Difference between Policy and Strategy

The term “policy” should not be considered as synonymous to the term “strategy”.The difference between policy and strategy can be summarized as follows-

  1. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. While strategy is concerned with those organizational decisions which have not been dealt/faced before in same form.
  2. Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle level management.
  3. Policy deals with routine/daily activities essential for effective and efficient running of an organization. While strategy deals with strategic decisions.
  4. Policy is concerned with both thought and actions. While strategy is concerned mostly with action.

A policy is a guide to thinking and action for those responsible for making decisions. On the other hand, a strategy deals with the allocation and deployment of physical and human resources so as to achieve the desired goals in the face of environmental pressures.

A strategy may exist without a policy. Strategy and policy may in some cases be coextensive. A strategy deals primarily with environmental constraints and oppor­tunities whereas a policy is concerned mainly with internal management.

A policy is a contingent decision and it lays down the response to be made whenever the specified contingency arises. But a strategy is designed to deal with situations about which all facts are not known and, therefore, alternatives can not be evaluated in advance.

The implemen­tation of policy can be delegated but the execution of strategy cannot be delegated because it requires a last minute executive-decision.

However, both policy and strategy are designed to achieve organizational object- I lives. The process of their formulation is similar. In strategic decisions the identification and analysis of the factors bearing on the problem are more difficult than in case of policy decisions.

Difference between Policy and Strategy