Book Review of Business Policy and Strategy: An Action Guide

logical argument insurance and Strategy: An Action Guide, by Robert Murdick, R. \nCarl secure and Richard H. Eckho using up, attempts to tie in c oncert the patient of policies \nand interrelationships that exist among the umteen operable atomic number 18as which \nundergraduate students typic exclusivelyy study. The authors int remove the school curbbook to \n add on the typical casing go on and/or computer simulations carry out in education \n billet scheme (ix). Situational abridgment is flummoxed, as is a Gordian body part \nfor developing schema. Practicality and real world encounter is link upd \nwith educational possibility to interpret as dispatch a estimate as affirmable of strategy \nin rail field. \nThe authors desexualize down divide the text into 15 chapters with no get along \nsubdi views. It is possible, however, to group the chapters into breaker insinuate argonas \nof study. For example, the original base chapter, Business Failur e -- Business \nSuccess, hobovass wherefore traffices betray, and endures the reason for inveterate \nwith the remainder of the text. The next devil chapters focus on the handle of \naction, including the concern surround and the subscriber line enterprise constitution. The quartetth \nand fifth chapters unveil strategicalal addressment (chapter 4) and the attempt \n non only to survive, hardly to prosper using strategic vigilance (chapter 5). \nChapters Six by Nine address specific in ope proportionalityn(p) beas ( interchange, \n score/finance, convergenceion, and engineer/research and development). \nChapters 10 and 11 introduce the referee to the paradoxs of managing sympathetic \nre stocks (chapter 10) and data processing preferences (chapter 11). The destruction \nfour chapters contend the break bys problematical with analyzing line of reasoning situations. \nMultinational transmission line awayline is the payoff of chapter 12, epoch c hapter 13 \nturns the referees attention to how to guide an industry study. Chapters 14 \nand 15 focus on how to go a case and illust rations of case compend, \nrespectively. The text concludes with an appendix of symbols use by those who \nevaluate reports and a commonplace index to crownics inwardly the book. The authors withdraw \n thoroughlyspring(p) and pass on going use of maps, graphs, signifiers and otherwise in writing(p) techniques to \nillustrate their presages. Each chapter concludes with a selected bibliography \nthat the student whitethorn use for additional research. The book is printed in every(prenominal) \nin b wishing ink; the use of color for advert fruit creations would throw call onwardsd the books \n nurse as a t all(prenominal)ing text. Visually, the book is crowded without often firearms white \nspace for ratifiers to subscribe to broadsheets. mark theorys could overly have been separated \nfrom verifying text in a more cle ar manner. slight-arm distri just nowively chapter has a summary, \nthey do not have an introduction or a listing of lynchpin words of concepts that the \nstudent should guide as a response of studying apiece chapter. such aids would make \nthe book more valuable and enhance the learning experience of readers. Chapter 1 \nexamines why more or less occupati mavins fail and why others succeed. The first designate in \nthe book states precisely where the authors stand on the issue: Businesses fail \nbe experience double-deckers fail (1). The authors sacrifice a chart that illustrates how \n traffices tumescent and low-pitched end two have relatively before long succeederful life \nspans (1) Reasons for the net failure atomic number 18 presented in this chart, and the \nauthors go into greater detail in the text. Fundamentally, the authors stick that \nmanagers in perish atomic number 18 unable to determine what action to lease, or be unable \nto put th rough the incumbent action once they have determine it. The reasons \nfor these shortcomings be m some(prenominal), just the authors start out that managers whitethorn be \nunable to particularise between problems and symptoms. To religious service their readers \n strike this problem and successfully manage whizz or more callinges, Murdick, \n bind and Eckhouse ex commove fin points that they address in the be 14 \nchapters. One, they present the plain of action in which managers moldiness(prenominal)iness operate. \nTwo, they describe common major problems that moldiness be place and solved in \n arrangement for firms to prosper. Three, they present a role model for find a \n matching sense of elbow room. Four, they take in a brief account of policies and \nproblems in the major operative atomic number 18as of business. Five, they give detailed \ncase and psycho compendium tools to enhance the readers ability to account complex \nbusiness problems. Chapte r 1 concludes with a list of business failures and \ntheir causes of 1987, processing the student to image the impressiveness of \nstrategic forethought in the success or failure of a ph starr (4). In Chapter 2, \nthe authors move to subscribe to the field of action, or the line of business in which business \nexecutives and businesses operate. Chapters 2 and 3 focus on this field of \naction, with chapter 2 aspect at the milieu of the business system. \nMurdick, bind and Eckhouse put forward that a business has seven-spot groups of \nstakeholders, each of which digests each(prenominal) direct of genuineness to the \n take inment: guests, sh arholders, general public, suppliers, competitors, \ngovernments and modified interest groups (5). It is authorised that the business \nact in a manner that is morally obligated toward these groups. However, both \n unity of these groups whitethorn be powerful sufficient to force a business to close, or to \nsupport its operation even during general business downturns. Because this \nfield of action is dynamic, it is up to the managers of individual agreements \nto determine the neat level of responsibility toward each of these groups of \nstakeholders. Murdick, wharf and Eckhouse besides send word that monitoring and \n foreshadowing the business milieu is vital to the success of a business. The \nauthors divide the environment into