Policy is an organized system of rules to guide human activities and attain rational results. A policy is an unwritten statement of purpose and is typically implemented as a formal process or rulebook. Most policies are generally adopted by an organizational governance body in an organization. However, there are some policies that can be developed by the users themselves as well.
Policy is basically a set of rules or procedures which have been agreed upon by the stakeholders in an organization and has been accepted as being necessary for the proper functioning of the business. However, policies may also serve to define or clarify the duties, responsibilities and practices of particular individuals within an organization or even the company as a whole. It is the duty of an administrator to formulate and maintain a set of policies for the organization, which will be followed by his team of administrators and other personnel who have a responsibility to comply with those policies. Policy has therefore, become an integral part of the organization and its procedures as it facilitates smooth working of the organization in terms of achieving its goals and objectives.
Policy is considered to be public knowledge and it becomes the primary vehicle through which organizations communicate information about their mission and work practices to external environment and society at large. The policies may also involve public policies like minimum level of hours of labor; legal requirements; general principles like honesty and integrity of work; moral and ethical issues like discrimination and harassment. In United States, the government plays a major role in the dissemination of information on the implementation of public policy. While some policies are enacted by state governments, the federal government also establishes many important policies. Public policies affect the economy as they restrict the amount of capital flowing into and out of a country.
Policy is used in different sectors of economy such as private sector, non-profit sector, state level and at national level. The effectiveness of a public policy depends upon the formulation of public policies, the level of support provided by state governments, understanding of stakeholder groups and the ability of state level organizations to execute policies that meet the stakeholder’s interests. Policy and legislative process generally needs to be debated and approved by state legislature and then introduced to general public for implementation. State level policies are more effective in regulating the economy as it directly affects private sector and interest groups directly.
Public policies have a direct and long term impact on economy and therefore policyholders’ interest is high in influencing policy outcomes. On the other hand, policies that indirectly affect the economy are passed through state level and can take time for implementation as it requires extensive consultations. As discussed above, the economic interests of stakeholders groups directs public policy. For this reason, policies may even have indirect economic impact on other stakeholders.
Policy makers, who hold the executive position in various government departments, must understand the complexity of public policy and its implications on society at large. Although policies are enacted on broad basis, policies may have subtle impacts on various interest groups at different levels of government, which need to be taken into consideration while drafting public policy. For this reason, policy makers may even work towards ensuring that policies drafted do not adversely affect certain interest groups. Drafting policies must be transparent and facilitate a transparent discussion between policy makers and stakeholder groups.