Policy decisions would also help in arriving at the amount to be spent on promotional activities. 4. Supply-side Policies! Koontz and O’Donnell divide the sources of policy into the following four types: By originated policy they refer to policy which originates from the top management itself. (b) It is difficult to adopt written policies to situations and conditions which change from time to time. General policies. B. Planning policies involve the future course of action. The difference between the current assets and current liabilities is the working capital. These should be maintained in the exact extent. Copyright 10. It will also depend on the type of the market. The “casualty” or liability component provides protection against legal liability for damages caused to other people or their property. © Copyright 2021, Insurance Information Institute, Inc. Monetary policy: Changes in the money supply to alter the interest rate (usually to influence the rate of inflation). Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. With loss sensitive insurance coverage, the company shares the burden of its loss expenses with the insurer. They flow basically from the organisation’s objectives as defined by top management. In this lesson, you'll learn about different types of public policy in the United States. Types Of Policies All businesses need property/casualty insurance coverage. Package policies are created for businesses that generally face the same kind and degree of risk. The make or buy decision can also be a part of the product on policy but can be part of the marketing strategy which is concerned with the overall strategy of the business. Some others advocate the policy of direct selling. Types of Monetary Policy Definition: The Monetary Policy is a programme of action undertaken by the central banks and other regulatory bodies to control and regulate the money supply to the public and a flow of credit, so as to ensure the stability in price and trust in the currency by targeting the inflation rate and the interest rate. Prohibited Content 3. The three main types of government macroeconomic policies are fiscal policy, monetary policy and supply-side policies. Supply-side policy: Attempts to increase the productive capacity of the economy. Home entrepreneurs have other options for coverage, including BOPs, or “incidental business endorsement", a special form that attaches to an existing homeowners policy. Typical commercial property insurance policies exclude losses of money and securities due to any peril and often do not insure inventory, equipment and other types of property against theft. (v) Does not become valid for all times. Large deductible policies are designed to give employers that are willing to retain most of the claims risk an option that reduces their insurance costs. They usually don’t require action but are intended to guide managers in their commitment to the decision they ultimately make. A wide variety of lines of business fall into these broad categories. It equally centers on the ecology of the political system and focuses on the internal operation, issues and clientele. In case of sales force, some organisations prefer to rely merely on salaries, but some other companies wish to build in a commission component to provide the necessary incentive. Report a Violation 11. This policy decisions have to be taken in connection with personnel administration. A business’s liability exposure includes not only paying damages and perhaps a penalty as the result of a successful lawsuit against it, but it also includes attorney’s fees and other costs involved in defending a company against a liability claim. The entire legal structure of our country stands on the collective actions of its representatives. A policy of promotion from within presupposes the existence of adequate training policies to develop persons for each higher positions. Functional policies can be classified as follows: Basically marketing policies relate to each of the “four Ps in marketing” namely. By this time, the store might have switched insurers. Thus the essence of policy is discretion strategy on the other hand, concerns the direction in which human and material resources will be applied in order to increase the chance of achieving selected objectives. Other benefits include sick leave, vacations, canteen facilities and working conditions. These policies are also concerned with the extent of bank borrowings permissible and allowances of credit facilities that should be extended to the customers. Policy decisions have to be taken in the area of pricing. 2. The deductibles are generally in amounts of $100,000 or higher. If a company is successful in controlling accidents and associated expenses, then its final premium will near the minimum level. There are four main types of public policy: distributive, redistributive, regulative and constituent. 3.2.2 Executive policy In most responsible and democratic societies, both developed and developing, capitalist and socialist, the executive policy is the form in which the executive body which may be a cabinet, an executive committee, For instance, some of the issues covered under domestic policy involve: 1. This means the current liability insurer is responsible for claims made during the policy period, even though the event that gave rise to the claim occurred in a prior year. Business interruption can also include the extra expense of operating out of a temporary location. Looking at some examples of these categories should give you an idea of how public policy fits into each area of society. Content Filtration 6. 3. It involves with regard to how much profits should be distributed by way of dividends to the shareholders and how much should be kept back for future capital requirements. These plans are frequently referred to as retrospective policies, because the amount the company pays for insurance during a set period is based on the losses sustained during that same period. Policy is defined as a definite course of method of action selected from among alternatives and in light... 2 Foreign Policy. Policy decisions have to be taken in the area of physical distribution of the product which involves considerations of channels of distribution and logistics. A Firm Foundation: How Insurance Supports the Economy, Insuring Your Business: Small Business Owners' Guide to Insurance. Specific Policies (i) Specific objectives defined, which are “actionable” (ii) Appropriate selection of major instruments to meet specific objectives “A public policy is … 1. The following are some of the written media: (a) All the members of the organisation can be guided as to the exact interpretation of policies so that they all possess a common understanding. Planning policies may formulate for whole organisation or for divisional departments. (c) It can be checked more readily for compliance within the organisation. Separation of church and state 5. So the actions and activities of all government officials collectively integrate to form public policy. After reading this article you will learn about the meaning and types of policies. For instance, while public policy is concerned with the public at large, domestic policy issues typically involve people from specific religions, cultures, or personal beliefs. Fiscal policy: Changes in government spending or taxation. Disclaimer 8. It is related to the size of the run and the extent of automation. The policy decisions on pricing are also affected by the type of trade channels and the discounts that might have to be offered. The promotional policy is also tied in with the pricing policies. Please sign in to access member exclusive content. Can also include the extra expense of operating out of a temporary.... The existence of adequate training policies to cover professional services, vehicles their. ( or Master ) policy separate insurance policies to develop persons for each business can … types of policy... And objective decision making you 'll learn about different types of policies businesses! 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