INTRODUCTION TO BUSINESS POLICY.

The greatest difficulty in the World is not for people to accept new ideas but to make them forget about old ideas John Maynard Keynes(Economist). The organization sets the objective and works towards their achievement. Once these objectives are defined and strategies determined, certain policies have to be made to put them into action. Business policies act as a guide to action.They provide the frame work within which an organization has to meet its business objectives. The policy points out the direction in which the company ought to go. Business policy basically deals with decisions regarding the future of an ongoing enterprise. Such policy decisions are taken at the top level after carefully evaluating the organizational strengths and weaknesses in terms of product price, quality, leadership position, resources etc., in relation to its environment. Once established the policy decisions shape the future of a company channel the available resources along desired lines and direct the energies of people working at various levels towards predetermined goals. In a way, business policy implies the choice of purposes, the shaping of organizational identity and character the continuous definition of what is to be achieved and the deployment of resources for achieving corporate goals. Without Business Policy, an organisation is like a ship without rudder, going around in circles. Its like a tramp; who has no place to go Joel Ross and Michael Kami. Business Policy defines the scope or spheres within which

decisions can be taken by the subordinates in an organization. It permits the lower level management to deal with the problems and issues without consulting top level management every time for decisions. Business policies are the guidelines developed by an organization to govern its actions. They define the limits within which decisions must be made. Business policy also deals with acquisition of resources with which organizational goals can be achieved. Business policy is the study of the roles and responsibilities of top level management, the significant issues affecting organizational success and the decisions affecting organization in long-run. A business policy is : guidelines to facilitate achieve predetermined objective as plan(decision making) involving all levels of the management in any business organisation.It set a statement on the mode and manner how the objectives will be achieved. Without a policy the organisation will function arbitrarily in an anarchic way and may not reach its objectives. Business policy is dependent on consumer satisfaction and gathering information regarding merits/demerits so as to introduce timely modifications on products. If this strategy is followed and policies are made, the organization will prosper.Business policies are guidelinesstatements (guide to plans & decision making) to facilitate predetermined objective on the mode and manner in the structural & functional aspects to achieve the objective formulated as plans at all levels of management in the business organisation. Decision making is the primary task of a manager. While making decisions, it is common that managers consult the existing organizational policies relevant to the decisions. Policies provide a basic framework within which managers operate. Policies exist at all

level in the organization. Some may be major policies affecting the entire organization while others may be minor in nature affecting the departments or sections in the organization. It has to be remembered that a policy is also a decision. But it is an due time standing decision, in the light of which, so many routine decisions are made. Following are examples of business policies. Policies aid in decision making and are the basis for procedures. They are responsibilities of top management. Policies are applied in long range planning and are directly related to goals. They are concerned with estimating availability of resources, their procurement their augmentation and their efficient utilization. The Business policy is integrative in nature. It enables the learner to understand the importance of looking at the organization as a unified whole. The functional flavor and emphasis is needed to motivate people to peak performance. But in the race to get ahead of other departments, especially where resources have to be put to effective use, one should not lose sight of the broad, overall interests of an organization. A course in business policy seeks to integrate the knowledge and experience gained in various functional areas of management. Individual departments may suffer from certain unique problems. Marketing may complain against poor quality, Production may look at poor sales support. Finance may find it difficult to come out with appropriate budgetary allocations and

Personnel Department may criticize the poor compensation plans coming in the way of improved performances. Sectional interests no doubt have to be taken care of. Every attempt must be made to put out the internal fires by emphasizing the overall goals for which the organization is known. Business policy course is multi-disciplinary in nature. It draws rich inputs from other disciplines such as Psychology, Economics, and Sociology etc. The students are made to examine the important issues from various angles. Sectional interests, sectoral demands, tunnel visions and departmental loyalties and a host of other disintegrating factors are examined and cross examined bit by bit, piece by piece while arriving at mutually satisfying decisions the course helps participants to cross fertilize ideas, synchronize thoughts and deal with issues dispassionately. They can come out of the shell cross functional boundaries and take effective decisions keeping the best interests of the organizations in mind. They are willing to look at the other side of the coin more closely. They are willing to listen and toss around ideas freely, interact openly and take everything good or bad in their stride.

A Business policy also helps participants to improve their decision making capabilities in a significant way. Participants are encouraged to gather information from diverse sources, investigate facts thoroughly examine the opinions of affected parties initially and resolve issues through joint, interactive sessions. Strategic decision making is not a one man show. Both the manager and the subordinates must be wiling to dissolve their differences examine facts objectively and arrive at decisions to mutual satisfaction. One can develop skills of this nature of course only through experience and observation. A Course in Business policy helps participants to understand the linkages between various functional specialties decide things objectively and rationally.

Business policies generally have a long life. They are established after a careful evaluation of various internal and external factors having an impact on the firms market standing As and when circumstances change in a major way the firm is naturally forced to shift gears, rethink and reorient its policies. The World Oil crisis during the 70s has forced many manufacturers all over the globe to reverse the existing practices and pursue a policy of manufacturing fuel efficient cars. Therefore, policies should be changed in response to changing environmental and internal system conditions.

