2. Meaning
policies are the general statements which are formulates by
an organization for guidance of its personnel
The objectives are first formulated and then policies are
planned to achieve them
They provide the framework within which the decision-
makers are expected to operate while making
organizational decisions
3. Definition
. “Policies were identified as guides to thinking in decision making.
They assume that when decisions are made, these will fall within
certain boundaries”. Knootz and O'Donnell
“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” George R. Terry
Characteristics of a sound policy
Based on the objectives
Clean, definite , explicit and understandable
written and precise covering all anticipated conditions
4. Cont
Based on careful consideration of resources and
environment of the organization
Reasonable and capable of being accomplished
Stable as well as flexible
It should be planned
Confirm to the norms of ethical behavior and standards
Communicated to the people who are to implement
just, fair and equitable to internal as well as external
groups
Reviewed and revised periodically
Lay down limits and yardsticks for action
5. Importance of policies
Gives practical shape to objectives
Facilitate quick decisions
Helps in making the actions of each manger more
predictable
Facilitate administrative control
It saves time and efforts
Builds confidence among employees to solve problems
6. Limitation of Policies
Do not offer universal solutions to all problems
Do not proceed instant solution to problems
kills the initiative of managers
Do not provide standard solutions to various problems
7. Steps in policy formulation
Definition of policy Area
Identification of policy alternatives
Evaluation of alternatives
Choice of policy
Communication of policy
Policy Application
Policy review and appraisal
