Managing a Business/MS-91

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Question
Define corporate policy and explain the policy formulation process

Answer
corporate policy
A formal declaration of the guiding principles and procedures by which a company will operate typically established by its board of directors or a senior management policy committee. Imbedded in corporate policy are the company's mission statement, objectives and the principles by which strategic decisions are to be made. It also forms the basis for measuring performance and ensuring accountability at all levels of the company.

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  The rapid scientific technological advancements are reshaping the world. Developments in information and communication technology have revolutionized every activity, be it scientific or business and commerce or individual and personal.  For business and commerce, they have facilitated improvements in productivity and bottomline of the business and commerce besides opportunities for better customer service.  The productivity improvements come out of the increased speed, accuracy and ability to handle big volumes that technology offers.  For the financial sector and banking, the developments in information technology have spelt very special benefits.
  In today’s globally competitive market, knowledge constantly makes itself obsolete with the result that today’s advanced knowledge is tomorrow’s ignorance.  One has to be on the learning curve and continuously move up.  All the knowledge workers have to leverage intellectual capital for growth—creative destruction—keep on innovating— otherwise someone else will be at the top of the pecking order.  Companies function in a world of exponentially shortening product and service life cycles where customer preferences and technologies change in a discontinuous and non-linear fashion and business paradigms and rules become obsolete.  The   future winners will be those business organisations who escape from the gravitational pull of the past on the fuel of innovation.
  In the opinion of some experts the twenty first century competition is characterized by at least three fundamental paradigms shifts, viz. -
  (a)   Ability of organisations and individuals to network globally and seamlessly;
  (b)   Ability to communicate, transmit, store and retrieve large amounts to information including voice, data, video; and
  (c)   Mobility of capital to feed good projects around the world.
  With the battle for market share and mind-share deepening, companies are increasingly resorting to non-traditional resources (like knowledge) and innovative means (like quick response) to create sustainable competitive advantage.

WHY CORPORATE GOVERNANCE?
  From the beginning corporate governance has acquired connotation of policing with policies.  Major reason for ‘confrontationist’ undertone is that managers remain unconvinced that corporate governance is a powerful tool for transparent, prudent and participative management that could be fair to all stakeholders and still enhance value of an enterprise as well as reward them commensurate with performance.  Consequently, several managers observe corporate governance because it would be difficult to openly object accountability to shareholders, who have risked their capital and responsibility to other stakeholders, whose livelihood depends upon prudent management. Nor can they be seen to grudge the right of stakeholders to get a true picture of business performance and style of management.  Perhaps failure in accepting whole-heartedly the spirit   of corporate governance is on account of fear of dilution of authority rather than with any predetermined plan for wrongdoing.    If corporate governance has assumed negative connotation, it is largely due to helplessness on the part of shareholders  to  deal  with  corrupt  and  incompetent  managers. Ironically, competitive business environment is bringing the best out of managers as a class.  Corporate governance has become a contentions issue because while empowering boards and shareholders to deal with incompetent and corrupt managers is a relatively easy matter, dealing with brutal violation of spirit of corporate governance by ‘excellent managers, who have created great shareholder value, is one the biggest challenges.
  In the context of fast changing corporate and socio-economic landscapes, fast paced technology and emergence of multilateral trading system, the following factors underscore the need for good corporate governance :
  (i)   Globalisation, privatisation, deregulation, causing revolution of rising expectations;
  (ii)   Advancements in Information Technology and E-Commerce.
  (iii)   Strategic alliances, mergers and acquisitions.
  (iv)   Intellectual Property Rights.
  (v)   Social responsibility, social audit and societal concerns.
  (vi)   Business and professional ethics.
  (vii)   Sustainable development.
  (viii)   Energy audit, environmental upgradation.
  (ix)   Need for excellence to cope up with fierce international competition.
  (x)   Need to strike a balance between compliance with rules and company’s need  to perform, so that company’s performance is not stifled by over regulation.          
   
