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Read this article to learn about the meaning of policy, its features, purpose of policies, considerations in policy formulation, characteristics of sound policy, process of policy formulation, factors influencing policies, types and limitations of policies. A policy in Management is a general statement which is formulated by an organization for the guidance of its personnel. The objectives are first formulated and then policies are planned to achieve them. Policies are a mode of thought and the principles underlying the activities of an organization or an institution. According to Koontz & O 'Donnel, "Policies were identified as guides to thinking in decision-making. They assume that when decisions are made, these will fall within certain boundaries." Policies do not require action, but are intended to guide managers in their decision commitments when they do not make decisions. In the words of George Terry, "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." Policies provide a framework within which a person has freedom to act. Policies acting as principles provide rules of action for achieving organization's specific objectives. The coordinating links in the organization are provided by policies. They govern and guide the actions of an organization's overall performance and its objectives in the various areas of operation-production, finance, marketing and personnel. The clear formulation of policies helps the executives to plan every operational aspect of the enterprise. This considerably helps them in their decision making. Though objectives and policies are used to achieve organizational goals but both are different in essence. The objectives are the goals and the policies are the ways to achieve them. The objectives are the end points of planning and policies prescribe the broad ways for achieving them. A policy gives guidelines and leaves scope fo

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