- Plural of policy
A policy is a deliberate plan of action to guide
decisions and achieve rational outcome(s). The term may apply to
government, private sector organizations and groups, and
Presidential executive orders
, and parliamentary rules of
are all examples of policy. Policy differs from rules
. While law can compel or
prohibit behaviors (e.g. a law requiring the payment of taxes on
income) policy merely guides actions toward those that are most
likely to achieve a desired outcome.
Policy or policy study
may also refer to the process of making important organizational
decisions, including the identification of different alternatives
such as programs or spending priorities, and choosing among them on
the basis of the impact they will have. Policies can be understood
as political, management, financial, and administrative mechanisms
arranged to reach explicit goals.
Impact of policy
Intended EffectsThe goals of policy may vary widely
according to the organization and the context in which they are
made. Broadly, policies are typically instituted in order to avoid
some negative effect that has been noticed in the organization, or
to seek some positive benefit.
Corporate purchasing policies provide an example
of how organizations attempt to avoid negative effects. Many large
companies have policies that all purchases above a certain value
must be performed through a purchasing process. By requiring this
standard purchasing process through policy, the organization can
limit waste and standardize the way purchasing is done.
The State of California
provides an example of benefit-seeking policy. In recent years, the
numbers of hybrid vehicles in California has increased
dramatically, in part because of policy changes that provide USD
$1,500 in tax credits as well as the use of high-occupancy vehicle
lanes to hybrid owners. In this case, the organization (state
and/or federal government) created a positive effect (increased
ownership and use of hybrid cars
through policy (tax breaks, benefits).
Policies frequently have side effects or
. Because the environments that policies seek to
influence or manipulate are typically complex
(e.g. governments, societies, large
companies), making a policy change can have counterintuitive
results. For example, a government may make a policy decision to
raise taxes, in hopes of increasing overall tax revenue. Depending
on the size of the tax increase, this may have the overall effect
of reducing tax revenue by causing capital
or by creating a rate so high, citizens are
disincentivized to earn the money that is taxed. (See the Laffer
The policy formulation process typically includes
an attempt to assess as many areas of potential policy impact as
possible, to lessen the chances that a given policy will have
unexpected or unintended consequences. Because of the nature of
some complex adaptive systems such as societies and governments, it
may not be possible to assess all possible impacts of a given
the policy cycle is a tool used for the analysing of
the development of a policy item. It can also be referred to as a
"stagist approach". One standardised version includes the following
setting (Problem identification)
- Policy formation
- Policy implementation
- Policy analysis and evaluation (continue or
An eight step policy cycle is developed in detail
in The Australian Policy Handbook by Peter Bridgman and Glyn Davis
(now with Catherine Althaus in its 4th edition)
- Issue identification
- Policy analysis
- Policy instrument development
- Consultation (which permeates the entire process)
The Althaus, Bridgman & Davis model is
. It is intentionally
meant to be diagnostic
. Policy cycles are
typically characterised as adopting a classical approach.
Accordingly some postmodern
challenge cyclical models as unresponsive and unrealistic,
prefering systemic and more complex models.
Policies are typically promulgated
official written documents. Such documents have standard formats
that are particular to the organization issuing the policy. While
such formats differ in terms of their form, policy documents
usually contain certain standard components including:
- A purpose statement, outlining why the organization is issuing
the policy, and what its desired effect is.
- A applicability and scope statement, describing who the policy
affects and which actions are impacted by the policy. The
applicability and scope may expressly exclude certain people,
organizations, or actions from the policy requirements
- An effective date which indicates when the policy comes into
policies are rare, but can be found.
- A responsibilities section, indicating which parties and
organizations are responsible for carrying out individual policy
statements. These responsibilities may include identification of
- Policy statements indicating the specific regulations,
requirements, or modifications to organizational behavior that the
policy is creating.
Some policies may contain additional sections,
- Background indicating any reasons and history that led to the
creation of the policy, which may be listed as motivating factors
- Definitions, providing clear and unambiguous definitions for
terms and concepts found in the policy document.
Policy addresses the intent
of the organization,
whether government, business, professional, or voluntary. Policy is
intended to affect the ‘real’ world, by guiding the decisions that
are made. Whether they are formally written or not, most
organizations have identified policies.
Policies may be classified in many different
ways. The following is a sample of several different types of
policies broken down by their effect on members of the
Distributive policies extend goods
and services to members of an organization, as well as distributing
the costs of the goods/services amongst the members of the
organization. Examples include government policies that impact
spending for welfare
, and public safety, or
a professional organization's policy on membership training.
Regulatory policiesRegulatory policies, or mandates, limit
the discretion of individuals and agencies, or otherwise compel
certain types of behavior. These policies are generally thought to
be best applied in situations where good behavior can be easily
defined and bad behavior can be easily regulated and punished
through fines or sanctions. An example of a fairly successful
public regulatory policy is that of a speed limit.
Constituent policiesConstituent policies create executive
power entities, or deal with laws. Constituent policies also deal
with Fiscal Policy in some circumstances.
Miscellaneous policiesPolicies are dynamic; they are not
just static lists of goals or laws. Policy blueprints have to be
implemented, often with unexpected results. Social policies are
what happens ‘on the ground’ when they are implemented, as well as
what happens at the decision making or legislative stage.
When the term policy is used, it may also refer
- Official government policy (legislation or guidelines that
govern how laws should be put into operation)
- Broad ideas and goals in political manifestos and pamphlets
- A company or organization’s policy on a particular topic. For
example, the equal opportunity policy of a company shows that the
company aims to treat all its staff equally.
There is often a gulf between stated policy (i.e.
which actions the organization intends to take) and the actions the
organization actually takes. This difference is sometimes caused by
political compromise over policy, while in other situations it is
caused by lack of policy implementation and enforcement.
Implementing policy may have unexpected results, stemming from a
policy whose reach extends further than the problem it was
originally crafted to address. Additionally, unpredictable results
may arise from selective or idiosyncratic enforcement of
Types of policy include:
- Causal (resp. non-causal)
- Deterministic (resp. stochastic, randomized and sometimes
- Memoryless (e.g. non-stationary)
- Opportunistic (resp. non-opportunistic)
- Stationary (resp. non-stationary)
These qualifiers can be combined, so for example
you could have a stationary-memoryless-index policy.
Other uses of the term policy
- Social Policy: an