Innovative management practices

A STUDY REPORT OF INNOVATIVE
MANAGEMENT PRACTICES
ANAND ASHOK MISHRA
DPGD/JA05/0122
PRIN. L. N. WELINGKAR INSTITUTE OF
MANAGEMENT
2006
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INNOVATIVE
MANAGEMENT
PRACTICES
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CERTIFICATE FROM THE GUIDE
This is to certify that the Project work titled INNOVATIVE
MANAGEMENT PRACTICES is a bonafide work carried out by Anand
Ashok S. Mishra, (Roll No.DPGD/JA05/0122) a candidate for the Post Graduate
Diploma examination of the Welingkar Institute of Management under my guidance
and direction.
SIGNATURE OF GUIDE:
NAME: GS Ramamurthy
DESIGNATION: Vice President
ADDRESS: HSEF Department
IPCL-MGCC
DATE:
PLACE: Nagothane, Raigad, Maharashtra
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Dear reader,
I welcome you to this study on “Innovative Management Practices”
If you are the manager, your success depends upon the success of your subordinates. If only
all your people give everything they are capable of, yours would be a very good team. You, as
their manager would win a lot of credit for making it happen.
This study is primarily a program about gaining insights of innovative organisation(s). It helps
reader to get clarity and to learn how to engage your people’s head and heart in their work. If
you understand the power of innovations, you will see that your effectiveness in all of your
relationships - whether official or personal - is enhanced.
The saying goes… “ You can not teach an adult anything. You can help him to discover it
within himself”. As you read, you will find that you know and you have always knowingly or
unknowingly made innovations to happen.
I need your help. A lot of time, energy and careful planning have gone into making this study
happen. Please read actively. Let this study be ours than mine. If you have questions,
comments and would like to inform, Please at “anand.mishra@ipcl.co.in”.
If you find the study enjoyable and applicable, my efforts in search and documenting have
worked.
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ACKNOWLEDGEMENT
I take this moment to acknowledge and express my deep gratitude to Prof. Rajesh
Aparhar, Madam Usha Krishnamurthy – both of Welingkar Institute and Shri GS
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Ramamurthy of IPCL where in I’m employed. Without them, my management study
would not have been possible.
The Table of contents
A. INTRODUCTION
A.1 Preface XII
A.2 Management XIV
A.3 Management Practices XX
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A.4 Challenges And Constraints XXV
A.5 Driving Innovations Into The Organisation XXVII
A.5.1 Benchmarking XXIX
A.5.2 Drive To Excellence/ ‘The Owner’ Concept XXX
A.5.3 Openness As An Element In The Culture XXXII
A.5.4 Standard Based Management System XXXIV
A.5.5 Quality Circle And Suggestion Scheme XXXV
A.5.6 Six Sigma XXXVI
A.5.7 Assessment Of Output XXXVII
A.5.8 SAP XXXVIII
A.6 Budget And Performance Integration XXXIX
A.7 Human Capital Management XLI
A.8 Key Elements XLIV
B. BACKGROUND
B.1 A Systemic View Of Organisation Behaviour XLVI
B.2 IPCL On A View XLIX
B.3 Maharashtra Gas Cracker Complex LI
C. METHODOLOGY
C.1 The Problem LXVI
C.2 The Scope LXVII
C.3 The Objective LXVIII
D. CONCLUSIONS/RECOMMENDATIONS LXX
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E. LIMITATIONS LXXIII
F. BIBLIOGRAPHY LXXV
G. APPENDIX
G.1 Study Questions LXXVIII
G.2 The List LXXIX
A. INTRODUCTION
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As a part of PGDBA curriculum, we as students are required to prepare a
project report under a project guide.
After lot of deliberations, I settled on “Innovative Management Practices”.
Because this area of study is found wanting and lacunae in this subject is
observed.
Shri GS Ramamurthy, one of the senior member of the organization wherein
I’m employed agreed to be my project guide.
This study should provide a solution for the lack of information relating to
management practices. The approach used in this study is to benefit from
exchange of information and discussions. By adopting the methodology as
mentioned later on, I will able to document management practices on the
basis of various aspects and innovative practice thereof.
