contention, for ………………….
A. First support of I, for ………………….
1. Proves, explain or illustrates A, for …………………..
a. Support 1 ……………………
• Showing two or more levels of evidence

Proposition of Policy

A. The financial position is weak, for ……………………
1. Current ratio has been low for past five years.
2. Surplus has been static.
3. The company has reached its limit for borrowing for …………………..
a. The debt-equity ratio is 1:1
b. Recent applications for loans have
been refused, and so on.



- Should be summary of
the essential points of the body of the brief.
- The closing should be a statement of the proposition.

5. Outline the Report
- rearranging logical argument to include audience appeal.
POLICY REPORT
– the goal of the policy report is persuasion; that is, to influence someone to take the action, recommended by the proposition.
Two main factors
:
- The characteristics of the situation-the nature of the problem presented; the specific issues to be resolved, the facts available.
- The predisposition of the evidence, awareness of the problem, recognition of the need for action, initial receptivity to the preposition to be offered.

II. Body
A. Need for Change
1. Policy Problems
2. Cause has been diagnosed
B. Proposed New Policy

III. Conclusion
C. Justification for Proposal
1. Proposal will remove the cause
2. Proposal is practicable
A. Restatement of Proposition
B. Significance of Proposal
C. Summary of Advantages of Proposed Policy

I. Introduction
A. Purpose
– To reappraise the policies of the corporation and submit recommendations for improvement.
B. Scope of the Report
1. Strategy
2. Organization
3. Management
C. Plan of the Report
1. Body made up of sections on strategy, organization, and management, each compromising a complete argument
2. Conclusion
a. Integrated Program
b. Significance
c. Advantages
D. Principal Recommendations

II. Body of Report
1. Need for change in strategy
a.
Do strategy problem exist?
1. Opportunities and risks in the environment
2. Corporate strengths, weaknesses opportunities, and threats
3. Consistency with management’s objectives with respect to values and sense of social responsibility
b.
Diagnosis of cause strategy problems
2. Proposed new strategy
a.
Economic mission
b.
Competitive approach
c.
Program of action
3. Justification for proposed strategy
a.
Appropriateness in removing the cause of the
strategy problems
b.
Practicability with respect to company’s
competence and resources

1. Need to adopt organization to implement
new strategy
a.
Do organizational problem exist as a result of the
change in strategy?
1) How does organizational structure fail to meet requirements of new strategy?
2) How do procedures and information systems fail to meet requirements of new strategy?
b.
Diagnosis of organizational needs
2. Proposed organizational changes
a.
Structures
b.
Procedures
c.
Information systems
3. Justification for proposals
a.
Appropriateness in implementing strategy
b.
Practicability with respect to
management resources

1. Need to staff the new organization
A.
Does staffing problem exist as a result of the new
strategy and organization?
1) Adequacy of board of directors
2) Adequacy of chief executive with respect to leadership
3) Competence of other key executives
4) Adequacy of management development to take care of future staffing needs
5) Provision for management succession
b.
Diagnosis of staffing needs
2. Proposed management changes
a.
Board of directors
b.
Chief executive
c.

Key subordinate executives
3. Justification for Proposal
a.
Appropriateness in staffing organization
b.
Practicability with respect to
1) Financial resources
2) Ability to assimilate new managers into the
organization

III. Conclusion

A. Restatement of proposals as an integrated program including strategy, organization and management
B. Significance of the proposals for the future of the company
C. Summary of the advantages of the proposed program

6. Writing the Report
– preparing the presentation.
1)
Organization.
The report should be structured logically and coherently. It should be unified, and every part should be related to the preceding and following parts.
2)
Contents
. It should be clear to the reader what problem is being discussed and what action is being proposed. The evidence offered should be clear, applicable, and adequate to support the conclusions.

-
Style.
The presentation should be edited for grammatical sentence structure, proper punctuation, accepted usage, accurate diction, and so forth. Words should be carefully chosen and sentences carefully structured
and related to make ideas clear.
THANK YOU!
After this chapter, you should be able to:


 Understand the process of policy formulation;
 Know the useful questions in strategy formulation; and,
 Apply the methods of advocating business policy proposals

Content Outline


 Introduction
 Process of Policy Formulation
 Useful Questions in Strategy Formulation
 Importance of Group Effort in Policy Formulation
 Advocating Business Policy Proposals

Importance of Group Effort in Policy Formulation
According to R. H. Wagner and C. Arnold (1965), policy formulation can be approached as a group effort. Such an approach should be facilitated through the use of group discussion techniques based on the problem-solving framework just presented. Utilizing the six steps in the basic approach as a beginning, a group leader can note pertinent question on his leadership outline in terms of the problem being considered. He can then further advance group thinking through interpretative summaries, and by means of transactions can lead the group from one major step to the next. It is a constant challenge to the leader of such sessions to maintain that balance between freedom and control which makes for
progress yet does not stifles creative thinking.
a. The Introduction
b. The Body
I
. The present condition of the company is unsatisfactory for ……………………
c. The Conclusion
B. Organization
(Implementation of
Strategy)
A. Strategy
C. Management

(Executive Manpower)
Chapter Objectives
Full transcript