Policy

Lore & Background

Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. It is a statement of intent implemented as a procedure or protocol, generally adopted by a governance body within an organization. Policies can assist in both subjective and objective decision-making. Subjective policies, such as work–life balance policy, assist senior management with decisions based on relative merits of factors and are hard to test objectively. Objective policies, such as a password policy, are operational and can be objectively tested. Governments and other institutions have policies in the form of laws, regulations, procedures, administrative actions, incentives, and voluntary practices. Resource allocations frequently mirror policy decisions. Policy differs from rules or law: law can compel or prohibit behaviors, while policy merely guides actions toward those most likely to achieve the desired outcome.

Reader's Guide

Policy is a fundamental concept in governance, business, and organizational management. It provides a framework for decision-making, ranging from subjective judgments to objective operational rules. The term applies broadly to governments, public sector organizations, businesses, and individuals. Policy is dynamic, not static; it involves implementation that often yields unexpected results. The policy cycle, notably Harold Lasswell's seven-stage model and James E. Anderson's five-stage model (agenda setting, policy formulation, decision-making, implementation, evaluation), is a heuristic tool for analyzing policy development, though scholars argue it oversimplifies the iterative and complex nature of policymaking. Policies can have intended effects, such as California's tax credits and high-occupancy vehicle lane access increasing hybrid car ownership, as well as unintended consequences, such as a tax increase potentially reducing overall tax revenue. Evidence-based policy requires three conditions: comparative evidence, support by preferences, and a sound account of that support. The study of policy remains central to understanding how organizations and governments achieve their goals.

Did You Know?

• A meta-analysis of policy studies concluded that international treaties aiming to foster global cooperation have mostly failed to produce their intended effects.
• The policy cycle was developed as a theory from Harold Lasswell's work.
• James E. Anderson's version of the stages model includes agenda setting, policy formulation, decision-making, implementation, and evaluation.