Evolution of business policy

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Business Policy




Name – kiran


  • Definition

  • four paradigm

•Pointer too future



  • objectives

  • Scope

  • From business to strategic management


Rectangle 5
Origin – 1911- Hayward business school – integrated course in

management aimed at providing general management capability.

Hofer: strategic management – A casebook in policy and planning: the business policy evolution has undergone four paradigm shifts. This transition is of overlapping nature.

Development of subject of business policy has always followed the

demands of real life business.

1930 -1960: environment change: new products: continuously changing

market: ford foundation recommended report, by Gordon and Howell, suggested a “capstone” course of business policy which would give the students an opportunity to pull together what they have learned in the separate business fields and utilise this knowledge in the analysis of complex business problems.


Paradigm one: ad- hoc policy – making

1900 -1930: era of mass production – maximizing output, mostly single product, standardized and low cost product, catering to unique set of customers servicing limited geographical area – informal control and co-ordination. strategic planning was centred on maximizing output.

Paradigm two: planned policy formulation

1930-1940: changes in technology, turbulence in political environment, emergence of new industries, etc. Planned policy formulation and shifting attention towards functional areas in rapid changing environment.

Paradigm three: strategy.
1940- 1960: planned policy became irrelevant due to increasingly complex changes. Firms had to predict environmental changes. A strategy needed to be formed with critical look at basic concept of business and its relationship to the existing environment then.

Paradigm four- strategic management

1980 ‘s : Shifting responsibility of general management in resolving strategic issues.
Everything out side the four walls is changing rapidly and this phenomenon is called as

‘discontinuity’ by Mr. Peter Drucker

Sources of competitive advantage within the firm.

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