MMPC – 017

Advanced Strategic
Indira Gandhi National Open University
School of Management Studies
Management

BLOCK 1
Introduction to Corporate Management 7
BLOCK 2
Corporate Level Growth Strategy 37
BLOCK 3
International Strategy 107
BLOCK 4
Strategic Enablers 151
 MMPC – 017
Advanced Strategic Management
COURSE DESIGN AND PREPARATION TEAM
Prof. K. Ravi Sankar *Prof. Nageshwar Rao
Director, Dean, Pt. Jawaharlal Nehru
School of Management Studies, Institute of Business Management
IGNOU, New Delhi Vikram University, Ujjain
Prof. U.M. Amin * Dr. Rajiv Ranjan Thakur
CMS, Jamia Milia Islamia, New Delhi Gitam Institute of Foreign Trade
Visakhapatnam
Prof. Arindam Banik * Dr. Amit Kapoor
International Management Institute Management Development Institute
New Delhi Gurgaon
Prof. Ram Singh *Mr. A.K. Srivastava
Indian Institute of Foreign Trade CMD, PEC Ltd.
New Delhi New Delhi
Prof. Ashish Bajpai *Prof. Madhulika Kaushik
Banaras Hindu University School of Management Studies
Varanasi IGNOU, New Delhi
Prof. Tanuj Nandan *Prof. B.B. Khanna
Motilal Nehru National Institute of School of Management Studies
Technology Allahabad IGNOU, New Delhi
Prof. Sumita Dave Prof. Srilatha
Amity Business School School of Management Studies,
Amity University, Raipur IGNOU, New Delhi
Dr. Sweta Srivastava Malla Prof. Neeti Agrawal
Indian Institute of Foreign Trade, School of Management Studies,
New Delhi IGNOU, New Delhi
Dr. Monica Sainy Prof. Anjali C. Ramteke
Shri Vaishnav School of Management School of Management Studies
Indore IGNOU, New Delhi
Dr. Manjari Agarwal Prof. Nayantara Padhi
School of Management Studies School of Management Studies
Uttarakhand Open University, Haldwani IGNOU, New Delhi
*Dr. S. R. Mahnot Sh. T.V. Vijay Kumar
Centre for Industrial and Economic School of Management Studies
Research New Delhi IGNOU, New Delhi
* Prof. M. L. Bhatia Dr. Leena Singh
Vasantkunj, New Delhi School of Management Studies
IGNOU, New Delhi
* Prof. M. Panduranga Vithal Prof. G. Subbayamma
Director, MINDS School of (Course Coordinator)
Management for School of Management Studies,
Infrastructure and Development IGNOU, New Delhi
Strategies, Bangalore
*Prof. G. Somayajulu
Institute of Public Enterprises
Hyderabad

Part of this course is adapted from the earlier MS-11: Strategic Management & MS-91:
Advanced Strategic Management and the persons marked with (*) were the original
contributors and the profiles are as it was in that material.
PRINT PRODUCTION
Mr. Tilak Raj
Assistant Registrar
MPDD, IGNOU, New Delhi
December, 2022
© Indira Gandhi National Open University (IGNOU), 2022
ISBN: 978-93-5568-695-4
All rights reserved. No part of this work may be reproduced in any form, by mimeograph
or any other means, without permission in writing from the Indira Gandhi National Open
University (IGNOU).
Further information on the Indira Gandhi National Open University (IGNOU) courses
may be obtained from the University’s office at Maidan Garhi, New Delhi – 110 068
Printed and Published on behalf of the Indira Gandhi National Open University
(IGNOU), New Delhi, by the Registrar, MPDD, IGNOU.
Composed & Printed at : M/s Educational Stores, S-5 Bulandshahar Road Industrial
Area, Site-1, Ghaziabad (UP)-201009.
 Course Content

S.No. Pages
Block 1 Introduction to Corporate Management 7
Unit 1 Corporate Management : An Overview 9
Unit 2 Corporate Policy 22
Block 2 Corporate Level Growth Strategy 37
Unit 3 Intensive Growth Strategies 39
Integration and Diversification Growth
Unit 4 36
Strategies
Unit 5 Strategic Alliances 81
Block 3 International Strategy 107
Unit 6 Internationalization Process 109
Unit 7 Evaluation of Market Risk Assessment 127
Unit 8 Entry into the International Markets 139
Block 4 Strategic Enablers 151
Unit 9 IT and Strategy 153
Unit 10 Technology and R & D 177
Unit 11 Knowledge Management 191
Unit 12 Innovation 212
MMPC-017: ADVANCED STRATEGIC
MANAGEMENT
This is an advanced course in strategic management. The main goal of the
course is to expand the understanding of the key theories and frameworks
in strategic management and to give them practical examples to construct
a company’s strategy. The fundamental theories of strategic management
continue to influence how we think about strategy, but the field of strategic
management also helps in keeping us abreast with globalised, complicated,
and fast-paced world. Therefore, this course offers a thorough understanding
of both the current theories that are applicable in an increasingly fast-paced
corporate environment, as well as the timeless core concepts of strategic
management that continue to hold true across a variety of scenarios.
Developing a solid understanding of these fundamental strategies and
frameworks will lay the groundwork for more than just developing strategies
for the learners.
The learning objectives of this course are to understand the:
•• abilities, and attitudes in strategic management ;
•• corporate level growth strategies;
•• the international strategies including strategic risk management;
•• concept of knowledge management;
•• role of innovation in strategic management.
 BLOCK – 1
INTRODUCTION TO CORPORATE
MANAGEMENT

7
 Block 1 Introduction to Corporate
Management
This block discusses corporate management which includes an overview
of corporate planning. The concept of corporate planning, the various steps
in the corporate planning process and the benefits and prerequisites of
corporate planning are discussed. It also explains the concept and features
of corporate policy. The scope, need for corporate policy and the various
steps involved in formulation of corporate policy are also dealt with.
Finally it discusses the various types of corporate policies and the role and
significance of corporate policy in corporate management. This block has
following two units:
Unit -1: Corporate Management: An Overview
Unit -2: Corporate Policy