The role of polices is very crucial for the success of any program. The policies are a guideline statement that helps organizations and business in achieving its objectives and goals. Business policy defines the scope that set the path of decision making. A business that lacks policy will surely come to an end sooner or later due to mismanagement and chaos.Business policies are guidelines-statements guide to plans & decision making to facilitate predetermined objective on the mode and manner in the structural & functional aspects to achieve the objective formulated as plans at all levels of management in the business organization. Business policies mainly consist of companys rule, its process and relationship. One can call business policies as mission statements as well. It is business policy that defines strategic management and helps in improving performance. According to the policy manual of General Electric Company, "Policy is definition of common purpose for organisation components of the company for benefit of those responsible for implementation, exercise discretion and good judgment in appraising and deciding among alternative courses of action." Definitions of Business Policy :According to Koontz and O'Donnell, "Policies are plans in that they are general statements of principles which guide the thinking, decision making and action in an organisation." Christensen et. al. and steiner," the study of the function and responsibilities of senior management, the crucial problems that

affect success in the total enterprise, and the decisions that determine the direction of the organisation and shape its future. Robert J. Slockler defines Business policy as, "Strategic guidelines for action and spells out what can and what cannot be done in all areas of a company s operation." RE Thomas, Business Policy, basically, deals with decisions regarding the future of an ongoing enterprise. Such policy decisions are taken at the top level after carefully evaluating the organizational strengths and weaknesses in relation to its environment.

Business Policy can also be defined as:1) A business policy is an implied overall guide setting up boundaries that supply the general limit and direction in which managerial action will take place. 2) A business policy is one, which focuses attention on the strategic allocation of scarce resources. Conceptually speaking strategy is the direction of such resource allocation while planning is the limit of allocation 3) A business policy represents the best thinking of the company management as to how the objectives may be achieved in the prevailing economic and social conditions 4) A business policy is the study of the nature and process of choice about the future of independent enterprises by those responsible for decisions and their implementation 5) The purpose of a business policy is to enable the management to relate properly the organizations work to its

environment. Business policies are guides to action or channels to thinking. Difference between Policy and Strategy. Difference between Policy and Strategy Policy is a blueprint of the 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 . Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle level management. The term policy is totally different from strategy and two should not be used synonymously. The difference between policy and strategy can be summarized as follows(add bullets) Policy is a blueprint of the organizational activities. While strategy deals with strategic decisions. Policy is mostly formulated by the top level management whereas strategy is set by middle level management. Policy involves with routine/daily activities essential for running of an organization, policy is relate to both thought and action whereas strategy is mostly concerned with action alone. There are various factors that affect business polices. The condition of market, global economic condition, competitors and most importantly customers area of interest plays crucial role in the business policies. To remain in the race and to be ahead businesses are spending time in reading current trend of market

and buyers and introducing desired change in their business policy for the betterment. Follow the strategic planning and set realist business policies for further growth of the business.

How Business Policy helps:-.

Business Policy helps . . . To determine the mission, objective, strategies of a firm . To know external and internal environment and how it affects the functioning of an organisation . To be receptive to new ideas, information and suggestion to have a practical approach to decision making and problem solving

1) Helps the participant to understand why functional boundaries are created and appreciate why the various sub units have to move Inc lose coordination while realizing the overall objective(s). 2) Helps to resolve difference between individual and organizational goals. Every attempt is made to pull all the functions and activities together. 3) Helps participants to work in an orderly manner appreciating the work put in by others. They understand and adjust with each

other by developing mutual trust, cooperation and understanding. Production knows its target maintenance keeps equipment and tools in good order, finance arranges funds and security takes care of goods and services. 4) Creates an understanding of how overall objectives and policies are formulated why everyone has to focus attention on pre-set targets and goals, why one should appreciate the viewpoint of the other while translating rhetoric into action; why one needs to anticipate changes and adjust accordingly. The course will certainly improve the capabilities of participants in monitoring events, forecasting problems and solving them proactively rather than reactively. Types of Policies: Policies come into being in any orgnisation in different ways. Koontz and O donnel have classified policies on the basis of their source under the following categories1. Original Policy: The top management formulates policies for the important functional areas of business such as production, finance, marketing etc. The objective is to help the concerned functional managers in decision making in their respective areas. Thus originated policies are the result of top management initiative. These policies are formulated in the light of the enterprises objectives. They may be broad or specific depending on the degree of centralization of authority. If they are broad, they allow the manager some operational freedom. On the other hand, if they are specific they are implemented as they are.

2. Appealed Policies: Managers often confront with particular situations as to whether they have the authority to take a decision on a particular issue or problem. The policies regarding some issues may be unclear or may be totally absent. In such case, he appeals the matter to his superiors for thinking. Appeals are taken upwards till they reach the appropriate level in the hierarchy. After thorough examination of the issues involved, policy decision would be taken at the appropriate level. 3. Implied Policies: In some cases there may not be specific policies. Managers draw meaning from the actions and behaviour of their superiors. Though there is no explicit policy, managers may assume it in a particular way and go about in their day-to-day operations. 4. Externally Imposed Policies: These are the policies which are not deliberately conceived by the managements. They are rather, imposed as the organisations by the agencies in the external environment like Government Trade Unions, Industry Association, Consumer Councils etc. These agencies to protect the interest of the respective groups may lay down certain policies to be followed by the business. As the interaction of the business with external environment is increasing, one can find many policies thus coming into being in any modern business. For instance, the recruitment policy of the organization is influenced by the Govt s policy towards reservation to weaker sections. Anti-pollution measures, concern for the quality of the product, customer care and service etc. come under this category. Further Business Policy are divided into more types. There are many types of policies marketing policies, financial policies, production policies, personnel policies to name a few in every organization. Within each of these areas more specific policies are developed. For example, personnel policies may cover recruitment, training, promotion and retirement policies.

