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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

In a diversified Indian conglomerate, the board lays down that every group company must follow a common code of conduct and a uniform approach to related-party dealings. At which level of policy-making does this decision sit?

This is a corporate-level policy. Top management or the board frames policies that bind every company in the group, such as a common code of conduct. Business-unit and functional policies apply only within one business or department, so they do not fit a group-wide rule.

  1. ACorporate-level policyCorrect
  2. BBusiness-unit-level policy
  3. CFunctional-level policy
  4. DOperational-level procedure

Explanation

Policies that apply across the whole group, such as a common code of conduct, are framed by top management at the corporate level. Business-unit policy covers only one business, and functional policy covers one department such as HR or marketing. Operational procedures are detailed routine steps, not group-wide direction.

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