Académique Documents
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Nishant Gaur
Asst. Professor
Business Policy defines the scope or spheres 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.
Specific-
Clear-
Reliable/Uniform-
Appropriate-
goal.
Simple-
Policy
Policy
deals with routine/daily activities essential for effective and efficient running of an
organization. While strategy deals with strategic decisions.
Policy
is concerned with both thought and actions. While strategy is concerned mostly with action.
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.
To study the role and responsibility of top management which can convert
an organization into success.
It aims for the successful future of an organization
It is responsible for building future course of action and give a sense of
direction.
Business policy lays down a long term plan, to be followed by the
organization.
While determining the future course of action , the senior management has
a paradigm or scheme of the type of organization they want their company
to become.
3.
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.
4.
Business policies generally have a long life. They are established after a careful
evaluation of various internal and external factors having an impact on the firms
market standing As and when circumstances change in a major way the firm is
naturally forced to shift gears, rethink and reorient its policies. The World Oil
crisis during the 70s has forced many manufacturers all over the globe to reverse
the existing practices and pursue a policy of manufacturing fuel efficient cars.
Therefore, policies should be changed in response to changing environmental and
internal system conditions.
Types of policies
Types of policies
Policies are broad statements, adopted by a business, that set out what the business
stands for and what its goals are. Procedures are usually implemented to support
each policy explaining how to apply the policy to the business's customers,
employees and products, and the instructions necessary to follow the policy.
Examples of areas where businesses typically institute policies are ethics, human
resources, accounting and customer service.
Ethics
Ethics policies address issues such as honesty, fairness, integrity and respect. For
example, the long-standing ethics policy regarding honesty instituted at Levi
Strauss and Co. as quoted by Inc.com reads: Honesty: We will not say things that
are false. We will never deliberately mislead. We will be as candid as possible,
openly and freely sharing information, as appropriate to the relationship.
Human Resources
Policies imposed in the area of human resources address issues such as hiring and
termination, benefits, promotion and salary increase and discipline. For example, a
typical human resources policy addressing hiring might read: New hires shall be
subject to a three month probationary period during which employment is 'at-will.'
Customer
Service
Customer service policies address issues such as employee attitude toward
customers. A sample policy dealing with customer relations as reported by Infonet.com
reads: All employees deal with our customers! No matter what your position, every
employee impacts the customer in some way. Employees are reminded to promote the
company just as they would represent their families. This means being friendly and
courteous on the business property, while visiting our stores, driving our vehicles on
roads and highways and in daily interactions. After all, you never know who knows
the person you are talking to... Other ways employees can enhance customer
relationships are to answer phones before three rings, transfer office calls correctly,
follow through on promises, give updates if necessary, greet walk-in customers or just
smile and say hello. Treating other as you expect to be treated goes a long way in
customer service relationships.
Accounting
Accounting policies deal with how money is handled in the company, both the
spending and the documenting of inflow and out-flow. An example of a typical
accounting policy regarding receipt of gifts to an organization might read: Gifts of
stock, bonds, manuscripts, art and antiques are recorded and such information is
openly available to officers, stock holders and employees as with any other corporate
asset.
Absenteeism Policy
Objectives in Attitudes:
Generalist rather Specialist
View of Practitioner
Orientation of Professional Businessman
More Value to Creativity & Innovation than to maintenance of
Status quo
Objectives in Knowledge:
Knowledge of concepts
Knowledge of situations
Objectives in Skills:
Analytical Ability
Strategic Analysis Ability
Strategy
Strategic Management
Set of decisions & actions resulting in formulation &
implementation of strategies designed to achieve the objectives
Requirement due to complexity & sophistication of Business
decision Making process
Effective dealing with environmental challenges with given orgn.
Resources
Dimensions of Strategic Management
Top Management Decisions
Allocation of Large Amount of Companys resources
Significant Impact on the Long Term Prosperity of the Firm
Future Oriented
Major Multifunctional or Multi business consequences
Consideration of factors corresponding to Firms external
environment
Importance:
Financial Benefits
Enhanced capability of problem preventions:
Improved quality of strategic decisions through group
interactions:
Greater Employee Motivation:
Reduction of Gaps and overlaps in activities:
Minimum resistance to change:
Evolution of Strategic
Management:
Strategic management has evolved through four phases:
Strategic Management