8
UNIT 1 CORPORATE MANAGEMENT:
AN OVERVIEW

Objectives
After reading this unit, you should be able to:
•• explain the nature and scope of corporate management;
•• describe the concept, nature, process, benefits and pre requisites of
corporate planning;
•• appreciate the importance of implementation and evaluation aspects
of corporate plan;
•• compare distinct approaches to corporate management;
•• assess the role of various strategists in corporate management;
•• identify factors leading to the need of corporate management; and
•• state the differences in corporate management practices adopted by
non business organizations.
Structure
1.1 Introduction
1.2 Nature and Scope of Corporate Management
1.3 Corporate Planning
1.4 Implementation of Corporate Plan
1.5 Review and Evaluation of Corporate Plan
1.6 Approaches to Corporate Management
1.7 Strategists and their role in Corporate Management
1.8 Need for Corporate Management
1.9 Corporate Management in Non Business Organisations
1.10 Summary
1.11 Key Words
1.12 Self-Assessment Questions
1.13 References / Further Readings

1.1 INTRODUCTION
Though corporate planning has been widely used in the United States and
some other European Countries for the last thirty five years or so, there
seems to be scant use of the term “Corporate Management”. Corporate
management is a broad phenomenon and covers a wide spectrum of activities.
In the context of strategic management, the term has three dimensions:
•• Corporate planning
•• Implementation of corporate plans
•• Evaluation and control of corporate plans.
9
Introduction to Corporate On the academic side, research on corporate management has not taken
Management off in India. However, a few studies may be seen with respect to corporate
planning.

1.2 NATURE AND SCOPE OF CORPORATE

MANAGEMENT
For the sake of convenience, the concept of corporate management has
moved through five paradigm shifts as narrated below:
Adhocism- when the exigency used to force the mangers to take appropriate
action to deal with situation. This continued till 1930.
Planned Policy- the great depression forced the planners and thinkers to
have a planned policy. Unforeseen incidents and contingencies are to be
anticipated.
Environment Strategy Interface- the strategy has to cope with
environment. The forces of internal and external environment have created
uncertainties. In order to cope with such situation, appropriate strategies are
being formulated keeping in mind the competitive advantage.
Corporate Planning- involves moving ahead from environmental appraisal
to strategic alternatives and choice. The planning needs to be strategic.
Corporate Management- aspects of implementation and control are also
considered in corporate planning process. It is a unified and integrated
process to get best results.
Nature of Corporate Management
The following aspects are important in this regard:
(i) It encompasses the entire management process.
(ii) It is concerned with the choice of alternatives, determination of
future course of action, mobilization of resources and deployment of
resources for attainment of goals.
(iii) It is both short term and long term.
(iv) It is related to all levels of management. Strategic issues, however, are
related to top management.
(v) It includes the following phrases:
•• Corporate Planning
•• Implementation Issues in Corporate Plan
•• Evaluation and Control
(vi) It is concerned with coping uncertain future with active intervention.
(vii) It is based on various types of plan viz., strategic plan, functional
plan, operating plan, organizational plan, etc.
(viii) It is all pervasive and integrative.
Scope of Corporate Management
The term corporate management is an extension of the term corporate
planning and also includes implementation and control aspects. More

10
specifically, the scope of corporate management is narrated as below: spread Corporate Management:
over different areas. They are as follows : An Overview

(i) Role of top management in corporate governance.

(ii) Code of conduct including audit committee, governance committee
etc.
(iii) Competitive scenario for domestic and global markets.
(iv) Competitive scenario for dynamic and global markets.
(v) Market structures and net work externalities.
(vi) Strategic enablers like IT, R&D, knowledge management and
innovations, etc.
(vii) Corporate social responsibility including ethics, values and social
audit.
(viii) Philanthropy as a strategic choice.
Activity 1
(i) Discuss the nature of corporate management in Indian context.
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(ii) Discuss the scope of corporate management.
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1.3 CORPORATE PLANNING

Corporate planning is a comprehensive planning process which involves
continued formulation of objectives and the guidance of affairs towards
their attainment. It is undertaken by top management for the company as a
whole on a continuous basis.
Druker defines corporate planning as “a continuous process of making
entrepreneurial decisions systematically, and with the best possible
knowledge of their futurity, organizing systematically the efforts needed
to carry out these decisions, and measuring the results against expectations
through organized systematic feedback.
This definition clearly emphasises the relation of corporate planning to
strategy.
According to Hussey “Corporate long range planning is not a technique,
it is a complete way of running a business. Corporate planning is a way of
keeping the company’s eyes open.
The following are the essentials of corporate planning.
11
Introduction to Corporate (i) Corporate planning deals with the future of current decisions.
Management
(ii) The process of corporate planning integrates strategic planning with
short range operational plans.
(iii) A few authorities use comprehensive corporate planning, strategic
planning, long range planning, formal planning, corporate planning
etc. as synonymous to each other.
(iv) Corporate planning is viewed as an organizational process resulting in
developing strategic intent and action plans to achieve the objectives.
The object of corporate planning is to identify new areas of investment and
marketing.
The purpose of corporate planning process is to formulate the organization’s
purpose, mission, objectives, goals, policies, programme strategies and
major action plans to achieve its objectives.
The corporate planning process involves the following steps:
(i) Formulation of strategic intent.
(ii) Environmental appraisal
(iii) Generation of strategic alternatives.
(iv) Evaluation of alternatives.
(v) Decisions in terms of strategy, policies and programmes.
There are many advantages of corporate planning.
The following are the benefits of corporate planning:
(i) It ensures a rational allocation of resources and improves coordination
between various units or divisions.
(ii) With corporate planning, significant improvement in performance is
reflected. In US, the percentage improvement in performance was 30-
40 percent.
(iii) A formal planning system can help the management in responding
to a dynamic environment and in managing a strategically complex
organization with limited resources.
(iv) With corporate planning, a sense of making a systematic and critical
review of business is developed.
(v) This develops a visionary approach. A habit of forward thinking is
encouraged in forward planning.
In India the organizations’ corporate planning process could not succeed.
The following can be the reasons attributed to the failure of corporate
planning in Indian organizations:
(i) Failure to keep the corporate planning system simple.
(ii) Failure to develop awareness about corporate planning process in the
organization.
(iii) Corporate planning tries to do all planning itself.
(iv) Chief executive gives planner a low status.

12
(v) Failure to modify the corporate planning system with the charging Corporate Management:
conditions in the company. An Overview

(vi) Planner has only a part time interest in planning.

