An Effective Business Policy Must Have These Important Features

Business policy is a concise description of the policies and procedures designed to guide a business organization in carrying out its activities with respect to business. Business policy is a complex document that deals with a wide range of topics like various types of corporate law, rules applicable in commercial activities, taxation, mergers and acquisitions, employee relations, acquisitions for growth and employees, financial matters, regulatory instruments, property, labour practices, etc. A business policy has the broadest meaning and application in all the fields of business activities. The policies expressed or implemented by an organization in accordance with the law may have far reaching effects not only on the conduct of business but also on the operations at a local as well as national level. Therefore, business policies are a must for every organization working towards attaining defined objective like growth, development and sustained financial performance.

Business policies contain detailed provisions for: identifying objectives, organizing management procedures, maintaining adequate supplies of capital goods and resources, regulating trade, providing jobs, acquiring and providing supplies of energy, working methods and systems, providing employment, and preventing competitive disadvantages. Apart from these, business policies may include rules applicable to company officers and managers, including delegation of power, authority, supervision and delegation of duties and functions, management policies, and internal policies. For the purpose of achieving desired objectives, all business policies have certain formalities like establishment of goals and objectives, selection of appropriate persons to deal with particular problems, formulation of plans, formulation of action plans and financial management. The policies also define the various procedures to be used for achieving the objectives. It also indicates the procedures for achieving objectives, and the modes of implementation to ensure proper execution.

The main features that make any business policy become very relevant and important for organizations are: it must provide guidelines to perform various functions and tasks; it should lay down rules and regulations necessary for organizations to function properly and smoothly; and it should lay down principles and values that an organization should work by. If these basic features are not present in any policy, the policy will have no practical value and will not become relevant and important for organizations. A business policy can be adopted as a rule or policy or it can be a part of a larger policy. Policies implemented as a whole tend to become more effective and become mandatory. However, policies within a group of policies can become more flexible and open to customization.