Business Policy

Business policy establishes the parameters or domains in which employees of a business may make choices. It
enables lower level management to address concerns and problems without constantly engaging high level
management.

Business policies are the rules that a company creates to direct its operations. They outline the parameters that
choices must adhere to. The acquisition of resources necessary to accomplish organisational objectives is
another topic covered by business policy. Business policy is the study of top-level management’s duties and
obligations, the key problems influencing organisational performance, and the long-term choices that will have
an impact on the firm.

Nature of Business Policy

A business policy must be specific, clear, uniform, appropriate, simple, inclusive and stable.

 Specific: If a policy is not specific, implementation becomes inconsistent and unreliable. For example,
“Employees may not park in the guest parking lot.”
 Clear: A business policy has no ambiguity. It is written in easy-to-understand language. For example,
“Immediate release of employment is the result of company drivers having two points on their driving
record.”
 Uniform: The policy should be a standard that everyone can follow from the top management to the plant
workers. For example, “Anyone entering the construction site must have a protective hat, shoes and glasses
on at all times.”
 Appropriate: Business policies should be relevant to organizational goals and needs. For example,
“Discrimination and sexual harassment accusations are investigated with disciplinary action applicable
based on investigation findings.”
 Simple: Policy must be understood by all that it applies to within the business. For example, “No smoking
within 100 feet of welding operations designated by the painted yellow floor lines.”
 Inclusive: A business policy isn’t something relevant to a small group in the business, it must cover the
wide scope and include everyone. For example, “Business attire is required at all times in the office or
meeting with clients.”
 Stable: This refers to implementation. If an incident arises, the policy should be stable such that there is no
indecisiveness about following it. For example, “Cell phones are not permitted in the conference room.”
A business policy can be flexible in changing parameters in the business, the industry or the marketplace.
Using these features as a guide to creating any business policy helps business leaders maintain a congruent
structure in the company. Being nimble in business and adjusting to an employee, consumer and market
feedback is what keeps great companies successful.
Importance of Business Policy

Business rules matter and have an impact on a variety of factors, including employee happiness, legal
responsibilities, and a company’s public image. Policies ensure that everyone is in agreement with what is
expected of them. A firm may have policies that apply to many facets of the business. There might be anti-
discrimination, safety, and human resources hiring rules. The dress code, lunchtimes, vacation days, and
holidays of workers may also be covered by policies. Greeting customers, managing phone calls, and details of
product delivery are among the other regulations that are pertinent to the customer experience.

These laws together foster a productive workplace. Workers who feel protected from harm or harassment at
work are happier and more effective. Every company owner has to take into account this crucial factor of
productivity. Employees are protected against bias when they are given clear instructions on dress code,
scheduling, and time off requests. It establishes the framework for collaboration and the tone of the working
environment. Working as a team, or at the very least taking into account other team members, is required even
for scheduling.

For consistent operations and the ability to fix possible issues, policies on operations and the customer
experience are crucial. Managers may focus on that part of the process to produce better returns if the policy is
to follow up after a product is delivered, but that doesn’t happen.

1. Establishing a Corporate Culture

Expectations are established when policies are spelled out in a written plan. As a result, a corporate culture of
what to do, what not to do, and how to behave is beginning to emerge. Employees in organisations with clearly
established rules are better equipped to accomplish their jobs and tend to deviate from the “script” less often
than employees in organisations without such regulations.

Of course, policies are useless if management does not carry them out. Some regulations—like those
pertaining to safety and discrimination—have legal repercussions and have a direct impact on output and
consumer satisfaction. If a management doesn’t insist that staff members follow the rule requiring a six-month
evaluation after acquisition, the firm may suffer and it will be more difficult for the manager to implement the
rule.

For instance, Google has a corporate culture that is very employee-driven, allowing parents to adjust schedules
around child care hours, allowing dog owners to bring Fido to work, and allowing employees to spend some of
their time working on personal projects instead of just the tasks that were assigned to them. The organisation
has laid out a lot of flexibility with very specific guidelines so that staff are aware of the limits. Because of this
approach, Google has developed into a desirable place to work and a technological leader on a worldwide
scale.

2. Employee Business Policy Training

Business leaders must train employees on business policy. Every employee should receive an employee
handbook outlining all policies in one central document. Updates should be disseminated in writing as
amendments to the handbook. Should the handbook become outdated, it should be revised so the newly
implemented changes are integrated into the employee handbook.
Employers should also keep the handbook accessible via the cloud or online portals so employees are able to
access it if there is a question. Additionally, by having it online, there is no excuse for any employee to say
they didn’t know.

