BUSINESS POLICY

MEANING OF BUSINESS POLICY

A policy is a principle or 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
body within an organization whereas procedures
or protocols would be developed and adopted by
senior executive officers. Policies can assist in
both subjective and objective decision 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 programme..

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 programme
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 problem-
solving; 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.