Factors Influencing Policy Determination

Factors Influencing Policy Determination– There are internal and external factors that influence policy determination and they are as follows:

The Internal Factors

• The Organizational Goals and Strategies: policies must be consistent with and contribute to organizational goals and strategies. In fact, policies are meant to operationalize and implement organizational goals and strategies.
• Managerial Values: organizational policies are influenced to a great extent by the way in which managers perceive realities as also managerial reliefs of what is good and what is not. Managers, are considered as prime movers of organizations half their own systems of personal values (for example honesty and truth in advertising) perceptions and preferences.
• Organizational Resources: The resources like finance, manpower, physical equipment and so on determine the capabilities and constraints of the organization and they provide a basis for determination of policies. For Example- A competent managerial team is able to formulate a bold and dynamic set of policies and cut through obstacles in their implementation.
• Organizational Structure: it provides the basis ‘for all managerial process including policy determination, by delimiting activities and authority roles and relationships and by providing needed staff support for exploration and development of policy options.
• Organizational Politics: it has been seen that human organization cannot escape from being affected to some extent from internal power, dynamics and politics, rivalry for authority, status, influence, scarce resources, as also personality clashes, vested interests, jealousies and so on. Policy determination in organization is also a political process 21 of sub optimization, compromises tight-rope walking and so on.

External Factors

• Socio-Political Factors: several groups in society are directly and indirectly interested in and affected by the functioning of organizations. They tend to exert some influence directly and through their representatives in government on organizations in their policy determination. For Example— Groups which advocate environmental safety, may pressurize manufacturing enterprises .to go in for an antipollution policy. Government may bring in legislation to ensure product, safety and quality.
• Product Market Factors: every organization, whether business or non-business, has something to offer to society and has its own clientele group of users. The policies determined by the individual organization have to reflect the needs and expectations of its clientele group as also the conditions and behavior of the product-market environment. For example-In the case of a business enterprise, the characteristics of its product market nature of demand and competition. type of customers, structure of industry and so on; influence its marketing policies in particular and other policies in general.
• Resource Market Factors: organizations draw their input requirements from society and the external environment. Therefore, the nature and behavior of markets for the organizations resources tend to behave an unmistakable influence on policy determination, for example, personnel policy, financial policy, purchase policy and so on.

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