OBJECTIVE OF GOOD GOVERNANCE
  It is felt that the objective of corporate governance i.e., the overall objective of wealth generation and competitiveness for the benefit of all can best be achieved through the twin components of :
  —   An “inclusive” approach to directors’ duties which requires directors to have regard to all the relationships on which the company depends and to the long, as well as the short-term implications of their actions, with a view to achieving company success for the benefit of shareholders as a whole; and
  —   Wider public accountability: this is to be achieved principally through improved company reporting, which for public and very large private companies will require the publication of a broad operating and financial review which explains the company’s performance, strategy and relationships (e.g. with employees, customer and suppliers as well as the wider community).
WHY EXCELLENCE IN CORPORATE GOVERNANCE?
  Business excellence has several connotations.  Excellence denotes outstanding performance, superior quality and consistently extraordinary service especially in the face of severe hardships.  The word conveys a value-driven approach consisting of respect for humanity, compassion and a positive and proactive attitude towards solving problems while achieving rapid growth.
  The future has no shelf life.  If today’s technology is yesterday’s magic, there is an imperative need to be innovative and creative to bring more excellence in vision and mission and products and services.  This is a message for Indian corporates and the whole economy of the country, which is going through the phase of churning where centuries old values, structures and practices are giving way to new paradigms comprising new rules of the game.  The scenario calls for bench marking of standards of excellence in all spheres of corporate activities, as it has become sine qua non for growth and long-term sustainability of companies.
  The scenario also calls for excellence in performance which can be achieved only through adherence to good corporate governance principles, such as accountability, transparency, probity, quality of information and by fulfilling their obligations towards society, the nature and the human well being.
  Our success in the future will be entirely dependent upon our ability to identify the opportunities, synergies our strengths and skills successfully and turn the challenges into opportunities. This is more important for corporate governance than for any other aspect of the economy.  More so, when corporatisation is becoming a way of life with primary, secondary and tertiary sectors increasingly opting for corporate paradigms.
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Corporate policies and procedures may sound heavy and cumbersome. They bring order, fairness and most importantly, protection against lawsuits. Although policy making may not be the most fun part of running a business , it's something every owner, executive and manager must take seriously to promote organizational success.
1.   Functionality
o   It takes coordination to get all the members of an organization to work together toward common goals. Managers play an important part of directing these efforts; however, managerial communication and support isn't enough. Policies help employees understand how a company works and wants things done. They provide guidance and information that organization members can self-access at any time. In this way, policies are an invaluable resource that help people do their jobs.
Legal Protection
o   Few, if any, businesses operate without legal and regulatory challenges. Lawsuits are an unfortunate part of operating and companies have to find ways to prevent them whenever possible and win them when necessary. Written policies are firm descriptions of how companies operate and in many cases demonstrate how their managements address important issues and maintain fairness in their conduct of business. For example, if a company faces a complaint of discrimination in hiring through the EEOC, having a diversity policy can be helpful in demonstrating that the organization is not biased.
Customer and Clients
o   Despite best efforts, it's hard to please everyone. Customers and clients often want things done their way and on their timeline, even when it's not possible or fair to other customers. Companies sometimes have to reshape customer expectations and in some cases say "no." When this happens, it helps to point to a policy that shows the company and its representatives aren't acting arbitrarily. While it's not foolproof, many customers and clients have a better time accepting what they don't want to hear when they can see it stems from a company's considered standard of operation.
Employee Management
o   Progressive discipline is one of the least pleasant parts of managing people. However, when a company has a problematic employee and discipline becomes necessary, company policies are very helpful. Employees need to understand the standards to which they are held and the reasons they are disciplined. Additionally, when managers need to take action against an employee, they should do so in accordance with well-considered human resources policies designed to promote fairness while simultaneously empowering managers to take action in the face of serious and dangerous misconduct.

