Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16/e

The Need for Clear Policies

Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals. Changes in a firm’s strategic direction do not occur automatically. On a day-to-day basis, policies are needed to make a strategy work. Policies facilitate solving recurring problems and guide the implementation of strategy. Policies are essential instruments for strategy implementation, for at least six reasons:

1. Policies set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior.

2. Policies let both employees and managers know what is expected of them, thereby increasing the likelihood ...