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Key Differences

Know the Differences & Comparisons

Difference Between Strategy and Policy

strategy vs policyIn business parlance, the terms strategy refers to is a unique plan designed with the aim of achieving a competitive position in the market and also to reach the organisational goals and objectives. In short, it is an interpretative plan, that guides the enterprise in realizing its goal. On the other hand, policy refers to a set of rules made by the organisation for rational decision making.

Policy lays down the course of action, which is opted to guide the organization’s current and future decisions. Many people have confusion regarding the two terms, but they are not alike. Here, one should know that policies are subordinate to strategy. Here, in this article, we made an attempt to point out the significant differences between Strategy and Policy. Have a look at it.

Content: Strategy Vs Policy

  1. Comparison Chart
  2. Definition
  3. Key Differences
  4. Conclusion

Comparison Chart

Basis for ComparisonStrategyPolicy
MeaningStrategy is a comprehensive plan, made to accomplish the organizational goals.Policy is the guiding principle, that helps the organization to take logical decisions.
What is it?Action planAction principle
NatureFlexibleFixed, but they allow exceptional situations
Related toOrganizational moves and decisions for the situations which have not been encountered previously.Organizational rules for the activities which are repetitive in nature.
OrientationActionThought and Decision
FormulationTop Level Management and Middle Level ManagementTop Level Management
ApproachExtrovertedIntroverted
DescribesMethodology used to achieve the target.What should be done and what should not be done.

Definition of Strategy

The strategy is a game plan, chosen to achieve the organisational objectives, gain customer’s trust, attain competitive advantage and to acquire a market position. It is a combination of well-thought intent and actions which lead to the organisation towards its desired position or destination. It is a unified and integrated plan made to achieve the basic objectives of the enterprise like:

  • Effectiveness
  • Handling events and problems
  • Taking advantage of opportunities
  • Full resource utilisation
  • Coping with threats

The strategy is a combination of flexibly designed corporate moves, through which an organisation can compete with its rivals successfully. The following are the features of the Strategy:

  • It should be formulated from top-level management. However, sub-strategies can be made by middle-level management.
  • It should have a long-range perspective.
  • It should be dynamic in nature.
  • The main purpose is to overcome from uncertain situations.
  • It should be made in such a way, to make the best possible use of scarce resources.

Definition of Policy

The policy is also regarded as a mini-mission statement, is a set of principles and rules which direct the decisions of the organisation. Policies are framed by the top-level management of the organisation to serve as a guideline for operational decision making. It is helpful in highlighting the rules, value and beliefs of the organisation. In addition to this, it acts as a basis for guiding the actions.

Policies are designed, by taking the opinion and general view of a number of people in the organisation regarding any situation. They are made from experience and basic understanding. In this way, the people who come under the range of such policy will completely agree upon its implementation.

Policies help the management of an organisation to determine what is to be done, in a particular situation. These have to be consistently applied over a long period to avoid discrepancies and overlapping.

Key Differences Between Strategy and Policy

The following are the major differences between strategy and policy

  1. The strategy is the best plan opted from a number of plans, in order to achieve the organisational goals and objectives. The policy is a set of common rules and regulations, which forms as a base to take the day to day decisions.
  2. The strategy is a plan of action while the policy is a principle of action.
  3. Strategies can be modified as per the situation, so they are dynamic in nature. Conversely, Policies are uniform in nature. However, relaxations can be made for unexpected situations.
  4. Strategies are associated with the organizational moves and decisions for the situations and conditions which are not encountered or experienced earlier. On the contrary. Policies define the rules for routine activities, which are repetitive in nature.
  5. Strategies are concentrated toward actions, whereas Policies are decision-oriented.
  6. The top management always frames strategies, but sub-strategies are formulated at the middle level. In contrast to Policy, they are, in general, made by the top management.
  7. Strategies deal with external environmental factors. On the other hand, Policies are made for the internal environment of business.
  8. Strategies often contain methodologies used to achieve the set target. In contrast, Policies determine what is to be done and what should not be done in specific circumstances.

Conclusion

The difference between Strategy and Policy is, a little complicated because Policies come under the Strategies. Apart from that, the policies are made to support strategies in several ways like accomplishing organisational goals and securing an advantageous position in the market. Both of them are made by the top management as well as made after a deep analysis.

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Comments

  1. Lindiwe Nzimande says

    March 30, 2016 at 8:17 pm

    Thank you

    Reply
  2. Stanisław says

    August 5, 2016 at 4:12 pm

    Thanks, Now I really, as a novice in this area, understand more.

    Reply
  3. suliman says

    October 24, 2016 at 10:14 pm

    thanks for the explanation…

    Reply
  4. Matti says

    April 11, 2017 at 7:12 pm

    Thanks.

    Reply
  5. hafsat says

    April 18, 2017 at 7:46 pm

    Thanks, for the article

    Reply
    • Surbhi S says

      April 19, 2017 at 9:57 am

      To all the readers,
      Thank you very much for liking the contents, your views are valuable to us.
      Keep Sharing 🙂 😀

      Reply
  6. Nisar Ali says

    February 8, 2018 at 2:43 pm

    thanks for differentiating the two mixing word. Can you further explain the it by giving recent examples please.

    Reply
  7. Dr. M Eisa Nang says

    July 3, 2018 at 12:10 pm

    Thanks for the comprehensive description on these two words, I got more, I appreciate.

    Reply
  8. Daovanh Sirivong says

    October 15, 2018 at 9:38 am

    Thank you, more understand now

    Reply
  9. Vineet says

    December 15, 2018 at 12:05 am

    Mam your answer was really good… I want another differentiation on Policy vs Rule

    Reply
  10. Grant D. says

    January 10, 2019 at 10:11 pm

    This has been cited by the united states airforce, congratulations.

    Reply
  11. Shivani says

    May 17, 2020 at 11:15 am

    Very well explained. Kindly provide your official blogs links on these kinda topics

    Reply
  12. Bounleuth says

    August 10, 2020 at 9:09 am

    Highly appreciated for your sharing.

    Reply
  13. Eman Abdu says

    September 15, 2020 at 10:29 pm

    Thank you for making things clear and easy to understand. Keep up the good work.

    Reply
  14. Mohammad Rashid Arif says

    February 18, 2021 at 11:49 am

    Thanks for your sharing.

    Reply
  15. Kathryn Marchebois says

    March 17, 2021 at 5:22 pm

    Thank you for really clarifying things for me.

    Reply
  16. Silla Kapsata says

    October 12, 2021 at 2:11 pm

    Thanks a lot. This is very clear and understandable!

    Reply
  17. esayas says

    May 18, 2022 at 2:24 pm

    thank you for your sharing

    Reply
  18. Kingsley joshua says

    May 23, 2023 at 2:11 am

    Thank you so much,now i understand the two words

    Reply
  19. Kingsley joshua says

    May 23, 2023 at 2:12 am

    Thank you so much

    Reply
  20. Bezawit lulseged says

    November 28, 2023 at 5:02 pm

    Thank you so much for your sharing

    Reply

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