Need- purpose- Policies establish indirect control over independent action, Promote
uniform handling of similar activities, Ensure quicker decisions, Help to maintain
institutionally the basic aspects of organizational behavior, Reduce misunderstanding
and confusion in day to day or repetitive decisions, Counteract resistance to rejection of
certain strategies by the organization members, Offer predominant answers to routine
problems Offer managers a maximum for avoiding hasty and ill-conceived decisions
Exhibit enviable ethical business practices
Different functional areas of policies
A. Personal policies
The development of competent and motivated employees
Employment facilities- package, compensation, regulations
Administration policies- recruitment, selection, orientation, career development
Feedback policies- discipline, control and valuation
Human capital- performance evaluation, training and development
Human resource development
Welfare- pubic relation, protection, care, feelings
Reducing turnover
Working environment
Future growth
Work study
Time and motion study
B. Financial policies
Growth in resources
Growth in earnings
Higher dividends
High return on invested capsule
Bigger profit margins
Attractive economic value added (EVA)- cost advantage- economies and diseconomies
of scale, learning and experience curve effects, cost of key resource inputs, link,
sharing, integration, time, first movers, outsourcing)
Strong bond and Credit rating
Market value added (MVA)
Bigger cash flows
Recognition as a blue chip company
Substantial rising in stock price
More diversified revenue base.
C. Marketing policies
Marketing takes care of product, place, price and promotion and service p that look into
package, passion, physical evidence, process & people.
Production policies/ product operation management policies must be coordinated with
marketing policies for the firm to succeed. Careful integration with financial components
such as capital budgeting and investments prove much better.
Operation decision areas are:
Low cost provider of goods and services,
Quality provider, Stress customer service,
Rapid and frequent introduction of policies,
Strive for absolute growth,
Seek vertical integration,
Maintain revenue capacity
Marketing in its simplest form is process of winning the customers for its products
and services. Research and development identifies market in terms of size,
characteristics of customers in terms of lifestyle, income, rate of growth and many
others. It promises getting and keeping with customers for attracting the new customers,
building customers loyalty ,brand management, measuring customer satisfaction,