(a) Policy may be defined as a basic statement serving as a guide for administrative action. It does not usually provide detailed answers to particular problems. The manager has some degree of freedom. For example, a policy like “promotions based on merit only” does not dictate the promotional choices. It simply eliminates one factor (for example experience) as an element in the choice. Thus a policy is a principle for conduct. It serves as a guide and a standard. It only tells people what they may or may not do. In other words, policies are “guidelines for decision making”. They direct the way in which activities are to be achieved. They are concerned with “how” of the administrative action. Objectives indicate the destination and policies “provide the route”.
What policies can do: – When policies are stated clearly, supported by suitable explanatory information, they offer great advantages to management. (i) they allow a more defined and flexible approach to recurring problems (ii) they convert objectives into a workable form (iii) they allow more decisions to be taken at lower levels of the hierarchy (iv) policies are one of the important means for building predictable patterns of behavior in an organization. They ensure a steady course of action and prevent unwarranted deviations from planned operation (v) policies can speed up decision making by providing blanket framework within which decisions can be made. They summaries past experience.
(b)(i) METHODS: – Methods “are sub-unit of procedure; they show clearly as to how a step of procedure should be performed. They indicate the techniques to be employed to make the procedure effective. The primary focus is on finding out the best way of doing a piece of work. For example, in a manufacturing concern product sampling may be a “method” used as one part of a quality control procedure. Methods cover limited territory, normally one department, and are tied to the efforts of one employee doing a piece of work. They are more limited in scope than procedure. The more completely a method is planned, the more efficient it will be. Achieving standard tasks would be difficult without standard methods.
(ii) RULES: – A rule is very specific and detailed guide to action. It is established to direct or restrict action in a fairly narrow manner. There is no scope for discretion or judgment. Rules must be followed precisely and observed strictly. Some rules are expressed in positive terminology like:-“hard hats must be worn by all mine workers while at work”. Others may be expressed in a negative way, e.g. “workers are not permitted to cross the fences against dangerous places”. Rules permit managers to simplify the decision-making process. For example, rules about absenteeism, late reporting etc. permit managers to resort to disciplinary action quickly. Rules help in regulating behavior in a fairly consistent manner. However, if rules are followed blindly, the organization may lose direction. Rules tend to limit flexibility and initiative. They introduce rigidity and spontaneity disappears. People may conform to rules without thought as to their contribution to goals so that the firm loses direction.
(iii) PROCEDURES: – A procedure is a well thought out course of action. It prescribes the specific way in which a piece of work is to be done. Procedures are called “action guidelines”. They are generally derived from policies. The basic purpose of procedure is to spell out clearly the way one is to go about doing something. Procedure are used in all major functional areas. Procedures play a vital role in an organization’s daily operations. They relieve the manager of much of the detail in directing subordinates. They indicate the steps to be accomplished as well as the required time and order of performance. The requirements for effective procedure are that they should be based on adequate facts of a particular situation, they should focus on a desired objective, they should be standardized, they should be stable, but subjected to periodic review to ascertain any change needed to be incorporated. There is perennial scope of improvement on any procedure.
(iv) PROJECTS: – A project is a small programme. Quite often, individual portions of a general programme are clear-cut and relatively distinct so they can be planned and executed as separate projects. When the operations of a programme can be easily divided into separate parts with a clear end-point, project structure is preferred. Each project has definite goals concerning task assignments and time. The project itself may consist of several sub-plans according to J.M.Stewart, a project has the following features:-
(a) the activity has a clear objective
(b) somewhat unique and unfamiliar to the existing organization
(c) the activity is complex and critical to the organization
(d) the activity is temporary with respect to duration of need
One advantage with the project from of organization is that it allows the project structure to be phased out. The best available talent can be pooled to accomplish a specific and complex activity within time, cost and/or quality parameters.
(v) Budgets: –
A budget is a numerated programme designed primarily to allocate the resources (personnel, materials, tools, facilities) of an organization. It is the blue print of a future course of action, an estimate that indicates the future usually in monetary terms, sometimes expressed in time, man-hours etc., and a projection that defines the anticipated cost of attaining an objective. Actually, a budget is more than a plan; it is a device for controlling activities. Actual results for the period, in terms of income or expenditure, are compared with the budgeted fixtures. Management must take rectificational measures if significant variations occur.