Business Rules– Strategic Principles, Policies, Rules for Competing in Digital Age: Relevancy, Agility of Governance Rulebook…

Business governance is a system of principles, policies, rules… by which a company is organized and managed. And in this highly competitive and disruptive digital age; it’s essential that companies have the agility to change and redeploy new or modified business rules, rapidly…

In other words, the rapid deployment of business rules that are relevant and consistent with the ever-changing dynamics of global markets… Essentially, business governance involves balancing the interests of the many stakeholders in a company, e.g.; shareholders, employees, customers, suppliers, financiers, government, community…

According to Henrik Liliendahl Sørensen; it’s useful to divide business rules into two different types; ‘external’ business rules, which are rules based on laws, regulations within industries and other rules imposed from outside an organization… and, ‘internal’ business rules, which are rules made up in an organization in order to be more competitive in an industry…

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A business ‘rulebook’ is collection of business policies, rules, advice… and like the rulebook of any game, a rulebook for a business enumerates all the ‘do’ and ‘don’t’ rules, along with the terms and definitions (vocabulary) needed to understand the rules… But, before jumping in too deeply, let’s define the meaning of business rule… According to several sources; ‘business rule’ is defined as: criterion(s) used to guide day-to-day business activity, shape operational business judgments, make operational business decisions… they assert business structure to control and influence the behavior of the business… they apply to people, processes, corporate behavior, systems… and are put in place to help the organization achieve its goals… The term ‘rules’ is shorthand for the range of different ways for coordinating– expectations, actions…

At the core of a business rules is the rule itself, and the concepts around rules, e.g.; decisions, rule patterns, rule families, rule clauses… and a decision is simply a logical grouping of rules… whereas, a business ‘policy’ tends to be less structured, less discrete, less atomic, less compliant with standard business vocabulary, less formally articulated…

Business managers create business policies to– control, guide, shape day-to-day business activity… business policies are the foundation for operational business governance… Hence, governing a business involves coordinating ‘how’– business ‘policies’ and ‘rules’ are created and deployed within day-to-day business operations… Unlike the rules for a ‘casual game’ business rules often change and quite rapidly…

In the article Business Rules and Rulebook Management by Ronald G. Ross writes: Business rules are not about mimicking intelligent behavior; they are about running a business… several important points about business rules: A business rule always tends to remove some degree of freedom, and if it doesn’t; it’s not a business rule but rather an adviceA business rule gives well-formed, practicable guidance in sufficient detail, such that when it’s applied in relevant circumstances, people know the behavior that is expected or the action(s) that must be taken… An ‘internal’ business rule is always under the jurisdiction of an organization… whereas, an ‘external’ rule is a government regulation or law, or condition imposed by outside organization that influences how an organization manages its day-to-day business activity…

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In the article Digital Age Has Changed Everything by Jure Klepic writes: To understand the workings of modern business one must also understand how people communicate, shape ideas… Today’s digital devices demand a person’s constant attention, completely changing the ways people interact, work, entertain, gain knowledge, conduct business, create, communicate… Now, people can talk to anyone at any time, and ideas can flow quickly and often quite explosive… Managers are finding that they need to communicate with younger employees in a whole new manner. Businesses that do not understand the explosive nature of the digital age can often find themselves struggling to catch up with a negative storyline…

Culturally, digital has changed the way people identify with one another and form communities. While 20th century consumers bonded in tight-knit neighborhoods, today’s target demographics gather together in far-flung global communities; they gather in chat rooms, social media communities, online forums to share personal stories, provide advice… Society has become much more visual; images and videos have become an integral part of culture and understanding– the world is overrun with images, meaning that business must work even harder to stand-out in a world of visual overload. Imagery and videos used by business must be– clear, precise, meaningful, and they must add to the storylines that consumers are creating for themselves…

Digital has changed the way people communicate… Cyberspace has changed dynamics of communication; people are more open and do not use as many filters as they would in face-to-face communications… People are sharing very personal information about themselves… but also, there is an overload of rude language, harsh criticisms, anger, hatred, even threats… How can businesses stand out in what is now considered to be an equal playing field where everyone and anyone can create a website, blog… and say what they want? Digital has changed the sense of self-Identity… People can take on virtually any personality or body form: Avatar representations of who they ‘are’, and it can be changed at anytime… This blurring of individual, cultural, and societal lines makes the managing of rapidly changing rules of business, even more challenging in the 21st century…

In the article Be Serious Player in Global Business by Thomas Travis writes: Global boundaries are becoming blurred as world governments and multinational companies seek to further their economic reach. And as business becomes increasingly global, companies must– organize, plan, operate, execute in new ways… Sometimes, the complexities of doing business on a global scale can feel overwhelming… But there are certain basics (rules) that define successful global enterprise that hold true for senior executives, as well as entrepreneurs, e.g.; fluency in language of trade won’t guarantee success but it will certainly maximize your chances when competing globally…

And, there are vital principles that apply when doing business globally regardless of– country, commodity, culture… Here are a few rules that might be helpful: You must understand trade agreements and preference programs and how they can impact your business… Protect your brand at all costs and its intellectual property… Maintain high ethical standards… Stay secure in an insecure world. Transparency in the supply chain is a clear priority… Expect the unexpected. You must be prepared to deal with situations that are not covered in traditional business plans… All global business is personal and forming personal, face-to-face relationships is key in global trade success…

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In the article Globalization Involves a Battle of Principles by John Braithwaite, Peter Drahos write: Conflict over different approaches to globalization often takes the form of a battle over ‘principles’… Principles are defined as agreed upon standards of conduct that grow out of the values and practices of a community of players…

Principles are more general or abstract than rules; in a sense, principles stand ‘behind’ rules and can give rise to new rules. Additionally, while some principles have a legal character, many do not… Principles, rather than specific rules provide different sides of a debate with a common basis for understanding. Individuals may not understand the technical details of specific rules, however they may very well understand general values and principles of the different players…

Hence, principles provide the basis for common understandings, but players usually oppose principles with other principles… and in negotiations, players come to the bargaining table armed with principles… Countries can use principles to establish general relationships without committing themselves to specific rules that they might come to regret later… Company principles must be appropriate to conditions in the different countries in which they operate, hence a ‘one-size-fits-all’ approach will not work. However in the final analysis its corporate behavior that counts, not the existence of a formal set of business principles…

Business rules are a formal expression of knowledge or preference, a guidance system for steering behavior (or transaction) in a desired direction. According to Barbara von Halle; on the grand scale, business rules are the guidance system that influences the collective behavior of an organization’s people, systems… The pressures facing many businesses today can seem insurmountable, and most of these pressures require changes in the way the business operates– principles, policies, rules. Most business executives are not overly interested in; data models, process models, object models… but they are very interested in business principles,  policies, rules…

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Indeed, it’s through policies and rules that business leaders steer the business… According to Ronald G. Ross, Gladys S.W. Lam; the ability to change and redeploy business rules is essential for business relevancy and agility. No business rule is ever set in stone, e.g.; across industries, it was found that typically 30-45% of all business rules change often, and quite rapidly… However, business rules must make sense for all stakeholders, and while business rules may be informal or even unwritten, documenting the rules clearly and making sure that they don’t conflict is a valuable activity…

When carefully managed, rules can be used to help the organization to better achieve goals, remove obstacles to market growth, reduce costly mistakes, improve communication, comply with legal requirements, and increase customer loyalty…