Introduction to Business Policy

I
ntr
oduct
iont
oPol
i
cyandBusi
nessPol
i
cy:Keyf
eat
uresofaBusi
nessPol
i
cy,
Element
s
ofaGoodBusi
nessPol
i
cy,
TypesofBusi
nessPol
i
cy,Di
ff
erencesbet
weenaPol
i
cyand
aSt
rat
egy
,Busi
nesspol
i
cyi
mpl
ement
ati
onst
eps

Lear
ningObj
ect
ives

Byt
heendoft
hisuni
t,y
oushoul
dbeabl
eto:

•
Def
ineaPol
i
cyandaBusi
nessPol
i
cy.

•I
dent
if
ykeyf
eat
uresofaPol
i
cyandBusi
nessPol
i
cy

•
Expl
aint
hei
mpor
tanceofaBusi
nessPol
i
cyt
oanor
gani
zat
ion

•
Recogni
zeagoodBusi
nessPol
i
cy

•Descr
ibet
hest
epst
oBusi
nessPol
i
cyFor
mul
ati
onandI
mpl
ement
ati
on

•
Dif
fer
ent
iat
ebet
weenaPol
i
cyandSt
rat
egy

I
ntr
oduct
ion

Thi
suni
tai
mst
oint
roducey
out
othebasi
cconcept
sofapol
i
cyandbusi
nesspol
i
cy
and t
othepr
ocessoff
ormul
ati
ng and i
mpl
ement
ing abusi
nesspol
i
cyf
orbet
ter
managementofan or
gani
zat
ion.Theuni
tal
so i
ntr
oducesy
out
othedi
ff
erences
bet
weenapol
i
cyandast
rat
egy
.Asani
ntr
oduct
oryuni
t,y
ouwi
l
lbeexposedt
ovar
ious
def
ini
ti
onsofapol
i
cyandbusi
nesspol
i
cy,
keyf
eat
uresofabusi
nesspol
i
cy,
impor
tance
ofcr
eat
ingbusi
nesspol
i
cyf
oranor
gani
zat
ion,
andwhatmakesagoodbusi
nesspol
i
cy.
Youwi
l
lal
sobeexposedt
othest
epsonewoul
dgot
hrought
ofor
mul
ateandi
mpl
ement
abusi
nesspol
i
cyandal
sot
othedi
ff
erencesbet
weenapol
i
cyandast
rat
egy
.

Def
ini
ti
onsofaPol
i
cy

Thewor
d‘Pol
i
cy’
isder
ivedf
rom t
heGr
eekwor
d‘Pol
i
tei
a’meani
ngpol
i
cyorgov
ernment
.
I
nthe aut
ocr
ati
c sy
stem t
he pol
i
cies ar
efr
amed by t
he l
eaderwher
eas i
nthe
democr
ati
csy
stem t
hepol
i
ciesar
efr
amedbyt
hepeopl
e.Ev
eryor
gani
zat
ion,whet
her

, pr
ofi
tmaki
ngornon-
prof
itmaki
ng,
haspr
inci
plesonwhi
chi
tist
obeconduct
ed.These
pr
inci
ples i
n busi
ness par
lance ar
e commonl
y cal
l
ed Pol
i
cy.Ther
e ar
evar
ious
def
ini
ti
onsofaPol
i
cy.Howev
er,al
lthedef
ini
ti
onshav
esomeusef
ulkeyel
ement
s.
Accor
dingt
oFagbemi
,apol
i
cyr
efer
stowhatanor
gani
zat
ionoraper
soni
ntendst
odo
ordoes.I
tisast
atementofi
ntentt
hati
simpl
ement
edasapr
ocedur
eorpr
otocol
.A
pol
i
cyi
sasetofi
deasorapl
anofwhatt
odoi
npar
ti
cul
arsi
tuat
ionst
hathasbeen
agr
eedt
oof
fi
cial
l
ybyagr
oupofpeopl
e,abusi
nessor
gani
zat
ion,agov
ernment
,ora
pol
i
ticalpar
ty.Ackof
fdef
inesapol
i
cyasadeci
sionr
ulenotadeci
sion.Forexampl
e,
“
Hir
eonl
ypr
ofessi
onal
l
yqual
i
fiedbusi
nessmanagementspeci
ali
stsf
orseni
orbusi
ness
managementposi
ti
ons”
.Whensuchaper
soni
shi
redt
heni
tbecomesadeci
sion.

Accor
dingt
oKal
ejay
e,apol
i
cyr
efer
saf
utur
ecour
seofact
ionofi
ntentt
owar
dst
he
act
ivi
ti
esofanor
gani
sat
ion.Thepol
i
cyexpr
essesbel
i
efsoft
heor
gani
sat
ion,t
hings
t
hatar
eri
ghtt
odoandt
hecour
sesofact
ionwhi
chi
toughtt
otakei
ntheor
gani
sat
ion.
Thi
s expl
ains why pol
i
cies on t
he same subj
ectcan be so di
ff
erentf
rom one
or
gani
sat
iont
oanot
her
.Pol
i
ciesar
egener
alst
atement
sofi
ntentorunder
standi
ngs
t
hatgui
deorchannelt
hinki
ngi
ndeci
sionmaki
ng.Apol
i
cypr
ovi
dest
hebedr
ockf
or
v
isi
on and mi
ssi
on st
atementoft
he busi
ness or
gani
zat
ion al
ong t
he cor
por
ate
obj
ect
ivesandgoal
.Pol
i
ciesenabl
ethebusi
nessest
obeassessedandgi
venani
mage
byt
hewayt
heycar
ryoutt
hei
rresponsi
bil
i
tyal
ongwi
tht
hei
rcl
i
ent
s/cust
omer
s.Apol
i
cy
i
sconsi
der
edt
obeagener
algui
del
i
nef
ordeci
sionmaki
ngi
nanor
gani
sat
ion.I
nact
ual
busi
nesssi
tuat
ion,notal
lpol
i
ciesar
ewr
it
tenst
atement
sassomepol
i
ciesar
eimpl
i
ed
f
rom t
heact
ionsofmanager
s.Forexampl
e,t
hepr
act
iceofpr
omot
ingf
rom wi
thi
nthe
or
gani
sat
ionbyt
hepr
esi
dentordi
rect
oroft
heor
gani
sat
ionmaybei
nter
pret
edby
subor
dinat
esasapol
i
cyf
ort
heor
gani
sat
ion.

Def
ini
ti
onsofaBusi
nessPol
i
cy

Wheny
ouhearacompanyei
therpr
omot
esaj
ointv
ent
ure,
div
est
sapar
tofi
tsbusi
ness,
embar
ksuponanexpansi
onpr
ogr
amme,
under
takesmer
ger
sandacqui
sit
ionsort
akes
ot
hersi
mil
aract
ionswhi
chhav
eal
ong-
ter
mimpactoni
tsf
utur
eoper
ati
onsandst
atus,