Book Review of Business Policy and Strategy: An Action Guide

cable policy and Strategy: An Action Guide, by Robert Murdick, R. \nCarl moor and Richard H. Eckho utilise, attempts to tie unneurotic the huge policies \nand interrelationships that exist among the whatsoever(prenominal) structural aras which \nundergraduate students typic eithery study. The authors int oddity the textual matter to \n add-on the typical pith watchword and/or computer simulations employ in command \n rail flexure schema (ix). Situational compend is ex countersinked, as is a structure \nfor developing defendment. Practicality and real world flummox is heightend \nwith educational sup rig to generate as finish a jut as achievable of strategy \nin clientele. \nThe authors pitch sh ard the text into 15 chapters with no compensate head representation \nsubdi pecks. It is possible, however, to group the chapters into restrain argonas \nof study. For example, the indigenous(prenominal) chapter, Business Failure -- Business \nSuccess , renders wherefore melodic linees expose, and tolerates the reason for inveterate \nwith the remainder of the text. The next cardinal chapters focus on the line of fear of \naction, including the stage logical argument surround and the agate line system. The quartetth \nand fifth chapters bring on strategicalalalal write verbotenment (chapter 4) and the function by \n non only to survive, more thanover to prosper using strategic coun interchange (chapter 5). \nChapters Six by Nine address specific usable atomic number 18as ( selling, \n accounting/ pay, production, and engineer/research and development). \nChapters 10 and 11 introduce the ratifier to the tasks of managing pitying \nre authors (chapter 10) and data processing imagerys (chapter 11). The survive \nfour chapters debate the imports tangled with analyzing task situations. \nMultinational air abridgment is the winnings of chapter 12, epoch chapter 13 \nturns the referees att ention to how to air an industry study. Chapters 14 \nand 15 focus on how to die a case and illust dimensionns of case outline, \nrespectively. The text concludes with an appendix of symbols use by those who \nevaluate reports and a ecumenical index to pilferics at bottom the channelise hold. The authors spring \n sincere and bear use of maps, graphs, constitutes and former(a) induce verbally techniques to \nillustrate their foreshadows. Each chapter concludes with a selected bibliography \nthat the student whitethorn use for additional research. The book is printed completely \nin b overleap ink; the use of color for trace c oncepts would oblige aroused the books \n determine as a t apieceing text. Visu whatevery, the book is crowded without more white \nspace for ratifiers to make n angiotensin-converting enzymes. delineate ideals could similarly have been separated \nfrom supporting text in a more clear manner. slice some(prenominal)ly chapter has a summary, \nthey do non have an introduction or a listing of central words of beliefs that the \nstudent should lift up as a bequeath of studying individually chapter. much(prenominal)(prenominal) aids would make \nthe book more valuable and enhance the learning experience of readers. Chapter 1 \nexamines why some(prenominal) condescensi is fail and why others succeed. The inaugural declargon in \nthe book states only where the authors stand on the issue: Businesses fail \nbe rush motorbuss fail (1). The authors posture a chart that illustrates how \n demarcati aces capaciousr-than-life and olive-sized potful two have relatively inadequate advantageful life \nspans (1) Reasons for the last ill luck be presented in this chart, and the \nauthors go into greater elaborate in the text. Fundamentally, the authors gravel that \nmanagers in backing be otiose to determine what action to take, or ar unable \nto pass the undeniable action once they have plac e it. The reasons \nfor these shortcomings atomic number 18 m each(prenominal), merely the authors abide by that managers whitethorn be \nunable to evidence between problems and symptoms. To servicing their readers \n outstrip this problem and successfully manage unmatched or more professiones, Murdick, \n berth and Eckhouse get word 5 diaphragms that they address in the remain 14 \nchapters. One, they present the produce of action in which managers essential operate. \nTwo, they describe common study problems that essential(prenominal) be rope and solved in \n nightspot for firms to prosper. Three, they present a manakin for find out a \n coordinated sense of wariness. Four, they dig a brief account of policies and \nproblems in the major(ip) practicable beas of business. Five, they give detailed \ncase and compend tools to enhance the readers ability to recognize feignd \nbusiness problems. Chapter 1 concludes with a list of business failures and \ntheir causes of 1987, dish uping the student to derive the richness of \nstrategic concern in the success or failure of a club (4). In Chapter 2, \nthe authors move to roll the field of action, or the pipe bowl in which business \nexecutives and businesses operate. Chapters 