Importance of Corporate Policy

Importance of Corporate PolicyBefore we discuss about the importance of corporate policy, you must know what exactly is a corporate policy. It is a formal declaration of the guiding principles by which an organization will function. It is usually developed by its board of directors or a senior management policy committee.

Corporate policies may appear heavy and complicated. In present scenario, corporate policies are essential even for businesses seeking to do things in a different way. Without proper policies, it will become extremely tough for the business to continue and policies work as guide and help the manager to direct all the actions towards the same goal.

What is the Importance of Corporate Policy?

  • Policies are necessary to perform the business activities in a smooth way.
  • Corporate polices offer clear cut courses for achievement of organizational goals.
  • If an appropriate explicit policy has been developed, most of the details can be easily taken care of by the employees and management would not needlessly spend its time as well as energy in performing such tasks.
  • Corporate Policies present you with instructions and a platform for making decisions.
  • Policies promote delegation of the power of making decisions.
  • Properly formulated corporate policies give a direction in which all management pursuits are targeted.
  • Policies provide steadiness to the action of the members of the organization.
  • Policies and guidelines prevent the subordinates to rethink on the day to day challenges and therefore prevent repeated analysis of problems.
  • Policies help in analysis of performance by serving as a standard.
  • Corporate policies boost employees’ commitment and loyalty for the business.
  • It helps in dealing with the issues for optimal utilization of limited resources.
  • Sound policies aid in developing good public image of an organization.
  • Corporate Polices give the organization clear targets so that the managers can decide regarding the future plan of action.
  • They act as tool for co-ordination and control.

Thus we can say that corporate policy is significant for a corporation. It helps in the all round development and growth of the organization. A sound corporate policy gives satisfaction to the workers with regards to working conditions, organizational culture, authority, and responsibility.

Video: Tips on Writing Corporate Policy

We have tried to state the significance and importance of Corporate Policy in today’s changing scenario. Successful policies call for reviews and revisions as laws and company environments change.


  1. Please provide an article on Importance of Policies and Standards

  2. Great article. What do you think about importance of policy implementation in an organization

  3. @Rock policy implementation in an organization is very important because of today’s globalized and ever changing business environment.

  4. The importance of procedure manuals and formal policies should not be underestimated. Many small enterprises don’t believe that such policies help their operations and choose to keep management flexible. Of course this point does have some validity for micro organizations it will lead to further problems for businesses that are getting into a larger state of existence.

  5. First thanks for providing this wonderful article. Yes you are right Corporate Policy manuals are very important in present dynamic environment.

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