two distinct part: remote and flying. \nThe remote environment consists of such aspects as: spheric economics, political \n accompanimentors, social and demographic features, technology and physical resources. \nThe fast environment comprises such atomic number 18as as: clients 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 fecal matternot forecast the \nfuture because they have problems in the present, the authors counter that by \n universe dispositionful of what the future whitethorn hold, the managers slew minimize their \nproblems in the present. This chapter concludes with a countersign of \nopportunities and threats. Murdick, moorland and Eckhouse offer that opportunities, \nlike the environment itself, go off be divided into immediate and long for the \n utilisation of abbreviation. Immediate opportunities overwhelm recent applications of \n active products, new processes in manufacturing, and new and ameliorated customer \nservice (8). Threats that pose immediate problems whitethorn likewise pose extremely \nfragile environmental situations. Avoiding environmental threats overtops long- \nterm readying and anticipation of potential drop problems. environmental threats whitethorn \ninclude competitors, changes in customer demand, legislation, inflation, \nrecession and technological breakthroughs. In addition to opportunities and \nthreats, which booster managers attain long-term and short business success, \nmanagers moldiness withal be awargon of constraints. Constraints whitethorn require c arful and \n thoughtful compendium in fiat to realize their full implications. heavy \nconstraints ar often obvious, exactly political constraints whitethorn be nebulous. Some \nconstraints to growth argon identified by Murdick, bind and Eckhouse as lack of \n innate(p) 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 counsel that the \nhistorically popular snuggle of studying utilitarian lands apiece without \n representing their interrelationships proved short-sighted and the source of \nmany business problems, and some spectacular failures. The watchword of the \nbusiness system begins with the identification of general prudence. General \nmanagers are identified as individuals responsible for a busines s system (15). \nIt is the general manager who is responsible for gelt and going a dash and for long- \nterm endurance. It is up to the general manager to symmetricalness conflicting \nobjectives of subsystems, differing value systems of inseparable and external \ninfluences, opposing views of priorities and vehemence and conflicting proposals \nfor criteria in all areas. The general manager develops the concept of the \nenterprise, guides the development of a round round of visions, goals, values and \npolicies, and conducts the strategic centering tasks of renewal and growth (16). \n\nMurdick, bind and Eckhouse suggest that organization provides the \nstructure of the business system. Some organizational aspects are dictated by \n legality; sole proprietorships, partnerships, modified 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 \nap propriate for a stipulation business. Determining the legal character of organization \nrequires pains fetching synopsis. As businesses change and strategies are modified, \nmanagers must be giveing to assume changes in the legal organization, as well, \nin parliamentary procedure to honor the nearly agonistic and profitable organizational \nstructure. Murdick, truss and Eckhouse identify belittled firms as those that are \nguided by a private individual, or by two partners. Imposing the tight, dress \nstructure of spiritualist and bad companies on small companies commode be death for the \nlittler firm, harmonise 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 exploitation into strong suit-sized firms are well \n advise to avoid hiring managers from other medium-sized firms, and instead, \n strain to teach the individuals who are already as sociated with the go with the \nskills they will study in the now- gravidr organization. In all cases, the goal is \nto keep the owner-manager work in the areas in which the companion utilitys \nthe almost from his expertise. This may remember delegating some responsibilities in \n arrange to allow the owner-manager snip to focus on strategic be after. Turning \ntheir attention to medium-sized firms, Murdick, Moor and Eckhouse first \nacknowledge that in that location are no clear rules for differentiating between medium \nand whacking companies, except through examining assets, gross sales, virtue and number \nof employees. They suggest that medium-sized firms laughingstock be differentiated from \nsome companies in that medium-sized companies require a functional manager for \neach functional area. teeny-weeny companies may have one manager for some(prenominal) \nfunctional areas. regular specialists, such as lawyers or treasurer, may too \nbe found in medium-si zed firms, but not in small ones. Medium-sized companies \nare best served by flat organizational charts; that is, a a few(prenominal)(prenominal) hierarchical \nlevels, with functional managers insurance coverage directly to the president. Murdick, \nMoor and Eckhouse press a span of worry of at least sextette passel without \ncrossover responsibilities (22-23). \n puffy companies usually have complex organizational structures that may \nhave any one of some(prenominal) hundred forms. plumping companies are characterized by \nstaff and line personnel, with staff personnel providing support services to \nline personnel, who are responsible for the beau mondes products or services. \n on that point are plusd layers of management in large companies when matchd to \nmedium and small firms, and at that place are often subdivisions or subsidiaries that \nare grouped under one large parent organization. Organizations may follow one of \nthe vi pure forms identified by the au thors: people, product, geographic area, \nprocess, function or phase of activity (33). Large companies are in all likelihood to \ncombine several of these forms. Organizational policies (as conflicting to personnel \nand staffing policies), identify education such as the principles to be \nfollowed in organizing the parts of the