Business Policy

Business Policy
 A Policy is a Statement, verbal, written or Implied, of
those principles and rules that are set by Managerial
Leadership as guidelines & constraints for the
organizations Thoughts and actions
 The purpose of the policy is to enable the management
to relate properly the organization’s work to its
objectives
 The existence of practical and comprehensive policies
tends to increase efficiency
 Decisions made within a policy framework have a
higher probability of being synchronized with other
decisions within the company
 Business Policy
 Refers to decisions about future of an enterprise
 Guiding Framework for repetitive decisions
 Top Management to Lower Management
Involvement
 Setting Long-Term objectives of an enterprise
 Study of functions & responsibilities of senior
management concerning crucial problems
 It Provides direction to the organization and
shape of future
 Business Policy
 Policies are set at different levels of Management
concerning different responsibilities:
 Dividend Policy: Board of Directors
 Capital Allocation for Expansion: Top Management
 Revenue Matters/ Sales Administration” Middle
Management
 Routine Actions: Lower Management
 Characteristics of Business
Policy
 Policy refers to total enterprise or a large
segment of it I.e change in organizational goals
 Long Term perspective & commitment
 Usage of critical resources vis-à-vis environment
 Continuous process in nature
 Identification of opportunities & choosing the
right strategy
 Adaptation to the Changing Environment
 Business Policy as a Field of
Study
 It gives an Integrated view of management
based knowledge & experience
 Complexities of business & its constraints wrt
environment
 Broader perspective of Management Learning
 Study of Top Mgmt. & Responsibilities &
decision making process
 Conceptualization of Key Business processes
Business Policy as a Field of Study

 A preparation for performance as a General manager and

broadening of perspective of specialist
 Understanding & Implementation of SM Process
 Objectives in Attitudes:
– Generalist rather Specialist
– View of Practitioner
– Orientation of Professional Businessman
– More Value to Creativity & Innovation than to maintenance of
Status quo
Business Policy as a Field of Study

 Objectives in Knowledge:
– Knowledge of concepts
– Knowledge of situations
 Objectives in Skills:
– Analytical Ability
– Strategic Analysis Ability
 Strategy
 Strategy is defining & achieving an organization's
objectives & implementing its missions
 Large scale, future oriented plans for interacting with
competitive environment to optimize achievement of an
organization’s objectives
 Pattern of an organization's responses to its environment
over time
 Long Term objectives or Purposes of an organization
 Different from Operating decisions I.e day to day related
activities
 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 Company’s
resources
 Significant Impact on the Long Term Prosperity
of the Firm
 Future Oriented
 Major Multifunctional or Multi business
consequences
 Consideration of factors corresponding to
Firm’s external environment