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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 organizations 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--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
organizations 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 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