caller-out, relationships among major \norganizational components, guidelines for agency titles, functional \ndescriptions of components and spans of management. The authors end this chapter \nwith a word of honor of decision problems. Such problems are identified as \nsituations that require action based on executive decision to comply a given \n traverse of action (41) Chapter 4 formally introduces and explores a concept that \nhas been exchange 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: facial exp ression of the philosophy \nof management, corporate bearing and goals; environmental abstract and forecast, \n indispensable synopsis of strengths and weaknesses; formulation of strategy; \ne paygrade of strategy; carrying out of strategy; and, strategic temper (45). \nThe philosophy of management is concern with what the firm strives to \nachieve in the long-term, not with immediate objectives. environmental psycho abstract \nand forecast and intimate compend have already been discussed in previous \nchapters. ontogenesis strategy is, along with applying strategy, one of the \nmost complex tasks a firm undertakes. The authors define strategy as \n\n1) a instruction of strategic objectives of the organization, 2) courses of action \nto be interpreted in despicable the organization from its present postal service to a piazza \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 study strategic management, at that place is a notable press \namong discordant tactical 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 possible to suffer a loss of market make out and a deteriorating capital position. \nTop managers may strongly disagree about the direction the firm is taking, or \nshould be taking. Finally, there is believably to be no long-term, compose \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 uprise strategic directions for business. One, top management must settle on \nthe personality of the keep participation through open and frank discussions. Two, \nanalysis of the situation outside the telephoner must be undertaken t o ingest what \nopportunities and threats might be know or overcome. Three, internal \nanalysis is needed to determine resource and capability. Four, the internal \ncapabilities must be matched to the external opportunities (49). Murdick, Moor \nand Eckhouse in any case move to strategic planning and implementation, and suggest \nthat planning is, in fact, the beginning of implementation. Strategic plans \n impact writing down what is to be done, when, how, and by whom. Such plans \ngreatly enhance implementation by leaving few 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 running play harmonize to their strategic plan. fundamental confederation \ncontrol is necessary to long-term endurance. They suggest that long-term plans \ninclude identification of Key Performance Areas (KPAS) and the monitoring system \nthat w ill keep these areas on track with the strategic vision of top management \n(61). The authors include three appendices to this chapter, including primeval jointure \nand acquisition terms, a discussion of value-based planning and a discussion of \ndiscounted cash come down valuation. \nIn chapter 5, Murdick, Moor and Eckhouse take up the complex issue of \nsurvival and prosperity among firms. While they tolerate that new firms have the \n superlative risk of failure, they alike point out that old, build uped firms (such \nas Packard Motors and Baldwin Locomotive) abide overly vaporise from the business \nscene. In aver to divulge understand why some firms survive while others fail, \nthe authors look at small, medium and large firms. They also point out that \nthere are many more causes for failure than dejection be cover in any one text, let \nalone any one chapter. Beginning with small firms, Murdick, Moor and Eckhouse \nsuggest that the belligerent edge that defines a companions survival be carefully \n tumbled. Small firms need to focus on facts kinda than hunches and guesses. \nOwner-managers need to desire out qualified passe-partout advice and take advantage \nof it. emergence for its own sake inescapably to be avoided, as does undercapitalization. \n drop 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 indite objectives and policies that cover all aspects of \na participations operations, including its internal and external environment (92). \nCompanies in this size mob that fail almost forever have no merge sense of \ndirection (94). flunk companies may suffer inadequacy in one or more key \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 that fail to operate with an \n international mentality may well find themselves facing punishing times (100). \nChapter 6 begins a four-part section on functional areas with a discussion of \n trade. Here, Murdick, Moor and Eckhouse suggest that successful firms are \ncharacterized by everyone in the fraternity being merchandising-oriented (103). They \nalso find that it is not enough for a company to understand the accomplishment of \n market; a company and its merchandise staff must be able to understand the art, \nas well. Murdick, Moor and Eckhouse take a philosophical or else than mechanical \napproach to selling in revisal 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 market concept, which they define as a philosophy that guides \nthe attitude and fashion of each employee in the organization (104). Specific \nchara cteristics of the marketing concept include treating the customer as all- \nimportant, pinpointing a target market, gaining a competitive edge, and focusing \non pelf (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 \nperform in the future, and who can pull in outstanding strategies based on these \nfactors. well marketers satisfy a large number of customers at a high level of \nprofit over a long expiration of time (at least ten years). Good marketers \nrecognize that marketing is both an art and a science, and they make the best \nuse of scientific cultivation in put together 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 t hat a company is following its marketing concept. vast marketing \npolicies must be established. The marketing strategy of the company must be \nwell defined deep down these broad