(vii) There is conflict between available soft database and manager’s need
for hard answers.
(viii) Top management becomes so engrossed in current problems that it
spends insufficient time on the corporate planning process.
Bhattacharya and Chakravarti have observed some commonalities in
instances of successful introduction of corporate planning in Indian
companies. A few prerequisites for success in corporate planning are as
follows:
(i) The chief executive must be totally committed and involved in the
corporate planning process.
(ii) Participation of those executives who would be responsible for
implementation must be ensured.
(iii) The process of corporate planning should be introduced on continuous
basis to cope with ever changing environmental factors.
(iv) The executives must understand that the real purpose of corporate
planning is to provide direction to the organization.
Activity 2
1) Discuss the nature and process of corporate planning.
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2) Name three to four big companies where corporate planning exercise
was initiated in recent years.
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3) Briefly the mention reasons of failure of corporate planning.
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1.4 IMPLEMENTATION OF CORPORATE PLAN

Implementation refers to those objectives which are necessary for achieving
the plans already formulated. Quite often, companies having good corporate
plans are not successful at market place. The planning commission in India
13
Introduction to Corporate has formulated elaborate plans for poverty alleviation through a number of
Management programmes but it is a well known fact that the achievements in terms of the
original goals are far from the targets. It is to be noted that the implementation
of strategy is mainly an administrative task based on strategic as well as
operational decision making. This activity primarily refers to action and
doing. The task of strategy formulation is some what distinct. It is primarily
an entrepreneurial activity and this managerial task requires analysis and
thinking.
Implementation of corporate strategy requires the analysis of the
following aspects:
•• Project Implementation
•• Procedural Implementation
•• Resource Allocation
•• Structural Implementation
•• Behavioral Implementation
•• Functional Implementation
Any organization which is planning to implement strategies must be
aware of the procedural framework within which the plans, programmes
and projects have to be approved by government agencies. The regulatory
mechanisms for trade, commerce and industry in India span the whole range
of legal structure from the constitution of India, the Directive Principles
of state policy to the rules and procedures imposed by the implementing
authorities at the local level. The requirements of licensing SEB, MRTP,
foreign collaboration, labour laws, environmental protection laws, etc. are
to be seen carefully. The resource allocation for budget be based on either
of the following methods:
•• Strategic Budgeting
•• Zero Base Budgeting
•• PLC Based Budgeting
•• BCG Budgeting
The total responsibilities to implement strategies (structural implementation)
have to be subdivided as follows:
(i) Defining the major tasks required to implement a strategy.
(ii) Grouping task on the basis of common skill requirements.
(iii) Sub-division of responsibility and delegation of authority to perform
tasks.
(iv) Coordination of divided responsibility.
(v) Design and administration of the information system.
(vi) Design and administration of the control and appraisal system.
(vii) Design and administration of the motivation and development system.
(viii) Design and administration of the planning system.

14
The first four mechanisms will lead to the creation of the structure. The Corporate Management:
remaining mechanisms are devised to hold and sustain the structure. An Overview

The aspects of strategy implementation that have an impact on the behaviour

of strategies in implementing the chosen strategies are related to behavioral
implementation. In this regard, the following issues are important:
•• Leadership
•• Corporate Culture
•• Corporate politics and use of power
•• Personal values and Business ethics
•• Social Responsibility
Rather than letting strategy implementation suffer due to politics and
power games within organizations, strategists have to learn to use them to
implement strategies.
Functional implementation is carried out through functional plan and
policies in five different functional areas. Operational implementation
is performed in four areas for operational effectiveness. The areas are
productivity, process, people and pace. The productivity is the measure of
the relative amount of input needed to secure a given amount of output. Pace
is the speed of operational implementation and is measured in terms of time.
Efficiency is the parameter often used to express the pace of operational
implementation.

1.5 REVIEW AND EVALUATION OF

CORPORATE PLAN
Corporate planning cannot said to be effective unless management
monitor how well the planned actions are matching actual achievements
as implementation programmes. If they find that the actual performance
does not conform to the planned performance, corrective action is taken to
enforce a strategy that is not being followed or modify corporate plan that is
not working. Strategic evaluation operates at two levels.
•• Strategic Level
•• Operational Level
The idea of strategic control is of a relatively recent origin and its techniques
are still in an embryonic stage. Four types of strategic controls are premise,
implementation, strategic surveillance and special alert control. Operational
control consists of setting standards, measuring performance, analysing
variance and taking corrective actions. MBO, network technologies,
balanced scorecard, key factor rating, bench marking, value chain analysis,
systems modeling, responsibility control centers, etc. are the techniques of
strategic evaluation and control.
The following aspects differentiate strategic control with operational
control:
(i) Strategic control is related to external environment while operational
control is related to internal organization.

15
Introduction to Corporate (ii) Strategic control has longest time horizon.
Management
(iii) Control is exercised exclusively by top management in strategic
control.
(iv) Budget schedules and MBO are used in operational control.

1.6 APPROACHES TO CORPORATE

MANAGEMENT
Corporate management systems vary from organization to organization
depending on a variety of factors: environmental conditions, organizational
size and complexity, age, top management values and styles. Variations in
the corporate management systems across organizations may be found first
in the top management’s basic approach to carry on corporate planning.
These approaches are as follows:
Top Down Approach- In this approach, the top management decides
everything and the implementation is being taken care of by the middle and
lower level management as instructed by top management.
Bottom Up Approach- This approach takes into account the realities and
complexities of operations at the ground level. The top management adopts
an open door approach. Suggestions are invited from all levels.
Hybrid Approach- This is a combination of top down and bottom up
approaches which is generally used in decentralized companies. There
is vertical communication between top management and the Strategic-
Business Units (SBUs) at different phases of the corporate planning and
implementation process.
Team Approach- Where lateral communication between the top managers
is easier. The chief executive may himself in collaboration with senior
managers, prepare corporate plans.
Activity 3
1) What are the methods of resource allocation?
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2) Explain Hybrid approach and team approach in corporate management.
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3) Distinguish between strategic control and operational control.
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 Corporate Management:
1.7 STRATEGISTS AND THEIR ROLE IN An Overview
CORPORATE MANAGEMENT
Strategists are individuals or groups who are primarily involved in the
formulation, implementation and evaluation of strategy. There are persons
outside the organization who are also involved in various aspects of
corporate management. In this section, we shall assess their role in corporate
management:
Board of Directors
The role of the board of directors has come under intense scrutiny in recent
times leading to the emergence of the issue of corporate governance. It
relates to the functioning of the board of company and the conducting of the
business internally and externally. The composition of Board of Directors in
some of the organizations is narrated below:
State Bank of India 7. Whole time Directors
4. Part time Directors
6. Nominee Directors

