Policy: Definition, Example and Related Terms
What is a Policy ?
A policy is a set of rules or guidelines that are made to guide decisions and achieve rational outcomes. The term is not limited to business and can be applied to any kind of organization or system. Policies can be informal or formal, and can cover a wide variety of topics, including business practices, human rights, and public health. A policy is typically a document that outlines specific procedures, rules, and regulations to ensure consistency and compliance in certain behaviors or activities. It is a guiding principle that helps individuals or organizations make decisions.
Scenario Description A company is negotiating a contract with a supplier and wants to ensure that the supplier follows ethical business practices. The company may have a Supplier Code of Conduct policy that outlines its expectations for suppliers. This could include rules on fair labor practices, environmental sustainability, and anti-corruption. The supplier would be expected to agree to these rules as part of the contract negotiation. A company is dealing with a contract dispute with a client. The company may have a Dispute Resolution policy that outlines the steps to be taken in the event of a dispute. This could include negotiation, mediation, or arbitration. The policy would provide a framework for how the dispute should be handled and could help to resolve the issue in a fair and efficient manner.