A strategy can be described as an action plan that provides a direction that has to be adopted by the organization in order to achieve its objectives. In this way, strategy is a decision-making choice and it involves the consideration of the strengths and weaknesses of the organization and also the external environment that has an impact on the organization. While in the past, strategy was mainly used by the military but now, it has become an integral part of the business organizations also. In case of business organization, a platform is required to consider the plans and policies that have been adopted by the competitors and then the plans of the organization have to be modified in such a way so that the superiority of the products or the services of the organization can be established. At the same time, strategy also helps in deciding the objectives of the organization as well as the way in which the resources of the organization have to be deployed in order to achieve these objectives.

In this way, strategy is related with deciding the long-term goals of the organization and also the adoption of a course of action and allocating the resources that are required to achieve these goals. Therefore a strategy is a broad plan that can be used to take the company to the position where it wants to be in future from the place where it is at present.

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Policies can be described as the guidelines that have to be used in the day-to-day functioning of the organization. However, the policies do not provide instant answers regarding all the problems that are being faced by the managers. In this way, there are certain limitations that are present in case of policies.

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There is a difference between the objectives and the policies of an organization. In this part, an attempt has been made to compare the objectives and the policies of the organization. For example, there is a difference between the meaning of objectives and policies. While the objectives can be described as the goals that have to be achieved by the organization, on the other hand, policies can be described as the tools that are used for achieving the objectives of the organization. In the same way, another difference that is present between objectives and policies is related with their need for the organization. While objectives can be described as the foundations of the organization and therefore, any organization without an objective is directionless as it will not be aware of the goals that have to be achieved by it and the direction in which it needs to go. On the other hand, policies provide the means that can be used by the organization to achieve these goals. In this way, while policies are essential for achieving the goals of the organization but they are not indispensable.

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In order to ensure the smooth operations of the organization, the managers have to formulate and implement a number of policies in the organization. Mainly these policies can be classified as:-

Major policies: the major policies of the organization can be described as the policies that are used for providing a unified direction to the organization and which require the commitment of significant resources of the organization. In this way, the major policies provide direction to the organization in its efforts to achieve its objectives. Therefore it is very important that the major policies are capable of supporting the goals of the organization.

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The policies are created by managers to make sure that the operations of the business runs smoothly. However there are certain factors, internal as well as external, that have an impact on these policies. These factors include:-

1. The objectives and strategies: the policies are created with a view to help the organization in achieving its objectives. Therefore the objectives and the strategies adopted by the organization provide the limitations within which the policies of the organization have to operate. At the same time, it is also very significant that the policies adopted by the organization are consistent with the goals and strategies of the organization.

2. Structure of the organization: the structure of the organization decides the level of positions of the employees and also decides the authority and the responsibility that has to be provided to the employees. Therefore the process of implementing a policy in the organization is also impacted by the nature of the structure that has been adopted by the organization. A policy implemented in the organization has to be consistent with various positions as well as the roles of authority in the organization. In the same way, the process of policy determination is also significantly impacted by the structure of the organization.

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