What is the main purpose of a policy?

The main purpose of a policy is to explain how higher management wants work done, which ensures that there is consistency and clarity in the decision-making process within an organization. Policies serve as a framework for employees by outlining the expectations and procedures that align with the organization's goals and objectives. They help in streamlining operations and providing employees with guidance on how to handle various situations in accordance with the established directives of upper management.

The clarity offered by a well-defined policy also supports accountability, as employees are informed of the standards expected of them and the methods to achieve desired outcomes. By establishing a common understanding of procedures, policies also facilitate compliance with regulations and promote organizational efficiency.

In contrast, the other options do not accurately represent the primary function of a policy. While some policies may provide coverage against loss, this is not a central purpose. Policies are not designed to excuse managers from decision-making nor are they meant to create guidelines for not making decisions. Instead, they are essential tools that help guide and inform decisions that are consistent with the organization's mission.