Good Policy Characteristics– The characteristics of a good policy are:
- Policy should help in achieving the enterprise’s objectives. It should provide only a broad outline and leave scope to subordinates for interpretation so that their initiative is not hampered. b. It should provide only a broad outline and leaves scope to subordinates for interpretation so that their initiatives are not hampered.
- Policy should not be mutually contradictory and there should not be inconsistency between any two policies, which may result in confusion and delay in action.
- They should be sound, logical, and flexible and should provide guide for thinking in future planning and action. Further, they should provide limits within which decisions have to be made.
- Policies should reflect internal and external business environment.
- Policies should be in writing and the language of the policies should be intelligent to the persons who are supposed to implement them and to those who are to be affected by them.
- Policy may originate at any level such as division level, department level, section level, etc. A manager may formulate policies within the limits of his authority and also within the limits of the policy laid down by his superiors.
- Policy starts with description of subject matter it covers, so that there may be common understanding of the policy among those who are to implement it.
- Policy must be reviewed periodically and modified according to the changed circumstances. It may be replaced by a new policy. Periodical review of the policy makes it more adaptable and acceptable.
Nature of Policy
- It Serves as Broad Guides to Decision-making in a Firm-The first step in planning is setting objectives. The next step is formulation of policies and strategies. Policies prescribe the most desirable ways and demand for the accomplishment of a given objective. They may be described as plans to serve as broad guides to decision-making in a firm.
- It is a Continuing Decision-A policy is a continuing decision. It remains in force and provides the answer to problems of recurring nature till it is changed. For Example-If it is the policy to management to fill vacancies in the organization from within, departmental heads need not consult or take approval of the top executive again and again.
It is a Dynamic Plan-There may be so many ways to reach the end point and the management chooses only one along which the managers and sub-ordinates are expected to move to reach the goals of the enterprise. Policy is not rigid like role. It has room for discretion on the part of those who are to be guided by them. It may be changed at anytime and replaced by a new policy at the particular level in the organization at which it was originally framed.
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