Substance over form: flexibility and adjustment in management
Managing business effectively under the dynamic environment today requires paradigm shift to be more effective and competitive. Typically, an organisation needs to have a well-established policy and procedure for reference and compliance by all employees.
Some companies may have a well-prepared and complete manual consisting of all necessary transactions in the normal course of business for reference. Under this environment, employees need to follow the procedure strictly in order to get things done. However, it would normally take time and difficult to deal with exceptional cases, and can end up with repeating meetings. Some companies keep the policy concise and more flexible to be adjusted according to the different situations. With the volatile market and fierce competition, companies need to balance between operational objective achievement and the control procedure for the maximum benefits of the companies.
The following are key factors causing the undermining operation due to the strict adherence to the company’s policy and procedure:
Don’t want to take risks - Apparently, following the company’s rules can protect responsible people from any negative consequences on their work. However, this may not be true in certain tough situations. For example, in a factory where the policy on material receiving, says if 1 per cent of defective item is found, the shipment has to be rejected. But under just-in-time concept application, without this material, the whole production line must be shut down. Some sorts of adjustment to the rule may need to be considered taking into account net impact to the company’s overall performance.
Don’t have an up-to-date procedure -Nowadays, it is quite difficult to maintain an up-to-date policy and procedure that reflect the latest changes in the business operations and management. New types of transaction can be agreed upon by concerned parties and outside stakeholders without making changes to the existing procedure on a timely manner. For example, there could be a new agreement on consignment material handling and the new product return approval procedure. Once the real transaction happens, it can get stuck because of the old rule.
Don’t want to make decision- Surprisingly, there are quite a numbers of responsible people who apply the working approach of DND (Decide not to decide) when facing difficult situation. They may not know what to do and choose buying-time methodology. Or that they don’t want to get involved in the critical issue. What these people normally do is keep asking for the new format of additional information repeatedly. This is dangerous to the company’s overall performance unless better management methodology is applied. Everything gets stuck at the critical decision making.
Don’t have complete understanding and information – The delay in getting things done can also be caused by simple reasons of lacking of information and understanding of certain complicated business transactions. There must be some reasons why the procedure cannot be followed properly. These kinds of situation can happen from time to time and really need to be resolved in an urgent manner. It’s probably due to internal problem or uncontrollable factors outside. For example, why a customer cannot send the complete purchase order to the company? Why the letter of credit cannot be opened? Why the certificate cannot be issued by the supplier? All these issues need more understanding and brainstorming by all parties concerned to seek proper solutions.
It is a challenge for companies to manage in a more responsive way. Sometimes, the rigid rules and regulations can be an obstacle and can hinder the company from moving forward in a more aggressive manner. Let’s think about how we can work with better rule, regulation, policy and procedure.
Dr Yanyong Thammatucharee is head of International Finance and Operation at Central Marketing Group. He can be reached at [email protected]
