Classification of Corporate Policies on the Basis of Origin

Student Solutions Manual for Financial Theory and Corporate PolicyOn the basis of origin, policies are classified as original policies, appealed policies, imposed policies and derivatives policies.

Original Policies:- These policies are formed from the company objectives. These are formed by the top management and the top management is responsible for guiding and directing them and the subordinates are responsible in the attainment of organization objectives.

Appealed Policies:- These are also called “suggested policies” because they are made by taking into account the suggestions of subordinates or people who implement these policies.

Imposed Policies:- External forces sometimes force the company to accept certain policies forcibly. These policies are called imposed policies. The external forces could include government rules and suggestions, arguments with trade unions etc.

Derivative Policies:– These policies are operational in nature and are derived from company’s major policies. They are made as guidelines to perform day to day operations.