Difference Between Strategy and Policy

In 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 Comparison	Strategy	Policy
Meaning	Strategy 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 plan	Action principle
Nature	Flexible	Fixed, but they allow exceptional situations
Related to	Organizational moves and decisions for the situations which have not been encountered previously.	Organizational rules for the activities which are repetitive in nature.
Orientation	Action	Thought and Decision
Formulation	Top Level Management and Middle Level Management	Top Level Management
Approach	Extroverted	Introverted
Describes	Methodology 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.

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.