After reading this article you will learn about the principles and factors of policy making.

Principles of Policy Making:

The adoption of the following principle make for sound and effective policy making:

1. The policy statement should be definite, positive clear and understandable to every in the organisation:

Policies must be applied with proper understanding and judgment. They must be capable of being easily understood. Definite and clear policies help prevent involuntary deviations from accepted courses of action and ensure that the actions of the individual managers are consistent.

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2. Policy statement should be reasonable, permanent and stable. Otherwise, they create uncertainty and indecision in the minds of those who seek guidance from them.

3. Policies should be flexible:

They must be feasible and capable of being implemented.

4. Policies should be based on fact and sound judgment and should not constitute merely personal reflections.

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5. Since policies are intended to be general principles to guide future actions, they should not prescribe detailed procedures.

6. Policies should reflect the objectives prescribed.

7. Policies should be communicated:

By communication is meant that the persons involved must understand the policy decision. It is not enough merely to have the policy in writing although that is an important step in communication of the policy.

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8. Policies should be subject to evaluation:

From time to time policies must be evaluated so that changes or innovations necessary may be immediately effected.

9. Policies should as far as possible be stated in writing.

Factors Determining the Policy Making:

A number of factors are to be considered before formulating policy.

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Thus the following factors are given below:

1. Foresight of the top management.

2. Public attitudes.

3. Technology from workers

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4. Response from workers.

5. Possible reactions of competitors.

6. Government regulation and control.

7. Financial implications.

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8. Business and general environment.

Considering the above factors, the basic policies are formulated by the members of the board of directors and top management personnel. In some concern an executive committee assumes the task of policy formulations. At the intermediate and lower levels of policies are formulated by managers in their respective areas with the aid of subordinate members.

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