Skip to content

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

Which of the following is generally regarded as a feature of an effective business policy?

An effective business policy is consistent with organisational objectives and reasonably stable, while remaining flexible enough to be reviewed when conditions change. It should also be clear, coordinated with other policies and communicated to those who apply it, so that it genuinely guides decision-making.

  1. AIt is vague so that every manager can interpret it freely
  2. BIt is consistent with the organisation's objectives and is stable yet flexible enough to be reviewedCorrect
  3. CIt is framed independently of other policies in the organisation
  4. DIt is kept confidential from the employees who must apply it

Explanation

An effective policy supports organisational objectives, is reasonably stable but open to review, is clear and is communicated. Vagueness, isolation from other policies and secrecy defeat its purpose of guiding decisions.

Did you get it right without looking?

One question tells you little. A timed set on Business Policy and Formulation of Functional Strategy shows your real accuracy, how long you take and where you lose marks.

Practise Business Policy and Formulation of Functional StrategyFree diagnostic mock

More Business Policy and Formulation of Functional Strategy questions