Established practices are policies and procedures that businesses have used in the past, providing insight into how they may react to future events. They offer stability and insight for employees and investors, but relying solely on them can hinder a company’s ability to adapt to new situations.
Also known as past practices, established practices are businesses’ activities that rely on policies and procedures implemented and used by those companies in the past. The general concept can be applied to a wide variety of situations outside the business world, including government operations or even the medical field. Sometimes expressed in direct terms in legally binding contracts, established practices may also be apparent based on the company’s history and how company officials have applied policies and procedures to specific events.
The value of established practices is that everyone involved in the company has a basis for projecting the reaction of company officials to certain events. By drawing on how the business performed in certain economic situations or coped with changes in its internal structure, it is easier for employees, investors and other stakeholders to anticipate how the business will respond to a current developing situation . Because such past practices may be stated in company founding documents or at least used extensively in past situations, taking them into consideration can be very helpful in planning for future events and deciding whether to maintain an interest in the business.
There are many benefits to established practices. The existence of established ways of doing business helps provide a degree of stability to the business. For those employed by the company, this means a reasonable concept of what to expect any day now. Often, what has happened before can provide a great deal of insight into how to handle expected changes in the market. Investors can also look at past performance and relate that history to the future when deciding to purchase additional shares, hold those already purchased, or sell all or part of the shares in anticipation of a future move in the market.
While there are a number of benefits over established practices, there are also some responsibilities to consider. Following past practices without considering a new approach can often compromise a company’s ability to adapt to new market situations. The end result can be loss of business volume and market share, ultimately leading to company bankruptcy. A good compromise is to always mine established practices in order to ascertain degree or relevance for new challengers, then make adjustments or alterations as and when necessary to cope with those new circumstances.
Protect your devices with Threat Protection by NordVPN
