a. Vision
b. Mission
1. Establishment of Intent c. Business Definition
d. Business Model
e. Goals and Objectives
External environment
a. Environmental Analysis
Internal environment or
Org appraisal
b. Corporate level strategy
Strategic Management
2. Formulating a Strategy c. Business level strategy
d. Strategic analysis and
choice
e. Preparing strategic plan
a. Activating strategies
b. Structural
implementation
3. Implementing the
strategy
c. Behavioral
implementation
d. Functional and
operational
implementation
a. Strategic evaluation
4. Evaluating the strategy b. Strategic control
c. Reformulating strategies
, UNIT I
What is a Business Policy?
A business policy is a set of guidelines that an organization has for governing the actions of its
management and employees. It enables the organization to make choices and decisions based on
their environment.
It is the study of
function and responsibilities of senior management
crucial problems that an enterprise should overcome to be successful
decisions that determine the direction of the organization
Nature of Business Policy
Business policy basically deals with decisions regarding the future of an ongoing enterprise.
Such policy decisions are taken at the top level after carefully evaluating the organizational
strengths and weaknesses in terms of product price, quality, leadership position, resources etc., in
relation to its environment. Once established, the policy decisions shape the future of a company,
channel the available resources along desired lines and direct the energies of people working at
various levels towards predetermined goals.
There are many types of policies – marketing policies, financial policies, production policies,
personnel policies to name a few in every organization. Within each of these areas more specific
policies are developed. For example, personnel policies may cover recruitment, training,
promotion and retirement policies. Viewed from a systems angle, policies form a hierarchy of
guides to managerial thinking. At the top of level policy statements are broad. The management
is responsible for developing and approving major comprehensive company policies. Middle
managers usually establish less critical policies relating to the operation of their sub units.
Policies tend to be more specific at lower levels. The manager’s job is to ensure the consonance
of these policies, each must contribute to the objectives of the firms and there should be no
conflict between sub system policies.
Scope and characteristics of Business Policy
Every business has a way in which it operates and does things. Businesses and company leaders
without clear business policies often have subordinates making decisions that don't mesh with
what leadership really wants to see. Clear, concise and written business policy plans help any
business maintain consistency in operations and relieve leadership from the need to
micromanage. When business policies are created and used, there is a standardization of how the
company delivers products or services to consumers.
Some important features or parameters of a good business policy are:
Specific: If a policy is not specific, implementation becomes inconsistent and unreliable.
For example, "Employees may not park in the guest parking lot."
, Clear: A business policy has no ambiguity. It is written in easy-to-understand language.
For example, "Immediate release of employment is the result of company drivers having
two points on their driving record."
Uniform: The policy should be a standard that everyone can follow from the top
management to the plant workers. For example, "Anyone entering the construction site
must have a protective hat, shoes and glasses on at all times."
Appropriate: Business policies should be relevant to organizational goals and needs. For
example, "Discrimination and sexual harassment accusations are investigated with
disciplinary action applicable based on investigation findings."
Simple: Policy must be understood by all that it applies to within the business. For
example, "No smoking within 100 feet of welding operations designated by the painted
yellow floor lines."
Inclusive: A business policy isn't something relevant to a small group in the business, it
must cover the wide scope and include everyone. For example, "Business attire is required
at all times in the office or meeting with clients."
Stable: This refers to implementation. If an incident arises, the policy should be stable such
that there is no indecisiveness about following it. For example, "Cell phones are not
permitted in the conference room."
Important functions of business policies
1. Objectives of the company are defined and classified: They provide workers with knowledge
about what is expected of them, e.g. behaviour and performance standards
2. The planning function is done systematically: They provide rules and guidelines for decision-
making in routine situations
3. A clear framework for the delegation of decision-making is provided: Business policy clearly
states the amount of authority that the subordinates have. It also specifies the limits of the
authority of the subordinates. Thus it tightens the authority on one hand and provides initiatives
to the subordinates.
4. Subordinates can use the policy directives intelligently and carefully: It also helps the
managerial personnel to perform the functions of control and coordination successfully by
providing a consistent and clear response across the company in dealing with situations.
5. Policy acts as the main foundation for evaluation and determining the quality of action and
decisions taken by executives. They provide an accepted method of dealing with complaints and
misunderstandings to help avoid claims of bias and favouritism.
Evolution of Business Policy
Business policy as a distinct field of study was introduced at Harvard Business School in 1911.
