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Difference between Policies and Strategy

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  • Last Updated : 30 Jun, 2022

The general statements that guide thinking and channel energy toward a particular direction are known as Policies. Policies are a type of Standing Plan and they provide a basis for interpreting strategy. A manager uses policies at his discretion. E.g. Decisions taken under recruitment policy can be in the case of recruiting employees for a new division, such as whether to recruit from the existing employees or to explore other external sources of recruitment, various policies under it regarding the salary structure, etc. A policy is used by organizations as a guide that avoids confusion and provides a structured and unified framework.

The unified, structured, and integrated plans that are designed to achieve specific objectives of an organization are known as Strategies. It is a comprehensive plan for achieving the goals of an organization. By ‘comprehensive’, we mean plans in which we determine long-term objectives, adopt a suitable course of action, and arrange and allocate necessary resources for achieving the objectives. A strategy prepares an organization to meet the changes taking place in the environment. It is usually made by the top-level management.

Difference between Policies and Strategy

Basis

Policies

Strategy

Meaning Policies are general statements that guide thinking and channel energy toward a particular direction. Strategies are unified, structured, and integrated plans that are designed to achieve specific objectives of an organization.
Aim Its main aim is to deal with repetitive issues. Its main aim is to prepare organizations against unforeseen events or challenges of the business environment.
Validity They remain valid for situations or events which are recurring in nature. They are useful for specific purposes.
Role of competitors          They are generally not made on the move of competitors. They are made after considering the moves of the competitors.
Hierarchy of plans They have a lower place in the hierarchy of plans and are generally considered to be supportive. They have a higher place in the hierarchy of plans and are generally considered  to be superior.
Example Organizations have policies for a proper code of conduct. Mc Donald’s and Burger King are giant fast food chains, which make their strategies considering each other. 
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