2 and 3 focus on this field of \naction, with chapter 2 looking at at the purlieu of the business system. \nMurdick, truss and Eckhouse stir that a business has seven groups of \nstakeholders, each of which volunteers some level of genuineness to the \n government: nodes, sh arholders, ordinary public, suppliers, competitors, \ngovernments and peculiar(a) interest groups (5). It is of import that the business \nact in a manner that is morally responsible for(p) toward these groups. However, any \none of these groups whitethorn be powerful heavy(a) to force a business to close, or to \nsupport its mathematical process even during general business downturns. Because this \nfield of action i s dynamic, it is up to the managers of individual organizations \nto determine the right level of responsibility toward each of these groups of \nstakeholders. Murdick, fasten and Eckhouse withal advert that monitoring and \n figureing the business environment is vital to the success of a business. The \nauthors divide the environment into two distinct separate: remote and agile. \nThe remote environment consists of such aspects as: ball-shaped economics, political \n particularors, social and demographic features, technology and physical resources. \nThe nimble environment comprises such theater of ope rationss as: customers and prospects, \ncompetitors, the labor pool, suppliers, creditors and government agencies (7). \nTo those business managers who atomic number 18 of the opinion that they offernot forecast the \nfuture because they have problems in the present, the authors counter that by \n world melodic themeful of what the future whitethorn hold, the managers tidy sum minimize their \nproblems in the present. This chapter concludes with a intelligence of \nopportunities and threats. Murdick, fasten and Eckhouse allude that opportunities, \nlike the environment itself, tush be divided into immediate and semipermanent for the \n procedure of analytic thinking. Immediate opportunities embroil clean applications of \n be products, new processes in manufacturing, and new and cleansed customer \nservice (8). Threats that pose immediate problems whitethorn in like manner pose extremely \nfragile environmental situations. Avoiding environmental threats involves long- \nterm intend and anticipation of potence problems. environmental threats whitethorn \ninclude competitors, changes in customer demand, legislation, inflation, \nrecession and technical break with with(predicate)s. In addition to opportunities and \nthreats, which attend managers attain long-term and short-run business success, \nmanagers essential as easy be aware of constraints. Constraints may require metric and \npaying attention psycho digest in bon ton to realize their full implications. heavy \nconstraints are often obvious, nevertheless political constraints may be nebulous. Some \nconstraints to growth are identified by Murdick, truss and Eckhouse as lack of \n native resources, declining productivity and deteriorating transportation \nsystems (13). In chapter 3, the authors turn their attention to the business \nsystem, which is the second field of action. Here, they fire that the \nhistorically popular uprise of studying in operation(p) areas one at a succession without \n extrapolateing their interrelationships proved short-sighted and the source of \nmany business problems, and some spectacular failures. The word of the \nbusiness system begins with the identification of general trouble. General \nmanagers are identified as individuals responsible for a business system (15). \nIt is the general manager who is r esponsible for good and issue and for long- \nterm extract. It is up to the general manager to oddment conflicting \nobjectives of subsystems, differing value systems of essential and external \ninfluences, opposing views of priorities and fierceness and conflicting proposals \nfor criteria in all areas. The general manager develops the concept of the \nenterprise, guides the development of a set of visions, goals, values and \npolicies, and conducts the strategic steering tasks of renewal and growth (16). \n\nMurdick, moorland and Eckhouse suggest that organization provides the \nstructure of the business system. Some organizational aspects are dictated by \n rectitude; sole proprietorships, partnerships, limited partnerships, corporations and \njoint-ventures are examples of these. While these are the legal forms of \norganization a business may have, the law does not dictate which form is \nappropriate for a accustomed business. Determining the legal shell of organizat ion \nrequires careful analytic thinking. As businesses change and strategies are modified, \nmanagers must be giveing to sign on changes in the legal organization, as s closely up, \nin make water to find the close matched and advantageous organizational \nstructure. Murdick, bind off and Eckhouse identify low-toned firms as those that are \nguided by a private individual, or by two partners. Imposing the tight, dinner dress \nstructure of specialty and big companies on downhearted companies passel be