A distribution policy determines how and where to distribute information and products both inside and outside an organization, managing risks and protecting the interests of the organization. It includes a formal policy for managing information and materials within an organization, a policy for material distributed to the public, a policy for products for sale, and a dividend distribution policy for publicly traded companies.
A distribution policy determines how and where to distribute information and products both inside and outside an organization. It is formulated by executives who carefully consider an organization’s needs and goals when deciding how to release materials. Internally, data and products must be made available to the personnel who need them, while managing risks such as losses externally. External distribution follows a series of chains to obtain products, information and services to final consumers and these chains must be carefully determined to protect the interests of the organization.
Organization officials can create a formal distribution policy for managing information and materials within an organization. They decide who has the authority to classify the material and how it can be passed among the personnel who work for the company. Some information, for example, may be restricted to top management because it is proprietary. Other data can be made freely available because it can be useful to everyone in the organization. Distribution policies can control the risk of loss or unauthorized access and can help companies trace the origins of a problem by limiting the number of people who see certain materials.
Material distributed to the public is also subject to a distribution policy. Organizations may make annual reports and some information freely available, especially if they are public or service-oriented agencies. A group promoting health care in developing countries, for example, might want members of the public free access to its reports on the lack of access to consistent health care in developing countries. Similarly, a government agency could make maps publicly available for use in research and other activities.
The products for sale move through a distribution chain which is also subject to a policy, set out in a contract between the company and the distributor. Companies want to make sure their products are delivered to the right locations and may have concerns about whether a distributor works with competitors, undercuts prices, or potentially undermines business in other ways. The nature of a distribution policy can determine how distributors handle products.
Publicly traded companies also maintain a dividend distribution policy. This determines how and when dividends are distributed to shareholders. Policy information is made available so people know when to expect dividends and can follow the company’s activities to determine whether they are consistent with the policy. Companies that fail to deliver on their promises to shareholders may be legally liable or could be considered bad investments.
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