Viewed from a systems angle, policies form a hierarchy of guides to managerial thinking. At the top of level policy statements are broad. The management is responsible for developing and approving major comprehensive company policies. Middle managers usually establish less critical policies relating to the operation of their sub units. Policies tend to be more specific at lower levels. The managers job is to ensure the consonance of these policies, each must contribute to the objectives of the firms and there should be no conflict between sub system policies. Although it is customary to think of policies as written statements it is not necessarily the case. For example a firm may simply decline to consider handicapped employees in the selection of new personnel. In effect, this becomes an effective policy even though the company has never verbalized its position.

Nature and Characteristics of Business Policy. The nature and objective of business policy are both formulated as plans and determined by a business organisation.Objective is the end to a plan while policy is the mode and manner to reach the objective. A business policy is: guidelines that facilitate to reach a predetermined objective both in mode and manner formulated from the top to the lower level management while Objectives are the endpoints to a plan. Business policy is the guide post to decision making. It helps in the managerial thinking process and thus leads to the efficient and effective attainment of the objectives of any organisation. Business policy has been defined as "Management's expressed or implied intent to govern action in the pursuit of the company's objectives." Business policy clarifies the intention of management in

dealing with the various problems faced. It gives the managers a transparent guideline to take their decisions by being on the safe side. Business policy helps the manager in identification of the solutions to the problem. It provides the framework in which he has to take the decisions. Following are the different view points of leading authorities as to what is business policy ? 1. The first category holds the opinion that policy and strategy are synonymous. Business policy has been defined by William Glueck as "Management policy is long range planning. For all practical purposes, management policy, long range planning and strategic managernent mean the same thing." However, this view is quite controversial as strategy and Business policy do not mean the same thing. Strategy includes awareness of the mission, purpose and objectives. It has been defined as, "the determination of basic long term goals and objectives of all enterprise, and the allocation of resources necessary to carry out these goals", while policies are statements or a commonly accepted understandings of decision making and are thought oriented guidelines. Therefore, strategy and Business policy cannot be used interchangeably as there is a clear line of differentiation between the two terms. This view stress upon the assumption that business strategy and policy are more or less the same. However, this view did not receive much support from various authorities in the area of business management. 2. The second group of experts view Business policy as the process of implementing strategy in the words of Frank 1. Paine and William Naumes, "Policies guide and channel the implementation of strategy and prescribe the processes within the organisation will function and be administered. Thus the term policy refers to organisation procedures, practices and structures, concerned with implementing and executing strategy." Supporting this view, Robert Mudric has defined Business policy as "A policy establishes guidelines and limits for discretionary action by individuals responsible for implementing the overall plan." The view represents Business policy to be: Restrictive Laying stress only on the practical side and ignoring the strategic dimension.

3. The third group considers business policy to be decisions regarding the future of an organisation. Robert J. Slockler defines Business policy as, "Strategic guidelines for action and spells out what can and what cannot be done in all areas of a company s operation." According to the policy manual of General Electric Company, "Policy is definition of common purpose for organisation components of the company for benefit of those responsible for implementation, exercise discretion and good judgment in appraising and deciding among alternative courses of action." 10

The views of different management authorities differ because of following reasons: There is no clear differentiation of policy from other elements of planning. There are different policies made at different levels of management for directing executives. Business policy encompasses and relates to the entire process of planning. Thus, Business policy focusses on the guidelines used for decision making and putting them into actions. It consists of principles along with rules of action that provides for successful achievement of Business objectives. An effective business policy must have the following features -(pls add bullets) 1) Specific- Set specific policies pertaining to organizations goals and objectives. Implement these policies smartly and achieve the goal. 2)Clear- Policy must be unambiguous. It should avoid use of misleading phrases and connotations. There should be no misunderstandings in following the policy. 3) Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the subordinates. 4)Appropriate- Policy should meet the organizations goal, in short it has to be appropriate. 5) Simple- A policy should be simple and easily understood by all in the organization.

6) Inclusive/Comprehensive- Plan comprehensive policy for the better and secure future of the organization. 7) Flexible- Policy should be flexible in operation/application. There should always be a scope of alteration in time of emergency. Though over flexibility could harm the organization but little flexibility in policy is required for healthy growth. 8)Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in the minds of those who look into it for guidance. To beat the increasing level of competition organizations are planning their policies following the concept of SWOT. SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses / Limitations, Opportunities, and Threats involved in a business venture. It involves specifying the objective of the business venture and identifying the internal and external factors that could cause hindrance in achieving business goals and marking the factor that could facilitate the growth of the business. The technique is designed to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. A SWOT analysis starts with setting objective for the organization. A SWOT analysis is incorporated into the strategic planning model. For the proper management of any business it is essential to identify the SWOT and work according to it. Identification of SWOT is important from the planning purpose. First, the policy makers have to decide whether the objective is

achievable if the objective is tough or unachievable then new objective has to be considered. The SWOT analysis is often used in many business areas including academics to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development.

