What Are the Advantages and Disadvantages of Policies?

Having written and implied policies is an opportunity to define and clarify top management objectives. Policy statements are a means for executive management to communicate its leadership and views. Executive management should develop a series of high-level policy statements that provide guidance to employees at all levels.

Another advantage is that policies provide a framework for consistent decision making and action. In fact, one of the primary objectives of a policy is to ensure that personnel act in a manner consistent with executive or functional management’s expectations. Finally, an effective policy provides an additional advantage by defining the rules and procedures that apply to all employees.

There are also potential disadvantages to policy development. First, a policy is often difficult to communicate throughout large organizations. Second, employees might view policies as a substitute for effective management. Policy statements are guidelines that outline management’s belief or position on a topic. They are not a set of how-to instructions designed to provide specific answers for every business decision. Third, policy development can also restrict innovation and flexibility. Too many policies accompanied by cumbersome procedures can become an organization’s worst enemy.

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