As a result of methodology, I would be touching on two areas as most
significant i.e.
Budget and performance integration
And
Management of human capital
As a first step, I will develop a questionnaire on the basis of which whole study
is to be carried. A copy of questionnaire will be found in Appendix.
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This study is intended to survey management practices and indicate what
these practices can teach us.
“It has to be generic”.
However, this study may survey, observe and identify practices within the
context of the organization environment, knowingly and unknowingly. Hence,
background will belong to the organization wherein I’m employed.
A.2 Management
Management is a universal process in all organized activities. It is not merely
restricted to factory, shop or office. Management is an exercise in harmonizing
men, money, machinery, materials and methods towards fulfilling of set
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objectives. Management is necessary for a business firm, government
enterprises, education and health services, military organizations, trade
associations and so on. Experts agree that management refers to those
carrying on the activity of management viz. the managers. All managers in any
branch of business or non-business activities perform those typical functions
of management cycle that is planning – organizing – leading – controlling.
In large organizations, we have different levels of management. The top
management is governing body of directors. It is supreme policy- making and
decision- making authority, the managing director as the head. Then we have
middle management i.e. departmental managers and subordinate officers
working under the heads of the departments and enjoy delegated authorities
from their bosses. Under the middle management group, comes the lower
level managers such as supervisors, foreman directly in charge of operatives
i.e. rank and file of workers. Lower level managers, middle managers and top
managers constitute management as distinguished from labour, operatives or
workers.
In a joint stock company, there is complete separation of management from
ownership. Shareholders are owners of the enterprise. They do not have
management rights and who constitute a small body of executives to whom
work of management is entrusted.
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The flow of authority or power is always downward, flowing from the top to the
bottom and this is achieved by proper delegation. Managers can do nothing in
isolation. Hence many times management is defined as that agency which
gets thing done thro’ and with other people.
Another way to analyze management will be in terms of workflow. Herein is
provided a workflow in which there are many of the concepts, techniques and
ideas present in management.
The basic is the management, which in fact discharges the managerial
functions. Some of the major steps in a typical management are shown herein.
Details will vary from company to company, work to work – for existing facility
or for a new project, but what you see is representative.
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Let’s discuss the steps shown herein.
EXTERNAL STANDARD
You see the first step in the program is for an external agency. Either a
government regulator or a company’s own corporate group sets an objective
standard to be followed by the operating facilities or project management.
Government Standards are usually quite general in nature, as they should be.
Because standard – setting bodies have to be conceived of all different types
of operations that fall under their jurisdiction.
Corporate standards are generally quite specific because they have to be
focused on those operations that the company carries.
GUIDANCE
Generally, external standards don’t provide enough details to actually develop
and run an operative facility or project. So, the managers need additional nuts
– and – bolts guidance. Guidance can be internally generated, or outside
experts and consultants can be hired. Big companies choose to develop a set
of “philosophies” that provide a foundation for many aspects of their work. The
philosophies, which are guidance documents, provide a basis for more
detailed design bases and engineering specifications.
Philosophies cover typical subjects such as:
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Operations;
Project Management;
Maintenance; and
Loss Prevention.
These philosophies can be foundation of a company practices.
RISK ANALYSIS AND PLAN
The next step you see is a risk analysis that will help in determining risk
identification, tackling those risky situations and prioritizing resources.
The results of the risk analysis are used as the foundation of the plan, which is
documented at this stage. The plan should clearly align with the external
standards provided at the start of the exercise. For example, if you have to
address a particular regulation, then the plan should clearly define all
elements in meeting such a requirement.
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Also, as part of the planning process, the operative facility or project
management can fix up the audit protocols at this point. The protocols must
explicitly address the external standards that the facility or project has to
follow.
IMPLEMENT
Having the plan, the Operative facility or project Management the same can
be implemented.
AUDIT/DELTAS
Believing the program can’t be perfect; gaps between goals and reality always
exist. However, a manager who owns such gaps doesn’t know of their
existence so audits are needed. An audit will evaluate results against the plan,
and suggest modification either to the plan or to the way in which the plan is
implemented. If the audit finds deficiencies or gaps, the process recycles to
the implement or management review step, as you see.