The course aimed at improving the general management capabilities of management students. It
was intended to tie together and give proper focus to the functions of business both internally and
b. Mission
1. Establishment of Intent c. Business Definition
d. Business Model
e. Goals and Objectives
External environment
a. Environmental Analysis
Internal environment or
Org appraisal
b. Corporate level strategy
Strategic Management
2. Formulating a Strategy c. Business level strategy
d. Strategic analysis and
choice
e. Preparing strategic plan
a. Activating strategies
b. Structural
implementation
3. Implementing the
strategy
c. Behavioral
implementation
d. Functional and
operational
implementation
a. Strategic evaluation
4. Evaluating the strategy b. Strategic control
c. Reformulating strategies
, UNIT I
What is a Business Policy?
A business policy is a set of guidelines that an organization has for governing the actions of its
management and employees. It enables the organization to make choices and decisions based on
their environment.
It is the study of
function and responsibilities of senior management
crucial problems that an enterprise should overcome to be successful
decisions that determine the direction of the organization
Nature of Business Policy
Business policy basically deals with decisions regarding the future of an ongoing enterprise.
Such policy decisions are taken at the top level after carefully evaluating the organizational
strengths and weaknesses in terms of product price, quality, leadership position, resources etc., in
relation to its environment. Once established, the policy decisions shape the future of a company,
channel the available resources along desired lines and direct the energies of people working at
various levels towards predetermined goals.
There are many types of policies – marketing policies, financial policies, production policies,
personnel policies to name a few in every organization. Within each of these areas more specific
policies are developed. For example, personnel policies may cover recruitment, training,
promotion and retirement policies. Viewed from a systems angle, policies form a hierarchy of
guides to managerial thinking. At the top of level policy statements are broad. The management
is responsible for developing and approving major comprehensive company policies. Middle
managers usually establish less critical policies relating to the operation of their sub units.
Policies tend to be more specific at lower levels. The manager’s job is to ensure the consonance
of these policies, each must contribute to the objectives of the firms and there should be no
conflict between sub system policies.
Scope and characteristics of Business Policy
Every business has a way in which it operates and does things. Businesses and company leaders
without clear business policies often have subordinates making decisions that don't mesh with
what leadership really wants to see. Clear, concise and written business policy plans help any
business maintain consistency in operations and relieve leadership from the need to
micromanage. When business policies are created and used, there is a standardization of how the
company delivers products or services to consumers.
Some important features or parameters of a good business policy are:
Specific: If a policy is not specific, implementation becomes inconsistent and unreliable.
For example, "Employees may not park in the guest parking lot."
, Clear: A business policy has no ambiguity. It is written in easy-to-understand language.
For example, "Immediate release of employment is the result of company drivers having
two points on their driving record."
Uniform: The policy should be a standard that everyone can follow from the top
management to the plant workers. For example, "Anyone entering the construction site
must have a protective hat, shoes and glasses on at all times."
Appropriate: Business policies should be relevant to organizational goals and needs. For
example, "Discrimination and sexual harassment accusations are investigated with
disciplinary action applicable based on investigation findings."
Simple: Policy must be understood by all that it applies to within the business. For
example, "No smoking within 100 feet of welding operations designated by the painted
yellow floor lines."
Inclusive: A business policy isn't something relevant to a small group in the business, it
must cover the wide scope and include everyone. For example, "Business attire is required
at all times in the office or meeting with clients."
Stable: This refers to implementation. If an incident arises, the policy should be stable such
that there is no indecisiveness about following it. For example, "Cell phones are not
permitted in the conference room."
Important functions of business policies
1. Objectives of the company are defined and classified: They provide workers with knowledge
about what is expected of them, e.g. behaviour and performance standards
2. The planning function is done systematically: They provide rules and guidelines for decision-
making in routine situations
3. A clear framework for the delegation of decision-making is provided: Business policy clearly
states the amount of authority that the subordinates have. It also specifies the limits of the
authority of the subordinates. Thus it tightens the authority on one hand and provides initiatives
to the subordinates.
4. Subordinates can use the policy directives intelligently and carefully: It also helps the
managerial personnel to perform the functions of control and coordination successfully by
providing a consistent and clear response across the company in dealing with situations.
5. Policy acts as the main foundation for evaluation and determining the quality of action and
decisions taken by executives. They provide an accepted method of dealing with complaints and
misunderstandings to help avoid claims of bias and favouritism.
Evolution of Business Policy
Business policy as a distinct field of study was introduced at Harvard Business School in 1911.
The course aimed at improving the general management capabilities of management students. It
was intended to tie together and give proper focus to the functions of business both internally and