Essentials of a Good Business Policy. How do we go about determining whether policy is good policy. In other words has it achieved the desired objectives of the organisation and the required outcomes. Good Business Policy must have this 17 characteristics:1) Outcomes are clearly stated. The policy outcomes are clearly stated.Policy must have a clear purpose and outcome if it is to be of any value to the organisation. It is important that staff recognise the problem that is being addressed through the policy implementation. It is extremely difficult to implement policy in a situation where people do not perceive there is a need for the specific policy unit to be developed or implement. If policy is being implemented to support an organisation in its growth and develop it is imperative that policy outcomes are clearly stated so that everyone and understands why the policy has been implemented in what the policy expectations are.

2) Assumptions are clear and explicit. The assumptions are explicitPart of the policy statement must clearly express why the policy has been written and what is hoped to be achieved by its implementation. Part of the consultative process prior to the implementation of policy needs to be a testing of the process and ideas as to why the policy needs to be implemented. One of the common problems within organisations is that people among level of the organisation believed policy next year it meant to resolve the specific problem may not necessarily exist across the entire organisation. The assumptions that have been made about why policy needs to be implemented must be tested within the organisational context. Is a perceived problem in one department a rule problem that needs to be addressed from an organisational point of view or is a specific issue relating to that department and had particular personnel within the Department. 3) There is linkage to organisational direction. There is linkage to organisational direction.Policy makers must ensure that policies linked to the overall direction and goals the organisation. The overall framework of the business will provide some strategic direction, and will be important in assessing the direction of the organisational policies. Policy writers must ensure that the policy supports existing policies and procedures within the organisation. One of the tests of good policy is that it supports the organisation in achieving its goals and objectives. Often time policy through its implementation can in fact hinder

staff in achieving the organisational goals. Policy should be seen as pillars supporting the structure of an organisation. Policy should be written in such a way that they clear obstacles to staff and enable them to better achieve their full potential. 4) Due process in the development stage has been observed. Due process has been observed.The organisational rules and principles must be established and clearly understood as part of the policy development process. It is crucial that all components of the organisation have some input into the policy development. Policy implemented in one department may seem fair and reasonable until that policy has a deleterious effect impact on other parts of the organisation as a whole. As part of the organisational framework the structure needs to be both developed and implemented that will enable policy development to happen in a concise and engaging manner so that all aspects of the organisation have their input into the policy development and implementation. 5) Stakeholders have been included in the development. Stakeholders have been included.Stakeholders in other words those who are directly affected by the implementation of policy and the policy outcomes need to have some inclusive process developed whereby they can participate in the policy development. Part of the policy development process therefore

is to clearly identify who all the stakeholders are. And appropriate consultative strategy needs to be implemented as part of the policy development process. One of the significant problems that can develop a stakeholders are invited to participate in policy development is the expectation from each stakeholder their specific outcomes or desires will be achieved by the policy implementation. Oftentimes it is difficult in fact almost impossible to achieve all the desired outcomes from each stakeholder group. One of the key components of policy development is to discuss with each of the stakeholder groups the policy outcomes that are going to be implemented. Where these outcomes clearly do not meet the stakeholders expectations it is imperative that the organisation identify these issues and resolve these conflicts as much as possible. 6) Public interest has been given a high priority. Public interest has been given a high priority.Public all government policy needs to have as its core public interest. In other words has the policy been written with the general outcome and expectation being that the public will be better off as result of a policy implementation. One of the core challenges for government as they implement policy is to ensure that the policy impacts do not have a deleterious effects on members of the community.

7) Organisational expectations have been met. Organisational expectations have been met.Policy writers must realise that they have two audiences they are dealing with first audience is a group of people that policy has a direct impact on. In other words the staff that are going to be directly impacted by the policy implementation. Staff may be required to implement new procedures as result of the new policy being implemented. Their work practices may alter to some extent. The second audience and in oftentimes more crucial audience other leaders within the organisation. Have the leaders expectations being addressed and realised in the policy outcome. It serves little purpose of the policy is tabled at a board meeting to find the majority of the board in fact do not support the policy intent or specific outcomes. Policy writers must have a clear understanding of the organisational expectations and what the policy intent and the outcome is as they develop the policy.

8) The policy is likely to be both efficient and effective. The policy is likely to be effective.The intended policy is to achieve a specific outcome is outcome needs to be effective in terms of the impact that it has on the organisation. Part of the consultative process is undertaken appropriately will help identify areas where the policy may not be effective i within the

organisation. 9) Outcomes are stated in measurable terms. The policy is measureable.This refers to measurable indicators that will provide proof a specific policy is having a desired effect. This is especially useful for the evaluation stage of the policy cycle. 10) There is a capacity to evaluate outcomes. There is capacity for evaluation.As indicated in the desired characteristic above, the ability to measure the effectiveness of any policy gives it capacity to be evaluated. Evaluation of policies helps an organization determine effectiveness and possible areas where change is needed, enabling that particular organization to work at its' most efficient level 11) It has been appropriately funded and resource. It is appropriately funded.Not only must an organization ensure its policies, and policy development initiatives, are properly and appropriately funded, it is imperative to identify and set aside the necessary funds for its implementation. Your organization should be budgeted for these initiatives; stay within budget. 12) There is clear accountability. Clear accountability.It should be easily apparent in the policy which persons and departments are accountable for what

actions, and within what time frame. Everyone, from the policy officers to the direct worker are accountable for some part of the policy, whether it be proper use of funds, proper protocols for developments, or the recommended implementations, must be held directly accountable. 13) It follows all appropriate laws. Policies, whether within government organizations or business, must adhere to certain laws. If the policy officers are uncertain if the policy they propose are crossing any legal lines, then the organizations lawyers must be consulted. Not doing so and allowing improper policy to be adopted in to implementation could be very costly on a legal level. 14) It is enforceable. A policy that cannot be enforced is not worth the time and effort put in to it, much less the paper it is written on. If the policy is practical then it should be enforceable. If not it may need to be revisited and amended. 15) It is historically informed. If an organization is not paying attention to past experiences they often find themselves "reinventing the wheel". It is a waste of time and effort, and money. Using a good policy framework can help prevent repetition as the organization should be constantly reviewing and revising, as necessary, all policies, learning from the evaluations.

16) Ideas have been tested prior to implementation. The ideas have been tested.Ideas can be tested through "field testing" or "dry runs". More practically however testing can be accomplished by looking back with a historical view, as mentioned previously. Consultations with staff and others who understand and have better "first hand" experience can also be useful when testing a proposed policy.

17) The policy outcomes are clearly stated. The policy outcomes should be clearly stated and if need arises it should made changes effectively. SCOPE OF BUSINESS POLICY The Scope of policy in an organisation is to: *Provide general guidance about the organisation's mission. *Provide specific guidance toward implementing strategies to achieve the organisation's mission. *Provide a mechanism to control the behaviour of the organisation. 1. Provide general guidance about the organisation's mission a. A policy that limits the industries in which the organisation will operate b. A policy about the geographical region in which the organisation will operate c. A policy about the general nature of the business i.e. profit

making, non-profit making, community recreation or elite sport d. A policy about affiliations with other organisations i.e. affiliation with a national body or a peak industry body 2. Provide specific guidance toward implementing strategies to achieve the organisation's mission a. b. c. d. e. f. A policy for athlete development. A policy for recruiting, training and utilising volunteers. A policy for employing staff. A policy for opening hours of a facility. A policy for promoting and staging events. A policy for doping control.

3.Provide a mechanism to control the behaviour of the organisation a. b. c. d. A policy for the inclusion of people with disabilities A policy that sets up judiciaries or disciplinary hearings A policy that regulates the election of office-bearers A policy for dealing with complaints

Business policies are statements of guidelines for Business thinking and action. They lay down the approach before the management to deal with the challenges in the environment. They cover the following broad areas that affect the decisions of the Organisation. 1. Business policy consists of a variety of subject that affect various interest groups in the Organisation and Outside it. 2. Business policy is concerned with the various functional areas like production, human resources, marketing and finance. 3. We call understand Business policy areas in two broad categories: Major and minor policies. The overall objectives, procedures and control are covered in major policies. These policies are concerned with each and every aspect of the Organisation, its structure, its financial status, its production stature, its human resources and all those issues which require attention like mergers, research, expansion, etc. Basically, the top management is involved in the framing of such major policies. Further, the operations and activities are also carried Out by

executives so that the organizational objectives are met. The minor policies are concerned with each segment of the Organisation with emphasis oil details and procedures. These policies are part of the major policies. The operational control call be made possible only if the minor policies are implemented efficiently. The minor policies are concerned with the day to day operations and are decided at the departmental levels. The minor policies may cover relations with dealers, discount rates, terms of credit etc. Thus, Business policies cover wide range Of Subjects ranging from operational level policies to the top level policies. 1) Dealing with suppliers and employees in a responsible way - for example by being open and honest about your products and services and avoiding pressure selling. It also means going beyond the legal minimum when dealing with employees and promoting best practice. 2)Building up a good relationship with the local community - for example by supporting a local charity or sponsoring a local event. 3)Minimising your impact on the environment and cutting pollution and waste - by using energy efficiency measures, eg switching off lights, reducing the use of water. You could also consider minimising waste and reducing the environmental impact of your business generally, eg buying locally to cut fuel costs.

Need and importance of Business Policy.

A written business policy communicates your company's expectations about appropriate employee work performance. Policy illustrates the acceptable performance boundaries while simultaneously

addressing the employees' needs. Some employers prefer a written policy that covers every conceivable situation; others prefer no written policy, whereby management decides each case as the situation merits. Find the ideal balance when creating a business policy for your business. The Business policy is integrative in nature. It enables the learner to understand the importance of looking at the organization as a unified whole. The functional flavor and emphasis is needed to motivate people to peak performance. But in the race to get ahead of other departments, especially where resources have to be put to effective use, one should not lose sight of the broad, overall interests of an organization. Business policy seeks to integrate the knowledge and experience gained in various functional areas of management. Individual departments may suffer from certain unique problems. Marketing may complain against poor quality, Production may look at poor sales support. Finance may find it difficult to come out with appropriate budgetary allocations and Personnel Department may criticize the poor compensation plans coming in the way of improved performances. Sectional interests no doubt have to be taken care of. Every attempt must be made to put out the internal fires by emphasizing the overall goals for which the organization is known. Business policy course is multi-disciplinary in nature. It draws rich inputs from other disciplines such as Psychology, Economics, and Sociology etc. The students are made to examine the important issues from various angles. Sectional interests, sectoral demands, tunnel visions and departmental loyalties and a host of other disintegrating factors are examined and cross examined bit by bit, piece by piece while arriving at mutually satisfying decisions the course helps participants to cross fertilize ideas,

