Corporate policies are statements of guidelines for corporate thinking and action. They lay down the approach before the management to deal with the challenges in the environment. They cover the following broad areas that affect the decisions of the organization.
i) Corporate policy consists of a variety of subject that affect various interest groups in the organization and outside it.
ii) Corporate policy is concerned with the various functional areas like production, human resources, marketing and finance.
iii) We can understand corporate policy areas in two broad categories: Major and minor policies. The overall objectives, procedures and control are covered in major policies. These policies are concerned with each and every aspect of the organization, its structure, its financial status, its production stature, its human resources and all those issues which require attention like mergers, research, expansion, etc. Basically, the top management is involved in the framing of such major policies.
Further, the operations and activities are also carried out by executives so that the organizational objectives are met. The minor policies are concerned with each segment of the organization with emphasis on details and procedures. These policies are part of the major policies.
The operational control can be made possible only if the minor policies are implemented efficiently. The minor policies are concerned with the day to day operations and are decided at the departmental levels. The minor policies may cover relations with dealers, discount rates, terms of credit etc.
Thus, corporate policies cover wide range of subjects ranging from operational level policies to the top level policies.