Policy vs Strategy: Difference and Comparison

Policy refers to a group that takes rational decisions by following rules for the fulfillment of goals. A strategy is a type of plan that makes it possible to achieve market position and achieve goals.

People are very confused about these two words and do not have complete information about them. In this article, the difference between these two words has been highlighted, which we will read about in the next section.

Key Takeaways

1. A policy defines guidelines and rules for organizational decision-making, whereas a strategy outlines the approach to achieving specific goals.
2. Policies aim to create consistency and compliance, while strategies involve flexibility and adaptation to changing circumstances.
3. Policy implementation requires less creativity and innovation than successful strategy development.

Policy vs Strategy

Policies are guidelines that are put in place to help achieve goals or outcomes. Strategy is a broader plans or frameworks that are designed to guide decision-making over time. Policies tend to be more focused on day-to-day operations, and strategies are concerned with long-term goals.

Policies are the rules of an organization that is mandatory to be followed by all the employees of that organization and help take the right decisions keeping in mind those rules. 

Apart from this, policies also have their importance in politics.  Policies are the rules framed by the top managers in an organization that helps in the internal decisions of the organization.

Strategies can come in many forms in any organization. The right strategy can move any organization forward and also helps people in decision-making. Strategies can be formal or informal.

Formal strategies enable organizations to take them to a higher level. Informal strategies are used in the act of group and individual selling.

Comparison Table

Parameters of comparison	Policy	Strategy
Definition	The policy is a type of group which guides and helps in the decision-making of the organization.	Strategy is a plan under which any goal or objective can be accomplished.
Nature	It works on certain principles i.e. it is fixed by nature.	It is flexible by nature.
Framed by	The policy is framed by the middle management.	Strategy is framed by top management.
Orientation	The policy supports both thought and action.	It is action-oriented.
Approach	Its approach is introverted.	Its approach is extroverted.

What is Policy?

To control the work being done by an organization, giving the right guidance, following the rules, and taking the right decisions is called policy. It is the limit within which appropriate decisions are taken.

It is readily available and accessible to all employees. Policies are designed to meet the objectives of an organization. Primarily it is an outline of a rule, principle, or guidance.

It is always presented in writing which makes it easy to understand. Policies can guide and effectively monitor all decisions that take place within the organization.

Policies also have different processes, which are laid down, formulated, and guided. These sets are mainly used to follow those policies. It represents goals and helps to explain the details of processes to guide long-term goals.

The ultimate duty of an organization is to provide the right policies to its employees so that the organization can accomplish its goals. The effects of a policy vary widely between an organization and an organization.

Policies are mainly used to protect an organization from negative influences and to reap the benefits of positive impacts.

Apart from the positive effects of policies, its side effects are also seen. In the absence of the right environment, its effect is not right and they try to manipulate.

Some complex adaptive systems are the reason for its ill-effects like society, government, big companies, etc.

What is Strategy?

The word “strategy” is derived from the Greek word “stratsgos” which means army. Strategy is a process by which goals are achieved.

Many definitions have been given, one of which is that the strategy is to guide an organization properly to get a good position in the future. The full credit of the outcome of the strategy goes to the plan which is used for the achievement of the goal.

It is helpful to all the organizations in an integrated way to provide the right environment and scarce resources so that the organization can fulfill its objectives in the future.

Before making any strategy, it is necessary to know that the decisions taken for any organization or firm are not taken in zero.

Another definition of strategy is also having the right knowledge about it to accomplish an objective, taking into account the uncertainty of the events taking place within it, is also an important part of the strategy.

Henry Mintzberg of McGill University has also defined it as a pattern of a stream of accurate decisions taken from opposite points of view.

Heinrich von Scheel has said that strategy is a unique combination of values ​​that are determined in the form of activities.

Main Differences Between Policy and Strategy

1. In any organization the policy is formulated very quickly so that the organizing head can inform their employees about those policies and work can be done promptly whereas strategy emerges as an effective plan when an organization starts a new project.
2. The policy is framed by the middle management whereas strategy is framed by top management.
3. The policy is not flexible as it is the same as written law whereas strategy is flexible as it differs in its formality.
4. The policy supports both thought and action while strategy is only action-oriented. 
5. There is less uncertainty in policy whereas uncertainty in strategy is high.

References

1. https://www.tandfonline.com/doi/pdf/10.1080/03073289.1993.10805782
2. https://www.sciencedirect.com/science/article/pii/S0149206396900410
3. https://link.springer.com/article/10.1057/palgrave.jors.2600813

Last Updated : 13 July, 2023