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Policies are written guiding principles designed to ensure decision making that is consistent with an entity's mission and philosophy. Policies can be generalized into three arenas—organizational, contractual, and relational—and tend to be broad statements that have the effect of a law in that violation of established policies generally carries a penalty or prescribed consequences.

Policies are established by the highest-level governing body, which may be a board or top management, and serve as the foundation on which procedures are built. A policy establishes what is acceptable to occur, whereas procedures operationalize something by outlining how it is to occur. For example, in the workplace there may be a policy on telecommuting that allows employees to work from home or another remote location via technology. The office ...

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