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1.POLICY
2. What is Policy A course of action that will create a desired objective in the interest of the masses or the people in a given country.
3. Types of Policies
 Substantive and Administration policy The first is concerned with the legislation, programs and practices that govern the substantive aspects of community work. This dimension of policy includes, for example, income security, employment initiatives, child care services and social exclusion.
4. Types of Policies
 The second type of policy focuses largely upon administrative procedures. These involve, for instance, the collection of statistical information on neighbourhoods and the evaluation of complex community programs.
5. Types of Policies
 Vertical and Horizontal Policy Horizontal policy-making is developed by two or more organizations, each of which has the ability or mandate to deal with only one dimension of a given situation. Horizontal or integrated policy is created between parts of an organization or among organizational components that are similar in hierarchical position .
6. Types of Policies Governments increasingly are focusing their efforts upon horizontal policy-making in recognition of the fact that many of the objectives they seek to achieve are complex and relate to the mandates of two or more departments, jurisdictions or non-governmental organizations. Areas of common interest include, for example, climate change, Youth employment and the range of concerns rooted in cities and communities.
7. Types of Policies
 Vertical Policy Vertical policy is what we think of as the normal or traditional way in which policy decisions are made. It is developed within a single organizational structure and generally starts with broad overarching policy, sometimes called “corporate” or “framework” policy. Such decisions are made at head office and guide subsequent decisions throughout the organization.
8. Types of Policies
 Reactive and Proactive Policy Reactive policy emerges in response to a concern or crisis that must be addressed – health emergencies and environmental disasters are two examples. Proactive policies, by contrast, are introduced and pursued through deliberate choice. Increasingly have been recognized as vital keys that unlock the doors to both economic wealth and social well-being.
9. Types of Policies
 Current and Future Policy Those that are currently on the public agenda and those that are not. Issues already on the public policy agenda (e.g., health care) often have high profile. A formal process to amend or improve the existing arrangement generally is in place.
10. Types of Policies If an issue is not currently or never has been ‘alive’ on the public agenda, then there is work to be done in making the case for its importance and raising awareness about the implications of non-response. Making the case usually involves gathering evidence that supports the policy. Relevant evidence includes, for example, research findings, evaluation data and results from focus groups.
11. Purpose of Public Policy
 Public policy has a clear and unique purpose which is; seeking to achieve a desired goal that is considered to be in the best interest of all members of society. Examples include clean air, clean water, good health, increased employment, an innovative economy, active trade, high educational attainment, decent and affordable housing, minimal levels of poverty, improved literacy, low crime and a socially cohesive society, to name a few.
12. Policy development as a decisionmaking process A public policy is a deliberate and (usually) careful decision that provides guidance for addressing selected public concerns. Policy development can be seen, then, as a decision making process that helps address identified goals, problems or concerns. At its core, policy development entails the selection of a destination or desired objective.
13. Policy development as a decisionmaking process The actual formulation of policy involves the identification and analysis of a range of actions that respond to these concerns. Each possible solution is assessed against a number of factors such as probable effectiveness, potential cost, resources required for implementation, political context and community support.
14. Policy development as a decisionmaking process In short, any given policy represents the end result of a decision as to how best to achieve a specific objective. Most people actually apply a similar process in the decisions they make in their everyday lives – even around fairly inconsequential choices.
15. Public Policy and Poverty reduction Poverty reduction involves multiple pathways Like many public policy concerns, poverty is a complex issue whose roots can be traced to many different factors. These include low levels of literacy and education; poor health or severe disability; economic shocks such as recession or labour market restructuring that typically throw substantial numbers out of work; and sudden change in life circumstances, such as separation, divorce or death of a spouse.
16. Public Policy and Poverty reduction While it has not been established that any one or all of these factors actually cause poverty, research evidence finds that they tend to be correlated with high levels of poverty. A correlation means that these factors are generally found to co-exist. The presence of multiple correlates of poverty means that a range of solutions is required to address this multidimensional problem.
17. Policy formulation processes
 Several steps comprise the policy process 1. Selecting the desired objective. 2. Identifying the target of the objective. 3. Determining the pathway to reach that objective. 4. Designing the specific program or measure in respect of that goal; Target, Cost and Financing, Political issues. 5. Implementing the measure and assessing its impact.
18. Conclusion
 Public policy represents a decision, made by a publicly elected or designated body, which is deemed to be in the public interest. Policy development involves the selection of choices about the most appropriate means to a desired end. A policy decision is the result of a method, which in theory at least, considers a range of options and the potential impact of each. The weighing of options takes into account various factors, including:
19. Conclusion
 who benefits (the more the better). who might be negatively affected (the fewer the better). time required to implement the solution. associated cost and financing. political complexities of a federate government structure.
20. Conclusion
 At the end of the day, the formulation of public policy involves a process of making good decisions – for the public good.



Select an organization of your choice (Name and describe the organization) and briefly discuss the various types of policies it has adopted.
MSA  INTERNATIONAL
the organisation I am  referring to

The  organization, I am  familiar  with  is  a
-a  large  manufacturer/ marketer of  safety products
-the products  are  used  as  [personal  protection safety] [ industrial  safety]
-the products  are  distributed through  the distributors as well as  sold directly
-the  products  are  sold  to various  industries like  mining/fireservices/defence/
as  well  as  to  various  manufacturing  companies.
-the  company employs  about  235  people.
-the  company  has  the following  functional   departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer  service
*distribution
*warehousing/  transportation
*TQM  