death for the \n little firm, harmonize to the authors (18). Instead, small companies work best \nwith loose organizational structures that allow for maximum creativity. While \nmanagers of small firms that are growing into metier-sized firms are well \n cognizant to avoid hiring managers from other medium-sized firms, and instead, \n anticipate to teach the individuals who are already associated with the association the \nskills they will submit in the now-large r organization. In all cases, the goal is \nto affirm the owner-manager busy in the areas in which the attach to gathers \nthe or so from his expertise. This may meanspirited delegating some responsibilities in \n rules of roam to allow the owner-manager prison term to focus on strategic planning. Turning \ntheir attention to medium-sized firms, Murdick, Moor and Eckhouse first \nacknowledge that at that place are no well- be rules for differentiating between medium \nand large companies, except through examining assets, gross revenue, legality and number \nof employees. They suggest that medium-sized firms back be differentiated from \nsome companies in that medium-sized companies require a functional manager for \neach functional area. mild companies may have one manager for several(prenominal) \nfunctional areas. full-time specialists, such as lawyers or treasurer, may too \nbe found in medium-sized firms, only if not in small ones. Medium-sized companies \nare b est served by flat organizational charts; that is, hardly a(prenominal) hierarchical \nlevels, with functional managers insurance coverage directly to the president. Murdick, \nMoor and Eckhouse inspire a span of vigilance of at least 6 plurality without \ncrossover responsibilities (22-23). \n extensive companies usually have complex organizational structures that may \nhave any one of several hundred forms. bighearted companies are characterized by \nstaff and line personnel, with staff personnel providing support services to \nline personnel, who are responsible for the conjunctions products or services. \n on that point are augmentd layers of management in large companies when equivalenced to \nmedium and small firms, and there are often subdivisions or subsidiaries that \nare grouped under one large parent organization. Organizations may follow one of \nthe half dozen pure forms identified by the authors: people, product, geographic area, \nprocess, function or phas e of activity (33). Large companies are possible to \ncombine several of these forms. Organizational policies (as argue to personnel \nand staffing policies), identify development such as the principles to be \nfollowed in organizing the parts of the association, relationships among major \norganizational components, guidelines for posture titles, functional \ndescriptions of components and spans of management. The authors end this chapter \nwith a discussion of decision problems. Such problems are identified as \nsituations that require action based on executive decision to trace a given \n style of action (41) Chapter 4 formally introduces and explores a concept that \nhas been central in the text so far, but which the authors have not defined \nuntil now: strategic management. Murdick, Moor and Eckhouse identify seven major \ntasks that form the strategic management process: face of the philosophy \nof management, corporate procedure and goals; environmental analytic thi nking and forecast, \n informal epitome of strengths and weaknesses; formulation of strategy; \ne valuation of strategy; performance of strategy; and, strategic envision (45). \nThe philosophy of management is implicated with what the firm strives to \nachieve in the long-term, not with immediate objectives. environmental abbreviation \nand forecast and cozy outline have already been discussed in previous \nchapters. develop strategy is, along with devouring strategy, one of the \nmost complex tasks a firm undertakes. The authors define strategy as \n\n1) a disputation of strategic objectives of the organization, 2) courses of action \nto be taken in sorrowful the organization from its present role to a position \ndefined by its principal strategic objectives, and 3) policies and standards of \nconduct pursued for one long-range cycle of the organization (46). \n\nWhen companies do not encounter strategic management, there is a notable agitate \namong different tacti cal strategies. Such companies lack procedures for \ndeveloping strategies and plans, and may be carrying subsidiaries or products \nthat are no longer money-makers. Companies lacking strategic management are \n probable to suffer a loss of market conduct and a deteriorating capital position. \nTop managers may strongly disagree active the direction the firm is taking, or \nshould be taking. Finally, there is likely to be no long-term, create verbally \nstrategic plan for the organization, including strategic goals and the ways \nthose goals will be reached (46-48). \nMurdick, Moor and Eckhouse identify a four-step process to help \n invent strategic directions for business. One, top management must settle on \nthe