Policy

A policy is a principle or rule to guide decisions and achieve rational outcomes. A policy is a statement of intent, and is implemented as a procedure or protocol. Policies are generally adopted by the Board of Directors or senior governance body within an organization whereas procedures or protocols would be developed and adopted by senior executive officers. Policies can assist in both subjective and objective decision making. Policies to assist in subjective decision making would usually assist senior management with decisions that must consider the relative merits of a number of factors before making decisions and as a result are often hard to objectively test e.g. work-life balance policy. In contrast policies to assist in objective decision making are usually operational in nature and can be objectively tested e.g. password policy. The term may apply to government, private sector organizations and groups, and individuals. Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all examples of policy. Policy differs from rules or law. While law can compel or prohibit behaviors, policy merely guides actions toward those that are most likely to achieve a desired outcome.

Policy occurs at various levels and points of interaction — personal, organizational, and public. If we use the right strategies we can be successful in influencing all aspects of policy.

• Personal policy: Personal policy is the set of standards you use to guide your own decisions and actions. Despite our best efforts, economic realities can sometimes make it difficult to carry out personal policies.
• Organizational policy: Organizational policy guides how organizations and businesses operate. Unlike public policy, which often has opportunities for public input, organizational policies are often made out of public view.
• Public policy: All levels of government — federal, state, and local — create policies to address specific issues or problems. These public policies are developed through a process that involves input from citizens, government staff, and elected officials.

The Policy Process
Several steps comprise the policy process It would be unrealistic and even incorrect to say that the formulation of policy follows a clear and consistent pathway or route. Policy development is actually an involved and sometimes haphazard process that differs widely depending upon the concern being addressed. Sometimes it is a long and winding road with lots of detours and stops along the way. Despite the variation in policy process, there are some general steps (described below) that are common to its development. These are:

• selecting the desired objective: The first step in policy formulation is to determine the desired objective. The selection of objectives typically derives from priorities and imperatives set at the leadership level.
• identifying the target of the objective: The next step in the policy process is to identify the appropriate targets toward whom the policy should be directed. The selected target is linked to the overall objective, which embodies within it either a direct or indirect statement of who will or should be affected by the proposed measure.
• determining the pathway to reach that objective: A third phase in the policy process is to determine from a range of options how best to reach the specified objectives. This part of the work is often difficult and contentious. Several key factors act as a lens against which to assess decisions in the development of policy.
  • Potential effectiveness – how well a policy will meet the stated goals – is the first key factor.
  • Efficiency is a second key factor, which involves how well resources are utilized in achieving goals and implementing policy.
  • Consistency is a third factor; it refers to the extent of alignment of the policy with the broader goals and strategies
• designing the specific program or measure in respect of that goal: Policy formulation does not end once a preferred route to the desired outcome has been selected. There is typically considerable design work to be done after the approach has been identified. In fact, it is at this point that the detailed work and tough decisions actually begin.
• implementing the measure and assessing its impact: Implementation is crucial to effectiveness, efficiency and consistency of a policy. A plan that may be excellent on paper could end up being very different from its intent if not properly implemented. It may be too slow, there may be too little investment for effective application or the policy may be inconsistent with other objectives or measures. Ideally, all policies and programs should assess and correct their course on an ongoing basis. The need for continuing feedback within the policy process is based on the assumption that evaluation is important and not just for accountability purposes

The Impact of Policies

• Intended effects: The intended effects of a policy vary widely according to the organization and the context in which they are made. Broadly, policies are typically instituted 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 cars in California has increased dramatically, in part because of policy changes in Federal law that provided USD $1,500 in tax credits (since phased out) as well as the use of high-occupancy vehicle lanes to hybrid owners (no low hybrid vehicles). In this case, the organization (state and/or federal government) created an effect (increased ownership and use of hybrid vehicles) through policy (tax breaks, highway lanes).

• Unintended effects: Policies frequently have side effects or unintended consequences. Because the environments that policies seek to influence or manipulate are typically complex adaptive systems (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 flight or by creating a rate so high that citizens are deterred from earning the money that is taxed. (See the Laffer curve) The policy formulation process theoretically 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.

See Also

Policy Governance
Business Ethics
Corporate Accountability
Corporate Governance
Governance
IT Governance
Corporate Social Responsibility (CSR)
Compliance