Business policies are guidelines that define limits for decisions and help organizations achieve goals. They cover all business aspects, responsibilities of senior employees, determining future actions, defining needs, and allocating resources. Policies are important for success by facilitating control, communication, clarity, motivation, review, efficiency, coordination, morale, and delegation of authority. Strategic management evolved from informal goals set by entrepreneurs to formal goals and hierarchies as businesses grew in size between World Wars I and the Great Depression. Strategic thinking and decision making are interconnected, with strategic thinkers assessing consequences before making informed decisions aligned with overall strategy.

1. BUSINESS POLICY

2. Business policies are the guidelines developed by an
organization to govern its actions. They define the limits
within which decisions must be made. Business policy also
deals with acquisition of resources with which
organizational goals can be achieved. Business policy is
the study of the roles and responsibilities of top level
management, the significant issues affecting organizational
success and the decisions affecting organization in the
long-run.

3. Scopes of Business Policy:
1.It should cover all the aspects of business.
2.It includes the functions and responsibility of senior
employees.
3.Deal with determination of future course of action.
4.Involves a choice of purpose and defining the needs.
5.Include the resources by the help of which organization
can achieve its goal.

4. Importance of a Business Policy:
Policies are the key for success of the business. Policies
offer great advantages to the management if they are
stated with clarity. It raises the confidence of the line
managers. They make the decisions within a given
boundary. The managers act without the need for
consulting the senior managers every time which
minimizes the need for close supervision. It also builds the
confidence of the managers. The importance of business
policies are discussed as follows:

5. 1. Control:
Policy facilitates effective control on the working of the
organization. It indirectly controls the managers at different
levels without directly interfering in their routine working.
2. Effective Communication:
Generally policies are written and well drafted statements.
Hence there is not a remote chance of confusion or
miscommunication. By setting policies the management
ensures that decisions made will be consistent and in the
best interest of the organization. Clearly laid down policies
try to eliminate personal hunch and biasness.
3. Clarity:
Policies clarify the viewpoint of the management for the
purpose of running a particular activity / activities.

6. 4. Motivation:
Policy enables the line managers to be self reliant. They
take the decision on their own in the confined border of the
policy. This raises their confidence and motivates them. A
well drafted policy provides a pattern within which
delegation of authority is possible.
5. Policy Review:
Regular review of policy is must to see to it that the existing
policies are relevant in the given situation. If required policy
may be modified or altered depending on the business
environment. Review of policy at regular intervals provides
a method of anticipating future conditions and situations
and helps to resolve how to deal with them.

7. 6. Economical and Efficient:
Policy enables the management to carry out its operations
effectively and efficiently. It enhances the working of the
organization.
7. Coordination of Efforts:
Policies ensure coordination of efforts and activities at
different levels in the organization. Activities and duties are
assigned in such a way that all activities in the organization
are integrated effectively. Policy coordinates with individual
efforts.
8. High Morale:
A well crafted policy can raise the overall morale of an
enterprise. Policy enables the managers to understand the
intention of the management.

8. Evolution of Strategic Management

9. The strategy concept recently evolved as an explicit tool for managing social and
economic organizations. To understand strategic management origin, it is necessary to
examine the evolution of organizations in our society. Family entrepreneurs like Cadbury
and Rowntree created most of our businesses in the late 18th century. At that time,
organizations were small in size. Most business organizations were created due to
entrepreneurial decisions made by the persons who acted as owners, managers, and
workers. Business decisions were made using intuition and the judgments of owners and
managers. It means that goals, strategies, and policies were very informal to compete in
the market, mostly developed from personal experience and intuition.
Immediately after World War I, the demand for goods rapidly increased, particularly in the
war-affected countries in Europe. This increased the volume of business. There was
increasing demand for rapid economic growth and the expansion of large-scale
manufacturing industries just after the war.

10. Between World War I and the Great Depression of the
1930s, many large companies came into existence to meet
the demands. The volume of business continued to
increase. With the increase in business volume,
administrative offices were created to coordinate individual
sub-units. The growth of administrative offices resulted in
the development of formal goals. Organizations formally
stated their goals and objectives. Jobs were assigned to
different levels of managerial hierarchy to achieve the
formal goals.

12. Evolution of Strategic Management

13. Strategic thinking and decision-making are
interconnected. A strategic thinker makes informed
decisions that align with the overall strategy. Conversely,
effective decision-makers are often strategic thinkers who
assess potential consequences before making choices

14. Strategic thinking and decision-making are
interconnected. A strategic thinker makes informed
decisions that align with the overall strategy. Conversely,
effective decision-makers are often strategic thinkers who
assess potential consequences before making choices
Strategic Thinking and Decision-Making teaches
individuals how–and when–to use, interpret, and evaluate
evidence, assess opportunities, identify critical issues, and
articulate practical courses of action. Participants examine
intuitive decision-making processes and discover common
decision traps or failures of reasoning that impact decision
quality. These include biases, mental short-cuts, and short-
term thinking.

15. Strategic thinking and decision-making are
interconnected. A strategic thinker makes informed
decisions that align with the overall strategy. Conversely,
effective decision-makers are often strategic thinkers who
assess potential consequences before making choices
Strategic Thinking and Decision-Making teaches
individuals how–and when–to use, interpret, and evaluate
evidence, assess opportunities, identify critical issues, and
articulate practical courses of action. Participants examine
intuitive decision-making processes and discover common
decision traps or failures of reasoning that impact decision
quality. These include biases, mental short-cuts, and short-
term thinking.