Larson & Toubro Ltd. 6. Whole time Directors

11. Part time Directors
TISCO
2. Nominee Directors
2. Whole Time Directors
9. Part Time Directors
Reliance Industries Ltd. 5. Whole time Directors
4. Part time Directors
2. Nominee Directors
The Companies Act, 1956 specified the following:
(i) One-third of directors will retire by rotation.
(ii) A public limited company must have at least three directors and a
private limited company must have at least two directors.
(iii) Only individuals and not the institution can be appointed as directors.
The role of the board is to guide the senior management in setting and
accomplishing objectives, reviewing and evaluating organizational
performance and appointing senior executives.
Chief Executive Officer
The CEO is designated as the managing director, executive director,
president or general manager in business organization. As the chief
strategist, the CEO plays a major role in strategic decision making with
the increase in size. Many companies have adopted the practice of sharing
the responsibility of chief executive among two or more persons. In India,
Reliance Industries has chairman, vice- chairman and managing directors
17
Introduction to Corporate while L&T has managing director and joint managing directors. ITC Ltd.
Management has a multiple executive system in the form of corporate management
committee. Attributes like self management and time management are very
important for CEOs.
Entrepreneurs
The entrepreneurs always search for change, respond to it and explicit it as an
opportunity. The entrepreneur is a venture capitalist. They play a proactive
role in strategic management. As initiators, they provide a sense of direction
to all concerned. S. Kumar Sundram as the chairman of the Bank of Madurai
Ltd., and after his death in 1986, the new chairman S.V. Shanmugavadivelu
provide an excellent example of the role of entrepreneurs as strategists.
SBU Level Executives
In corporate management, SBU level strategy formulation and
implementation are the primary responsibilities of the SBU level executives.
They act as divisional heads. They yield considerable authority within the
SBU while maintaining coordination with other SBU heads and corporate
level management.
Consultants
They assist the organizations in their corporate management process.
Smaller organizations may take the benefit of consultants for improving their
corporate governance. A.F. FerguSon, S.B. Billimoria, Mckinsey Company,
Anderson Consulting, etc. are the notable consultants. Boston Consulting
helps in building competitive advantage while KPMG Peat Maruick assists
in strategic financial management and feasibility studies.

1.8 NEED FOR CORPORATE MANAGEMENT

The following factors have forced the strategists to look into issues of
corporate management:
(i) Scarcity of Resources
(ii) Fast Technological Changes.
(iii) Changing Human Values
(iv) Multiplicity of Stake holders.
(v) Growing Competition
(vi) Liberalization, Privatization and Globalization
(vii) Growing scale of business operations
(viii) Faster and Quicker Modes of Transportation and Communication
(ix) Professionalisation in Management

1.9 CORPORATE MANAGEMENT IN NON

BUSINESS ORGANIZATIONS
The basic objective of non-business organizations is to provide service
to the people who come in contact with these organizations. Unlike the
business organizations which are characterized by profit motive, risk
bearing and creation of utilities, non business organizations provide service
18
to the clients. Measurement of the effectiveness of these services is highly Corporate Management:
qualitative and therefore judgmental. The following are the specific areas An Overview
where corporate management issues are to be taken with greater care:
(i) Non business organizations are not interested in attracting large number
of clients. Such organizations do not go for rigorous environmental
analysis.
(ii) Non- business organizations have larger number of interest groups. In
this environment, the corporate management process becomes more
political. The decision outcomes may not be as service oriented as is
usually conceived.
(iii) Non business organizations seldom go through the rigour of strategic
management process. They get their resources from the public. They
operate on the basis of non focused strategic actions.
iv) The performance evaluation criteria in case of non-business
organizations is highly qualitative and therefore judgmental.
Activity 4
i) Critically evaluate the role of Board of Directors in corporate
management.
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(ii) State three important factors forcing the immediate need of corporate
management.
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1.10 SUMMARY
Corporate management is a broad phenomenon and covers the activities
of corporate planning, implementation of corporate plans, evaluation
and control of corporate plans. The concept of corporate management
has moved through the stages of adhocism, planned policy, environment
strategy interface and corporate planning. Corporate management has the
following broad characteristics.
•• encompassing entire management process
•• short term as well as long term
•• all pervasive, integrative and relates to all levels of management
•• concerned with coping uncertain future with active intervention.
Corporate planning is a way of keeping the company’s eyes open. It is a
comprehensive planning process which involves continued formulation of
objectives and the guidance of affairs towards their attainment. This process
19
Introduction to Corporate is continuous and is carried on by top management. The process involves
Management the following steps:
•• Formulation of strategic intent
•• Environmental appraisal
•• Generation of strategic alternatives
•• Evaluation of alternatives
•• Decision in terms of corporate plan
In India, corporate planning could not bring desired results. Factors like poor
participation, complicated process, part time interest, domination of routine
issues bring bottlenecks to effectiveness in corporate planning process.
Implementation refers to those activities which are necessary for achieving
the plans already formulated. This administrative task is based on action
and decision making. The issues like project, procedure, structure, resource
allocation, behavior and managerial functions need special attention.
Review and evaluation of corporate plan operate at two levels i.e. strategic
control and operational control. Budgets, schedules and MBO are used
in operational control. Four types of strategic control are premise,
implementation, strategic surveillance and special alert control.
Variations in the corporate management systems may be top down
approach, bottom up approach, hybrid approach and team approach.
Board of Directors, Chief Executive officer, Entrepreneurs, SBU level
executives and consultants play an important role in corporate management
process. Scarcities of resources, fast technological changes, LPG, changing
human values etc. are forcing the strategists to push the case of effective
corporate management. Non business organizations have to adopt a distinct
corporate management process to cope up with the changes in the emerging
environment.

1.11 KEY WORDS

Corporate Management: It includes corporate planning, implementation
and evaluation.
Corporate Planning: is a continuous process of making entrepreneurial
decisions systematically and with the best possible knowledge of their future,
organizing systematically the effort needed to carry out these decisions.
Implementation: refers to those activities which are necessary for achieving
the plans already formulated.
Strategic Control: is aimed at a continuous assessment of the changing
environment to see that the strategy is not out of line with it.
Operational Control: is directed towards the evaluation of real time action.
Hybrid Approach: A combination of top down and bottom up approach of
corporate management.

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 Corporate Management:
1.12 SELF- ASSESSMENT QUESTIONS An Overview
1. What is corporate planning and what are its important characteristics?
2. “Corporate planning is as good as its implementation” Discuss.
3. What is corporate management? Discuss its nature and scope.
4. Explain the benefits and failures of corporate planning.
5. Narrate corporate planning process in brief. Also state the benefits of
corporate planning.
6. Explain various types of implementation issues in brief.
7. What is behavioral implementation? Explain it with the help of the
details of a company.
8. What is strategic control? How is it different from operational control?
9. Narrate briefly the approaches to the corporate management. Which
one is the best in Indian environment?
10. Critically evaluate the role of board of directors in corporate
management process.
11. Write a note on corporate management in non- business organizations.
12. Write notes on the following:
a. Procedural implementation
b. Role of consultants in corporate management
c. Approaches to corporate management.

