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Business Policy and Implementation

Business policy is created by managers, from the top down, who set out the rules, guidelines and procedures for making decisions across the organization. In this way, lower-level managers and employees can make decisions without having to consult upper-level bosses each time. These policies are derived from the organization's mission, vision and strategic plan, and are designed to guide the organization in a way that furthers the organization's overarching goals. Thus, strategy is the basis for business policy, and business policy helps define many of the day-to-day tactics for implementing an organization’s strategic plan.

There are a wide variety of formal and informal policies that operate within an organization such as employee codes of conduct. Corporate social responsibility, environmental protection and ethical guidelines may also be incorporated into business policy. Furthermore, compliance policy is becoming increasingly important with new legislation and greater regulation of business. This includes compliance with the Foreign Corrupt Practices Act (FCPA), Sarbanes Oxley Act (SOX), the Digital Millennium Copyright Act (DCMA) and other environmental and human rights legislation.

Supply chain policy is also coming into focus as corporations are held responsible by consumers to ethically source products and supply chain inputs. This includes policies that require suppliers to consider health and safety in low wage factories, promote fair trade, avoid child labour, and guarantee food quality and safety. Risk management policies are also similarly important.

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