Russell worked for one of the Fortune 500 companies with a branch in Canary Wharf, London. One day he was out walking the dog accompanied by his 10-year-old son. Jack was clutching his mobile phone close to his ears. At the other end of the line was his mother who was at home preparing dinner in their pent house residence. They were living the dream. As father, son and dog walked past a Signpost of one of the budget stores, Jack, still talking with his mother, asked her if they could stop by and get some ice-cream. His mother said `no’. She had her reasons. They were living the high life and, it must be demonstrated, she thought. `Please Mom’, Jack insisted but his mother told him “Jack, it is against our policy to buy our ice-cream from that store”. The boy turned to his father and asked “Daddy, what is `policy’”? Russell looked down at his son and said “son she meant to say it is our `principle’ not to buy our ice-cream from that store”. The boy asked, “So, does `policy’ mean `principle’”? The man smiled and said to his son, `no not exactly’.So what is Policy?
In its simplest and yet broad form, policy `is a guide to action’. So whether it is Fiscal Policy, Insurance Policy, Corporate Policy, Public Policy, this definition is broad enough to cut through all and without further explanation, one might be tempted to refer to other types of policy than intended in this article. For our purpose, the use of `policy’ relates to business or corporate policy. Therefore, in specific terms, we would define business or corporate policy “as a guide to managerial action in their day-to-day activities directed towards the achievement of the corporate objective’.
No doubt a manager trying to reposition an organisation will find that, in his corporate analysis, one of the issues he must review is the organisation’s policy document otherwise called `policy manual’, without which implementation of plans will be difficult.
Five main types of Policies that are very important for any organisation are the following:
· Regulatory Policies –which guides the conduct and behaviour of organisational members in and around the company. It spells out what is expected of them in certain situations, how they should respond to circumstances and issues as they arise while at work. Regulatory policies may also spell out such things as appearances or wearing of uniforms at work and what a manager can do if a member of staff violates this guideline.
· Distribution policies – which guides the organisational members, especially the marketing and sales staff, with respect to how they should supply or distribute the companies products. Which market should they focus on and at what time, especially if they are dealing with seasonal products? Distributive policies may also spell out guidelines about what products should be `pushed’ and which should not. This guideline may further assist the marketing department to decide how much advertising should be done for each product.
· Financial Policies – which spells out guidelines for raising of funds for the finance of corporate activies. Finance policies, will guide the organisational members, for example, with respect to what percentage of sales should be in reserve, when to go to the money or capital market to raise funds for the finance of organisational activities. It may even spell out when and where not to go borrowing.
· Personnel Policies – which spells out guidelines for the recruitment of human resources for and into the company. Personnel policies may include the display of `diversity’ in the recruitment process. Others may simply prefer to be `equal opportunity’ employers for all races and gender. It will also spell out guidelines about promotion, redeployment and even dismissal.
· Production/Service Policies – spell out guidelines about what products or services the organisation sells. How and when will new products be developed? By whom and how much resources are to be dedicated to product development and manufacturing? The guidelines assist the production manager and his department to take actions in their day-to-day activities. For service organisations, service policies spells out what services the organisation can undertake and what they cannot.
Ofcourse, the purpose of corporate policy is to guide organisational members when they need to make decisions on issues affecting the business, with or without their superiors present. If the guideline requires a manager to consult his superior, it would be insurbodination for him to do otherwise.
How Firm should Policy Be?
Fellow twitter, LaRita Heet, once asked so how firm should corporate policy be? The answer to this question is in the definition of policy itself. As a `guide’, corporate policy cannot and should not be rigid. It is simply a `guide’ and should be flexible enough to allow organisational members to use their discreation. The efficiency of any orgnisation is partly dependent on how much resources they have, and partly also, on how effectively the resources are allocated and managed by the organisational members.
But then, what marks an organisation out from their competitors is their distinctive competences, which includes, not just the available resources and their allocation but on how much `efficiency’ was achieved as a result of the display of `discreation’ by the organisational members.
Contents of Policy Document
A well articulated policy provision should be able to contain the following:
· Reason for which the policy is being issued
· What should be covered and how far should the policy go. Who are those likely to be affected by the policy
· When should the policy take effect? I discuss this further below under communication of policy
· What part should you play and which individuals or parties should play certain roles as needed.
Stages in the development of policy:
Despite what several authors write, there are six generally acceptable stages of policy development and introduction:
1. Identify the problem areas in your organsiation, bearing in mind the need to prescribe `guidelines’ to the conduct of organisational members in their day-to-day attempt to solve those problems and achieve a common goal. In an earlier post, I stated that every organisation has a problem. The difference is only in the degree of the problem within the company. It is because organisations have `problems’, that they need to be managed. Common problems in every organisation often concerns the allocation of resources within the company. How well the organisational members can effectively allocate the resources and solve organisational problems makes the difference. This is why some organisations prosper, while others fail. So having identified the problem, proceed to the next stage.
2. Formulate appropriate policies after consultation with the top level management in your organisation. Policies have to be formulated by the top level management because they have the capacity to look into every nook and cranny of the company and to see when things are not going well. It is also on their shoulder that the issue of leadership and control rests. So organisational members will be looking up to them to `show the way’ or the direction that they expect their organisation to head. Loose organisations soon become obtuse, amorphous and unguided. The result is best imagined.
3. Adopt the policy as evidence of its acceptability to the management team as the acceptable way to follow in their daily activities in trying to solve organisational problems within the company. Adoption is very much like accenting to a bill in the legislature. It is the stage at which the signature of the executive powers in the company is obtained. It is usually important to secure the support of the management team as evidence that it is not a unilateral action. After that, the next stage.
4. Take adequate measures to communicate the formulated policies to every member of the organisation as the acceptable way to follow in order to appropriately solve the organisation’s problems. Ensure that group meetings, if possible is held to formerly present it to them. Use film shows if available or latest presentation techniques, such as projectors, so that they understand what has been decided and why. Set effective date and move to the next stage.
5. Once the policies decided have been communicated and policy document presented, the implementation takes effect from the stipulated date. Managers can look up issues with the policy document if need be and take appropriate decision as the guidelines stipulates. Implementation is a very important stage of policy development because a badly implemented policy can wreck an organsiation.
6. Evaluation: As feedbacks are received, check the implementation part of the policy development from time to time to see where managers are having problems and why. Policy development without evaluation is not complete and it would be difficult to make necessary corrections for effective running of the organisation.
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