Meaning and Definition of Policy:
A policy is a general statement that guides thinking, action and decision making of managers for the successful achievement or organizational objectives Policies define the limits within which decisions are to be made. This ensures consistent and unified performance and exercise of discretion by managers.
The top managers generally frame the policies. However, a manager at any other level may low down policies within the limits of his authority and also within boundaries set by policies of his seniors.
A policy is not static and may be modified or reviewed in the light of changes in the environment. A policy may be verbal, written or implied.
A well defined policy help the manager to delegate authority without undue fear, because the policy lays down the limits for decisions by the subordinates. Moreover, policies operationalise objectives, speed up decision making, ensure coordination, help in training and orienting employees and ensure proper administrative control.
Different scholars have defined the term policy as follows:
Heinz Weihrich and Harold Kountz
Policies are plans in that they are general statement or understanding that guide or channel thinking in decision making. Not all policies are statements they are often merely implied from the actions of managers.
F.T. Hanker
A policy is a statement, verbal, written or implied of those principles and rules but are set by managerial leadership as guidelines and constraints for the organisation’s thought and action.
E.F.I Brech
Policy is a patter of direction for the guidance of those who carry responsibility for the management of the activities of the enterprise.
Dalton McFarland
Policies are planned expressions of the company’s official attitudes towards the range of behaviour within which it will permit or desire its employees to act.
George Terry
Policy is a verbal, written or implied overall guide setting up boundaries that supply the general limits and direction in which managerial action will take place.
Features of Policy
Policy has the following important features:
1. A policy is a standing, repeat-use plan for answering the recurring problem of the similar nature.
2. It is a guide thinking in decision making. It is not an exact order in which things are done. It provides the framework within which decisions should be taken. It unfolds the broad guidelines for achieving organizational objectives.
3. It allows some amount of judgement or discretion on the part of the executives.
4. It prescribes the course of action selected to guide and determine present and future decisions.
5. It lays down the limits within which decisions are to be made. This ensures consistent and unified performance and exercise of discretion on the part of the executives.
6. Policies are generally framed by top-level management, however, managers at other levels also can frame necessary policies to deal with recurring problems of similar nature, such as departmental policies, divisional policies – formulated at the level of department or division.
7. Departmental or divisional policies are formulated within the limits of the authority of hte respective in charge and also within the limits set by the organizational policies.
8. A policy is not static. Policies are reviewed and modified from time to time as per requirements or demands of the changing environment.