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Objectives are the desirable results or organizational or individual activities. They are the purposes for which the organization exists. They are the ends towards which organizations direct their energies and concerns. They are the ‘reference points for the efforts of the organization’. Without objectives there is likely to be (i) haphazard activity, (ii) uneconomical commitment of funds (iii) poor utilization of people, and (iv) mediocre operating results in the long run. A policy on the other hand, is a guide to the action or decisions of people. It provides a ¬∑standing answer to recurring questions. For example, promotions based on merit (a policy of) helps managers to fill up vacancies on the basis of talent and exceptional performance under repeated situations. According to R.C. Davis, when policies are properly established and applied uniformly throughout the organization they (i) prevent deviations from planned courses of action, (ii) ensure consistency of action, and (iii) facilitate co-ordination of action.

 Differences between Objectives and Policies

Objectives Policies
  • Basic purpose, Organizations is basically goal attainment instruments. Objectives are the purposes for which the organization exists. Without objectives organization would be purposeless and chaotic.
  • Focus Objectives are the end toward which organizations I -individual efforts are directed.
  • Philosophy Objectives reflect management philosophy in a broad way. They summarize the pious intentions of management in a general way.
  • Policies are not basic to the existence of an organization. However, without policies to guide decision executive thinking, organization actions are bound to be less optimal.
  • Policies are the means for the achievement of goals. They help achieve the objectives in a consistent way.
  • Policies provide meaning and content to objectives. They provide standing answers to recurring questions.