Business policies

Some companies don’t succeed not because they don’t have good strategic plans but because they fail to implement those plans. One of the tools used in implementing a strategy are right business policies. Without good policies to implement a strategic plan, a good strategy may fail to see the light of day.
A policy is defined as a broad guideline for decision-making that links the formulation of strategy with its implementation.
Policies are used by companies to make sure that employees throughout the organisation make decisions and take actions that support the organisation’s mission, vision, objectives and strategies.
Business policies can simply be seen as the instructions that the organisation lays down to manage its activities. A policy provides a range within which the subordinates can take decisions in an organisation.

This enables the lower level management to resolve issues and take decisions without having to consult top management always.
Policies define limits within which decisions are made. Good policies enable the proper acquisition and distribution of limited resources to needy areas in order to meet organisational goals.
Business policies also help in the analysis and definition of roles and responsibilities of top management and the decisions they make which have a long term effect on the organisation. Business policies therefore deal with major issues that have an effect on the success of an organisation.
Policies play a very critical role in the running of an organisation. A company will operate consistently, effectively and efficiently when dealing with both internal and external issues if it has well established policies.

Business policies should be set up before the company starts operating, even before recruiting its first employees so that activities of a repetitive nature can be easily administered. Without policies on the ground, an organisation will struggle to achieve organisational objectives.
Policies are articulated by management so that they facilitate thinking and action in decision making both at the top and lower levels. It ensures that activities are performed in a desired way.
Business policies are very important because of the following reasons:

l Policies help in coordinating all activities in the organisation thereby ensuring uniformity of action throughout the organisation. If well crafted, policies will encourage cooperation and promote initiativeness within the organisation.
l Subordinates will be able to take prompt action and quick decisions with the help of policies because they give guidelines and limits within which subordinates can make decisions. Subordinates will be able to take decisions confidently without having to consult their immediate superiors every time because a good policy should give guidance on what action to follow in a particular situation.

l Policies save time in that when they are formulated those involved in their formulation try to think of frequent problems and then provide ways to resolve those issues.
l Policies are set to help implement certain strategies in the organisation which are intended to meet organisational objectives. In this way policies will provide a basis for assessing performance because there will be uniformity in implementation of critical activities.

Policies ensure that all the activities of the organisation are synchronised with the objectives of the organisation. There will be minimal divergence from the planned course of action. Management usually tends to deviate from the objective if policies are not well defined. To ensure operational efficiency of an organisation there is a great need to have policies.
l Policies help to identify and define executive roles and responsibilities. This makes it much easier for senior management to delegate authority to subordinates who will have policies at their disposal to help them run the business without frequently consulting senior executives before making decisions.

The policies will provide appropriate guidelines to the subordinates to help them in determining the suitable actions which are within the limits of the stated policies.

l Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy (ACCA P3), advanced performance management (P5) and entrepreneurship.
He is the Managing Consultant of Shekina Consulting (Pty) Ltd and provides advisory and guidance on leadership, strategy and execution, corporate governance, preparation of business plans, tender documents and on how to build and sustain high-performing organisations.
For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com, call on +266 58881062 or WhatsApp +266 62110062 .