synchronize thoughts and deal with issues dispassionately. They can come out of the shell cross functional boundaries and take effective decisions keeping the best interests of the organizations in mind. They are willing to look at the other side of the coin more closely. They are willing to listen and toss around ideas freely, interact openly and take everything good or bad in their stride. Business policy also helps empolyees to improve their decision making capabilities in a significant way. Employees are encouraged to gather information from diverse sources, investigate facts thoroughly examine the opinions of affected parties initially and resolve issues through joint, interactive sessions. Strategic decision making is not a one man show. Both the manager and the subordinates must be wiling to dissolve their differences examine facts objectively and arrive at decisions to mutual satisfaction. One can develop skills of this nature of course only through experience and observation. A Course in Business policy helps to understand the linkages between various functional specialties decide things objectively and rationally. 1) Helps to understand why functional boundaries are created and appreciate why the various sub units have to move Inc lose coordination while realizing the overall objective(s). 2) Helps to resolve difference between individual and organizational goals. Every attempt is made to pull all the functions and activities together. 3) Helps to work in an orderly manner appreciating the work put in by others. They understand and adjust with each other by developing mutual trust, cooperation and understanding. Production knows its target maintenance keeps equipment and tools in

good order, finance arranges funds and security takes care of goods and services. 4) Creates an understanding of how overall objectives and policies are formulated why everyone has to focus attention on pre-set targets and goals, why one should appreciate the viewpoint of the other while translating rhetoric into action; why one needs to anticipate changes and adjust accordingly. The course will certainly improve the capabilities of participants in monitoring events, forecasting problems and solving them proactively rather than reactively. Some of the benefits of formal policies include: *Helping staff to make decisions more efficiently. *Providing instruction on how to do tasks. *Creating confidence and reduce bias in decisionmaking. *Protecting staff from acting in a manner that might endanger their employment. *Protecting staff from acting in a manner that might endanger the safety of themselves and others. *Help staff to initiate actions and take responsibility without constant reference to management. *Increase the accountability of business or organisation's and its staff. The creation of policies is actually good evidence of proactive or forward-thinking management. How do you feel about your organisation's policies? Policies provide a baseline of internal control, a

starting point for internal training, and a foundation for improvement. A business without internal controls is at risk of waste, fraud and abuse. A company without training produces more errors, mistakes, and rework. And an organization that fails to improve is quickly overtaken by the competition. provides employees with a handy reference to daily business operations, common company activities, or routine organizational tasks. New personnel will find your operations manual useful for getting trained and up to speed, fast on such things as internal controls. After all, with standard operating procedures in place, training is faster and interruptions are reduced. Business Policies helps the employees to understand their duties and functions:-Balance:-The ideal business policy encourages individual productivity without making the employee feel as though you micromanage him. According to Entrepreneur magazine, neither an extremely detailed nor a nonexistent business policy create a highly productive work environment. Put your business expectations in writing, so employees know how to meet your requirements. Address employee goals, and tell him how you expect him to achieve the goals. Once communicated, faithfully enforce, manage and update your business policies. Job Descriptions:-Include in your business policy a description of each position in the organization. Employees must understand their role and how they will interact with others within the organization. Each employee should understand how their work impacts others in the company. Make the reporting structures clear both

inside the department, between departments and company wide. Once employees understand their responsibilities, hold them responsible for their work performance. The AME Info website describes business policies as "the strategic link between the company's vision and its day-to-day operations." A well-written business policy allows for management guidance in business operations without constant intervention by management. Liability:-All employees, including managers, must understand the acceptable behavior boundaries at work. Entrepreneur magazine states that when employees misbehave on the job, the employer may be held liable for how that situation affects clients, individuals or other employees. A written business policy with clear behavioral expectations helps establish that you do not approval of and are not contributing to the employee's bad behavior. The lack of a written business policy can lead to litigation. Consequences for Violations:-Establish rules that address any violations of your business policy. Stating the consequences for violating business policy puts the employee on notice and also increases the employer's options for effectively dealing with behaviors contrary to policy. Decide what behaviors mandate an immediate dismissal and what behaviors will trigger a disciplinary approach, and clearly outline the steps involved in your disciplinary procedure. From policy, the employee understands the disciplinary process. When possible, improve the employee's future performance and the company's employee retention rate by helping the employee strengthen a flawed performance, rather than losing him as a valued

member of your team.

