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    Business Policy: Nature, Scope

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    2K20DMBA158 Prabhakar Mallik
    Business policy refers to guidelines established by top management to direct executives and ensure corporate goals are met. Policies can be formal or informal, and guide strategy setting, objective defining, and managerial operations. Business policy creates a sense of purpose and prepares an organization to address daily challenges. It is the responsibility of top management to shape long-term strategy and objectives, establish general policies, and guide the organization accordingly. An organization's overall performance depends on pragmatic policymaking at the executive level.

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    Business Policy: Nature, Scope

    Uploaded by

    2K20DMBA158 Prabhakar Mallik
    17 views2 pages
    Business policy refers to guidelines established by top management to direct executives and ensure corporate goals are met. Policies can be formal or informal, and guide strategy setting, objective defining, and managerial operations. Business policy creates a sense of purpose and prepares an organization to address daily challenges. It is the responsibility of top management to shape long-term strategy and objectives, establish general policies, and guide the organization accordingly. An organization's overall performance depends on pragmatic policymaking at the executive level.

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    Business Policy

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    Business policy refers to guidelines established by top management to direct executives and ensure corporate goals are met. Policies can be formal or informal, and guide strategy setting, objective defining, and managerial operations. Business policy creates a sense of purpose and prepares an organization to address daily challenges. It is the responsibility of top management to shape long-term strategy and objectives, establish general policies, and guide the organization accordingly. An organization's overall performance depends on pragmatic policymaking at the executive level.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    17 views2 pages

    Business Policy: Nature, Scope

    Uploaded by

    2K20DMBA158 Prabhakar Mallik
    Business policy refers to guidelines established by top management to direct executives and ensure corporate goals are met. Policies can be formal or informal, and guide strategy setting, objective defining, and managerial operations. Business policy creates a sense of purpose and prepares an organization to address daily challenges. It is the responsibility of top management to shape long-term strategy and objectives, establish general policies, and guide the organization accordingly. An organization's overall performance depends on pragmatic policymaking at the executive level.

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    Business Policy: Nature, Scope

    As already observed, policies are basically formulated by the two management or


    the general management for guiding, directing and facilitating the thinking and
    acting process of the various functional executives, to ensure the best contribution
    towards the corporate objectives and goals. Policy can either is formal or informal,
    which can be applied, implied or imposed.

    It originates from the top management for the express purpose of guiding
    themselves and their subordinates to make use of their operational tools as
    effectively as possible. It also enables to set objectives for the whole organization
    in general and for the various functional areas in particular.

    It is the corporate policy that creates a sense of mission and purpose in the
    executive value judgment, and in their managerial operations, because a direct and
    purposeful preparation to face the challenges, opportunities and threats of the day-
    to-day business activities, is provided by the business policy from time to time.

    According to Edmund, the associates’ business policy is concerned with the


    top management function of:

    1. Shaping high-level, long-range corporate objectives and strategic that will be


    matched, to both company capacities and to external realities in a world marked by
    rapid technological, economical, social and political change.

    2. Casting up an effective well-matched set of general policies for the pursuit of


    that strategy.

    3. Guiding the organization in accordance with that strategy.

    The mission of the top management is influenced by the policy at various


    levels and phases. They are:

    1. Perception of industry and economic trends that affect the prospects of the
    economy.

    2. Clearly understanding the needs, opportunities, threats, strengths, weakness and


    problems.
    3. Selecting the best opportunity or opportunities from an array of them, this can
    cope with the capacity of the company.

    4. Formulating of a strategy taking into account the opportunity and availability of


    resources.

    5. Development of operating plans for the pursuit of the chosen strategy and
    policies.

    6. Creation of organizational relationships, organizational climate, and an


    atmosphere for the proper implementation of policy.

    7. Evaluating the performance and the progress, and

    8. Periodic re-evaluation of positions in the light of developments within the


    organization and its environment.

    To sum up it can observe that the overall performance of the company depends on
    the pragmatic policies, and the top management is mainly responsible for the
    policy formulation.

    Business policies cover such a wide variety of subjects and are so broad-based that
    every possible matter that affects the interests of any one in the organization, the
    community and the government are included in them.

    In fact, business policies cover all the functional areas of business- production,
    marketing, personnel and finance. These functional areas are generally covered by
    the term as “major policies” and “minor policies”.

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