Question

Describe the meaning of policies, procedures and budgets.

Answer 1

• Policies:
  

Koontz and O’Donnell defines “policies are general statements or undertakings which guide or channel thinking in decision-making of subordinates.” So, policies act as guides to thinking and action of subordinates in the organisations. It should be clearly prescribed and understandable by all.

• Procedures: Procedures are plans that establish a required method of handling future activities. They are guides to action, rather than to thinking and they detail the exact manner in which certain activities must be accomplished. They are chronological sequences of required actions.
• Budgets:A budget is a statement of expected results expressed in numerical term. It may be referred to as a numbered programme. A budget may be expressed either in financial terms or in terms of labor-hours, units of product, machine hours, or any other numerically measurable term. It helps the organisation to control the action by comparing budgetary and actual result.