Delta is sometimes used to describe the difference between plan and
performance because this sounds less critical than ‘deficiency’ or ‘fails to
meet’.
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SUCCESS/CONTINUOUS IMPROVEMENT
Practically, once the plan is implemented and has cleared the audit hurdles,
management declares that they have successfully implemented the program.
However, accepting that the risk can never be low enough, improvements can
always be made. Once the program you see is complete, management starts
the process over again – probably at the risk analysis and planning step in
order to achieve even higher levels of safety and economic performance or
based on lessons learned, management may elect to recycle to the Guidance
step to develop new approaches and practices to be managing the program.
A.3 Management Practices
Management practices presents the “how to do it” response to “what has be
done within available resources” The first step in identifying management
practices is to determine the tasks, the top managers consider to be important.
However, before “what to do” and “how to do it”, major issues constituting
general management operating activities need to be identified. Thereafter, the
tasks and practices associated with each issue can be discussed.
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The leading management issues in order of importance are
1. Maintain focus,
2. Organize to accomplish the work effectively and efficiently,
3. Manage the company’s vision and values,
4. Manage the decision making process and
5. Manage the flow of information.
What can be accomplished?
1. To maintain focus
 Develop a written plan and use a system for monitoring the
company’s activities against the plan.
 Use a formal customer feedback process to maximize customer
retention.
 Look for total solutions for customers.
 Pun in place a system to have written proposals to evaluate new
business opportunities.
2. To organize to accomplish the work effectively and efficiently
 Set clear responsibilities and priorities for managers and employees.
 Provide formal training for all new hires.
 Monitor “real – time” operating variables such as adherence to
schedules and quality measures.
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 Expand the span of control of top managers instead of adding layers
to the organization.
3. Manage the company’s vision and values
 Set out clear criteria and core values for product/service quality and
customer care.
 Provide a mechanism to encourage new product or service ideas
from employees.
 Hold regular, formal communication meeting.
 Compensate employees on achieving specific business goals.
4. Manage the decision making process
 Define and agree on priorities.
 Delegate day – to – day decisions.
 Review priorities on quarterly basis.
 Use planning process to create alignment of priorities to the top
managers.
 Impose and stick to time deadlines for key decisions.
 Use a process of approval for capital spending proposals, strategic
decisions and operating budget.
5. Manage the flow of information
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 Hold regular communication meetings.
 Share plans of the company.
 Maintain state – of – the art information technology.
The management employs strategies and tactics to accomplish the tasks.
These are known as Management Practices. Early on, the management
practice was to mostly depend on the experience and intuitions of the
managers as well as their versatility and flexibility. The success is oftentimes a
product of manager’s experience and organization development. Even now, it
is generally accepted practices. However, this unfortunately constrains the
organization to shift into crisis management mode, if resources are few or
“The Hero Tires”. Hence, a process of practice identification of people noted
for their managerial excellence was adopted. Often new practices are visible
in a gradual change. To sustain optimally efficient performance, oftentimes
something new device, method or concept leading to breakthrough change in
current practice gets introduced. These introductions are called as innovations
in the practices. If the innovation is demonstrated to be superior to other
approaches and to deliver tangible results effectively, it is labeled as ‘Best
Practice’.
A.3.1 Innovations
Innovation is a “continual learning process”. It requires discipline thro’ which
we draw out our potential in terms of commitment, practice passion, patience
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and perseverance. It is difficult process. Real innovation is often much more
collaborative than at first appears. Many of the innovations come from
customers. The problem is that most companies are not organized to tap this
source of innovative thinking.
The benefits of innovations in practices are manifold. Enhanced product or
service quality may result. Higher productivity may also be associated. ‘I’
practices typically reduce the need for supervision and promote flexibility in
deployment so that the employees can be used more efficiently. Innovations
also have the potential to increase employee moral, thereby improving
performance through reduction in grievances and through greater efforts and
diligence. Innovations provide flexibility to solve problems across traditional
job categories and across time.
