In: Categories » Business » Strategic planning » Significant Planning Guidelines and Policies
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Planning guidelines and policies are statements or ground rules that provide a framework for management decisions and actions that are related to the achievement of organizational objectives. The framework established by these guidelines and policies also affects decisions made within the context of the strategic plan. It is not concerned with day-to-day decisions as long as those decisions are consistent with strategic objectives. This framework, in general, serves three important purposes: It (1) provides guidelines, (2) establishes limitations, and (3) focuses direction. The framework is important for planning in a number of ways: 1. It helps to sharpen and define the organization’s mission and focus. 2. It eliminates the need to make the same decisions repeatedly. 3. It ensures that efforts are not expended in areas that are not acceptable to senior management. 4. It provides measurable parameters for performance that cannot be violated without triggering a managerial response. What follows are some examples of policies and policy statements, from a variety of corporate perspectives, that help to illustrate these points and can serve as models for anyone whose job it is to create and draft policies. FinancialThe company will reinvest at least 60 percent of its net income in the business. It is the company’s objective to pay a regular dividend to common shareholders on a quarterly basis. Corporate DevelopmentThe company will not enter businesses in which the market growth rate is less than 15 percent. All acquisitions of other companies, whether in whole or part, must have the approval of the board of directors. Companies will be acquired only if their markets are known to senior management and there are synergistic benefits to the relationship. Our corporate image and purpose shall always be maintained. We will consider only opportunities for investment or acquisition that will maintain or enhance our corporate image of progressiveness, technical excellence, customer commitment, and merchandising preeminence in the sale of quality products and services. New opportunities will not be considered if they will in any way compromise the reputation for being an ethical company with due regard to human and social responsibilities that we have worked so hard to achieve and maintain. Our employees command respect for their business abilities, integrity, fairness, and humanity. Investment, whether capital expenditure or corporate acquisition, requires a return on equity of 20 percent or greater. This serves to enhance our current expectations for corporate performance. CorporateThe company will prepare a three-year strategic plan and an annual budget. The company will establish goals for each of these documents, measure the performance of its staff against these parameters, and incorporate these evaluations into its compensation plans. It is company policy to comply with all OSHA and EPA regulations. We will develop training programs that will assure compliance without the need for outside audit. The company will make certain that employee safety is always emphasized and never compromised in all of its activities. It is the company’s policy to comply with generally accepted accounting principles in the preparation of information for any regulatory agency, financial institution, or any other interest that may receive this information.
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