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C o n f i d e n t i a l

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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

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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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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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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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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 thecondition 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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Corporate Culture

Corporate cultureis 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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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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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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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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SM_Unit 6_PPT