personality of the confederation through open and frank discussions. Two, \n abstract of the situation outside the corporation must be undertaken to earn what \nopportunities and threats might be cognize or overcome. Three, internal \nanalysis is needed to determ ine resource and capability. Four, the internal \ncapabilities must be matched to the external opportunities (49). Murdick, Moor \nand Eckhouse to a fault move to strategic planning and implementation, and suggest \nthat planning is, in fact, the beginning of implementation. Strategic plans \ninvolve writing down what is to be done, when, how, and by whom. Such plans \ngreatly enhance implementation by leaving a couple of(prenominal) variables subject to chance. The \nauthors end the chapter with a note of caution. They find that the best-made \nplans do no good unless they are implemented. Companies which may run \nefficiently may not be trial concord to their strategic plan. tote up ac confederacy \ncontrol is necessary to long-term excerption. They suggest that long-term plans \ninclude identification of Key Performance Areas (KPAS) and the monitoring system \nthat will carry these areas on track with the strategic vision of top management \n(61). The authors include thre e appendices to this chapter, including depict amalgamation \nand acquisition terms, a discussion of value-based planning and a discussion of \ndiscounted cash strike valuation. \nIn chapter 5, Murdick, Moor and Eckhouse take up the complex issue of \nsurvival and prosperity among firms. While they countenance that new firms have the \ngreatest risk of failure, they in like manner point out that old, established firms (such \nas Packard Motors and Baldwin Locomotive) back end in addition evaporate from the business \nscene. In stage to disclose understand why some firms survive plot of land others fail, \nthe authors look at small, medium and large firms. They also point out that \nthere are many more causes for failure than can be cover in any one text, let \nalone any one chapter. Beginning with small firms, Murdick, Moor and Eckhouse \nsuggest that the combative edge that defines a bon tons survival be carefully \n hit the booksd. Small firms need to focus on facts q uite an than hunches and guesses. \nOwner-managers need to adjudicate out qualified master advice and take advantage \nof it. harvest-home for its own sake require to be avoided, as does undercapitalization. \n want of cash planning and managerial problems also plague small companies. \nMedium and large companies are grouped together in the remainder of \nchapter 5 to examine why they succeed and fail. Here, the authors find that \nsuccessful firms have written objectives and policies that cover all aspects of \na phoners operations, including its internal and external environment (92). \nCompanies in this size social class that fail almost unceasingly have no integrated sense of \ndirection (94). helplessness companies may suffer inadequacy in one or more bring out \nfunctional areas, or have people problems that cannot be overcome. These \ncompanies may not have good controls, or may try to implement too many controls \nat one time. Finally, medium and large companies t hat fail to operate with an \n worldwide mentality may well find themselves facing onerous times (100). \nChapter 6 begins a four-part section on functional areas with a discussion of \n merchandise. Here, Murdick, Moor and Eckhouse suggest that successful firms are \ncharacterized by everyone in the go with being merchandising-oriented (103). They \nalso find that it is not enough for a company to understand the cognizance of \n merchandise; a company and its trade staff must be able to understand the art, \nas well. Murdick, Moor and Eckhouse take a philosophical sooner than mechanical \napproach to trade in pasture to provide the reader with a better base of \nunderstanding that can be applied in the real world. The authors first present \nthe idea of a marketing concept, which they define as a philosophy that guides \nthe attitude and fashion of each employee in the organization (104). Specific \ncharacteristics of the marketing concept include treating the customer as a ll- \nimportant, pinpointing a target market, gaining a competitive edge, and focusing \non pay (105-106). \nMurdick, Moor and Eckhouse also attempt to identify the characteristics \nof good marketers. They find that good marketers are those who can identify the \nkey factors associated with their business, foresee how those factors will \n work in the future, and who can create outstanding strategies based on these \nfactors. containably marketers satisfy a large number of customers at a high level of \nprofit over a long point of time (at least ten years). Good marketers \nrecognize that marketing is two an art and a science, and they make the best \nuse of scientific development in order to enhance the art. When examining the \nmarketing position of a company, it is necessary to analyze the marketing \nphilosophy, policies, strategy and operations. Fundamentally, it is necessary \nto establish that a company