Explain Features and Purpose of Policy?

Every organization has to make a number of decisions. Some of these decisions have long-term orientation and some decisions are related with the day-to-day operations of the organization. The long-term decisions also help in further decision-making. In this regard, policy and strategy are the parts of planning that provide guidance for further decision-making. Generally, the terms policy and strategy are used interchangeably but in reality, the orientation and significance of these two terms is different.

What is Policy?
Policy can be described as a general statement that has been formulated by an organization to provide guidance for the managers. First of all, objectives are formulated and then policies are created to achieve these objectives. Policies can be described as the mode of thought and the principles underlying the activities of the organization. It needs to be noted that policies do not need any action but the purpose of the policies is to guide the managers in their decision-making commitments when decisions are not made by them. At the same time, both policies and objectives are used for achieving the goals of the organization but both of them are different. Objectives can be described as the goals and policies are the methods that are used to achieve these goals. While the objectives are the endpoints of planning, policies provide the general methods to achieve these objectives. A policy provides the basic guidelines and the person implementing these policies have the scope of interpreting them. This means that a policy has to be flexible and on the other hand, a rigid policy turns into a rule.

Features of a Policy:
On the basis of the above discussion, there are certain salient features of a policy. These are:-

i. A policy can be described as the standing plan that provides answers to repeating problems that are of a similar nature. In this way, a policy provides guidelines or answers to the members of the organization so that they can decide the most appropriate future course of action. A policy provides guidance regarding what has to be done by the members of the organization in a particular situation.

ii. A policy restricts the area within which a decision has to be taken to achieve the goals of the organization. In this way, it helps in avoiding the need for repeated analysis of situations and at the same time, it also allows the delegation of powers but at the same time, retaining control over the actions.

iii. Policies are the models of thought and principles underlying the various activities of the organization. Therefore, policies can guide the behavior as well as the decisions made by the managers.

iv. In all the organizations, managers have to make policies. As mentioned above, policies are required at every level of management to provide guidelines regarding the future course of action. But it needs to be noted that there is a difference in the significance of policies at different levels. Therefore the higher the level of management, the more important policies will be decided by it and in the same way, at the lower level of management, the less significant or the minor policies are needed.

Purpose of policies
Policies are considered as very significant for achieving the goals of the organization. At the same time, good policies also ensure that there is coordination in the efforts and activities made in the organization. Therefore, the purposes for which policies are formulated include:-

i. The main purpose of policies can be described as to ensure that there is no deviation from the course of action that has been planned by the organization. There is a framework within which all the members of the organization are expected to work. In this way, the policies make sure that the broad guidelines regarding the action are being followed by all.

ii. As the policies create the framework for all the members of the organization, it also helps in ensuring that there is proper delegation of authority within the organization. Therefore the managers are aware of the authority needed by the subordinates to fulfill the work allocated to them. In this way, the policies allow the delegation of adequate authority to the subordinates.

iii. In case of policies, there is also a scope for interpretation. Therefore, while the main aspects are provided by a policy however the real mode of implementation has to be decided by the person who has the responsibility to implement it.

iv. Policies are also helpful in future planning. Therefore the impact of policies also helps in thinking about the future course of action.

v. Policies also make sure that there is a consistency of action in the organization. The same guidelines are provided to everyone in the organization and at the same time, the actions are also required to conform to these broad guidelines.