Give the meaning of 'policy' and 'strategy' as types of plans. (2024)

FAQs

Give the meaning of 'policy' and 'strategy' as types of plans.? ›

Policies are made at every level because the managers at every level need to decide or predetermine the way of handling a situation and policy acts as a guide to take decisions in an unexpected situation. Strategy: A strategy is a comprehensive plan to achieve the organisational objectives.

Policy is a set of common rules and regulations, which forms as a base to take day to day decisions. Strategy is a plan of action while the policy is a principle of action. Strategies can be modified as per the situation, so they are dynamic in nature.

(i) Strategy: A strategy is a comprehensive plan to achieve the organisational objectives. The dimensions of strategy are: (a) Determining long-term objective. (b) Adopting a particular course of action. (c) Allocating resources for achieving the objectives.

Policy can be described as the general statements or understanding that provides guidance to the managers in decision-making. Policies are standing plans that guide the management that is engaged in managerial operations.

Policies are general statement that sets out the limits within which decisions are taken by the managers and thus assures the consistent performance. On the contrary, procedures, suggest the exact way of performing an activity. It indicates the sequence for handling various business activities.

A strategic policy example is a written statement of an organization's choices in its operating environment. For example, a public or nonprofit agency chooses which of society's problems to address through public services.

Policies facilitate solving recurring problems and guide the implementation of strategy. Policies are essential instruments for strategy implementation, for at least six reasons: Policies set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior.

Once a policy has been agreed or adopted formally, a strategy outlines how that policy is implemented. Policies cannot make an impact unless they are enacted. The most effective policies include action plans, which help translate the goals and objectives of the policy into outputs, outcomes and impact.

Business involves various strategies to fulfil their long-term and short-term goals. Corporate, Business and Functional are the three types of business strategies. Corporate strategy is the overall plan that guides the other two strategies.

The purpose of a plan is to describe a solution for implementing a policy. Other key characteristics of a plan include: It addresses the question of "how" to carry out a policy. It is carried out with an initial investment of time and resources.

What forms a policy? ›

Usually, a governing body triggers the development of policy, either directly or indirectly, through announcing strategic intent. This intent is then developed into a policy with an accompanying strategy/plan of action.

The strategy is the best plan opted from a number of plans, in order to achieve the organisational goals and objectives. The policy is a set of common rules and regulations, which forms as a base to take the day to day decisions. The strategy is a plan of action while the policy is a principle of action.

Policies can assist in both subjective and objective decision making. Policies used in subjective decision-making usually assist senior management with decisions that must be based on the relative merits of a number of factors, and as a result, are often hard to test objectively, e.g. work–life balance policy.

The basic role of a strategy is to provide Direction of Action. A strategy is a plan or a set of plans of action which is formulated by the management or the development team in order to attain long term organizational objectives or the overall aim of the firm.

The strategy is formulated and used to guide decisions beyond its implementation, but there is an overarching force that is left unacknowledged before we reach the strategy formulation – the business policy.

While Business Policy provides the framework for consistent decisions, Strategic Management charts the course toward competitive advantage and long-term success. By understanding them, you can improve your decision-making skills and achieve success.

While decision-making focuses on individual choices, policy-making is a broader process that considers multiple stakeholders and aims to achieve effectiveness and shared acceptance.