• Policy formulation; formulation of policies is mainly by top management. Facts must be gustered and analyzed, members in the organization must be consulted.

      • Policy communication; once a policy is formulated it must be communicated to those who are ultimately responsible for its application. Policy manuals, company handbooks, written memorandums, broad letters and announcement etc. generally passed into the service in order to disseminate the policy.

      • Policy application; policy decision rest basically on human judgement and intuition. Consistency in applying the policy is very essential and at the same time some flexibility is necessary in day to day affairs.

      • Policy review and appraisal; hospitals will have a standing committee for the review of policies as a part of organizational structure. Policies need to be revised in the light of new environmental circumstances.

Types of policies;

1. Formulated policy; A formulated policy is one which is specified by the organization for providing guidelines to its members. Most of the policies in private sector organizations fall in this category as every organization formulates various policies on different aspects. Such a policy flows from higher level to lower levels in the organization. This policy may be broad giving general guidance for the action or may be spelled completely so as to leave little scope for definition and interpretation.

2. Implied policies; Sometimes policies may not be clearly stated, and the action of managers particularly at the higher levels provide guidelines for actions at the lower levels. Sometimes, the organization has clearly expressed policies for its image but it is not able to enforce these. In such a case, the action of the decision maker, consciously or unconsciously, depends on his own guidelines, prejudices and whims. Moreover, in the absence of any specific guidelines, decision is based on individual interpretation of the situations and consequent actions.

3. Imposed policy;

Imposed or external policies are thrust on an organization by external forces such as government or labor unions. These agencies may either provide complete guidelines on the subject matter or provide a broad framework for devising specific policies. Policies of the organization must conform to local, state, and federal laws. Collective bargaining and union contracts direct labor policies. Professional And social groups – such as the American Nurses Association, National League for Nursing, church, school and charitable organizations mold policy.

4. Appealed policy; An appealed policy arises from the appeal made by a subordinate manager to his superior for deciding an important case. The need for such an appeal may arise because the particular case has not been covered by any policy. The appeal is taken upward and the decision made on the case sets a precedent which becomes policy providing guidelines for deciding similar cases in future.


  • Policies serves as guides in decision making

  • Policies create standardization

  • Policies save time

  • Policies control the performance

  • Policies define an area within which a decision to be made to ensure that the decision will be consistent with and contribute to the objectives of an organization.

  • It refers to all employees.


A disadvantage of policies is the reluctance to revise them when they become outdated. Managers should review policies periodically, and if that fails, personnel can appeal for a revision.


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