Business Policy &

Strategic Management
SY BMS
By Deepika Vinoth
Meaning of BUSINESS POLICY
 Christen and others defined

 “the study of the functions and responsibilities of senior

management, the crucial problems that effect success in
the total enterprise and the decisions that determine the
direction of the organization and shape its future”
 Functions and responsibilities of senior management
related to organizational problems which affect the
success of the enterprise as a whole
 Deals with determination of the future course of action
 Involves a choice of purpose and define the what needs
to be done in order to mould the future of the
organization
 Mobilization of resources to achieve organizational goals
and objectives
POLICY
 Policy
 The word Policy is derived from the Greek word ‘Politeia’
which means polity or Government

“Policies help decide issues before they become

problems”
- By Harold Koontz and Heinz Weihrich
Nature of Business Policy
 Policy is plan of action to guide decisions and actions

 The term policy is applicable to Government, private and

public sector, groups and individuals

 Includes identification different alternatives and choosing

the best among them

 Defines an area within which a decision is to be made,

ensure decision will be consistent and contribute towards
the organizational goals and objectives
 Policies exist at all levels from top management to
executive level

 TRAI regulates the telecommunication companies for its

deviant behaviour

 Business policy refers to formulating strategies, their

implementation and evaluating their effectiveness

 Policies may be clearly stated but difficult to interpret

Definition of Business Policy
 Richard Owens “ A business policy is a principle for the
conduct of a business enterprise or some phase of its
activities”.
 George Terry “ A policy is a verbal written or overall guide
setting up boundaries that supply the general limits and
directions in which managerial action will take place”.
 Leonard Kazimier “ Policy is general statement or
understanding which guide decision making by subordinates in
various departments of an enterprise”.
 Ralph Davis “Policy is statement of a principle or group of
principles, with their supporting rules of action that conditions
and governs the achievement of certain objectives to which a
business is directed”.
Features of Business Policy
Acts as guidelines for achieving the
predetermined goals and objectives

May be in writing or in oral form

Developed on the basis of organisation
resources and allocation
Dynamic – subject to change depending
upon their business environment
Meant for subordinates, developed
to suit specific situations
Applicable to all

Provide consistency in decision making

Importance of Business Policy
Provides Effective
Economical
stability to the coordination
Operations
organization and control

Realizing Goals Rights Ethical

and Objectives Decisions Considerations

Clear
Delegation of
Allocating
Authority resources