Here is a term paper on ‘Policies in an Organisation’ for class 11 and 12. Find paragraphs, long and short term papers on ‘Policies in an Organisation’ especially written for school and college students.

Policies in an Organisation

Term Paper Contents:

  1. Term Paper on the Meaning of Policies
  2. Term Paper on the Types of Policies
  3. Term Paper on the Formulation of Policies
  4. Term Paper on the Merits of Policies
  5. Term Paper on the Limitations of Policies

Term Paper # 1. Meaning of Policies:

Policies are general statements or understanding which provides guidance in decision making to various managers. They are means to guide the thinking of managers in their decision making. Policies are derived from objectives and are designed to operationalize them. So they are termed as operational objectives which reflect the true character of the organisation.


They are used for repeated reference and provide a ready guidance for recurring managerial decisions. Policies provide the means for carrying out the management process by making clear both the direction of the organisation and the way in which it is to achieve its goal. Policies tend to pre-decide issues and thus allow a manager to delegate his authority.

Policies are regarded as mini-plans as they aid in mapping out a course of action to be followed for the achievement of objectives. Policies are both restrictive and permissive. They are restrictive in the sense they define the boundary within which the manager has to take decisions. They are permissive in the sense that they permit the managers to decide freely but within limits set by policies.

Koontz and O’Donnell define policies as, “general statements or undertakings which guide or channel thinking in decision-making of subordinates.”

Louis A. Allen defines a policy as, “a continuing decision which applies to repetitive situations. It is a standing answer to a recurring question”.


So a policy is devised to guide the organisational members to deal with a particular situation in a particular manner. It delimits the area within which a decision is to be made and assures that the decision will be consistent with and contributive to business objectives.

To features of a sound policy are specified as follows:

(a) It should be based on objectives and it contribute to the achievement of objectives.

(b) It should be clear, unambiguous and explicit.


(c) It should be in writing.

(d) It should be by considering the resources and environment of the organisation.

(e) They should be reviewed and revised periodically.

(f) They should be in the form of general guidelines and allow scope for decision making at lower levels. They should be general and flexible guides rather than detailed procedures.


(g) It is to be uniform in its application; it must be fair to all. It should offer equity and justice to those who are affected by it.

These are also to be considered as the principles in policy making.

Term Paper # 2. Types of Policies:

Policies are classified as:

(1) Organisational policies


(2) Functional policies

(3) Original, Appealed and imposed policies

(4) General and specific policies

(5) Written and unwritten policies.


(1) Organisational Policies:

Organisational policies are the overall policies of the organisation. They are formulated by the top management. They are the basic policies which are used uniformly throughout the organisation. The organisational policies can be classified as Top management, middle management and lower management based on the level, for which it is designed.

Top management policies are meant for top management planning and this may be related to product selection, sales forecasting, sizing the enterprise etc.; Middle management policies are related to area of operation, junior executives and they are related to functional areas. Lower level policies relate to day-to-day performance of employees.

(2) Functional Policies:


These are meant for specific functions or departments. They are derived from organisational policies. They are to be applied in various departments. Example: Sales policies, Finance policies, Production policies, Personnel policies.

(3) Originated, Appealed and Imposed Policies:

This classification is attempted on the basis of origin. Originated policies are deliberately formulated by top managers based on their own initiative to guide their subordinates. They are reduced to writing and included in policy manual.

Appealed policies are those which are formulated based on the appeal of the subordinates. While performing the subordinates apply their mind effectively to evolve a policy which is not existing at the present. So they prefer an appeal in writing to the top management and they approve of it. Imposed policies are those which are imposed on organisations by outside forces like Government, Trade unions Trade associations etc. Policies are imposed by these forces or create conditions for their adoption.

(4) General and Specific Policies:

Based on freedom granted regarding implementation.


Policies are divided into General and Specific policies. General policies are stated in broad terms to give freedom to the units of the organisation. Specific policies are more focused in their statement and are intensively defined to restrict freedom of action.

(5) Written and Unwritten Policies:

Written policies are explicit declarations in writing. Written policies are better guides. But they tend to create rigidity in organisation.

Implied policies are those which are not written but they are to be inferred by the conduct organisational members. This is used to maintain secrecy, not to reveal the strategy and to use discretion to the maximum.

Term Paper # 3. Formulation of Policies:

Policies are standing decisions which are used repetitively over a period of time by different levels in the organisation. They are required in various areas of the organisation. The top management may not be competent in evolving policies for all functional areas in the organisation. So to develop policies for various areas the functional managers are to be involved. This will boost the morale of the participants and will ensure better acceptance of these policies.

In formulating a policy the steps to be taken are:


(a) Entrust the job to a committee of top executives.

(b) The committee should consider the environment under which they need a policy and its specific purpose is to be identified.

(c) The committee to analyse various policy alternatives. They have to examine the effect of alternatives on the value system of the organisation. The committee to adopt the alternative which is expected to yield the best possible results in terms of achievement of objectives of the enterprise.

(d) The policies should be reduced to writing. Special skill is required to select and adhere the policy language which will state and synthesize the general principles and scope for discretion.

(e) Develop Policy Manual – Policy manual refers to a book which contains the policies of the organisation. It facilitates easy reference and guidance. Its merits are it minimizes misinterpretation, and misunderstanding. Ensures smooth functioning. Provides a check list for current policies. Plays the role of an effective instructional device to staff for familiarizing them with policies and procedures for effective functioning. This is to be modified and updated periodically.

Principles to be followed in policy formulation are:


i. It should be definite, positive and clear. It should easily intelligible.

ii. It should be translatable into practices and peculiarities of every department.

iii. It should be flexible and at the same time have a high degree of performance.

iv. It should be formulated to cover all reasonably anticipatable conditions.

v. It should be based on facts and sound judgment.

vi. It should be in conformity with the available environment.

Term Paper # 4. Merits of Policies:


A policy is a guide for repetitive action in major areas of activity. It helps managers at various levels to act with confidence without consulting the seniors. This will ensure prompt action.

The benefits of policies are:

(a) The top management provides guidelines for performance to lower level managers.

(b) It gives confidence to lower level managers to function promptly.

(c) Policies facilitate better administrative control by providing the rational basis for evaluation.

(d) The management ensures that decisions made will be consistent and in tune with the objectives and interest of the enterprise.


(e) It secures coordination of efforts.

(f) It saves lot of time and effort of the managers.

Term Paper # 5. Limitations of Policies:

The Limitations are:

(a) They bring about rigidity in operations. They leave no room for initiative by the subordinates.

(b) They cannot cover all problems and unforeseen situations may arise.

(c) They are no substitute for human judgement. Policies only delimit the area within which decisions are to be made.

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