Features Of Business Policy 21404v

Features of Business Policy An effective business policy must have following features1.

Specific- Policy should be specific/definite. If it is uncertain, then the implementation will become difficult.

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Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There should be no misunderstandings in following the policy.

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Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the subordinates.

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Appropriate- Policy should be appropriate to the present organizational goal.

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Simple- A policy should be simple and easily understood by all in the organization.

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Inclusive/Comprehensive- In order 1. Policies to must be known and understood have a wide scope, a policy must be by all who are affected by them. Written comprehensive. policies are most effective because they are spell out what organization should or should not do under a given situation.

2. Policies should be stable. If policies are to serve as guides to actions, they should not 7. Flexible- Policy should be flexiblebe changed frequently. Careful study should therefore taken in formulating policies. in operation/application. This does not imply that a policy should be altered always, but it 3. Policies must be consistent within the should be wide in scope so as to ensure that company at all levels and departments of the line managers use them in the organization. repetitive/routine scenarios. Stable- Policy should be stable 4. Policies must be sincere. Policies are public pronouncement of the philosophy else it will lead to indecisiveness and uncertainty in minds of those who look intoand beliefs of the company. The wording of policies should include real intention, it for guidance. otherwise, they become mere writings on paper and meaningless in practice. Difference between Policy and Strategy The term “policy” should not be considered as5. Policies must be realistic. Present situations or conditions must be considered synonymous to the term “strategy”. if policy statements are to be implemented. The difference between policy and They should not be a mere statement of strategy can be summarized as followsideals and commitments which cannot be implemented if conditions were different. 1. Policy is a blueprint of the 8.

organizational activities which are repetitive/routine in nature. While strategy is concerned with those organizational decisions which have not been dealt/faced before in same form. 2.

Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle level management.

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Policy deals with routine/daily activities essential for effective and efficient running of an organization. While strategy deals with strategic decisions.

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5.

Policy is concerned with both thought and actions. While strategy is concerned mostly with action. A policy is what is, or what is not done. While a strategy is the methodology used to achieve a target as prescribed by a policy.

CHARACTERISTICS OF A GOOD POLICY

6. Policies must be ed up. Policy making should be built around shared corporate goals and values, not around organizational structures or existing functions. 7. Policies should be future proofed. Reflects identified prospective trends and not only on past performance. As is commonly stated: the past is not a guarantee of the future. 8. Policies must be goal based. Focus on outcome delivered without unnecessary emphasis on the method by which it is to be achieved. 9. Policies must be inclusive. Policy makers take as full as possible of the impact the policy will have on different groups who are affected by the policy. Brings together the view points of the regulator and the regulated to find the best middle ground.