But this isn’t enough. Employers should hold training sessions to review key policies. Many businesses are
holding inclusivity training, helping employees better understand what type of language or actions could be
perceived as harassment or discrimination. Don’t assume employees know right from wrong. Train them to
understand it. This helps keep the business and the employee out of legal trouble.

The same is true when it comes to operations. If you need employees to follow a specific script on the phone,
the review it with them and role play. This holds true for personal interactions as well. Don’t just review sales
processes. Take the time to review potential customer service issues so that employees are better trained to
address potential problems during the day. The more an employee can deal with customer problems, the less is
redirected up the chain of command to leadership. That frees up business leaders to focus on growth and
development strategies.

3. Violations of Business Policy

When running a business, it’s important to stick to the rules. Even something as simple as “every off-site
worker’s shirt will be tucked in” needs to be managed. As we’ve already talked about, you can’t choose when
to put a policy into place. This makes the employees confused and angry because they don’t know which boss
will show up on any given day.

If a business policy is put in place and managed consistently, then employees who break it need to be held
responsible. Management should be able to follow a process or set of rules that is right for the action. This lets
you keep track of what’s going on with your employees and figure out if anyone needs to be let go.

For example, if the policy says that all men must wear a tie and all women must wear pantyhose, the employee
might get a verbal warning and then a note in their file if they break the rule. If you broke the rules more than
once, you could be put on probation or even get suspended. On the other hand, if the policy is that hard hats
must be worn at all times on site, then breaking the rule is a safety issue that needs to be dealt with right away,
even if it means writing the person up and taking them off the site.

When it comes to legal issues like harassment and discrimination, policies should require that legal experts,
law enforcement, and an investigation be used to find the truth. People can be separated and job duties can be
changed while an investigation is going on, but firing is rarely a good idea before an investigation is over.

4. Importance of Your Business Policy

The policies and methods of implementation you choose as a business leader to adopt will directly affect how
your employees perform. Some business leaders don’t want to have everything in a rigid format while others
like to implement specific processes at every stage of the company operational process. This is a business
owner’s decision.
 Keep in mind that some policies and procedures are designed to prevent legal issues while others are designed
to build a company image, experience and culture. A business leader should be aware of how policies are
affecting his team. If a dress code is becoming a problem for the majority of employees, a new policy such as a
casual Friday policy could change the office dynamic in a positive direction. If no cell phone policy exists but
employees are spending hours on personal calls, texts and social media then a new policy with training should
be implemented and managed to improve productivity. Managers should regularly evaluate company policies
and their effectiveness to the business’ success.

5. Building Business Policies

Usually, a business owner or his first team of leaders will write an employee handbook and a business plan
with a mission and vision as the first step in making policies. The team needs to think about what kinds of
standard policies are set by federal and state laws. Some policies that are regulated are those about privacy,
rules against discrimination, overtime and holiday pay, and even programmes for health care.

Most businesses will find that these regulated rules are the same, though some companies have chosen to go
above and beyond what is required. Then there are the policies for business and culture. These include the
image that the company’s leaders want it to have and the culture that they are trying to build inside the
company. A business policy could say anything, from how to dress to whether or not you can smoke at work.

Once the main policies are set, business leaders need to keep an eye on how employees and customers react to
them. If a policy is hurting the overall productivity of the company, feedback should be asked for and changes
should be thought about. This is what every business leader must do to be successful. Businesses are living
things that change all the time. Being too set in your ways can hurt your performance and get you bad results.
Sometimes, the first step in fixing problems with production is to fix problems with business policies.