‘I’ practices may also carry costs including both those associated with change
from traditional command – and – control culture and those associated with
the increased compensation required to attract and retain the employees
having the requisite skills to perform under a high involvement system.
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A.4 Challenges and constraints
It is decidedly difficult to reach consensus while defining an efficient
organization. In order to propose a somewhat a objective picture, it can be
said that an organization that clearly defines specific objectives and attained
goals before they undertake a new project is more likely to be successful in
their endeavors. The enthusiasm and good will of managers do have a limit,
so it is essential for managers to continuously seek new practices that will
respond to their evolving needs. Furthermore, they should use means and
tools that increase their chances for success – never loosing sight of how their
performance will be rated and the consequences.
Although innovative practices are efficient tools, we cannot ignore the context
and constraints under which the organization operates as well as the
challenges and risks they must face. The underlying drivers of adoption of
innovative work practices differ organisation to organisation. For example, the
organisation performing in domestic market if pushed into international
competition is more likely to adopt innovative practices. The human resources
in the establishment may also affect the use. More highly skilled employees
are better suited to high involvement required by these practices. Multi
establishment organisation may be more likely to adopt innovative practices
by learning from each – other. Unionisation may also influence adoption. It
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takes hard time for unions to welcome the changes that come with ‘I’
Practices.
“Top managers and institutional factors determine innovations”
‘I’ practices are not panacea for organizational problems. They are meant to
achieve optimally efficient management performance. Leadership,
commitment, courage and openness are essential qualities for the long - term
survival as well as a firm and strong presence in the community they serve. In
short, they must adhere to the spirit of their mission; which is often greater
than the organization itself.
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A.5 Driving Innovations Into The Organisation
The development, adoption, application and integration of ‘I’ practices into the
organisation are major responsibilities of the managers. The top managers
and network/institutional factors are important determinants of whether and
when the organisation adopts innovation. Effective sharing and migration of
the practices have remained a challenge for the managers. However, the drive
for “continuous improvement” is essential for all those who strive to be world –
class. To achieve this, there are three basic ideas:
 The organisation must clearly define the vision and ensure that
top managers share this vision. It is then responsibility of middle
managers to maintain the vision.
 The organisation establishes policies that employees will adopt
and undertake.
 The top managers are responsible for guiding the activities and
ensuring all contribute to the organisation’s objectives.
Mutual interests bring groups together to share and keep up with the latest
improvements. It is these broader based groups that undertake an integrated
management approach to address common issues, share lessons learned and
promote opportunities to innovate.
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“Innovations come from external factors. It is how the organisation adopt to the
change and keep continual improvement going.”
Now, we will examine innovations employed by the organisation and counted.
Because of the way they have made impact on the business and affected the
way, work is organized inside the establishment. I consider all having the
virtue of getting documented. A tabular list can also be found in the appendix.
I did not include Management Information System as a part of questionnaire.
However, this is an important area for the organisation. There are several
improvements as introducing SAP – discussed later on - underway to phase
out old, legacy system. Also introduce enterprise architectures and MIS that
better in carrying out the organisation’s jobs. As a consequence, we believe
that this area needs to be reviewed in the not too distant future.
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A.5.1 Benchmarking
The discipline of innovation requires organisation working together, learning
from one another’s efforts.
“To do something new, people invariably experience periods of discomfort.
Confronting the threat and uncertainty, the change brings best done together,
not in isolation.”
Benchmarking entails reviewing processes, practices, policies and operations
against peers. It provides an excellent opportunity to learn how others do their
processes and operations similar to one’s own. Benchmarking itself is a
metric; it validates a process or practice. The organisation systematically
conducts benchmarks in the operations and human resource functions. Areas
of operations include the process, security, safety, utility operation and
sometimes-financial management. Human resources areas include salary and
compensation, hiring, retention and promotion. Benchmarking helps by
sharing data, learning from what has worked, and by not repeating the same
mistakes.
Often benchmarking is part of everyday agenda. If someone sees something
in another company that looks “cool” then managers will look at and
understand the activity. The company will then attempt to assimilate as long
as its core values remains intact.
