Strategies refer to the determination of the purpose and the basic long-term objectives of an enterprise and the adoption of course of action and allocation of resources essential to gain these aims & objectives. Hence, objectives are a part of strategy formulation. Policies refer to general statements of understandings that guide managers in the preparation of decision-making. They provide an ideal outline within which decisions need to be taken. Policies normally do not require action but are intended to guide managers & executives in their commitment to the decision they ultimately prepare. The essence of policy is discretion. [Power to exercise own judgment]Reversely, strategy concerns the direction in which human & material resources are applied with a view to increasing the chance of achieving selected objectives. Certain major policies and strategies may be essentially the same. A distinction between the two terms may be made as follows; Policies normally guide a managers’ s thinking or philosophy in
decision-making while a strategy refers to the commitment of resources in a given direction. The key or principal function of the strategies and policies is to unify and give direction to plans. The principal of the strategy and policy
framework is, “the more strategies & policies are clearly understood and implemented in practice, the more consistent and effective will be the framework for enterprise plants”…….Koontz.
Every organization or enterprise has a definite mission, which define site purpose. What type of business an organization is going to undertake, for example, hotel business or exploration activity, like oil extraction etc. It encourages the management to explain intelligently & continuously the scope of its products or services. The purpose of the hotel is to serve fresh foods to its customers so as to fulfill their demand, taste & pleasure, The purpose of the oil company is to extract oil from a well for a given period. In each case, they are committed to create surplus and profit in order to survive. But this basic objective is accomplished by undertaking activities, going in clearly defined directions, achieving goals and accomplishing a mission.