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

In the hierarchy of corporate decision-making, business policy is usually framed by which level of management?

Business policy is usually framed by top management, including the board of directors, because it sets overall direction and limits for the organisation. Middle and lower levels implement it through procedures and rules. Auditors and outside consultants may advise but do not themselves frame policy.

  1. ATop management, including the board of directorsCorrect
  2. BOnly the lowest-level supervisors
  3. COnly external consultants without board approval
  4. DOnly the statutory auditors

Explanation

Business policy sets the overall direction and is formulated by top management and the board, then implemented by middle and lower levels. Supervisors, consultants without approval and auditors do not frame policy for the company.

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