Policies and procedures are necessary because they eliminate confusion, create structure and enforce uniform standards throughout a large group. They are most effective when clearly documented.
In organizations or businesses, written policies and procedures function like a rule book for day-to-day operations. Polices define the organization's purpose, ideals and mission. Procedures define the organization's step-by-step methods of enacting those policies.
Some organizations have unwritten policies and standards, meaning that everyone is expected to act according to a certain code of conduct, whether or not the rules were formally expressed. This may work for small organizations, where all members have roughly the same goals and working styles. However, for utmost efficiency, policies and procedures should be written and easily accessible, so that they can be referred to during moments of disagreement or confusion. Especially in large organizations, documented policies and procedures are necessary to keep all participants on the same page and enforce clear standards.
It is helpful to review the policies and procedures from time to time, to make sure they are still viable and to refamiliarize the participants with more seldom used procedures. This is especially important for policies and procedures regarding emergency situations, such as evacuation procedures.
Policies and procedures are often a legal necessity. In some cases, having clear policies and procedures in place, and being able to prove they are adhered to, can help an organization avoid legal liability in court.