1.13 REFRERENCES / FURTHER READINGS

GHOSH, P.K., Business Policy Strategic planning and Management,
Sultan Chand & Sons, New Delhi 1996.
GLUECK WF and LR Iavch, Business Ploicy and Strategic Management
Mc Graw Hill, New York 1984.
KAZMI, AZHAR, Business Policy and Strategic Management, Tata
McGraw Hill Publishing Co, Ltd., New Delhi-2002.
MAMORIA C.B., MAMORIA SATISH, RAO, P. SUBBA, Business
Planning and Policy, Himalaya Publishing House, Bombay.2001.
MILLER A. and G. G. Den Strategic Management” Mcgraw hill, New
York 1996.
PRASAD, L.M., Business Policy: Strategic Management”, Sultan Chand &
Sons, New Delhi. 2002.
SHRIVASTAVA, R.M., Corporate Strategic Management”, Pragati
Prakashan, Meerut, 1995.
SHRIVASTAVA, R.M., Management Policy and Strategic Management,
Himalaya Publishing House, Bombay. 1999.
THOMPSON J.L. Strategic Management: Awareness and Change,
International Thompson Business Press, London 1997.

21
 UNIT 2 CORPORATE POLICY

Objectives
After reading this unit, you should be able to:
•• explain the concept of corporate policy and its features;
•• list out the determinants of corporate policy;
•• develop an understanding about the scope and need for corporate
policy;
•• explain the steps in formulation of policy;
•• discuss the various types of corporate policy; and
•• describe the significance of corporate policy.
Structure
2.1 Introduction
2.2 Concept and Meaning of Corporate Policy
2.3 Features of Corporate Policy
2.4 Determinants of Corporate Policy
2.5 Scope of Corporate Policy
2.6 Policy Formulation Process
2.7 Classification of Corporate Policy
2.8 Importance of Corporate Policy
2.9 Summary
2.10 Key Words
2.11 Self-Assessment Questions
2.12 References / Further Readings

2.1 INTRODUCTION
The organization sets the objectives and works towards their achievement.
Once these objectives are defined and strategies determined, certain policies
have to be made to put them into action. Corporate policies act as a guide
to action. They provide the framework within which an organization has to
meet its corporate objectives. The policy points out the direction in which
the company ought to go. Some of the policy statements are-
“We promote employees on the basis of experience”
“We sell televisions only for cash”
In each of these statements, one could understand that there is a problem
and the policies help as a guide for finding the solution.
Some policies are just broad guidelines while some can be more specific.
According to Koontz and O’Donnell, “Policies are plans in that they are
general statements of principles which guide the thinking, decision making
and action in an organization.”
22
Policies aid in decision making and are the basis for procedures. They Corporate Policy
are responsibilities of top management. Policies are applied in long
range planning and are directly related to goals. They are concerned with
estimating availability of resources, their procurement their augmentation
and their efficient utilization.
In this unit, we shall discuss the concept, features, scope and essentials of a
policy. The classification of policies has also been discussed. In this era of
competition and dynamic environment, the need and importance of policies
has also been explained alongwith the formulation process.

2.2 CONCEPT AND MEANING OF CORPORATE

POLICY
Corporate policy is the guide post to decision making. It helps in the
managerial thinking process and thus leads to the efficient and effective
attainment of the objectives of any organization.
Corporate policy has been defined as “Management’s expressed or implied
intent to govern action in the pursuit of the company’s objectives.” Corporate
policy clarifies the intention of management in dealing with the various
problems faced. It gives the managers a transparent guideline to take their
decisions by being on the safe side. Corporate policy helps the manager in
identification of the solutions to the problem. It provides the framework in
which he has to take the decisions. The distinct views regarding policies can
be categorized into the following three broad groups:
i) The first category holds the opinion that policy and strategy are
synonymous. Corporate policy has been defined by William Glueck as
“Management policy is long range planning. For all practical purposes,
management policy, long range planning and strategic management
mean the same thing.” However, this view is quite controversial as
strategy and corporate policy do not mean the same thing. Strategy
includes awareness of the mission, purpose and objectives. It has
been defined as, “the determination of basic long term goals and
objectives of an enterprise, and the allocation of resources necessary
to carry out these goals”, while policies are statements or a commonly
accepted understandings of decision making and are thought oriented
guidelines. Therefore, strategy and corporate policy cannot be used
interchangeably as there is a clear line of differentiation between the
two terms.
ii) The second group of experts views corporate policy as the process of
implementing strategy. In the words of Frank I. Paine and William
Naumes, “Policies guide and channel the implementation of strategy
and prescribe how processes within the organization will function
and be administered. Thus the term policy refers to organization
procedures, practices and structures, concerned with implementing
and executing strategy.”
Supporting this view, Robert Mudric has defined corporate policy as
“A policy establishes guidelines and limits for discretionary action by
individuals responsible for implementing the overall plan.”
23
Introduction to Corporate The view represents corporate policy to be
Management
•• Restrictive
•• Laying stress only on the tactical side and ignoring the strategic
dimension.
iii) The third view considers corporate policy to be decisions regarding
the future of an organization.
In this view, Robert J. Mockler defines corporate policy as, “Strategic
guidelines for action. They spell out what can and what cannot be done in
all areas of a company’s operation.”
According to the policy manual of General Electric Company, “Policy is
definition of common purpose for organization components of the company
for benefit of those responsible for implementation, exercise discretion and
good judgment in appraising and deciding among alternative courses of
action.”
These views of different management scholars differ because of following
reasons:
•• There is no clear differentiation of policy from other elements of
planning.
•• There are different policies made at different levels of management
for directing executives.
•• Corporate policy encompasses and relates to the entire process of
planning.
Thus, corporate policy focusses on the guidelines used for decision making
and putting them into actions. It consists of principles along with rules of
action that provides for successful achievement of corporate objectives.

