Policies can be defined as guidelines for managerial decision-making within the organization.

Managers are given the freedom to make decisions as long as they adhere to the policies of an organization. The policy serves as a guiding principle for every decision made in the organization.

Rules, on the other hand, are specific statements that describe what is allowed or not allowed in an organisation.

Rules tell the organisation members what's considered what is permitted and prohibited in the organization.

One important feature of rules is that they are very rigid and allow no room for a different interpretation.

Differences Between Policies and Rules

1. Policy guides the decision of every organisational member whereas rules guide and regulates the behaviour of every member of the organisation.

2. A rule specifies what to do or not do, whereas a policy outlines what should be done in various circumstances.

3. Rules are specific statements intended for specific situations, whereas policies are general statements intended for general situations.

4. The purpose of policies is to guide decision-making and thinking in the organisation whereas the purpose of rules is to guide the behaviour and actions of subordinates in the organization.

5. Policies are based on the objectives of the organization whereas rules are based on the policies and procedures of the organization.

6. Policies allow for use of discretion as managers can interpret the policy differently based on their understanding of the policy.

In contrast, rules allow for no use of discretion as they can not be interpreted differently.

Indeed, rules are usually very specific enough to prevent misunderstandings and ambiguity.

7. While policies may allow for some form of exceptions or exemptions, Rules never permit any type of exceptions or exemptions

8. Example of a policy is "pay before service". An example of a rule is " No smoking here".

9. Rules are orders which must be obeyed and adhered to.

Policies, on the other hand, are frameworks for making decisions

10. Rules violations always result in punishment, whereas policy violations could result in or not result in punishment.

11. While rules are meant to be enforced, policies are meant to be implemented.

Rules are enforced because they describe doing and don'ts while policies are implemented because policies made by the organization have to be implemented.

To sum up, the main difference between policies and rules is that policies guide decision making of members of the organization whereas rules guide the behaviour of members of the organization.


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