OBJECTIVES OF BUSINESS POLICY

The objectives of business policy generally revolve around guiding the organization towards its long-term
goals and ensuring its sustained success in a competitive environment. Here are some common objectives:

1. Strategic Direction: Business policy aims to set a clear strategic direction for the organization. This involves
defining the mission, vision, and values of the company, as well as establishing long-term goals and
objectives.
2. Profit Maximization: One of the primary objectives of business policy is to maximize profits for the
stakeholders of the company. This involves making strategic decisions that optimize revenue generation, cost
management, and resource allocation.
3. Market Leadership: Business policy often seeks to establish the organization as a leader in its industry or
market segment. This may involve strategies such as innovation, differentiation, and market expansion.
4. Sustainable Growth: Business policy aims to facilitate sustainable growth for the organization, ensuring that
it can continue to thrive over the long term. This involves balancing short-term profitability with long-term
viability, as well as considering the impact of business activities on society and the environment.
5. Risk Management: Business policy involves identifying and mitigating risks that could potentially impact the
organization's performance or reputation. This includes risks related to market volatility, regulatory changes,
competitive threats, and operational issues.
6. Stakeholder Satisfaction: Business policy aims to satisfy the needs and expectations of various stakeholders,
including customers, employees, investors, suppliers, and the community. This involves maintaining positive
relationships with stakeholders and addressing their concerns effectively.
7. Adaptation to Change: In today's dynamic business environment, adaptability is crucial for success. Business
policy aims to enable the organization to adapt to changes in the market, technology, regulations, and other
external factors effectively.
8. Resource Utilization: Efficient utilization of resources is another objective of business policy. This includes
optimizing the use of financial capital, human capital, physical assets, and other resources to achieve the
organization's goals.
9. Ethical Conduct: Business policy often includes guidelines for ethical conduct and corporate responsibility.
This involves acting with integrity, honesty, and fairness in all business dealings, as well as considering the
broader societal impact of the organization's actions.
10. Long-Term Value Creation: Ultimately, the overarching objective of business policy is to create long-term
value for the organization and its stakeholders. This involves making strategic decisions that contribute to
sustained growth, profitability, and prosperity.

Business Purpose:

The business purpose is the fundamental reason for the existence of a company. It goes beyond just making
profits and encompasses the broader impact or contribution that the organization seeks to make to society. The
purpose defines the company's core values, guiding principles, and its role in the world. It reflects the
company's commitment to fulfilling a specific need or addressing a particular problem in the marketplace or
society at large.

Mission Statement:

The mission statement is a concise declaration of the organization's purpose and its primary objectives. It
articulates what the company does, who it serves, and how it serves them. A well-crafted mission statement
communicates the company's core values, goals, and priorities to both internal and external stakeholders. It
provides a sense of direction and serves as a guiding framework for decision-making and strategic planning. A
mission statement should be clear, inspiring, and reflective of the company's unique identity and aspirations.

Objectives:

Objectives are specific, measurable targets or outcomes that the organization aims to achieve within a defined
timeframe. Unlike the mission statement, which outlines the broader purpose and direction of the company,
objectives are concrete and actionable goals that support the mission. Objectives can encompass various
aspects of the business, including financial performance, market share, customer satisfaction, product quality,
employee development, and social responsibility. They provide a roadmap for success and help align the
efforts of individuals and teams towards common goals. Objectives should be SMART (Specific, Measurable,
Achievable, Relevant, Time-bound) to ensure clarity and effectiveness in driving progress.
Business Policy

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
the long-run.

Features of Business Policy:

An effective business policy must have following features-

1. Specific & Definite:

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

2. Clear:

Policy must be unambiguous. It should avoid the use of jargon 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 be appropriate to the present organizational goal.

5. Simple:

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

6. Inclusive/Comprehensive:

In order to have a wide scope, a policy must be comprehensive.

7. Flexible:

Policy should be flexible in operation/application. This does not imply that a policy should be altered always,
but it should be wide in scope so as to ensure that the line managers use them in repetitive/routine scenarios.

8. Stable:

Policy should be stable else it will lead to indecisiveness and uncertainty in minds of those who look into it for
guidance.

Scopes of Business Policy:

 It should cover all the aspects of business.

 It includes the functions and responsibility of senior employees.
 Deal with determination of future course of action.
 Involves a choice of purpose and defining the needs.
 Include the resources by the help of which organization can achieve its goal.
 Importance of a Business Policy:

Policies are the key for success of the business. Policies offer great advantages to the management if they are
stated with clarity. It raises the confidence of the line managers. They make the decisions within a given
boundary. The managers act without the need for consulting the senior managers every time which minimizes
the need for close supervision. It also builds the confidence of the managers.

The importance of business policies are discussed as follows:

1. Control:

Policy facilitates effective control on the working of the organization. It indirectly controls the managers at
different levels without directly interfering in their routine working.