2.3 FEATURES OF CORPORATE POLICY

After understanding the concept of corporate policy, following features can
be identified:
•• General Statement of Principles
Policies are general statement of principles followed by corporate for
the attainment of organizational objectives. These principles provide
a guide to action for the executives at different levels.
• Long Term Perspective
Corporate policies have a long life and are formulated with a long
term perspective. They provide stability to the organization.
• Achievement of Objectives
Corporate policy is aimed at the fulfillment of organizational
objectives. They provide a framework for action and thus help the
executives to work towards the set goals.
• Qualitative, Conditional & General Statements
Corporate policy statements are qualitative in nature. They are
conditional and defined in general manner. These statements use

24
 words as to maintain, to follow, to provide etc. They can be specific at Corporate Policy
times but most of the times, a corporate policy tends to be general.
• Guide for Repetitive Operations
Corporate policies are formulated to act as a guide for repetitive day
to day operations. They are best as a guide for the activities that occur
frequently or repeatedly.
• Hierarchy
Corporate policies have an hierarchy i.e. for each set of objectives
at each level of management there is a set of policies. The top
management determines the basic overall policy, then the divisional
and / or departmental policies are determined by the middle level
management and lower level policies are more specific and have a
shorter time horizon than policies at higher levels.
• Decision Making Process
Corporate policy is a decision making process. In formulating
corporate policy one has to make choices and the choice is influenced
by the interests and attitudes of managers engaged in making the
policies.
• Mutual Application
Corporate policies are meant for mutual application by subordinates.
They are made for some specific situation and have to be applied by
the members of the organization.
• Unified Structure
Corporate policies tend to provide predetermined issues and thus
avoid repeated analysis. They provide a unified structure to other
types of plans and help mangers in delegating authority and having
control over the activities.
• Positive Declaration
Corporate policy is a positive declaration and a command to its
followers. It acts as a motivator for the people following it and thus
they work towards the attainment of the objectives efficiently and
effectively. The corporate policy lays down the values which dominate
organization’s actions.

2.4 DETERMINANTS OF CORPORATE POLICY

The corporate policy of an organization is influenced by various interrelated
and interacting factors. These factors can be classified as internal and external
factors. The determinants which are internal to the firm/organization and
which influence the decisions directly are known as the internal factors.
External factors include all those factors which act from outside the firm
and influence the organization externally. We discuss these determinants
one by one below:
INTERNAL DETERMINANTS
The determinants include the corporate mission, corporate objectives,
corporate resources and the management values which are all internal to the
25
Introduction to Corporate organization and play a very important role in the formulation of corporate
Management policy.
(i) Corporate Policy
The policy maker has to understand the corporate mission, so that the
policy is in tune with it. Corporate mission provides the company with
the meaning for which it exists and operates. Because policy provides
guidelines for managerial action, it has to be made in a manner that it
accomplishes the corporate mission.
(ii) Corporate Objectives
Another internal determinant of corporate policy is the corporate
objectives. All organizations frame organizational objectives and work
towards their achievement. Policy makers must take into account the
economic, financial and other objectives of the company.
(iii) The Resources
The organization has to carry out its activities keeping in mind the
resources it has. The corporate policy has to identify the various
resources available and then only can it be made sound. The size
of plants, capital structure, liquidity position, personnel skills and
expertise, competitive position, nature of product, etc. all help in the
formulation of corporate policy.
(iv) Management Values
Corporate policy reflects the values imbibed in the organization. The
personal values of the managers forming corporate policy influence
its formulation. Management values differ from organization to
organization. It is an important determinant of corporate policy.
EXTERNAL DETERMINANTS
These include the forces external to the firm. The external determinants
of corporate policy are industry structure, economic environment, political
environment, social environment and technology.
(i) Industry Structure
The formulation of corporate policy is influenced by the industry in
which the firm exists. The structure of industry comprises of size of
firms, the entry barriers, number of competitors, etc. The corporate policy
is formulated keeping in mind competitors, strategies, policies etc.
(ii) Economic Environment
Economic environment comprises of the demand, supply, price trends,
the national income, availability of inputs, the various institutions,
etc. It includes all these factors which influence the policies of the
firm. Therefore, it becomes one of the most important determinants of
corporate policy.
(iii) Political Environment
The firm has to carry out its activities in accordance with the
government regulations and policies. If these are not complied with
the firm would not be able to meet its objectives in an efficient manner.

26
 The various policies like monetary policy, fiscal policy, credit policy Corporate Policy
influence the corporate policy of the firm.
(iv) Social Environment
The firm affects various sections of the society. The various sections
in turn influence the activities of the firm. The social beliefs of the
managers influence policies. The religious, cultural and ethnic
dimensions have to be dealt with while formulating policies of an
organization.
(v) Technology
Every now and then, new technologies are entering the market. An
organization has to change with the changes in the environment.
It has to remain up to date with respect to technology it uses. Thus
technology also plays an important role in formulation of corporate
policy.

2.5 SCOPE OF CORPORATE POLICY

Corporate policies are statements of guidelines for corporate thinking and
action. They lay down the approach before the management to deal with the
challenges in the environment. They cover the following broad areas that
affect the decisions of the organization.
(i) Corporate policy consists of a variety of subject that affects various
interest groups in the organization and outside it.
(ii) Corporate policy is concerned with the various functional areas like
production, human resources, marketing and finance.
(iii) We can understand corporate policy areas in two broad categories:
Major and minor policies. The overall objectives, procedures and
control are covered in major policies. These policies are concerned
with each and every aspect of the organization, its structure, its
financial status, its production stature, its human resources and all
those issues which require attention like mergers, research, expansion,
etc. Basically, the top management is involved in the framing of such
major policies. Further, the operations and activities are also carried
out by executives so that the organizational objectives are met.
The minor policies are concerned with each segment of the organization
with emphasis on details and procedures. These policies are part of the major
policies. The operational control can be made possible only if the minor
policies are implemented efficiently. The minor policies are concerned with
the day to day operations and are decided at the departmental levels. The
minor policies may cover relations with dealers, discount rates, terms of
credit, etc. Thus, corporate policies cover wide range of subjects ranging
from operational level policies to the top level policies.
Activity 1
1. “Policy and Strategy are synonyms to each other.” Comment.
………………………………………………………………………
………………………………………………………………………
27
Introduction to Corporate ………………………………………………………………………
Management ………………………………………………………………………
………………………………………………………………………..
2. What are the determinants of corporate policy?
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………..