1. Accounting Policies, Procedures and Forms
1. Chart Of Accounts
2. Files And Records Management
3. Travel And Entertainment
4. Management Reports
5. Period-End Review & Closing
6. Controlling Legal Costs
7. Taxes And Insurance
8. Property Tax Assessments
9. Confidential Information Release
10. Document Control
11. Cash Drawers And Credit Cards
12. Cash Receipts And Deposits
13. Problem Checks
14. Wire Transfers
15. Check Signing Authority
16. Check Requests
17. Bank Account Reconciliations
18. Inventory Control
19. Inventory Counts
20. Fixed Asset Control
21. Customer Property
22. Fixed Asset Capitalization & Depreciation
23. Sales Order Entry
24. Point-Of-Sale Orders
25. Customer Credit Approval And Terms
26. Sales Order Acceptance
27. Shipment Of Goods
28. Invoicing And Accounts Receivable
29. Sales Tax Collection
30. Progress Billing
31. Account Collections
32. Customer Returns
33. Vendor Selection
34. General Purchasing
35. Project Purchasing
36. Receiving And Inspection
37. Shipping And Freight Claims
38. Accounts Payable And Cash Disbursements
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2. Finance Policies, Procedures and Forms
1. Document Control
2. Service Processes
3. Continuity Planning
4. Document Control
5. Record Control
6. Annual Stockholder’s Meetings
7. Board of Directors’ Meetings
8. Business Plan
9. Capital Plan
10. Valuation
11. Bank Loans
12. Stock Offering
13. Debt and Investment
14. Asset Acquisition
15. Leasing
16. Working Capital
17. Cash Management
18. Inventory Management
19. Related Party Transactions
20. Foreign Exchange Management
21. Managing Bank Relationships
22. Merchant Accounts
23. Letter of Credit
24. Financial Forecasting
25. Financial Reporting
26. Financial Statement Analysis
27. Financial Management Review
28. Financial Restatements
29. Financial Information Release
30. Sarbanes-Oxley Compliance
31. SAS 70 Compliance
32. Risk Assessment
33. Risk Management
34. External Auditing
35. Internal Auditing
36. Corrective Action



