Strategic management and business policy go hand-in-hand.
Importance of Business Policy
Examples of Business Policies
The Five Stages of the Strategic Management Process
Key Concepts for Strategic Management and Organizational Goals
Businesses need to implement sound strategies to succeed. Those strategies form part of an overall management and business policy that guides the business in connecting with customers, generating profits and managing resources. The related concepts of strategic management and business policy are keys to help small business owners manage their responsibilities and set clear objectives.
Strategic management represents a theoretical concept first introduced by Peter Drucker in the mid-20th century. The idea behind strategic management is that organizations will be better equipped to meet their goals and objectives if the owners and managers adopt a clear business philosophy. For many businesses, that philosophy will be to increase their share of the market. For others, it might be about making a difference in the community or about developing new products. Sometimes, a combination of motives drives the management’s strategy. In any case, strategic management helps the business to keep its sights set on what matters most and to not get distracted by ancillary concerns.
The generic term business policy refers to all of an organization’s processes and procedures. This can range from human resources policies to the company’s marketing agenda and its plans for growth and development. Business policy is closely related to strategic management because the policies are essentially the strategies put into action. If the strategy calls for an increased market share, for instance, the business policies would be constructed to match this strategy. The two terms are so closely intertwined that they are often use interchangeably. Policies become strategies and vice versa. The important thing for a business owner to keep clear is that strategic management is a mind-set or philosophy for doing business, but business policies are the specific methods for running the organization on a day-to-day business.