Question

Explain 'objective' and 'policy' as types of plan using suitable examples.

Answer 1

• Objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve. Objectives are considered as a prerequisite for planning. The managers cannot make plans if they have not established the organizational goals first. While the objectives of the enterprise are the basic plans of the firm, it is also possible that various departments of the organization may also have their own objectives. Therefore, even if the objectives of the departments are required to contribute to achieving the objectives of the enterprise, but it is possible that the goals adopted by these two can be totally different.
  
• Policies 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. The policies of the organization also prescribe the boundaries within which the managers have to make decisions and it also ensures that all the decisions made by the managers are directed towards achieving the goals of the organization. At the same time, the policies also help in dealing with the issues before they take the shape of problems.