Question

Give the meaning of 'Policy' as a type of plan.

Answer 1

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. 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. In this way, with the help of policies, the managers do not have to waste their time in analyzing the same situation whenever it arises. Policies also allow the managers to delegate authority within the permissible parameters and still the managers can retain control on these activities. Therefore, it can be said that policies encourage initiative and discretion but also ensure that they remain within the limits.