Definition of Business Policy Business Policy defines the scope within which decisions can be taken by the subordinates

in an organization. It permits the lower level management to deal with the problems and issues without consulting top level management every time for decisions. Business policies are the guidelines developed by an organization to govern its actions. They define the limits within which decisions must be made. Business policy also deals with acquisition of resources with which organizational goals can be achieved. Business policy is the study of the roles and responsibilities of top level management, the significant issues affecting organizational success and the decisions affecting organization in long-run. A business policy represents the best thinking of the company management as to how the objectives may be achieved in the prevailing economic and social conditions

A business policy is the study of the nature and process of choice about the future of independent enterprises by those responsible for decisions and their implementation The purpose of a business policy is to enable the management to relate properly the organizations work to its environment Business policies are guides to action or channels to thinking

FEATURES 1. Specific- Policy should be specific/definite. If it is uncertain, then the implementation will become difficult. 2. Clear- Policy must be clear. There should be no misunderstandings in following the policy. 3. Reliable/Uniform- Policy must be uniform enough so that it can be efficiently. 5. Simple- A policy should be simple and easily understood by all in the organization. 6. Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive. 3. Flexible- Policy should be flexible enough followed by the subordinates. 4. Appropriate- Policy should be appropriate to the present organizational goals in operation/application. This does not imply that a policy should be altered always, but it should be wide in scope so as to ensure that the line managers use them in repetitive/routine scenarios. 8. Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of those who look into it for guidance

9. Difference between Policy and Strategy 10. The term policy should not be considered as synonymous( with similar meanings) to the term strategy. The difference between policy and strategy can be summarized as follows11. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. While strategy is concerned with those organizational decisions which have not been faced before in same form. 12. Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle level management. 13. Policy deals with routine/daily activities essential for effective and efficient running of an organization. While strategy deals with strategic decisions. 14. Policy is concerned with both thought and actions. While strategy is concerned mostly with action. 15. A policy is what is, or what is not done. While a strategy is the methodology used to achieve a target as prescribed by a policy

Nature Of Business Policy 1. Are general in nature 2. Identify company rules 3. Explain why they exist 4. Tells when the rule applies 5. Describes who it covers 6. Shows how the rule is enforcement 7. Describes the consequences 8. Are normally described using simple sentences & paragraphs Importance 1) Helps the participant to understand why functional boundaries are created and appreciate why the various sub units have to move Inc lose coordination while realizing the overall objective(s). 2) Helps to resolve to different between individual and organizational goals. Every attempt is made to pull all the functions and activities together Helps participants to work in an orderly manner appreciating the work put in by others. They understand and adjust with each other by developing mutual trust, cooperation and understanding Production knows its target maintenance keeps equipment and tools in good order finance arranges funds and security takes care of goods and services

3)

4)

Creates an understanding of how overall objectives and policies are formulated why everyone has to focus attention on pre-set targets and goals, why one should appreciate the viewpoint of the other while translating rhetoric into action; why one needs to anticipate changes and adjust accordingly. The course will certainly improve the capabilities of participants in monitoring events, forecasting problems and solving them proactively rather than reactively.

5) A business policy is : guidelines to facilitate achieve predetermined objective as plan(decision making) involving all levels of the management in any business organisation.It set a statement on the mode and manner how the objectives will be achieved Scope of Business: Scope of business is very broad. It includes all those activities, which are related to the production and distribution of goods and services with an objective of earning profit. Industry: Industry is a part of business. The purpose of industry is to convert the basic raw material into finished or semi finished goods. Industry can be divided into two parts. Primary Industry: Primary industry is concerned with the production of raw material. Genetic Industry: The genetic industry is concerned with the breeding of plants and animals etc. Extractive Industry: In this industry hidden resources below the surface of earth are extracted like extraction of oil, gas and coal etc Secondary Industry: This industry is concerned with the conversion of basic raw material into finished or semi finished goods. Basic raw material is received from the primary industry. This industry can also be divided into two types. Constructive Industry: All kinds of construction are included in this type of industry like construction of roads, buildings, bridges etc. Manufacturing Industry: In this industry raw material is converted into some finished or semi finished goods like textile mills, sugar mills etc.