Corporate policy

IGC-DEFINITION (abbreviated)

Corporate policy / Unternehmenspolitik
Corporate policy has the task of harmonising external interests in the company and purposes that determine the company with internally pursued objectives, in order to create a match between the external environment and the business environment. This match should, in the long term, guarantee the business’s autonomy and survival. To achieve this, management must establish the basic values and standards of conduct that should become second nature; at the same time they must determine the principles of behaviour for dealing with customers, suppliers and employees.

Corporate policy consists of the following elements:

• vision
• mission statement
• business concept

A vision is a concrete picture of the future, near enough for people to see that it is realisable, but far enough away to stir the enthusiasm in the organisation’s workforce for a new reality. A communicable vision should consist of a short and clear statement, formulated in a way that is easily remembered. The vision is the basis for the mission statement. However, for actual strategic and operative management, both the vision and the mission statement are still too vague. They must be defined in more detail in the business concept.

The business concept may be divided into three parts:

• market and technological concept
• financial concept
• social concept

These parts grow out of a holistic view of the business’s management towards all environments, including, of course, the natural environment. A corporate policy that is really applied depends on two preconditions. Its principles must be practised on a daily basis by top management – and it must be formulated in writing, so that managers refer to it as a guide.

from: IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.)

Source

IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.), 4. Auflage, Schäffer-Poeschel, Stuttgart, 2010