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A.5.2 Drive To Excellence / ”The Owner” concept
“The organisation believes in encouraging ordinary people to do extraordinary
things.”
Managers can have a driving value in the form of determination to complete
projects and/or programs on time and on budget while exhibiting the very
highest quality of work. Managers see themselves surviving because of quality
of the work performed. The work is to produce high quality products and
services that meet customer’s price, delivery terms and specifications at the
lowest possible cost using the most efficient processes and yielding maximum
profit.
Management can attempt to cultivate employee collaboration and networking
through its structure. Management can identify core competencies, thereby
finding employees having high competence and teaming abilities and able to
manage the career on the own focusing on the customers. The organisation
can designate the identified employees as “the owner” in the designated
areas. The managers work with them to analyse and perform a complete
assessment of where improvements can be made in products, processes and
technologies throughout the organisation. The managers can help them by
addressing
 Elimination of waste
 Integration of product and process development
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 Fact based performance management that enables to make
decisions in “real time” based on real events.
Operational excellence is a hard won achievement in complex manufacturing.
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A.5.3 Openness As An Element In The Culture
“Building a culture in which people express the views without the fear of
reprisal is a huge challenge.”
The organisation has its own unique culture nurtured by the top managers and
institutional factors. For example, finding and adopting the practices can be a
part of the culture. The organisation can maintain a database accessible by all
employees devoted to lessons learned and the practice adopted. The
employees can be encouraged to use automated database.
“Management culture drives the focus on results and quality from the top
down.”
The organisation rewards openness and willingness to admit a mistake.
Because the analysis carried thereafter becomes opportunity to learn.
However, there is always a limit to tolerance.
The key features of the culture are
 An open door policy for employees,
 Allowing decisions to be taken at any level within approval framework,
 Allocating the time to participate in the future focused events,
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 Act for the good of the company,
 Reinforcement of the core values and expectation of the management
on daily basis,
 Employee participation in analyzing the problems and their root cause,
 An organized disciplined time management programs.
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A.5.4 Standard Based Management System (SBMS)
International Organization of Standards developed a series of quality
management approaches to assist business. ISOs are recognized in over 161
countries. ISO certification is a major requirement by most US companies,
agencies for those wishing to do business with them. These standards are
revised on the basis of eight management principles that reflect the
management practices. SBMS is an online information system integrating the
applicable ISOs of the organisation.
It puts guidelines, manuals, standards, and procedures relevant to the work
and up – to – date policies online to provide the staff immediate access to the
latest information. The creation of SBMS replaced thousand of copies of
printed materials and automated basic functions. Metrics of success include
improved staff performance and productivity, which are reflected in the
company environment, health, safety and security statistics.
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A.5.5 Quality Circle And Suggestion Scheme
A QC is defined as a small group that performs quality related activities within
the circle of lower management. Management forms the group or the people
can be encouraged to form the group. The small group carries its work
continuously as part of a company wide program of quality control, self -
development, mutual education and improvement. It focus on areas as cost,
safety and productivity and their activities sometimes relate indirectly to
product quality improvement. These activities are aimed at making
improvements. The suggestion scheme is an integral part and the number of
suggestion is regarded as an important criterion in reviewing the performance.
The QC is in turn expected to assist them so they can help the employees
generate more suggestions.
Management works hard to consider these suggestions. It is not uncommon
for the top management to spend a whole day listening to the presentation of
the activities of QC and giving awards based on predetermined criteria.
Managers are willing to give recognitions to employee’s efforts for
improvements and make its concern visible wherever possible. Often, the
suggestions are circulated in the workplace in order to encourage competition
among workers and among groups. Each suggestion, once implemented,
leads to a revised standard.
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A.5.6 Six – Sigma
Six - sigma is used not only to drive behaviour in manufacturing, but also to
drive efficiency in many of the administrative and research part of companies.
“It is more than innovation. It is the way of working.”
Six - sigma is a systematic data driven approach to develop and build robust
technology maps. It focuses on customer issues, improvements to internal
processes and improvements in products and services to the marketplace.
