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Chapter 2:

Developing a UsefulApproach to Policyand Strategy

Formulation andAdvocacy(Group 1): Cabansag, Dalida,Fiecas, Panahon

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Introduction

John Deweys (1993) concepts of howpeople think provide a useful rationalefor the approach as a whole: the process

of policy and strategy formulation maybe viewed as a form of reflective, whereone progresses step by step from

recognition of the problem to solution.

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Formulation

v Record Present Policy

This step is the formulation for subsequent steps. Basically,the policies of big business organizations are a matter ofrecord. They are embodied in long-range plans, organizationalstructure and standard practice instructions and procedures.

The task of recording present policy becomes much moredifficult, but even here it is usually possible to infer from trendsand executive behavior what policies are implicit in theorganizations operations. However, if efforts to record presentpolicy fail, one can fall back on the size-up approach for the

next step. In recording present policy it is important to clarifythe criteria that top management want to use as to the kind ofcompany they want to operate and feel they ought to operate.

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v Identify Policy Problem

The present policy is reappraised to determine whether policyproblem exist. A policy problem is a major problem that may have a

significant influence on the future success of the business organizationas a whole. In reappraising present policy, one must first look at theorganizations environment. In order to estimate the consequences ofcontinuing present policies, one needs to study external trends anddevelopments and to make assumptions about the economic outlook,the shape of future technology, and competitors action. One needs to

establish premises about the environment on which analysis of businessorganization operations can be based. A useful next step is to analyzethe financial and operating picture. Attention should be directed toevaluating margins, profits and returns on investment, cash flow, andavailability of capital. Policy problems may take the form of threats oropportunities 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 otherindications of loss of health or vigor.

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v Diagnose the Cause

The roots of the problem may lie in (1) an inadequatestrategy, (2) inappropriate implemental approach, or (3)suffering from ineffective management.

v Formulate Alternative Policies

Whether the underlying cause has to do with strategy,implementation, or management, or a combination of these, itis characteristics of modern planning approaches that the firststep is to consider all alternatives to offer some possibility ofproviding a solution. The important thing here is that no

possible alternative be overlooked. This is the place forinnovation rather than for logic.

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v Evaluate Alternative Policies

This step requires analysis and comparison with respect torelevant factors. In business policy problems, factors involvingsubjective judgment are often more important and moredetermining than in operating problems. Evaluation ofalternative solutions requires recognitions of the relevantconsiderations and evaluation of alternatives with respect toeach. The product of this analysis is a ranking of every

alternative with respect to each relevant consideration.

v Choose a New Policy

The choice of a new policy marks the end of the basic six-step procedure.

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Formulation

v Record Present Policy

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?

v Identify Strategy Problems

a) Are the significant trends discernable in the environment?

b) Are attractive opportunities emerging?

c) Are possible threats becoming evident?

d) Are significant strengths, weaknesses, opportunities, and threatsdeveloping inside the company?

e) Do these external trends and internal developments challenge thevalidity of the present strategy?

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v Diagnose the Cause

a) Does the strategy adequate exploit opportunities and/or meet threats in theenvironment?

b) Is the strategy consistent with organizations competence and resources?c) What is the organizations distinctive competence?

d) Does the strategy make full use of this competence?

e) Is the strategy consistent with the kind of business management want tooperate?

f) Is the strategy consisted with the kind of business management feels it

ought to operate?g) What is the substance of the strategy problem?

v Formulate Alternative Strategies

a) What are the alternatives for solving the strategy problem?

b) To what extent do the organizations competence and resources limit thenumber of alternatives that should be considered?

c) What does the organization have to do well in order to succeed with eachalternative?

d) Can the business organization do it?

e) To what extent do managements preferences limit the alternatives?

f) To what extent does managements sense of social responsibility limit thealternatives?

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v Evaluate Alternative Strategies

a) Which alternative best solves the strategy problems?

b) Which alternative offers the best match with the organizationscompetence and resources?

c) Which alternative best satisfies managements preferences?

d) Which alternative best meets managements sense of socialresponsibility?

e) What is the relative importance of each of the preceding

considerations?v Choose a New Strategy

a) What should the new strategy be?

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mpor ance o roup or n o cyFormulation

According to R. H. Wagner and C. Arnold (1965),policy formulation can be approached as a groupeffort. Such effort should be facilitated through theuse of group discussion techniques based on the

problem-solving framework. One of the principaltools contributing to effective leadership is a carefullyprepared plan for guiding the discussion. It is aconstant challenge to the leader of such sessions tomaintain that balance between freedom and control

which makes for progress, yet does not stifle creativethinking.

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Proposals

Process of developing a presentation:

v Phrasing the proposition stating the solution arrived bythe process of formulation as a proposition policy.

Three major kinds of proposition:

a) Proposition of factsb) Proposition of values

c) Proposition of policy

A proposition is an expression of a judgment for which oneseeks acceptance. Any proposition of policy must be expressed

as a normative statement. A normative statement calls forsome specific action to be performed and is characterized bythe word should.

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v Discovering the issues and formulating the majorcontentions raising the vital questions on which thevalidity of the proposition hinges and formulating the

affirmative answer to these questions.

Support of a proposition of business policy will involveanswering affirmatively questions relative to four issues:

a) Do policy problems exist?

b) Has the cause of the policy problems been diagnosed?

c) Does the proposed policy remove the cause?

d) Is the proposed policy practicable?

Two important characteristics of issue:

a) Issues are question on which the validity of the

proposition hinges.b) Each issue is vital to the proposition

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v Marshaling the evidence selecting the facts, reasons,opinions, and assumptions to use in support of the majorcontentions.

Four sources of evidence:

a) Facts

b) Generalizations

c) Opinions

d) AssumptionsIt is important that sufficient relevant evidence be presented insupport of any contention. Evidence contradictory to thecontention may often exist as well, and should not be ignored.Opposing arguments must be dealt with in developing support

for a contention.

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v Outlining the report rearranging logical argument to includeaudience appeal.

Two main factors in planning:

a) The characteristics of the situation, the nature of the problem presented,the specific issues to be resolved, the facts available.

b) The predisposition of the evidence, awareness of the problem, recognitionof the need for action, initial receptivity to the predisposition to be offered.

v Writing the report preparing the presentation

Three major areas to be checked:

a) Organization the report should be structured logically and coherently. Itshould be unified, and every part should be related to the preceding andfollowing parts.

b) Contents it should be clear to the reader what problem is being discussedand what action is being proposed. The arguments should be sufficiently

complete and developed, irrelevant material and repetition should bedeleted to avoid distracting him from the thread of the argument. Theevidence offered should be clear, applicable, and adequate to supportconclusions.

c) Style presentation should be edited for grammatical sentence structure,proper punctuation, accepted usage, accurate diction and so forth.

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v Briefing the argument organizing the major contentions andevidence into logical order.

It is a preparation tool designed to organize the logic of the

argument, and is valuable primarily as an aid in making theargument, complete and consistent. It is not intended to servedirectly as an outline for the written report but provides the logicalfoundation for such an outline.

Three parts of brief argument:

a) Introduction include a statement of the proposition; the origin andhistory of the problem, including a definition of the present policy; theimmediate cause for discussion; and a statement of the issues. It isdesigned to lead to the supporting statements of the analysts standon the proposition, but not to set forth that support.

b) Body present the major contention as the main points, eachsupported by reasons and evidence arranged in a logical order.

c) Conclusion a summary of the essential points of the body of thebrief. The closing should be a statement of the proposition.

erna ve pproac n repar ng

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erna ve pproac n repar ngPolicy Report

Formulation

OutlineBrief

Report

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The End