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

Kaveri Textiles Ltd. has a standing rule that every purchase above a stated value must be approved by the purchase committee, and this rule is applied the same way to all departments year after year. Which feature of business policy does this best illustrate?

The standing purchase approval rule illustrates that business policies provide consistency and uniformity in decision-making. Because the same guideline is applied to recurring situations across all departments, similar cases are treated alike, reducing arbitrary decisions and helping coordination throughout the organisation.

  1. APolicies are formulated only at the operational level
  2. BPolicies give consistency and uniformity in decisions across the organisationCorrect
  3. CPolicies are one-time decisions with no repeat application
  4. DPolicies are always unwritten and informal

Explanation

A rule applied uniformly across departments over time ensures consistent treatment of similar situations, which is a core feature of policy. Policies are not one-time decisions, they are generally framed for recurring situations, and they are normally expressed in writing, so the other options are wrong.

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