What constitutes a good business policy? A Review of Best Practices and Theories

Written By
Patrik Björklund
Patrik Björklund
Published
July 6, 2023
Topic
Policy

Una polĂ­tica operativo Ă© o fondo de una organizaciĂłn de valores, goles, y strategias. A well-formulated policy can help create a positive work culture, increase employee engagement and improve business performance.

In this article, we will discuss the most important aspects of a good business policy, based on theories and research in organizational and leadership theory. We will also provide concrete examples from policies to illustrate how these requirements are met.

1. Clear and easy to understand

A clear and easy-to-understand policy ensures that all interested parties can understand the purpose of the policy and how it should be followed (Shannon & Weaver, 1949). An example of an operating policy that meets this requirement is:

> “Leads, develops, centralizes and organizes construction and infra-projects in the business areas of consultancy, academia and real estate.”

2. Relevant to the business and its objectives

A policy that is relevant to the business and its objectives is more likely to be effective and appreciated by employees (Locke & Latham, 1990). An example of a relevant operating policy is:

> “Our clients evolve by listening and daring to ask why, contributing with excellence and experience, as well as making a difference through a personal commitment.”

3. Flexible

A flexible policy can be adapted to changing conditions and developments within the business (Teece, Pisano & Shuen, 1997). An example of a flexible operating policy is:

> “<Företagsnamn> is continually improved by having a structured approach that follows the PDCA* cycle and complies with relevant laws, regulations, and industry-specific requirements.”

4th. Measurable

A measurable policy makes it possible to monitor and evaluate how well the policy is being enforced and the effect it has on operations (Drucker, 1954). An example of a measurable business policy is:

> “We strive for continual improvement through prevention, monitoring and follow-up.”

5. Clear responsibilities and roles

A policy that includes clear responsibilities and roles ensures that it is clear who is responsible for complying with and enforcing the policy. The RACI model is a common method for defining responsibilities and roles within organizations. An example of an operating policy that meets this requirement is:

> “Our staff is valued in that we provide the opportunity to be heard and seen, to develop personal, and to thrive and have fun at work.”

6. Communicative

A communicative policy reaches out to all interested parties and empowers them to provide input and influence policy content and implementation (Kahn, 1990; May, Gilson & Harter, 2004). An example of a communicative business policy is:

> “We, the people who work at <Företagsnamn>, are engaged, competent and customer-focused, as well as creating a safe, interesting and fun workplace.”

7. Feasible and realistic

A feasible and realistic policy does not place unreasonable demands on the business or its employees (Hackman & Oldham, 1976). An example of an operating policy that meets this requirement is:

> “We reduce our climate and environmental impact by using resources efficiently and minimizing waste.”

8. Up-to-date and up-to-date

An updated and up-to-date policy reflects the current situation and future objectives of the business (Lewin, 1947; Kotter, 1995). An example of a current operating policy is:

> “We are open to new opportunities and challenges and are constantly adapting to changing market conditions.”

9. Supports a positive work culture

A policy that promotes openness, collaboration and a shared understanding of the values and objectives of the business contributes to a positive work culture (Schein, 1985; Denison, 1990). An example of an operating policy that meets this requirement is:

> “<Företagsnamn> shalt, through creative responsiveness to customer & mother earth, develop, market and provide our customers with services in mechanical processing.”

Closing

A good business policy is an important part of an organization's success and well-being. Por seguendo os principais e aspectos presentados en este artigo, organizaciones pode crear polĂ­ticas que Ă© claro, relevante, flexibel, measurables, communicativo y poder una cultura de trabajo positivos. Dit, in turn, will contribute to increased efficiency, commitment and success for the organization and its employees.

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*The PDCA cycle, also known as the Deming cycle, is an iterative four-phase model for continuous improvement. PDCA stands for Plan-Do-Check-Act, which is directly translated as Plan-Do-Check-Act. It is widely used in the framework of management systems and ISO certifications. This cycle is repeated continuously for constant improvement. It is central to many ISO standards, including ISO 9001, ISO 14001 and ISO 45001, a fundamental part of an effective management system.

Fontes

  1. Shannon, C. E., & Weaver, W. (1949). The Mathematical Theory of Communication. University of Illinois Press.
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  2. Locke, E. A., & Latham, G. P. (1990). A theory of goal setting & task performance. Englewood Cliffs, NJ: Prentice Hall.
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  3. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18 (7), 509-533.
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  4. Drucker, P. F. (1954). The Practice of Management. Harper & Row.
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  5. The RACI model has no specific source, as it was developed and refined over time by various organizations and consultants. However, it is a generally accepted method in project management and organizational structuring.
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  6. Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33 (4), 692-724.

    May, D. R., Gilson, R. L., & Harter, L. M. (2004). Psico-condizioni di significativa, sicurezza e disponibilitĂ  e l'engagement del spirituale humano a lavoro. Journal of Occupational and Organizational Psychology, 77 (1), 11-37.
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  7. Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work: Test of a theory. Organizational Behavior and Human Performance, 16 (2), 250-279.
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  8. Lewin, K. (1947). Frontiers in group dynamics: Concept, method and reality in social science; social equilibria and social change. Human Relations, 1 (1), 5-41.

    Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Harvard Business Review, 73 (2), 59-67.
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  9. Schein, E. H. (1985). Organizational Culture and Leadership. San Francisco: Jossey-Bass.

    Denison, D. R. (1990). Corporate culture and organizational efficiency. New York: John Wiley & Sons.
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