Program : MBA

Semester : IV
Subject Code : MB0052
Subject Name : Strategic Management & Business policy
Unit number :6
Unit Title : Business Policies
Lecture Number :6
Lecture Title : Business Policies

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 Unit-6 Business Policies

Business Policies

Objectives:

• To understand business policy

• To understand the need of business policy

• To study the types of business policy

• To discuss importance of business policy statements

• To study the role of corporate culture in implementing strategy

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 Unit-6 Business Policies

Lecture Outline

• Introduction & Features of Business Policy

• Importance of Business Policy
• Definitions of Important Terms
• Types of Business Policies
• Business Policy Statements
• Corporate Culture
• Summary
• Check Your Learning
• Activity

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 Unit-6 Business Policies

Introduction

Business policies are the directions or paths taken by an organisation

to manage its activities.

Features of business policy are:

• It should be specific and clear
• It should be uniform and appropriate
• It should be comprehensive and flexible
• It should be stable and in a written form

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Importance of Business Policy

The importance of business policy are:

• Promote coordination throughout the organisation

• Help to make quick decisions
• Control the planned activities effectively
• Help in decentralising and reorganising roles and responsibilities

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Definitions of Important Terms

Policy: It is a set of actions laid down by the senior management to

achieve business objectives.

Procedure: It involves a series of steps which have to be followed in

order to achieve a specific goal.

Process: Business activities are considered as process.

Programmes: It is a set of principles laid down to accomplish a

specific goal.

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 Unit-6 Business Policies

Types of Business Policies

The various types of business policy are:

• General or specific policy

• Written or implied policies

• Originated, imposed and appealed policies

• Organisational and functional policies

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Business Policy Statements

Business policy statements are formal certificates, displaying the

condition of business in a condensed form.

Steps to develop policy statements are:

• Gathering information and customising into a policy
• Using simple words & covering all the queries
• Selecting a pilot group to review policy legally
• Updating the policy regularly

Different parts of policy statement are:

• General statement of intent
• Organisation & arrangement

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 Unit-6 Business Policies

Corporate Culture

Corporate culture is a well defined culture explaining values, attitudes and

standards followed by organisational members.

Features:

• Innovation and risk taking

• Attention to detail & Outcome orientation
• People orientation & Team orientation
• Aggressiveness & stability

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Corporate Culture contd..

Role of corporate culture in strategy implementation:

• Helps the smooth implementation of strategy

• Amends values
• Motivates employees to achieve oragisational objectives
• Encourages informality
• Tolerates mistakes
• Acts as community cultural centers

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Corporate Culture contd..

Hindrances due to corporate culture:

• Cultural difference
• Loss of jobs
• Existence of subcultures
• Communication breakdown

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 Unit-6 Business Policies

Summary

• Business policies are very important for an organisation in terms of

its growth, success and achievement determined goals.
• Business policy statements should be formulated for successful
functioning of the organisation.
• Corporate culture and its role in governing the organisation has to be
given prominence while making business policies.

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 Unit-6 Business Policies

Check Your Learning

1. What are the features of business policy?

Ans. Specific, stable, uniform, appropriate, comprehensive, flexible and
should be in a written form.
2. State whether true or false:
i) Business policies are not involved in the success of an organisation.
Ans. False – Business policies plays very important role in success of the
organisation.
3. What are the parts of policy statement?
Ans. General intent statement, organisation and arrangement.

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 Unit-6 Business Policies

Activity

Suppose in a company, you belong to a team wherein your team and

senior management are involved in creating policy statements.
Suggest measures you would take while implementing a policy
statement.

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