Understanding Business Strategy and Organization Contours

The question asks what provides the "broad contours" of an organization's business. This phrase refers to the overall shape, direction, and scope of what an organization does or plans to do. Let's look at the options provided to determine which best fits this description.

Analyzing the Options

We are given four options: Objective, Strategy, Policy, and Procedure. Each plays a different role in managing an organization, but only one describes the high-level outline of the business.

• Objective: An objective is a specific, measurable goal that an organization aims to achieve. For example, increasing market share by 10% is an objective. While objectives guide strategy, an objective itself isn't the broad outline of the entire business; it's a target within that outline.
• Strategy: A strategy is a comprehensive plan designed to achieve objectives. It defines the organization's overall direction, how it will compete, what markets it will serve, and what resources it will allocate. A strategy provides the high-level blueprint – the "broad contours" – of the business's direction and scope.
• Policy: A policy is a set of rules or guidelines that govern decision-making and behavior within the organization. Policies help ensure consistency and compliance but operate within the framework defined by the strategy. They are more specific rules than the broad contours.
• Procedure: A procedure is a step-by-step guide explaining how to perform a specific task. Procedures are operational details and are much more granular than the broad contours of the business.

Strategy Defines Broad Contours

Based on the analysis, the term that best describes the "broad contours of an organisation's business" is strategy. Strategy sets the fundamental path, choices, and approaches that define the overall shape and direction of the business. It determines where the organization focuses its efforts and resources.

Let's illustrate with a simple example:

Imagine a company making shoes.

• Strategy: Decide to focus on high-end athletic shoes for professional athletes, sold primarily online. This is the broad contour.
• Objective: Achieve $5 million in sales within two years. This is a specific goal related to the strategy.
• Policy: Policy on returns stating customers can return unworn shoes within 30 days. This is a rule within the operational framework.
• Procedure: Steps for processing an online order, from payment confirmation to shipping. This is a specific task detail.

As you can see, the strategy provides the fundamental blueprint – the broad contours – guiding all other aspects like objectives, policies, and procedures.

Therefore, the correct answer is Strategy.

Revision Table: Key Organizational Concepts

Additional Information on Business Strategy

Business strategy is crucial for an organization's success. It involves making choices about:

• What business are we in? Defining the core purpose and scope.
• Where will we compete? Identifying target markets or industries.
• How will we compete? Determining the competitive advantage (e.g., cost leadership, differentiation).
• How will we grow? Planning for expansion, new products, or market entry.

Developing a sound business strategy requires analyzing the internal environment (strengths, weaknesses) and the external environment (opportunities, threats). A well-defined strategy provides clarity, aligns resources, and guides decision-making throughout the organization, effectively drawing the "broad contours" of its operations.