3. Computer & Network Policies, Procedures and Forms
1. Information Technology Management
2. IT Records Management
3. IT Document Management
4. IT Device Naming Conventions
5. TCP/IP Implementation Standards
6. Network Infrastructure Standards
7. Computer and Internet Usage Policy
8. E-Mail Policy
9. IT Outsourcing
10. IT Department Satisfaction
11. IT Asset Standards
12. PIT Asset Management
13. IT Vendor Selection
14. IT Asset Assessment
15. IT Asset Installation Satisfaction
16. IT System Administration
17. IT Support Center
18. IT Server / Network Support
19. IT Troubleshooting
20. IT User-Staff Training Plan
21. IT Threat And Risk Assessment
22. IT Security Plan
23. IT Media Storage
24. IT Disaster Recovery
25. Computer Malware
26. IT Access Control
27. IT Security Audits
28. IT Incident Handling
29. IT Project Definition
30. IT Project Management
31. Systems Analysis
32. Software Design
33. Software Programming
34. Software Documentation
35. Software Testing
36. Design Changes During Development
37. Software Releases and Updates
38. Software Support
39. Software Consulting Services
40. Software Training
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4. Human Resources Policies, Procedures and Forms
1. Personnel Records
2. Forms Development
3. Document Control
4. Mail & Express Services
5. Telephone Answering
6. Property & Access Control
7. Separation
8. Workplace Rules & Guidelines
9. Human Resources Reports
10. Dress Code
11. Employee Hiring
12. Job Descriptions
13. Employment Applications
14. Interviewing Applicants
15. Background Investigations
16. Payroll
17. Paid & Unpaid Leave
18. Insurance Benefits
19. Healthcare Benefits
20. Employee Retirement Income Security Act
21. Consolidated Budget Reconciliation Act
22. Development Management
23. Training Reimbursement
24. Computer User & Staff Training Plan
25. Internet & E-mail Acceptable Use
26. Performance Appraisals
27. Employee Discipline
28. Workplace Safety
29. employees  with Disabilities Act
30. Family and Medical Leave Act
31. Drug Free Workplace
32. Health Insurance Portability And Accountability
33. Harassment & Discrimination
34. Posting Requirements
35. Equal Employment Opportunity Software Training
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5. Sales & Marketing Policies, Procedures and Forms
1. Advertising
2. Customer Life Cycle
3. Customer Quality
4. Customer Requirements
5. Customer Service
6. Direct Mailing Marketing
7. Goals and Objectives
8. Internet Marketing
9. Lead Assessment
10. Marketing Plan
11. Marketing Research and Analysis
12. Marketing Strategy Plan
13. Meeting
14. Product Cycle Management
15. Product Development
16. Product Launching
17. Product Recall
18. Public Relations
19. Sales Administration
20. Sales and Marketing Document Control
21. Sales and Marketing Records Management
22. Sales Call Management
23. Sales Compensation Plan
24. Sales Hiring
25. Sales Lead Management
26. Sales Supplies
27. Sales Training Plan
28. Situation Analysis
29. Stakeholder Analysis
30. Strategy Team
31. Trade Show Event
32. Vision and Mission
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6. ISO 9001 QMS Policies, Procedures and Forms
1. Document control
2. Record control
3. Internal audits
4. Control of non-conforming product/material
5. Corrective action
6. Preventive action
7. Management reviews
8. Competence, training, and awareness
9. Sales orders
10. Project definition
11. Design and development
12. Design change
13. Vendor evaluation
14. Preproduction planning
15. Manufacturing
16. Identification and traceability
17. Customer property
18. Control of monitoring and measuring equipment
19. Process monitoring and measurement
20. Customer satisfaction
21. Data analysis and continual improvement
22. Receiving and inspection
23. Purchasing
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7. Security Planning Policies, Procedures and Forms
1. Procedural security
2. Annual risk assessment and evaluation
3. Ethics and employee conduct
4. Fingerprinting and photographing of employees
5. Policy and criminal violations
6. Employee use of drugs or alcohol
7. Possession and carrying of firearms
8. First aid and medical emergencies
9. Suspicious persons and activities
10. Identification procedures
11. Internal investigations
12. Court testimony by employees
13. Proprietary information
14. Guard program
15. Information security and the edp center
16. Fire prevention and detection
17. Hazardous material
18. Inventory, delivery and receiving controls
19. Security devices
20. Opening & closing cash-handling facilities
21. Transportation of currency
22. Combinations
23. Key and access device control
24. Work station security
25. Employee assignments during emergency responses
26. Emergency operating procedures: all personnel
27. Robbery procedures: staff personnel
28. Robbery procedures: management
personnel
29. Extortion procedures: staff personnel
30. Extortion procedures: management
personnel
31. Bomb threat procedures: staff personnel
32. Bomb threat procedures: management personnel
33. Disaster response procedures: staff personnel
34. Disaster response procedures:
management
35. Violence in the workplace
36. Personal protection and safety for
employees
37. Executive protection program
38. Testing and training requirements
39. Security training program
40. Documenting investigations
41. Media relations
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8. Disaster Recovery Policies, Procedures and Forms
1. Disaster Management & Business Recovery Plan
2. Annual Risk Assessment Exercise
3. Disaster Management Plan: Annual Testing & Training Program
4. Disaster Management and Business Recovery Plan Orientation
5. Synopsis, Disaster Management Plan
6. Disaster Management Plan: (Items for Review and Completion)
7. Disaster Management Plan: Database Screens
8. Sample Personnel Database
9. Sample Equipment Database
10. Sample Facilities Database
11. Emergency List Database
12. Centers of Operation
13. Disaster Recovery Questionnaire
14. Disaster Management Plan: Annual Review
15. Emergency Supplies for Office and Departments
16. Emergency Notification Procedures
17. Service Agreement
18. Data Processing Service Agreement
19. Disaster Recovery Log
20. Chronological Log of Events
21. Testing of Solutions Documentation
22. Recovery Worksheet
23. Restoration Worksheet
24. Resumption Worksheet
25. Reconstruction Worksheet
26. Employee Personal Profile
27. Sample Facility Diagrams
28. Training Handout
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Managing a Business

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Leo Lingham

Expertise

In Managing a business, I can cover all aspects of running a business--business planning, business development, business auditing, business communication, operation management, human resources management , training, etc.

Experience

18 years of working management experience covering such areas
as business planning, business development, strategic planning,
marketing, management services, personnel administration.

PLUS

24 years of management consulting which includes business planning, strategic planning, marketing, product management, training, business coaching etc.

Organizations
BESTBUSICON   Pty Ltd--PRINCIPAL

Education/Credentials
MASTERS IN SCIENCE

MASTERS IN BUSINESS ADMINSTRATION

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