In an organization, various functional areas are seen. The policies are classified according to functional areas i.e. production policies, marketing and sales policies, financial policies and personnel policies.

Production Policies:- These policies are concerned with product to be produced, type of technology, equipment, selection of plant layout, location and size, manufacturing cost, inventory control, quality control, etc.

Marketing & Sales Policies:- The policies which relate to policies in market analysis, business law, salesmanship, advertising are concerned with total process of marketing mix and product mix. These include decisions with respect to customers, channels of distribution, dealers, sales control, promotions, etc.

Financial Policies:- The success of business depends upon these policies. These consist of policies with respect to capital structure, methods of raising funds, the utilization of funds, credit policy, dividend decisions, profit policy, costing and accounting policy, etc.

 Personnel Policies:- Employees are very important for the organization and the personnel policies are concerned with issues like recruitment, selection, training and development, promotions and transfer, wages and incentives, etc.