Limitations of Business Policy:

Business policy and its implementation is a long term process. It leads to changes in organization hierarchy or otherwise, which leads to resentment and dissatisfaction among employees. Some groups in the organization consider themselves responsible for profits and hence make unreasonable demands on the management. A few of the reasons are:Time Consuming: An analysis of internal and external environment, forecasting, interaction with officers and employees take considerable amount of time. This leads to limiting the strategic management`s success . Though the top management formulates the business plans, sometimes they fall in producing results due to the uncertainties in the implementation stage. 1. Very Expensive Process Planning is the big process so it is very time consuming and you can say money consuming.it may delay certain cases.the expenses on planning is directly proportional to the time spent on planning. if you plan to maintain your budget according the planning process, then result may vary in many cases. 2. Non availability of data it is major problems on the everywhere you can not find the real data which you want. planning loses its value in absence.and the second problem is when you can not effort too much money for sufficiant

information. 3. Inability of planner Planning is a forward looking process. if a planner has a tendency to follow rather than lead then he can not make a good plans. So you need a good planner. 4. Rigidity Planning involves the determination of a course of action in advance. It may lead to internal inflexibility and procedural rigidity. For example With the planning a business or organization may achieve certain goals. But this way planning may create rigidity or It locks business into certain goals. 5. Forcasting Planning has its limitation just as it can not forcast anything . Planning is the roadmap to achieving the certaqins goals. if the forcasts do not turn out to be true, the effectivness of planning is likely to be highly impaired. If authentic figures and information are not available, planning becomes unrealistic. 6. External Factors External factors are very difficult to predict. some external factors are War, goverment control and polocies, Market slump etc.these may make the implementation of plans very difficult. 7. Less Accurate Planning and prediction for future work may be a awful work for anyone. Business planning is done by fast, simple and accurate techniques. Inefficient techniques of data collection used by planners cause

accuracy problems. 8. Over Ambitious Projections Sometimes Business owners and professionals set over ambitious projections then reality. Outline a clear vision. Business planning should be based on real facts and it must show a realistic path to targeted goal. Make it real and alive. 9. Top Level Commitment Everyone know that commitment is essential to success. And true commitment at the top level is the major challenges in business planning process. It gives power to people to make solid decisions within the limitations of planning. The other limitations of the business policies includes: i) Implementation of the strategic plan should be preplanned and based on detailed action. Many times managements fail to monitor the implementation process. ii) Some managers are reluctant to formulate objectives for their departments or jobs. iii) Managers are sometimes afraid of failure, to achieve business plans. iv) Managers fail to integrate the plans of their departments or jobs with the organizational/company plans. v) Some managers do not have required skills to understand and analyze the external environment

vi) Forecasting often becomes misleading due to wrong premises. vii) Mangers due to their deficient and inherent nature, fail to plan efficiently. viii) The uncertainties in the environment, makes the business plan in efficient. ix) Inter-group conflicts: Inter group conflicts and inter-departmental conflicts are the other important limitations of business plan. These limitations are also due to,Lack of understanding about the objectives of the firm,Lack of constructive approach to objectives,Different values and personalities of individual managers,Competition for scarce resources. Built-in conflict between a young manager and an experienced manager.

Process/Steps of Business Policy.

The organisation is to develop policies that reduce or eliminate the threat that the problem or issue causes. But how is a policy made? Where do you start? The first step is conduct some research. 1. Read, if possible, policy documents created by other organisations on the same topic Whilst it may not be appropriate or fair to copy completely policies developed by other organisations, it may be quite reasonable to utilise them to develop an understanding of the topic, keywords and phrases and to obtain a picture of what is involved. For the inexperienced writer, it may be more than useful to gain an insight into how the policy document may be structured.

2. Research legislation on the Internet Changes in legislation can create a need to create or amend policy. For example, the introduction of the Good and Services Tax (GST) has impacted on all sport and recreation organisations. Recent changes to the laws regarding Fringe Benefits Tax have also had an effect. There is a wealth of information on the Internet about legislation, not just tax but any legislation can be downloaded in full or viewed on a desk top personal computer. 3. Conduct a meeting It is important to seek the assistance of others to analyse and define the problem. Unless the problem is defined well, it is difficult to find a solution. The meeting may be used to gather ideas from meeting participants about the nature of the issue or problem and how it might be solved. For instance, if the issue was about how to deal with misdemeanors of athletes while on way trips, then a meeting of coaches, managers and officials is likely to provide many suggestions. 4. Survey participants or a particular group of participants such as coaches Conducting a survey of participant satisfaction may be one possible way to gain information for the development of a policy on event organisation or customer services. The survey may ask participants to provide views on what they feel is really important. 5. Read minutes of management committee meetings (if allowed) Some organisations publish the minutes of their committee meetings or may allow them to be viewed

by non-committee people. Minutes of management committee meetings often document the most important issues that the organisation faces. They may contain some detail of discussion about how issues may be solved. Minutes of meetings may be less fallible than individuals. They do not change from year-to-year or have memory lapses. For this reason, minutes are a historical record of the organisation and may provide excellent information for policy development. 6. Read other documents such as annual reports or event reports Annual reports are another historical record of the organisation that may provide information about problems and issues that require policy development. Reports about events and programs that the organisation has conducted may provide opinions and views as to how they may be improved. 7. Read industry magazines and journals With the more and more sport and recreation journals going on-line, there is considerable information about all kinds of policy issues on the Internet. Often articles provide many helpful suggestions about important issues that require sport and recreation organisations to update their policies. Government agencies for sport and recreation are good place to start looking for these journals. 8. Seek legal advice The lack of policies, or policies that are inadequate can lead to legal action being taken against an organisation. Obtaining legal advice in the research phase and in the final approval of the policy may not be advisable but also necessary.