2.6 POLICY FORMULATION PROCESS

A corporate policy is formulated by the top management. The formulation
comprises step wise procedure. The process is similar to the decision making
process and requires analysis, judgment and experience. The steps involved
in the process are:
(i) Environmental analysis
(ii) Identification of policy alternatives
(iii) Evaluation of alternatives
(iv) Choice of policy

I
Environmental Analysis Internal Environment

External Environment

Identification of Policy
II Alternatives

III Evaluation of Alternatives

(Consequences of policies)

IV
Choice of Policy
If, not acceptable

Figure 2.1: Policy Formulation Process

28
i) Environmental Analysis Corporate Policy

The first step in the process of policy formulation is environmental

analysis. There are basically two environmental factors: internal
and external. The external environment of the company comprises
of economic, technological, political and social forces operating
outside the boundaries of the company. These influence the company
indirectly and the company has no control over them. These have to
be continuously analyzed and understood before the formulation of
policies.
The internal environment of the organization comprises of the firm’s
employees, the organization structure, resources, value system,
functional departments, etc. These affect the organization’s activities
directly as they are internal to the organization.
Both internal and external forces interact and a change in one affects
the other. The two together provide for identification of problem areas
with respect to which the policies could be made.
ii) Identification of Policy Alternatives
Once the analysis has been done, the next step requires identification
of policy alternatives. The environmental analysis helps to determine
the opportunities and threats facing the company and also its strengths
and weaknesses. When the organization is engaged in the matching of
its strengths with the opportunities, various policy options emerge. The
options or alternatives also arise with the help of past experience, past
performance results and the practices followed by the management.
Identification of alternatives has to be done efficiently and then only
can they be evaluated for one choice.
iii) Evaluation of Policy Alternatives
After the various alternatives have been identified, they are to be
evaluated so that the best one could be selected. The evaluation of
policies is known as policy audit. The alternatives can be evaluated
on the basis of their consequences in terms of their contribution to
corporate goals. Several criteria could be used for evaluation like
growth, unit, profitability, development, meeting of organizational
goals etc. The evaluation has to be done with care so that errors may
not occur. Policy should not only be feasible but it should also be
consistent with organization’s goals.
iv) Choice of Policy
The last step in the policy formulation process is the choice of the
best alternative from among the various alternatives identified and
evaluated. The evaluation helps in the selection of the best possible
policy. If any of the alternatives are not acceptable and not consistent
with company’s objectives then the process reverts back to the
identification of alternatives where fresh alternatives are looked for.
The search begins again.
The various alternatives are compared with each other and the most
preferred option is selected. This selected policy has to be tested so
29
Introduction to Corporate that it could be known whether it fits in the organizational boundaries
Management and meets the organizational goals. After being successfully tested,
the policy becomes ready for implementation and the manner in
which it would be implemented should be explained clearly.
After the policy has been made, it becomes necessary to review it
from time to time so that it does not become obsolete.
Activity 2
1. Discuss environmental analysis aspect in strategy formulation.
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………..
2. Discuss the fourth step in policy formulation process.
………………………………………………………………………
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………………………………………………………………………
………………………………………………………………………

2.7 CLASSIFICATION OF CORPORATE POLICY

Corporate policies have been classified on the basis of various criteria. Over
the years, the number of bases have changed and developed.
Basically there are three main types of policies:
•• Basic Policies
•• General Policies
•• Departmental Policies
Different authors have given different kinds of classifications. Some have
classified policies on the basis of functional areas, while some have classified
them on the basis of levels. Alfred and Beatty have classified policies as:
•• Top Management Policies
•• Upper Middle Management Policies
•• Middle Management Policies
•• Foremen Policies
•• Operating Force Policies
•• Sales Policies
•• Production Policies
•• Research Policies
•• Financial Policies
•• Costing Policies
•• Accounting Policies
•• Marketing Policies
•• Promotion Policies
•• Product Policies
30
To make the study easier, the policies have been classified differently in Corporate Policy
figure 2.2 given below.

Production Policies

Marketing Policies
v) Functional Areas
Financial Policies

Personnel Policies

Planning Policies

Organizing Policies
vi) Nature of Management
Functions Actuating Policies

Controlling Policies

Figure 2.2 Classification of Policies

31
Introduction to Corporate i) Classification on the basis of Scope
Management
On the basis of scope of an organization, policies are classified as Basic
Policies, General Policies and Departmental or Specific Policies.
•• Basic Policies- These are framed by the top management and
spell out the basic approach of a company to its activities and
its environment.
•• General Policies- These are framed by the middle level
management and are more specific. They apply to large
segments of the organization.
•• Specific Policies- These are framed by the foremen and
supervisors and are very specific in nature. They are applicable
to routine activities.
ii) Classification on the basis of Expression
On the basis of expression, corporate policies can either be expressed
or implied.
•• Expressed Policies- The policies which are expressed in clear
words either orally or in writing are the expressed policies.
These are most suitable for small organizations.
•• Implied Policies- The Policies which are understood by the
employees, code of conduct or behavior and are not expressed
orally or through written statements are known as implied
policies. They flow from philosophy, values and traditions of
the organization.
iii) Classification on the basis of Level
Different policies are framed at different levels of management. These
include:
•• Top Management Policies-These are framed by the top
management and it is only responsible for them. The policies are
derived from top management planning and top management
sees that they are put into effect and judges the results.
•• Middle Level Management Policies-These are laid down by
the middle level managers and deal with the organizational
activities e.g. selection of executives, employee training,
deciding processes, methods, techniques, etc.
•• Lower Level Management Policies- Those people who have
direct control over the working force comprise the lower level
management. These people set up policies with respect to the
accomplishment of tasks of sub divisions of the organizations.
iv) Classification on the basis of Origin
On the basis of origin, policies are classified as original policies,
appealed policies, imposed policies and derivative policies.
Original Policies: These policies are formed from the company
objectives. These are formed by the top management and the top
management is responsible for guiding and directing them and
the subordinates are responsible in the attainment of organization
objectives.
32
 Appealed Policies: These are also called “suggested policies” because Corporate Policy
they are made by taking into account the suggestions of subordinates
or people who implement these policies.
Imposed Policies: External forces sometimes force the company to
accept certain policies forcibly. These policies are called imposed
policies. The external forces could include government rules and
suggestions, arguments with trade unions, etc.
Derivative Policies: These policies are operational in nature and are
derived from company’s major policies. They are made as guidelines
to perform day to day operations.
v) Classification on the basis of Functional Areas
In an organization various, functional areas are seen. The policies
are classified according to functional areas i.e. production policies,
marketing and sales policies, financial policies and personnel policies.
Production Policies- These policies are concerned with product to be
produced, type of technology, equipment, selection of plant layout,
location and size, manufacturing cost, inventory control, quality
control, etc.
Marketing & Sales Policies- The policies which relate to policies in
market analysis, business law, salesmanship, advertising are concerned
with total process of marketing mix and product mix. These include
decisions with respect to customers, channels of distribution, dealers,
sales control, promotions, etc.
Financial Policies- The success of business depends upon these
policies. These consist of policies with respect to capital structure,
methods of raising funds, the utilization of funds, credit policy,
dividend decisions, profit policy, costing and accounting policy, etc.
Personnel Policies- Employees are very important for the organization
and the personnel policies are concerned with issues like recruitment,
selection, training and development, promotions and transfer, wages
and incentives, etc.
vi) Classification of Policies on the basis of Nature of Management
The main functions of an organization comprise of planning,
organizing, actuating and controlling. The policies may therefore be
classified as planning policies, organizing policies, actuating policies
and controlling policies.
Planning Policies- These policies are concerned with the determination
of ways to attain the objectives of the organization. Such policies
decide corporate objectives, alternative courses of action, comparison
of alternatives, establishment of budgets, schedules, procedures etc.
Organizing Policies- These policies are concerned with allocation
of activities to members of the group so that through their collective
efforts, objectives could be achieved. These are those policies which
provide for issues like organization structure, authority, responsibility,
delegation, centralization and various relationships.

