This article will help you to learn about the difference between policies, goals, and objectives.

Difference between Policies, Goals, and Objectives

Policies are the Guidelines for Actions

These are means to achieve the objectives. A policy may be a verbal, written or implied overall guide for decision making. In other words, policies provide guidelines and limits for decision making. As an example, a firm may have the policy of selling goods only against cash or no employee will accept any outside job, etc.

Policy may be taken as an expression of intentions of Top Management and is long lasting. Policies are valuable because they allow lower levels of management to handle problems without going to top management for a decision every time. Policies provide a broad guide as to how the objectives of a firm are to be achieved.


Objectives are the ends towards which the activities of the enterprise are aimed.


Objectives may be classified as:

(a) External e.g., to supply goods of good quality at reasonable prices.

(b) Internal e.g., maximum profitability, good labour relations, job satisfaction and security.

(c) Short term e.g., Production and sales targets for a period of three to six months.


(d) Medium term e.g., for a period from one to five years.

(e) Long term objectives e.g., for a period from five to twenty years.

(f) Economic e.g., increase in profit by 10%.

(g) Non-economic e.g., bringing job satisfaction, improving employer-employee relations etc.


(h) Major objectives, applicable for the entire organisation e.g., product diversification.

(i) Derived or Minor objectives i.e., derived from major objectives. They are sectional or depart­mental objectives.


A goal is any achievement of an end point that is stated in quantitative terms, an example of which is the achievement of a certain amount of profit for a specified time period. Goals represent the desired future conditions, which the organization strives to achieve.

A goal may be a specific accomplishment, such as manufacturing 1000 automobiles during a given time period. Goal refers to a future state or condition which when realized contributes to the fulfillment of the mission.