15 Important features of good business policies

15 Important Features of good business policies

The following are some of the important and essential features of good business policy.

Important features of Good Business policy

Image: Important features of Good Business policy

1. Policies act as guidelines to managers to resolve recurring problems, so as to attain predetermined objectives.

2. Policies help the management to delegate duties to subordinates with full confidence that these duties will be carried out strictly as per the policy decisions.

3. The effective policies help the executives to know how others will act and this will help them to have better coordination in achieving the well formulated objectives.

4. Business policies are never static and are subject to alternation or modification depending upon the business environment.

5. Policies should be properly implemented by trained managers and executives in right time so as to attain the results.

6. Clear-cut policies help the organization to have consistency in execution process and also performance of the executives.

7. Policies deal with the nature and process of choice about the future of the business activities. These policies are to be handled by the top level and middle level executives.

8. Policies are not a set of rigid of clear-cut rules and regulations instead they are living precepts guiding an enterprise to continue within the set pattern of behavior.

9. They are overall guides determining the direction of managerial action subject to policy restrictions.

10. Policies further cover the wide field of product mix and market mix guiding the enterprise as to how much and what type of products to be manufactured and its channels of distribution.

11. Policies provide guidelines for subordinates and are framed to suit a specific situation.

12. Policies are general statement of principles for achieving predetermined goals through guiding actions by executives at different levels.

13. Policies are multipurpose in nature. Their functions include:

  1. avoiding confusion.
  2. providing guidelines at all levels.
  3. enabling the enterprise to run smoothly without any hindrance,
  4. helping management to achieve maximum utilization of human resources and material resources.

14. Policies decide the course of action for all other functional areas of management and they act as formal agreement to be followed strictly at all levels in the organization before taking any decision.

15. Business Policies govern the planning, decision making, coordination, direction, control and other managerial functions.