33
Introduction to Corporate Actuating Policies- The actuating policies include providing
Management leadership, integrating tasks, communication and organization
climate. These policies are concerned with organizing the employees
of the organization.
Controlling Policies- Controlling is the process by which the
performance is compared with the set objectives. These policies
provide for establishment of standards, pointing out deviations,
ascertaining causes for deviation and taking corrective actions.

2.8 IMPORTANCE OF CORPORATE POLICY

For effective management, the solving of day to day problems is not enough.
What is required is the proper assessment of all kinds of activities and
operations taking place in the organization. After the assessment, they are
to be defined in clear cut way, so that objectives could be met. For definition
of the business activities and their efficient implementation, the selection
and application of policies is required. Without a guiding light, it would
become very difficult for the business to go on and policies act as guide and
facilitate the manager to direct all the activities towards the same goal.
•• Policies are needed to carry out the business activities in a smooth
manner.
•• They provide clear cut courses for attainment of business objectives.
•• If a proper explicit policy has been formulated, many of the details
could be conveniently handled by the subordinates and management
would not unnecessarily waste its time and energy in doing them.
•• Policies provide a guide and framework for decision making.
•• Policies encourage delegation of the power of decision making.
•• Good policies provide a direction in which all management activities
are focused.
•• Policies provide stability to the action of the members of the firm.
•• Policies deter the subordinates to rethink on the day to day issues and
thus avoid repetitive analysis of issues.
•• Policies facilitate evaluation of performance by acting as a standard.
•• They enhance employee’s enthusiasm and loyalty for the organization.
•• They help in solving the problems for optimum utilization of scarce
resources.
•• The sound policies help in building good public image of the business.
•• Polices provide the firm with clear objectives with which the managers
can decide about the future course of action.
•• They act as tool for coordination and control.
Thus, corporate policy is very important for an organization and helps in the
overall development and growth. A sound policy provides satisfaction to the
employees in terms of working conditions, culture, authority, responsibility
and relationships.

34
Activity 3 Corporate Policy

1. Distinguish between expressed and implied policies.

………………………………………………………………………
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2. Explain functional policies in brief. Explain the Derivative policies.
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………..
3. State the importance of corporate policy.
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………
………………………………………………………………………..

2.9 SUMMARY
Corporate policy is the guideline which helps the management to carry out
its activities in an efficient and effective manner so that the objectives of
the organization are met. However, there are different views with regard
to definition of corporate policy. The features of corporate policy include
general statement of principles, long term perspective, achievement of
objectives, qualitative, conditional and general statements, guide for
repetitive operations, helps in decision making process, provides a unified
structure and helps to determine a positive declaration for its followers. The
determinants of corporate policy include internal and external determinants.
The scope of corporate policy is very broad and consists of variety of
subjects that affect various internal groups in the organization. The
formulation of corporate policy is very important and facilitate the managers
to achieve goals. The process of corporate policy formulation include four
steps- environmental analysis, identification of alternatives, evaluation of
alternatives and choice of corporate policy. Policies are classified on the
basis of various criteria - scope, expression, level of management, nature of
origin, functional areas and nature of management functions. Policies have
an important role to play in organizations.

2.10 KEY WORDS

Corporate Policy: Management’s expressed or implied intent to govern
action in the pursuit of the company’s objectives.
Internal Determinants: The internal factors which influence the policy
formulation of a firm.
External Determinants: The external factors which influence the policy
formulation of a firm.
35
Introduction to Corporate Actuating Policies: The actuating policies include providing leadership,
Management integrating tasks, communication and organization climate. These policies
are concerned with organizing the employees of the organization.
Appealed Policies: These are also called “suggested policies” because they
are made by taking into account the suggestions of subordinates or people
who implement these policies.
Derivative Policies: These policies are operational in nature and are derived
from company’s major policies. They are made as guidelines to perform day
to day operations.
Implied Policies: The policies which are understood by the employees
code of conduct or behavior and are not expressed orally or through written
statements are known as implied policies. They flow from philosophy,
values and traditions of the organization.

2.11 SELF-ASSESSMENT QUESTIONS

1. What do you mean by corporate policy? What are the different views
with respect to corporate policy?
2. Discuss the features of corporate policy. What are the essentials of an
effective corporate policy?
3. How is corporate policy formulated? Describe with the help of a
diagram.
4. In today’s changing scenario, what is the importance of framing a
corporate policy?
5. How is corporate policy classified? What are the various kinds of
corporate policy?
6. Select an organization of your choice and name various types of
policies it had adopted.

2.12 REFERENCES / FURTHER READINGS

GHOSH, P.K., “Business Policy Strategic planning and Management ”,
Sultan Chand & Sons, New Delhi 1996
GLUECK WF and LR Iavch, “Business Ploicy and Strategic Management”
Mc graw Hill, New York 1984.
KAZMI, AZHAR, “Business Policy and Strategic Management”, Tata
Mcgraw Hill Publishing Co, Ltd., New Delhi-2002.
MAMORIA C.B., MAMORIA SATISH, RAO, P. SUBBA, Business
Planning and Policy, Himalaya Publishing House, Bombay.2001
MILLER A. and G. G. Den “Strategic Management” Mcgraw hill, New
York 1996
PRASAD, L.M., “Business Policy: Strategic Management”, Sultan Chand
& Sons, New Delhi. 2002
SHRIVASTAVA, R.M., “Corporate Strategic Management”, Pragati
Prakashan, Meerut, 1995.
SHRIVASTAVA, R.M., Management Policy and Strategic Management,
Himalaya Publishing House, Bombay. 1999
THOMPSON J.L. “Strategic Management: Awareness and Change”,
International Thompson Business Press, London 1997.
36