Business policy is an analysis of the major issues and functions affecting the operations of a company, the major issues affecting organizational growth and the major decisions affecting the company in the long run. The importance of business policy is growing day by day as it has become the need of the hour. The importance of business policy cannot be understood without an understanding of how policies affect the companies. A policy makes the strategy for the organization. There are several factors which are considered while developing a business policy such as the goals and objectives to which the organization is going to contribute, and the type of business to which it is related, and finally the resources available for the activities related to the business.
There are several examples of business policies, which are very important in organizations. One of these policies is the organizational income statement. The organizational income statement provides the details about the income produced by the organization within a definite period of time and provides the direction for the future of the company. Another example is the performance of the subordinates or team leaders. Most often the subordinate is more or less responsible for the performance of his leader or team leader, and hence the responsibility lies with the latter in most of the cases. For this reason, the performance of the subordinates are also examined in detail in the business policy.
The above examples clearly explain the meaning of business policies. It is the overall task of the company to develop and implement business policies for the development of the organization. In addition to this there are various other functions of a company which can be effectively executed only by having proper organizational policies. These policies are to be developed and implemented by the top management of the company, by functioning on the instructions given by the Board of Directors or other upper level management of the company. Therefore business policies are very much necessary for the development of an organization.