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Policies are general statements or understandings that guide managers’ thinking in decision making. They usually do not require action but are intended to guide managers in their commitment to the decision they ultimately make.
The essentials of policy formation may be listed as below.
ü A policy should be definite, positive and clear. It should be understood by everyone in the organization.
ü A policy should be translatable into the practices.
ü A policy should be flexible and at the same time have a high degree of permanency.
ü A policy should be formulated to cover all reasonable anticipatable conditions.
ü A policy should be founded upon facts and sound judgment.
ü A policy should conform to economic principles, statutes and regulations.
ü A policy should be a general statement of the established rule.
ü Importance of Policies
ü Policies are useful for the following reasons:
ü They provide guides to thinking and action and provide support to the subordinates.
ü They delimit the area within which a decision is to be made.
ü They save time and effort by pre-deciding problems and
ü They permit delegation of authority to mangers at the lower levels.
Decision making is taken only after a thorough analysis and reasoning and weighing the consequences of the various alternatives.
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