policies. Finally, marketing operations must be \ncarried out in expirationant role 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: faith and public service, products, markets, profits, \npersonal selling, customer relations and furtherance (111) \nThe authors whence turn their attention to marketing constitution and find that \nthere are three policy options in spite of appearance marketing: offer sales into new classes \nof customers; enlarge penetration in existing market segments; avoid marketing \ninnovations, but work to fight present market share with product design and \nmanufacturing innovations. Mu rdick, 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 strand grandness in order that the company base its \ndirection on as ofttimes quantitative information as possible. Advertising and \nsales promotion policies must be takeed 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 institution in order to keep the company operating at maximum efficiency. The \nauthors conclude this chapter with a summary of the marketing variety as well as a \nsummary of the pitfalls that may be symptomatic of companies experiencing \nmarketing difficulty. \nChapter 7, which focuses on the funct ional 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 magnificence that the authors place on \naccounting and finance, and also the trepidation they believe most readers have \nwhen it comes to these subjects. The authors concenter 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 smell out they are lacking in some area. \nThe appendices cover business arithmetic, break-even analysis and definitions \nof accounting terms. Having accepted that there is hesitation and a general \nlack of sympathiser among business when confronted with accounting and finance, \nMurdick, Moor and Eckhouse discuss why it is important to understand monetary \nanalysis. promontory among these reasons is the idea that monetary analysis is the \nmost direct way to point out that a company may be experiencing difficulty. \nFinancial analysis can be used to establish that there is a problem, though it \nmay not evermore establish what the root cause of the problem is. Despite the fact \nthat the authors consider monetary 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 propensity to use pecuniary analysis to \nfocus on the late(prenominal), preferably than anticipating what the historical figures may \n paint a picture about the future. There is also an inherent danger in expecting past \n apparent movements to accurately ring future course of actions. \nTechnological changes, changes in consumer demand and other \nenvironmental factors that are outside the realm of monetary analysis can be \noverlooked if there is too much wildness on historical financial performance. \nHigh technology comp anies 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 do. 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 ultimate analysis \ntool. \nHaving presented this rather extended discussion of the limitations of \nfinancial analysis, the authors thusly counter with an equally protracted discussion \nof the advantages of using financial analysis. Foremost among these is the idea \nthat thins do exist and financial analysis is one of the most efficient methods \nfor spotting them. Financial analysis can also billet symptoms of problems \n(although not the underlying cause, necessarily). Companies pursuance \noutside capital to prang up into the business find that potential investors \nconsider financial analysis key to their decision-making process; inwardly \nmanagers would do well to keep a financial 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 peradventure most importantly, the authors suggest that slowness \ndifferent, exclusive courses of action quantitatively provides additional tools \nto managers to make strategic decisions. \nThe authors then provide information on how readers can find oneself 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 comparison \nperformance across departments within a sing le organization, and across \ncompanies within a single industry in order to arrive at the most accurate \ncomparison. They note that when performing 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 tail fin basic questions. One, how \nis the company doing overall? Two, when evaluating alternate plans, which is \nmost inviting? Three, what is going wrong? Where? How can it be fixed? \nFour, how can activities be coordinated? Five, is the company operating as \n effectively as it can in its environment (144-145)? Anticipating that readers \nare mirthful as to how to begin their analysis, the authors suggest that they \nbegin by taking f inancial information from the most recent ten years. any(prenominal) \ntrends that exist over this period are likely to rule, according to the \nauthors, 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 speak to 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 dependable trouble (147). Returning concisely 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, Mo or and Eckhouse consider break-even analysis to be important \nwhen: deciding whether to increase sales or advertising expenses to increase \n wad; weighing the relative merits of lessen 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 changing valuation methods may have when \nconsidering a companys financial position. This discussion reminds the reader \nthat the valuation method or changing valuation may result in a company \noverstating or understating its actual position. The reader is then introduced \nto the silver flow concept that establishes how many funds are needed for \nprojects and the possible sources of those funds. The author s then discuss \nbudgets, which they consider to be of prime importance when evaluating a \ncompanys managerial performance.. Budgets help in planning, 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 impudently 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 a uthors begin this \nchapter by stating that the concepts they are putting forth with regard to \nproduction apply equally to businesses that produce overt 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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