Ten characteristics of effective business policy

Principles, norms, rules and standards brought together as guidelines for conducting a business is what business policy stand for. Such a business policy must lead the operators of business to make proper action and decision. To be effective as business policy it must have ten characteristics.

1. Broad but specific: Guidelines given in a business policy statement must stipulate what is required to be done, in broad manner but in specific words

2. Clear but concise: Issues surrounding business conduct must be explained with clarity but in nutshell without digressing or loading too many ideas that border on ambiguity

3. Uniform yet flexible:  Norms and principles need to be uniformly applied by the operators of business policy. Never the less, there must be a degree of flexibility in-built so that operators have the freedom to go up or down  in executing policy as circumstanced dictate

4. Simple yet comprehensive:  The business policy statement must be written in simple language using straightforward idiom without sacrificing sufficient details

5. Stable yet adaptable:  One thing that makes business policy unique and sacrosanct is the stable manner it is enshrined and implemented. Policy remains static but practice differs. This we call as adaptability factor in a policy statement. Once again it is the circumstances that shape adaptability which cannot be forecast or predicted at the time of penning business policy document

6. Directional:  Policy gives the operators the direction where to go and how to go. It prods them how to proceed under “if and when” scenario

7. Dependable:   Operators must get an impression and confidence too while implementing business policy. More so, in planning & control of business where operators If they feel they cannot depend on the policy to guide them have to run around like headless chicken

8. Internal consistency: This requirement is a must for any document whether it is policy statement or accountancy reports. For example, in a discount policy, operators in production and marketing departments are advised how it will be consistently applied. Otherwise there could be clash between these two departments

9.  Multiuse: Business policy is not restricted to one department or single activity. It entails every activity that is done in the conduct of business without brooking delay, negligence and postponement on the part of anyone in the firm

10. Delegates authority: A business policy works well only when it delegates authority to heads of departments to do what is required of them. Such delegation must be hierarchical with allowable limits and referrals when exceeding limits.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist