What do you mean by Plan, Objectives, Policies, Strategies and Procedures

Posted in Principles of Management | Email This Post Email This Post

A plan can be described as the commitment of the organization to a particular course of action in order to achieve the desired. This also means that several plans have to be followed by the organization in order to achieve different objectives. Generally, it has been seen that manages make the mistake of considering only the major programs as the plans. However, there are several future courses of action that also need to be considered as plans. Therefore, the starting of the production of a new product or the establishment of a new factory also needs to be considered as plans. The classification of the plans can be made on the basis of the origin, purpose, used on the type of plans. There are certain plans that are present in the form of standing plans and at the same time, some other plans are single use plans. As the name suggests, the single use plans are only used on one occasion only and are not used again. On the other hand, the standing plans can be used by the organization repeatedly, on more than one occasion. Some of the examples of standing plans include the objectives, policies, procedures and rules and strategies etc. therefore once they have been formulated, the organization uses these plans for a long time and on more than one occasion. But at the same time there are plans like budgets and programs that are only used on one occasion and once they have been used, the organization is required to formulate these plans all over again. Therefore, different types of plans can be described as follows:-

Objectives: objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve. Objectives are considered as a prerequisite for planning. The managers cannot make plans if they have not established the organizational goals first. While the objectives of the enterprise are the basic plans of the firm, it is also possible that various departments of the organization may also have their own objectives. Therefore, even if the objectives of the departments are required to contribute to achieving the objectives of the enterprise, but it is possible that the goals adopted by these two can be totally different. For example, while the objective of the enterprise is to earn a particular amount as profit but on the other hand, the goal of a particular department is to sell the products.


Purpose or Mission: the purpose or the mission of the organization identifies the basic task or the function of the organization. It is very important that each and every organization should have its own purpose because purpose makes the working of the organization meaningful. The society also assigns a purpose or a mission to every organization. For example the purpose of business organizations can be to produce and distribute products or services. On the other hand, the purpose of the mission of public works department can be to construct roads. In this way, the purpose of the organization can be considered as a standing plan in case of business organizations and it also defines the basic purpose of the organization which allows the other actions to be designed by keeping in view the purpose of the organization. In this way, the purpose of the organization comprises of the long-term vision regarding the future of the organization and the reasons why the organization exists. The mission of the organization indicates the activities that the organization is going to undertake at present and in future.

Policies: policies can be described as the general statements or understanding that provides guidance to the managers in decision-making. Policies are standing plans that guide the management that is engaged in managerial operations. The policies of the organization also prescribe the boundaries within which the managers have to make decisions and it also ensures that all the decisions made by the managers are directed towards achieving the goals of the organization. At the same time, the policies also help in dealing with the issues before they take the shape of problems. In this way, with the help of policies, the managers do not have to waste their time in analyzing the same situation whenever it arises. Policies also allow the managers to delegate authority within the permissible parameters and still the managers can retain control on these activities. Therefore, it can be said that policies encourage initiative and discretion but also ensure that they remain within the limits.

Strategies: although earlier the word strategy was mainly used by formulating military action plans. The term strategy was used in order to elaborate the plans that were made by keeping in view the probable moves of the adversary. However these days, strategies are used by the managers in the field of business operations also. In this way, strategies can be described as the comprehensive and integrated plans that are designed by the managers with a view to make sure that the organization achieves its objectives. Therefore the managers decide the long-term goals of the organization and then the required resources are allocated so that the desired results can be achieved. The purpose behind making strategies can be described as to portray a picture of the type of enterprise that is being envisioned. However, the strategies do not try to provide the programs that are required to achieve the objectives but they provide a framework that guides the thinking of the managers and also their actions.

Procedures: procedures can be described as the details of action or the guidelines that are given in order to achieve the objectives of the organization. The procedures provide details regarding the ways in which the things have to be done by the organization. In this way, there is no room for personal judgment in these cases. It is also important that the procedures should help in implementing the policies of the organization. The procedures should also decide the policy of accountability. Therefore, a procedure can be described as a series of related tasks that have to be done in the chronological order and it is also the established way in which a particular work has to be performed.


There is a significant difference between procedures and policies. The procedures act as a guide regarding the action while the policies guide the thinking of the managers. Policies are the guidelines that help in taking decisions but the procedures provide the various methods through which each stage of work has to be accompanied. While there is a scope of interpretation in case of policies in order to see if a particular policy fits generation but there is no such scope as the procedures are tailor-made.

Procedures offer certain advantages to the organization. First of all, the procedure provides details regarding these sequences that need to be followed in order to complete a particular task. It also allows the managers to keep updated if the work is going on according to the plans. In this way, procedures can also be used as a control mechanism because when a particular procedure has been adopted to do a particular work, it can be immediately noted if there is any discrepancy in completing that work.
Procedures also help the managers in ensuring consistency as well as the uniformity of performance. Therefore, when procedures have been established in the organization, the managers can use these procedures again and again. With the help of standardization of procedures, the requirement for decision-making in similar situations by the managers can also be reduced. Therefore, whenever there is a need to perform a similar task, the same procedure can be adopted by the managers to do that task. In this way the efficiency of the organization is also increased.

Procedures also allow the managers to establish a particular sequence that has to be followed for each work. In this way the managers can coordinate various activities of different departments or the sections of the organization because in this case, all of them will be following the same procedures.
But apart from the above mentioned advantages, procedures also have certain limitations. The first such limitation is rigidity which arises as a result of following the procedures. As a procedure has to be used continuously time and again, it may result in discouraging initiative and discovery within the organization. Procedures are also required to be reviewed constantly. The reason is that a same procedure cannot be followed for long-term. Therefore the changing situation requires that the procedures should be constantly reviewed. In order to keep the procedures effective, they need to be updated so that they are suitably adjusted in order to meet with the present situations.

Rules: Rules are the plans that provide the required course of action regarding a particular situation. Therefore a rule can also be described as a decision that has to be made by the management regarding what needs to be done in case of a particular situation. In this way, a rule is always rigid and definite and it does not allow the subordinates to have any discretion or deviation. As against the procedures, the rules do not provide for any chronological sequence of the steps that have to be taken by the employees in order to achieve a particular objective. However it is possible that in some cases a rule can be a part of the procedure. On the other hand, there are certain rules that are not a part of procedure, for example the “no smoking rule” in the factory. However a rule which requires that the payment has to be made within 21 days can be a part of the procedure adopted by the management.

The rules provide the limits of behavior that is expected and acceptable within the organization from all the members of the organization. The rules also allow the managers to predict the behavior of the employees and how they will act in particular situation. The rules also help the management in channeling the behavior of the employees in a particular direction. Sometimes the employees of an organization resent the implementation of certain rules as they believe that these rules may stifle their actions. However in these cases, the problem is not with the rules but the problem is with the way in which these rules are presented to the employees. At the same time, the management should also try to introduce the rules that are very necessary and the need for implementing these rules should also be properly explained to the workers.

Programs: Programs are the sequence of activities that have been designed with a view to implement the policies and to achieve the goals of the organization. Therefore, programs are devised with a view to deal with a particular situation. Programs can be described as a combination of policies and procedures, rules, task assignments, budgets etc. that are designed for a particular purpose to perform a particular course of action. In this way, separate programs have to be developed in order to accomplish different tasks. A single program cannot be used to achieve several goals. In this way a program is a single use plan that is designed for non-repetitive and new activities.

The characteristics of programs can be described as follows:-

Programs are single use comprehensive plans. They are formulated with a view to achieve particular purpose. Once the objective has been achieved, a particular program is not used anymore. In order to formulate a program, sometimes several small plans may need to be prepared. For example a program that has been developed with a view to increase the sales of the company by 20% may require that several small plans also have to be created.

A program is developed with a view to achieve the goals of the organization.
Programs provide a time limit within which it has to be implemented. Therefore, there is a strict timetable to finish the particular task.
It is also important that a program ensures coordinated efforts of planning.

Programs offer several advantages to the organizations. The main advantages of programs can be described as follows:-

Programs provide a course of action that has to be followed by the organization in order to achieve its objectives. The details regarding the required actions have to be taken and a strict timetable has to be followed. This helps in implementing the plans.

Programs also help the management in creating better coordination within the organization. It ensures that the policies and procedures, budgets and rules etc. are in order which provide better quality coordination in the organization.

Programs can also be described as action oriented plans and at the same time, they also help in motivating the employees of the organization.

But at the same time, there are certain limitations associated with programs; these are:-

In case the programs are not developed carefully, there is a risk that the programs may fail. Therefore it is very important that the action that has to be taken and the procedure that needs to be followed in a particular program should be selected by the managers very carefully. In case there are lapses at any stage, it is likely that the programs may prove to be ineffective.

Similarly, in case of programs there is always the risk that the coordination within the organization can be inadequate. If the different elements of programs like the rules, policies, procedures etc. are not balanced in a proper way, it is possible that the programs may not be coordinated properly.

There are several sub-programs in case of the major programs. In such cases, all sub-programs have to be successfully carried out so that the main program can be completed successfully. If there is any error in implementing any of the sub-programs, the success of the whole program can be endangered.


Budgets: Budgets are the monetary or the quantitative expression of the plans and policies that have to be followed by the organization in future. Therefore the term budgeting is used in order to describe the activity of preparing budgets and other procedures related with planning, coordinating and controlling the business of the organization. A budget has been described as a financial statement or a quantitative statement that is prepared before a particular period, regarding the policy that has to be followed by the organization in order to achieve its objectives.

Know more about budgets and its characteristics here

This article has been written by KJ Singh a MBA Graduate from a prestigious Business School In India
Article Published:November 19, 2016
More Entries : More MBA Related Stuff:

Recently Added

Follow us on FB