What are the factors that have an impact on policies?

The policies are created by managers to make sure that the operations of the business runs smoothly. However there are certain factors, internal as well as external, that have an impact on these policies. These factors include:-

1. The objectives and strategies: the policies are created with a view to help the organization in achieving its objectives. Therefore the objectives and the strategies adopted by the organization provide the limitations within which the policies of the organization have to operate. At the same time, it is also very significant that the policies adopted by the organization are consistent with the goals and strategies of the organization.

2. Structure of the organization: the structure of the organization decides the level of positions of the employees and also decides the authority and the responsibility that has to be provided to the employees. Therefore the process of implementing a policy in the organization is also impacted by the nature of the structure that has been adopted by the organization. A policy implemented in the organization has to be consistent with various positions as well as the roles of authority in the organization. In the same way, the process of policy determination is also significantly impacted by the structure of the organization.

3. Resources available to the organization: various resources like financial and human resources as well as the physical facilities that are available to the organization also have an impact on the process of policy formulation in the organization. For example if any policy has been selected by the managers and for the purpose of implementing such a policy, more resources are required than the resources that are available with the organization, such a policy cannot turn out to be successful. In this way, the resources available with the organization provide the boundaries within which the policy has to operate.

4. Social factors: the policies adopted by an organization are also impacted by a number of social factors. For example if in a particular society, there is a demand for high-quality products or if such society highly values the steps to protect the environment, all these factors will have to be considered by the managers while formulating the policies for their organization.

5. Political factors: the policies created and implemented in an organization are also usually impacted by the political factors of the organization. For example, the ideology of the party in power in a particular country has an impact on the framework of business in the country. In the same way, the ideology of such a political party can also be seen in the monetary and industrial policies adopted by the government of the country. Therefore, all the business organizations are also required to implement the policies of the government in the policies that are going to be adopted by them. In this way, the political factors have a great impact on the policies adopted by the organizations.

6. Managerial values: the main force behind the creation and implementation of the policies are the managers, therefore the values and ethics of the managers have a very significant impact on the policies formulated by them. Therefore, if the managers in a particular organization highly value honesty and truthfulness, these values will also be reflected in the policies that will be created by them for their organization.