Objectives and policies do not state the ways and means through which objectives are to be accomplished and policies put into effect. Hence, there is a need for procedures. Procedures are clear-cut administrative specifications prescribing the time sequence for work to be done. They can be defined as plans "prescribing the exact chronological sequence of specific tasks required to perform designated work." Thus, procedures tell how a particular activity is to be carried out.

Features of Procedures

Some important features of procedures are: (a) They are a guide to action.

(b) They are generally meant for repetitive work so that some steps are followed every time that activity is accomplished. This is the reason why 'procedures' are also called 'repetitive use plans.'

(c) Procedures are established in keeping with the objectives, policies and resources position.

(d) They are concerned with establishing the time sequence for work to be done.

Procedures can be established for a wide variety of work such as purchase and issue of raw materials from store, recruitment of staff, termination of staff, verge payment, holding of meetings, etc.

Distinctions between Policies and Procedures

The main points of difference are:

(1) Policies are a guide to decision-making whereas procedures are a guide to action only.

(2) In the case of policies, there is some room for interpretation and discretion but in the case of procedures, as they are more rigid and specific, there is no scope for discretion.

(3) While policies are a part of strategies of the business concern, procedures are only operational tools and a guide to action only.

(4) While policies are basic things and are formulated by the top management, procedures are generally based on policies and are decided generally at a somewhat lower level of management.


Method specifies the way in which a particular step is to be performed, procedure tells the various steps to be taken to perform a particular task, but method tells how a particular step in the procedure is to be performed. Thus, the method, as it explains the steps, is more detailed than procedure.


A rule specifies what is to be done and what may not be done in given initiation. Rules do not leave any scope for decision-making or judgment. They ire to be enforced rigidly and also a fine or penalty may be imposed for ignoring hem. 'No smoking' is an example of a rule. Fig. 4.3 indicates the freedom management has to act in the case of policies, procedures and rules.


Strategy is a term which is normally used in the battlefields for planning a military movement, handling of troops, etc.

In modern times, the word 'strategy' has found its way into the management field. In the context of a business concern, strategy indicates a specific programme of action for achieving the organisation objectives by employing the ïrm's resources efficiently and economically. It involves preparing oneself for meeting unforeseen factors. It is also concerned with meeting the challenges posed by the policies and actions of other competitors in the market.

Definition and Characteristics of Strategy

A.D.Chandler defines strategy as "the determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources to carry out these goals."

According to the R.N.Anthony, strategy is "the process of defining the objectives of the organisation, on changes in their objectives, on the resources used to attain these objectives, and on the policies that are to govern the acquisition, use and disposition of these resources."

The above definitions reveal the following important characteristics of strategy:

(1) It provides guidelines to the enterprise for thinking and action.

(2) It involves in finding out a judicious combination of human and other resources to achieve the objectives of the organisation.

(3) Its formulation involves taking into consideration external environment (opportunities and challenges) and internal environment (organization's resources and capabilities).

(4) As strategy depends on both external and internal factors which are not static, it has to be adjusted to the changed circumstances. Hence, strategy is not static but dynamic.

(5) Because of the importance of strategy to the business concern, it is formulated by the top management and not delegated downward in the organisation.

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