1)The organisation also needs to know and understand the purpose of policies and to recognise that the issue or problem can be effectively dealt with by the creation or modification of a policy. 2)Appoint a person or person(s) to co-ordinate the policy development process The policy development process may take place over several months. There needs to be someone or perhaps a committee who is "driving" the process. 3)Establish the policy development process The process requires research, consultation and policy writing tasks. The co-ordinator should develop a plan of what tasks need to be done, by whom and when. 4)Conduct research Read policy documents created by other organisations on the same topic Research legislation on the Internet Conduct a meeting with staff and other people with experience Survey participants or a particular group of participants such as coaches Read minutes of management committee meetings (if allowed) Read other documents such as annual reports or event reports Read industry magazines and journals Seek legal advice 5) Prepare a discussion paper The purpose of the discussion paper is to explain the

nature of the problem or issue, to summarise information yielded by research and to suggest a number of policy options. The discussion paper will be an important tool in the process of consultation. 6) Consultation - Stage 1 Circulating the discussion paper to all stakeholders (interested parties) is a first step in the consultation process. It may also be necessary to telephone stakeholders and send notices to remind stakeholders to read the discussion paper. It is then important to gain as much feedback from stakeholders as possible. This may be effected through workshops, open meetings, your web site and by meetings with individuals. Several months may be required to ensure that this stage of consultation is thorough. 7) Prepare a draft policy When there has been sufficient time for consultation processes to be completed the next step is to prepare a draft policy. 8) Consultation - Stage 2 When the draft policy is completed it should be circulated to key stakeholders, published in the organisation's newsletter and web site, discussed in further meetings and forums. At this stage it is necessary to seek help from stakeholders to fine tune the wording, clarify meaning and make adjustments to the policy before it is finalised. 9) Adoption When the co-ordinator of the policy development process is reasonably satisfied that all issues and concerns about the policy have been aired and dealt

with, it is time to finalise the policy. The final policy document needs to be formally adopted by the management of the organisation (management committee) with an appropriate record entered in to the minutes. 10) Communication Following formal adoption of the policy it should be communicated far and wide throughout the organisation and stakeholders. Training sessions may need to be conducted to ensure that organisation personnel are fully informed and able to implement the policy. If the policy is not well communicated it may fail. 11) Review and evaluate The implementation of the policy should be monitored. The policy may still require further adjustments and furthermore the reasons for the policies existence may change. A general practise is to set a date for the policy to be reviewed, this might be one a year or once in every three years. It just depends on the nature of the policy.

ELEMENTS/COMPONENTS OF BUSINESS POLICY.

Business policies are the rules and standards of how a business is supposed to operate. Usually composed of legal requirements, industry regulations and core values of the business, these written policies are the documents referred to when settling disputes or determining future growth. Because the business environment and laws can change over time, it is important for businesses to regularly analyze business policies in order to mitigate against

potential conflicts, lawsuits and financial loss. 1. POLICY FORMULATION: Policy formulation may begin at any level of management and may flow upwards or downwards along the levels of organization. Policy usually is formed by, the board of directors and senior management, who determine the main policies, being passed up the chain of command until someone takes responsibility for making a decision. 2.POLICY COMMUNICATION: Make sure Business Policy is written in such a way that everybody in the organisation can understand it and that is not confusing . That right; it need to be communicated to the whole organizatio , not just executives. Changes in the workplace have the potential to scare people. Company's policy that's going to have a significant effect on your employees, it's important that you mange the communication of your new ideas carefully. Allowing rumor and conjecture to develop can be bad for staff morale and your management's authority. You'll want to make sure you provide as much information as possible about your planned changes and be confident that your staff fully understands what you're trying to do. 1)Draw up a document detailing the finer points of your company's new policy. Print off enough of these to distribute among all of your employees. 2) Make a number of slides containing bullet points explaining the details of your new policy and its ramifications for your employees using presentation software. 3)

Why Do We Need Business Policies:

Many business people wonder Why Do We Need Business Policies because to them it is not necessary. But the important thing that we need to know is that there no place that functions well without rules and regulations. Policies may sometimes not favor the business people since they limit them from running the businesses the way they want. However, some policies are for protecting businesses. Therefore, entrepreneurs should not wonder Why Do We Need Business Policies. It is fundamentally important for organisations to develop policy. An organisation without policy is an organisation without control. If there were no formal documented policies, then organisation personnel at any level would have no guidance on how to make decisions. Imagine if you had a faulty product and you wished to return it to the shop from which it was purchased. If the shop has no policy on refunds, the result on whether you were able to obtain a refund might depend upon which person you spoke to, or whether the person you spoke to was having a bad day. In short, an absence of policy leads to inconsistency of decision making. From the point of view of the business of organsiation manager, policies provide really useful and necessary assistance. The manager cannot be everywhere all the time to ensure staff carry out their tasks correctly and responsibly. Instead the manager will develop and communicate policies, and ask staff to read and adhere to them. Therefore policies help to decrease the amount of direct supervision by the manager, and at the same time increase the efficiency of work processes. Not everyone understands why policies exist. Some people may view them as being bureaucratic and overbearing. In reality, however, the existence of policies provides many benefits provided they are written well and kept up to date.

(need to add..)

If you are charged with the responsibility to develop a policy, it will be important to consider that the policy you write will be constrained by policies, laws and regulations of parent organisations, umbrella organisations, regulatory bodies, community expectations, government policy and legislation. That is why wide consultation is a key to successful policy formulation.

BIBLIOGRAPHY: WHEELEN AND HUNGER: "STRATEGIC MANAGEMENT AND BUSINESS POLICY". WWW.GOOGLE.COM