Chapter: Business Policy

Contents:

1. What is policy?
Policy formulation is a responsibility of top level management.
-Policy is called as a rules, guidelines, and principles of decisions (strategy)
-Policy is not a decisions but it is a rules of decision.
-Policy is the objectives, modes of thought and body of principles underlying the
activities of an org.

2. What is business policy?

Business policy= Business+ Policy- Business policy refers the policy implants in the
business organizations to achieve their designed goals.
Business policy refers the scopes and spheres within which decisions can be taken by
the subordinate in an organization. It permits the lower level management to deal
with problems and issues without consulting top level management every time for
decisions.
3. Feature of business policy
a. Specific
b. Clear
c. Reliable/ Uniform
d. Appropriate
e. Simple
f. Inclusive/ Comprehensive
g. Flexible ( it can adopted or change within change of circumstances)
h. Stable ( it should be fixed for a specific period)
4. Objectives of business policy
Business policy formulated for attaining specific objectives:
a) Efficiency and effectiveness in performance of org.
b) Equal provision of services and treatment of customers.
c) Better management and provision of better quality services.
d) The utilization and application of resources
e) The formulation mission statement
f) The establishment of vision of the org.

5. Difference between policy and strategy

Policy- is a guidelines, rules, and principles
Strategy- is a decision, course of action, activities for achieving goals.
6. Importance of business policy
a. Learning the course
b. Understanding the business environment
c. Understanding the organization (SONALI BANK AND ISLAMIC BANK)
d. Personal development

7. Purposes of business policy

Knowledge
Skill
Attitude
Generalization of problem-solving
8. Sources of policy
a) Originated source- policy generally formulated by top level management and
it will submit to top to down.
b) Appealed source- When, any operational level manager faced any crisis of
policy (guidelines) for solving problems, they may appeal to top level
management for specific policy (Cyber security or digital security act).
c) Implied source- When a general policy reflect any observation for specific
service or operation. If this operation has included other many sub-
operations that are not mentioned in the present policy.
d) Externally Imposed source- Policy or guidelines imposed by the stakeholders
(governance). UGC rules for academic operation of universities at COVID 19.
9. What makes a good policy?
a. Purpose statement
b. Specification
c. Implementation section
d. Effective date
e. Applicability and scope statement
f. Background
g. Definitions.
10. Types of policies

Rules

Figure-1 Steiner’s Pyramid of Business Policy

Levels of pyramid:
Down layer- Level-1: Rules (Delivery of paychecks, loitering around, plant,
security, smoking, etc)
Level-2: Procedure (Handling income orders, servicing customer, complaints,
shipping)
Level-3: Minor Policy (Merchandise, display, plant layout, maintenance,
absenteeism)
Level-4: Functional policy (marketing, finance, production, R&D,)
Level-5: Secondary Policy (selecting of geographical area, major customer
group)
Level-6 (TOP): Major Policy (Business lines, code of conducts)

11. What are the policy implementation task/ steps

Implementation of policy means putting policy into action.
Steps you should complete:
a) Set up a committee/ working group (Assignment people for implement this
rules)
b) Consult stakeholders
c) Revised draft policy (if necessary), Circulate
d) Have policies reviewed for legal accuracy
e) If board of directors or advisory board exists, do a board vote (Top level
authority approval).
f) Set policy implementation date.
g) Monitor and review.
h) Consider creating and distributing a policy manual.