2. Effective Communication:

Generally policies are written and well drafted statements. Hence there is not a remote chance of confusion or
miscommunication. By setting policies the management ensures that decisions made will be consistent and in
the best interest of the organization. Clearly laid down policies try to eliminate personal hunch and biasness.
3. Clarity:

Policies clarify the viewpoint of the management for the purpose of running a particular activity / activities.

4. Motivation:

Policy enables the line managers to be self reliant. They take the decision on their own in the confined border
of the policy. This raises their confidence and motivates them. A well drafted policy provides a pattern within
which delegation of authority is possible.

5. Policy Review:

Regular review of policy is must to see to it that the existing policies are relevant in the given situation. If
required policy may be modified or altered depending on the business environment. Review of policy at
regular intervals provides a method of anticipating future conditions and situations and helps to resolve how to
deal with them.

6. Economical and Efficient:

Policy enables the management to carry out its operations effectively and efficiently. It enhances the working
of the organization.

7. Coordination of Efforts:

Policies ensure coordination of efforts and activities at different levels in the organization. Activities and
duties are assigned in such a way that all activities in the organization are integrated effectively. Policy
coordinates with individual efforts.

8. High Morale:

A well crafted policy can raise the overall morale of an enterprise. Policy enables the managers to understand
the intention of the management.
Purpose of Business policy:

To integrate the knowledge gained in various functional areas of management

To adopt a generalist approach to problem-solving.

To understand the complex inter-linkages operating within an organization through the use of systems
approach to decision making and relating them to changes taking place in the external environment.

What is Strategic Intent?

Strategic intent is the guiding principle of a business’s long-term strategy. It defines the company’s objectives
and how it plans to achieve them. Without a clear strategic plan, a business is at risk of drifting and eventually
failing.

In short, Strategic Intent is a term that refers to the long-term goals of an organization. It’s a key factor in
determining where an organization should focus its efforts and what type of strategies it should pursue.

There are a few different reasons why businesses might need to develop strategic intent. Perhaps the company
is experiencing stagnant growth or is feeling challenged by new competitors. In any case, developing a clear
understanding of what your organization wants to achieve will help you make informed decisions about your
strategy and future course of action.

Creating a strategic intent document can be helpful in crystallizing these thoughts. It can also serve as a guide
for measuring progress and making changes as needed.

There are many factors to consider when developing a strategic intent, but some key considerations include:
customer needs, competitive landscape, resources available, and company culture.
Once you have determined what you want to achieve, it’s important to track progress and make adjustments as
necessary. By staying focused on your long-term goals, you’ll be able to maintain competitiveness and
maximize your potential for success.

The Hierarchy of Strategic Intent

Strategic intent is the overarching goal or purpose of a business. It is the guiding principle that underlies
everything a business does, from its day-to-day operations to its long-term vision.

Hierarchy of Strategic Intent includes 5 types of elements: Vision, Mission, Goals, Objectives, and Action
Plans.

Vision: A clear and compelling statement of the purpose or goal of a business, its fundamental nature.

Mission: The function or purpose of the business as clearly articulated to employees and customers; is a truth-
based narrative that explains what the company does, why it does it, and how it does it.

Goals: Set objectives for the business operation based on your vision and mission; be specific in what you
want to accomplish (“become a $100 million company by 2025”).

Objectives: Specific actions taken by a business to achieve goals; must be measurable (e.g., make a sale)

Action Plans: Action plans are set within this hierarchical structure, outlining what needs to be achieved (at
what time) in order to achieve the objective (e.g., marketing campaign, new sales initiative). The Action Plan
should be broken down into sub-objectives and sub-sub-objectives for each of the goals and objectives.

Importance of Strategic Intent

Strategic intent is an important concept for businesses because it helps them understand what they are trying to
achieve. It gives them a clear vision for the future and guides their actions.

There are several reasons why having a strategic intent is important.

 First, it helps businesses focus on their long-term goals. They can be more creative in developing ways
to achieve these goals, and they will be more likely to find successful strategies if they have a clear
picture of what they want to achieve.
  Second, having a strategic intent allows businesses to make decisions with clarity and certainty. They
know what they are trying to achieve, and they can plan accordingly. This allows them to take action
quickly and efficiently, which is essential in today’s fast-paced world.
 Finally, having a strategic intent enables businesses to set high expectations for themselves and their
employees. They know what they need to do in order to reach their goals, and this sets the stage for
success.
An organization without strategic intent is direction less and businesses can easily get lost and drift aimless