Technology Innovation

Management &
Entrepreneurship
Module I : Planning – Standing Plans
Policy, Procedure, Method
 Standing Plans - Policy
•Policy
–General guideline for decision making [boundary, do’s and dont’s]
–Bring employee thinking in sync with organization objectives
–Does not dictate terms
–Example hire meritorious persons, avoid cut throat competition, farmer oriented
fertilizer company
–Objectives are end point of planning; policies channelize decisions to these ends
 Standing Plans - Policy
•Policy : Advantages
–Uniformity of action, predictability
–Speed up decisions @ lower level
–Helps easy delegation of authority to subordinates
–Gives shape to objectives
 Standing Plans – Policy Types
•Policy : Types on basis of sources
–Formal originated policies from top management – company manual
–Appealed policies : result of appeal by subordinate to manager regarding a particular
situation
–Implied policies : not in writing or verbal; office space depending on seniority
–Externally imposed by
•Government : export ban on shortage of essential commodities
•Trade Association, trade unions : OPEC oil output, TRAI
 Standing Plans – Policy Types
•Policy : Types based on functions
–Production : Method, Output, Inventory (JIT), Research
–Sales : Market, price, packaging, distribution channel, commission
–Finance: Capital structuring, working capital, internal financing, dividend payment
[Zoho, Bearys – No borrowing, no VC]
–HR : Recruitment, training, work conditions, staff welfare
•Policy : Types based on organization levels
–Company policies
–Major department policies
–Minor (derivative) policies
 Standing Plans – Effective Policy Making
•Guidelines for effective policy making
–Must
•Be In writing
•Reflect organization objectives
•Have manager’s active participation
•Balance between stability and flexibility
•Not pull in different directions
•Not be detrimental to society
•Be comprehensive to cover contingencies
•Be periodically reviewed
 Standing Plans - Procedures
•Procedures
–Detailed guidelines to implement policies; set of detailed instructions
–Example: material purchase
–Storekeeper raise requisition to purchase department
–Purchase department call for tenders
–Purchase department place orders on selected suppliers
–Inspects purchased materials for acceptable quality
–Purchase department sends supplies to stores
–Purchase department release payment to suppliers
–Example: Hiring
–Place ad -> screen resumes -> conduct written test -> conduct interview for
shortlisted candidates -> medical examination of selected candidates -> extend job
offers
–Other examples: conducting AGM, loans to employees, sick leave, bill clearing by
accounts department
 Standing Plans
Procedure: advantages & disadvantages
•Procedure: Advantages
–Standard way to execute a task
–Bring uniformity across organization
–Work simplification
–Eliminate unnecessary overlapping steps
–Give good executive control over performance
–Process dependant, not person dependant
•Procedure: Disadvantages
–Can be rigid rules; can limit innovation & work performance improvement
–Can cause duplication, overlapping & conflict between departments
–Can be mitigated by periodic management reviews
 Standing Plans - Methods
•Method
–Way to do a particular procedural step; “how to conduct a written test”
–Can be made better & economical over time;
•GET selection for 14 PSUs thru GATE
–Makes procedure effective and useful
–Less fatigue
–Better productivity
–Lower costs
–PERT & CPM motion study : Assam Inverterless
 Standing Plans - Rules
•Rules
–For a given situation : what to do/ what not to do
–Examples
–Overtime sanction
–Regulate travel allowance
–Sanctioning customer entertainment bills; Wipro gifts & customer lunch bill claims
by techno marketing personnel
–Avoid repetitive senior management authorization
–Predictability and uniformity
–Neither a policy/procedure/method
•Unlike policy, does not guide thinking
•Unlike procedure, does not have time sequence
•Unlike method, not w.r.t a particular step or procedure
 Single Use Plans
•Programmes
–Do given task conforming to organizational objectives with policy, procedure &
budget
–Deadlines, budget important
–Examples
–Opening branches in new geo
•Get the accommodation
•Recruit personnel
•Establish supply chain to new branches
–Send employees for training
–M&A
–New product launch [Outdoor & Rural Advertising : Toothpaste in rural karnataka]
 Single Use Plans
•Budgets
–Financial statement for specified period (objective to achieve & policy to pursue)
–Quantitative statement of expected results : Revenue, person hours, # of units made
–Budget types: sales, production, cash, revenue, expense
–Helps to compare planned v/s actual performance; removes unnecessary items of
expenditure