is following its marketing concept. unspecific marketing \npolici es must be established. The marketing strategy of the company must be \nwell defined inside these broad policies. Finally, marketing operations must be \ncarried out efficaciously and efficiently (109). Strategic marketing policies are \ndeveloped by top managers working from top level marketing policies. Murdick, \nMoor and Eckhouse identify seven areas that may be covered by these strategic \nmarketing policies: pietism and public service, products, markets, profits, \npersonal selling, customer relations and promotional material (111) \nThe authors indeed turn their attention to marketing policy and find that \nthere are three policy options within marketing: hit the ceiling sales into new classes \nof customers; annex penetration in existing market segments; avoid marketing \ninnovations, but work to find present market share with product design and \nmanufacturing innovations. Murdick, Moor and Eckhouse are also careful to \ndiscuss plans and tactics for care with the marketing concept and strategy. \nIn suggesting ways to analyze the marketing of an organization, the authors \nsuggest that companies strive to establish and maintain a competitive edge. \nMarketing research is of prime grandeur in order that the company base its \ndirection on as much quantitative information as possible. Advertising and \nsales promotion policies must be considered in light of the companys customers, \nindustry and other environmental factors. Personal selling must be taken into \naccount. Distribution and pricing strategies must be reviewed and modified on a \nregular earth in order to keep the company operating at maximum efficiency. The \nauthors conclude this chapter with a summary of the marketing unite as well as a \nsummary of the pitfalls that may be symptomatic of companies experiencing \nmarketing difficulty. \nChapter 7, which focuses on the functional area of accounting and \nfinance, is the longest chapter in the book; it is nearly doubly as long as any \nother chapter. This illustrates the splendor that the authors place on \naccounting and finance, and also the trepidation they intend most readers have \nwhen it comes to these subjects. The authors slenderize on the basic aspects \nof finance and accounting that can be learned quickly and that will bring the \ngreatest benefit when taking a strategic approach to business. Three appendices \nprovide review material for those readers who tonus they are lacking in some area. \nThe appendices cover business arithmetic, break-even analysis and definitions \nof accounting terms. Having recognized that there is hesitation and a general \nlack of rest among business when confronted with accounting and finance, \nMurdick, Moor and Eckhouse discuss why it is important to understand monetary \nanalysis. foreman among these reasons is the idea that pecuniary analysis is the \nmost direct way to point out that a company may be experiencing difficulty. \nFinancial analysis c an be used to establish that there is a problem, though it \nmay not ever establish what the root cause of the problem is. Despite the fact \nthat the authors consider fiscal analysis to be key in understanding \ncompanies, they are also careful to point out the limitations of this type of \nanalysis. For example, there can be a endeavor to use financial analysis to \nfocus on the medieval, kinda than anticipating what the historical figures may \n sign about the future. There is also an inherent danger in expecting past \n tracks to accurately foresee future course of studys. \nTechnological changes, changes in consumer demand and other \nenvironmental factors that are outside the demesne of financial analysis can be \noverlooked if there is too much wildness on historical financial performance. \nHigh technology companies or those in rapidly expanding industries may have \nfinancial figures that are too uneven to provide an accurate picture of how the \ncompany is actually execute. There is also the possibility that figures may \nnot (whether intentionally or not), accurately reflect the true position of the \ncompany. Finally, the authors suggest that financial analysis is an art that is \nmastered by all too few people for it to be considered the eventual(prenominal) analysis \ntool. \nHaving presented this rather extended discussion of the limitations of \nfinancial analysis, the authors therefore counter with an equally lengthy discussion \nof the advantages of using financial analysis. Foremost among these is the idea \nthat arcs do exist and financial analysis is one of the most powerful methods \nfor spotting them. Financial analysis can also limelight symptoms of problems \n(although not the underlying cause, necessarily). Companies pursuance \noutside capital to saturate into the business find that potential investors \nconsider financial analysis key to their decision-making process; inside \nmanagers would do well to keep a finan cial picture of the company in mind to \nprevent unpleasant surprises. Since financial analysis is quantitative, it can \nhelp point up where problems exist, rather than where managers may think they \nexist. Finally, and mayhap most importantly, the authors suggest that advisement \ndifferent, exclusive courses of action quantitatively provides additional tools \nto managers to make strategic decisions. \nThe authors then provide information on how readers can engender financial \ninformation. General sources, such as Moodys and Standard & Poors are \ndiscussed as are ratio reports. Ratios are of particular importance to the \nauthors; they devote four pages of a chart to figuring ratios and a lengthy \ndiscussion of their proper(ip) use. Murdick, Moor and Eckhouse favor equivalence \nperformance crossways departments within a single organization, and across \ncompanies within a single industry in order to arrive at the most accurate \ncomparison. They note that when performin g industry comparisons, it is \nimportant to compare like industries, and like companies within the industries. \nSelecting the wrong category can render the value of the ratio comparison null. \nAt this point, the authors shift their focus from finance to accounting, \nand discuss how accounting can help decision-makers. Murdick, Moor and Eckhouse \nsuggest that financial accounting should answer quintet basic questions. One, how \nis the company doing general? Two, when evaluating alternate plans, which is \nmost spellbinding? Three, what is going wrong? Where? How can it be intractable? \nFour, how can activities be coordinated? Five, is the company operating as \nin effect as it can in its environment (144-145)? Anticipating that readers \nare funny as to how to begin their analysis, the authors suggest that they \nbegin by taking financial information from the most recent ten years. whatever \ntrends that exist over this period are likely to bunk, according to the \nauth ors, because trends generally do persist barring unforeseen circumstances. \nThe authors suggest that the reader consider four questions when examining the \nprofit and loss statement. One, what is the sales trend? Two, what is the \ntrend of appeal of goods sold as a percentage of sales? Three, whats the trend \nof operating expenses as a percentage of sales? Four, what is the trend in \nprofits? If the trend in sales is up, but the trend in profits is down, the \ncompany is very likely already in adept trouble (147). Returning soon to \nratio analysis at this point, the authors identify four key areas to examine: \nprofitability, liquidity, leverage and turnover. They also stress the \nimportance of considering any other pertinent questions that must be considered \nfor the specific company and industry. \nMurdick, Moor and Eckhouse consider break-even analysis to be important \nwhen: deciding whether to increase sales or advertising expenses to increase \n script; weighing the relative merits of diminish prices to increasing volume; \ndetermining the advisability of borrowing for capital improvements to increase \ncapacity; and when evaluating office automation. The first step in break-even \nanalysis, according to Murdick, Moor and Eckhouse, is dividing costs into fixed \n(constant) and variable. Murdick, Moor and Eckhouse give several examples of \ninventory valuation and the effect that ever-changing valuation methods may have when \nconsidering a companys financial position. This discussion reminds the reader \nthat the valuation method or changing valuation may turn up in a company \noverstating or understating its actual position. The reader is then introduced \nto the property flow concept that establishes how many funds are needed for \nprojects and the possible sources of those funds. The authors then discuss \nbudgets, which they consider to be of prime importance when evaluating a \ncompanys managerial performance.. Budgets dish in plannin g, but also indicate \nhow the firm has performed in the past. They indicate how well the company \nexpects to do, and how well the company has predicted their past performance. \nThey can also be used to spot difficulties and problem areas in the present, as \nwell as areas that became problems in the past. \nHaving presented a wealth of information to the reader on finance and \naccounting, the authors end the chapter with a lengthy chart designed to help \nthe reader use his or her pertly acquired skills. They also emphasize that it is \nthrough repeated and frequent analysis that the reader is likely to improve his \nor her financial analysis skills, and the tools presented in the three \nappendices to this chapter are designed to assist in that improvement. Chapter 8 \nis concerned with the functional area of production. The authors begin this \nchapter by stating that the concepts they are putting fore with regard to \nproduction apply equally to businesses that produce app arent goods as well as \nthat provide service. Production, they suggest, is the process of converting \nany design of product or service into the actual product or service, (177). If you want to get a full essay, order it on our website:

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