BUSINESS POLICY

MEANING OF BUSINESS POLICY

Apolicyis aprincipleor protocol to guide
decisions and achieve rational outcomes. A
policy is a statement of intent, and is
implemented as a procedure[1]or protocol.
Policies are generally adopted by the
Board of or senior governance bodywithin an
organization whereas procedures or protocols
would be developed and adopted by senior
executive officers. Policies can assist in
bothsubjectiveandobjectivedecision making.

Business Policy
Business policies are guidelines used to
dictate the culture of a company and create
expectations
for
employees
and
management. Policies can spell out specific
behaviors that are deemed unacceptable and
outline the disciplinary actions that will occur
when they happen. Business policy is also
used to establish organization in a company.
Creating a chain of command is a vital
business function for allowing all parties to
know which employees are responsible for
which departments and duties.

The Genesis of Business Policy

The origins of business policy can be
traced back to 1911, when Harvard
Business
School
introduced
an
integrative course in management
aimed at the creation of general
management capability. This course
was based on case studies which had
been in use at the school for
instructional purposes since 1908.

The Nature of Business Policy

The Business Policy nature has the
following features:
It is the process of upgrading its
product mix.
It promote joint ventures with other
concerns.
It promote divested from one business
to another due to price hikes due to
heavy Taxes/Duties on its present
product remeting in losses to business.
It promote major expansion program.

 From the happenings reported above, we see

that when a company either upgrades its
product mix, promotes a joint venture, divests
in another company, undertakes an expansion
program or takes such similar action having a
long-term impact on its future operations and
status, it is the result of senior management
decision-making. The senior management, in
any organization, is primarily responsible for
guiding the future course of action and
providing a sense of direction. Toward these
ends, business policy attempts to inculcate in
one the capability for senior management

Purpose of Business Policy

The purpose of business policy is three-fold:
(1) To integrate the knowledge gained in
various functional areas of management;
(2) To adopt a generalist approach to problemsolving; and
(3) To understand the complex inter linkages
operating within an organization through the
use of systems approach to decision-making
and relating them to changes taking place in
the external environment.
In order to make the study of business policy
purposeful, the specific objectives need to be
defined.

 Strategic management and business

policies are strongly connected. Strategic
managers use business policy to lay out
the foundations for their visions of success.
When these leaders implement their
policies, it creates structure and direction
for the department or entire organization.
Existing policies can help a new manager
develop strategies that are in line with
current company direction. This serves to
ease the transition and provide cohesion
from an old managerial system to a new
one.