POLICY VS LAW

LAWS ARE CONDITIONS THAT MUST BE FOLLOWED WHILE POLICIES ARE THE OBJECTIVE OF THE LAW.

Example: The treaties law said the government would provide education. The policy was to do so using residential schools.

Policy

Policies are objectives that an organization or a government sets for itself to achieve in a given period of time, and laws are the tools that help a government achieve these objectives. For example, a government may have views in the sphere of health and education with certain objectives in mind. It formulates policies as guidelines or a framework to move forward in the desired direction and it is these principles outlined in policies that help a government to come up with proposed laws.

Policies describe the objectives and missions of a government and how it proposes to achieve these objectives using various methods and principles. A policy document should not be misconstrued as a law. However, new laws in various spheres of social life such as health, education, finance, etc reflect the intentions of the government. So you get to know the goals of a government reading its policy statement. Directives set out in a policy statement become laws only when the government is able to present and push through the draft bills in the houses of the parliament.

Law

Laws are the standard rules and regulations that are compulsory and to be followed by all the people of the country. Laws are set of principles that guide people’s actions in various situations of life. Laws are compulsory and there are provisions in these laws for punishment for those who break or do not follow these laws.

So, when a new government assumes power, it has a policy statement but it needs to convert these policies into laws before it can set out on its agenda. Laws help a government in setting up legal and institutional framework to further the aims spelt out in its policy statement.

Though it is mostly the executive that is in charge of making policies fro different spheres of economy and public life, even a private member can come up with a bill in the parliament that can take the shape of a law if it is debated and passed by the parliament.

In brief:

Difference Between Law and Policy

• Policies are stated objectives; laws are rules to be followed compulsorily

• Polices reflect the objectives of a government, laws provide the legal and institutional framework to further these policies.

• Policies are made in the name of public by the government and it has to draft bills and get them passed to give these policies a concrete shape of laws

• Policy is what a government intends to do; laws help it in doing what it intends to do.

HISTORY OF POLICY

ETYMOLOGY

It comes from the Greek word "Polis" meaning "city", or "body of citizens". Other words that come from the word "polis" are "metropolis", which is governed by "politicians" who dictate policy, which is enforced by "police".

• Hofer has viewed the evolution of business policy in terms of four paradigm.

• For the sake of convenience, these shifts may be considered as four overlapping phases in the development of the subject of Business Policy. It is interesting to note that the development of business policy as a field of study has closely followed the demands of real – life business.

• Ad hoc Policy – According to Hofer and others the first phase which can be traced back to the mid 1930’s rested on the paradigm of Ad Hoc Policy making. The need for policy making arose due to the nature of the American business firms of that period.

• The firms which has originally commenced operations in a single product line catering to a unique set of customers in a limited geographical area expanded in one or all of these three dimensions. Informal control and co-ordination became partially irrelevant as expansion took place and the need to integrate functional areas arose. This integration was brought about by

framing policies to guide managerial action. Policy making became the prime responsibility of erstwhile entrepreneurs who later assumed the role of senior management.

• Planned Policy formulation

• Due to the increasing environmental changes in the 1930’s and 40’s in the U.S. planned policy formulation replaced Ad Hoc policy making. Based on this second paradigm the emphasis shifted to the integration of functional areas in a rapidly changing environment.

• Strategy Paradigm

• Increasing complexity and accelerating changes in the environment made the planned policy paradigm irrelevant since the needs of a business could no longer be served by policy making and functional area integration only. By the 1960’s there was a demand for a critical look at the basic concept of business and its relationship to the environment. The concept of strategy satisfied this requirement and the third phase based on a strategy paradigm emerged in the early sixties.

• Strategic Management

• The current thinking which emerged in the eighties is based on the fourth paradigm of strategic management. The initial focus of strategic management was on the intersection of two board fields enquiry : The strategic processes of business firms and the responsibilities of general management. Thompson and Strickland say “ The approaches and methods of analysis of strategic management have not yet coalesced into theory of how to manage an enterprise. But they very definitely do represent a powerful way of thinking to resolve strategic issues.

• The resolution of strategic issues that affect the future of a business firm has been a continual endeavor in the subject of business policy. The endeavor is based on the development of strategic thinking. As Whitefield says “Really useful training (in strategic management should yield)… A comprehension of a few general principles with a through grounding in the way they apply to a variety of concrete details. Most likely, the students will forget the details and principles but remember (usually unconsciously) new, non – obvious ways of thinking strategically.” The general principles underlying strategic thinking have been the focus of the efforts of researchers and academicians in the field of Business Policy.

IMPORTANCE OF POLICY-MAKING

Policies perform several important functions in organizations. First and foremost, they simplify decision making. They delimit the area of search for possible alternatives and preclude the need for repeated, in-depth analysis of recurring, similar problems. Consequently, they promote efficiency in the utilization of managerial time.

Policies also permit managers to delegate to subordinates more decisions and more important decisions than they would otherwise. Thus, if a manager establishes a policy governing a specific class of decisions, he or she will feel more comfortable delegating these decisions to subordinates because they will have set guidelines within which to make choices. The delegation of decision-making authority is important because it frees up managerial time for activities such as opportunity finding and planning that typically are put off.

Finally, policies help secure consistency and equity in organizational decisions. Thus, if several managers make decisions in a particular policy area, their decisions will be consistent within the limits established by the governing policy. Equity is also promoted through the policy mechanism, especially with regard to personnel and vendors. For example, an announced policy of permitting the company employees with the greatest seniority to have first choice of vacation times would tend to be viewed as more equitable than allowing managers to make these decisions without guidelines. By the same token, a policy stating that supply contracts will be awarded to the lowest qualified bidder would normally be viewed as fair by vendors.

SUMMARY

Policy making is concerned with the formulation of general statements or understandings that guide or channel managerial decisions. Policies, whether written or implied, are essential components of a company's planning framework because they simplify the making of recurring decisions and facilitate the delegation of these decisions. Successive delegations tend to result in a hierarchy of policies within traditional organizations. In organizations where empowerment is practiced, the principal function of policies is to provide essential limits to otherwise broad employee discretion.

It is not overly far-fetched to suggest that without policies, because of excessive analysis and the concentration of decisions at the top, corporate decision making in the hierarchical firm could be slowed to the point of bringing operations to a virtual standstill. Conversely, in the empowered organization, there would be the potential for complete lack of control and chaos. Yet, in today's fast-moving business world there is also the great danger of policies becoming rapidly outmoded. For this reason, audits and ongoing reviews are a must if a company's policies are to remain effective decision guides.