To be able to understand the term policy and procedure manual, there is a need to define each of the words contained in the term. In management, policy refers to the set of guidelines enforced by the organization to direct and regulate its actions, while procedure is a fixed step-by-step set of actions or activities that the organization must adhere to so as to correctly perform a specific task. Manual, on the other hand, pertains to a book that is commonly used.

Although the two terms policy and procedure can be used interchangeably, management delineates between the two. Whilst the former serves as a guide to the organization's decision-making activities; the latter directs actions. Policies are flexible as procedures are rigid and detailed. Policies are the forte of top management whereas procedures are the responsibility of the lower organization level. In general, policies guide procedures, thus, they are more fixed than the latter, which evolve according to the demand of the changing times.

That being said, any organization whether small or big, private or government owned, offline or online based should first secure their policy and procedure manual before starting operation. It serves as the foundation upon which organizational operations are built upon by giving wisdom and prudence to every action performed within the organization. It is a reflection of the mission, vision, goals, and values of the company. It is especially important during times when an organization faces a problem as the manual directs the correct course of action to be taken and guides the type of choices to be made.