Six-sigma training can even bring positive cash flow because to be accredited,
the employee has to complete one or more significant project, which results in
money savings or an equivalent business impact.
The organisation using six - sigma can eliminate redundant requirements,
automate notification resulting in labour saving and improve new hire
recruiting process to bring positive cash flow.
Six - sigma applies to all organisations that have goals of delivering products
that better satisfy their customers at higher reliability, faster delivery and lower
costs. The metrics and their relative importance vary. For example, cash flow
may not be important but high reliability can be. The principles and process of
six – sigma applies to all.
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A.5.7 Assessment Of Output
Innovations are badly needed because problems are changing. The
organisation survives due to high quality work of the employees and the
excellent reputation in their field. The discipline of innovation can be identified
as key to the success.
The discipline can be outlined as
 The organisation must focus on the mission, core competencies
and goals
 The management must define what it means by results
 Assess and reassess what we are doing and how we are doing it
 Ability and willingness to abandon the programs, where you don’t
get results
Using this framework, the organisation can assess the contribution of new
ideas and innovation as well as describe the cumulative benefits against the
mission and goals of the organisation.
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A.5.8 SAP
SAP stands for System Applications and Products for data processing. SAP
has set new norms for standard software that can be universally implemented.
SAP uses advanced development techniques to achieve comprehensive
integration of business administration and data processing. It combines state –
of – art technology with comprehensive business administration functionality to
provide a fully integrated business solution for the enterprise.
SAP is event – driven transaction processing software in the organisation most
concerned with day – to – day needs of the organisation in conducting its
ongoing activities.
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A.6 Budget And Performance Integration
The organisation plans, programs strategies to allocate the resources to the
projects, departments or divisions that deliver tangible benefits and results.
The organisation has made the significant progress in driving resource
allocation decisions called the budget. The organisation focuses on
establishing a baseline for planning, decision making in a multiple year
context, strengthening accountability and integrating financial data and
operation. The purpose of performance integration into budgeting is to provide
greater focus on performance - based decisions to improve program
performance and efficiency. It is also intended on investment in high pay off or
high priority based activities, mostly on those that can achieve greater results
for the same or less cost.
Innovative measures are
 Online data systems and process integration that provide reliable
cost and performance information for planning, programming
and budget decision – making;
 Creation of standards for developing meaningful performance
measures that focus on outcomes and outputs instead of
activities;
 Usage of an integrated team approach to analyse budget and
make recommendations;
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 Multiple years planning and budget process to ensure that
budget requests are based on priorities and performance;
 Reduction in number of targets to focus on critical performance;
 Evaluate the use of common performance measures that can be
applied across multiple divisions;
 Standardise management reporting to the top managers to
enhance accountability, improving reporting consistency, ensure
prompt and corrective action taken and improve the report’s
overall value.
 Submit a fully integrated budget to the top manager.
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A.7 Human Capital Management
The organisation needs the employees because innovations come from the
people not from the machines. Employee practice in India has historically
reflected a culture of employees entering a company after completing their
studies and the staying till retirement. However, the organisation has
recognized that the society is changing and raising the agenda of part – time
working, female professionals and increasing job mobility. The company has
to respond to these challenges. There is little doubt that if the organisation is
to maintain the reputation as world class, company must recruit and retain a
bright and highly motivated work – force. Human capital remains the primary
resource of the complex. And leadership and innovative measures are the key
elements of the success. Here, Human Capital Management intended to help
the top managers better manage the most important asset – the people.
HCM serves the organisation and comprises multiple area of expertise
including
 Recruiting,
 Retention,
 Succession planning,
 Risk management,
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 Diversity in the work – force,
 Management information,
 Employee communication and relations,
 Training needs analysis, program design and implementation,
 Performance evaluation,
 Work life initiatives.
Innovations observed are
 Personal appraisal system to reward top performers and select
out weak performers;
 On the job training by teaming with more experienced
employees;
 Succession planning;
 Bonus levels tied to the performance metrics – set on a balanced
individual and team - based contributions;
 Employee need based training programs in the calendar year;
 IT based information systems to add the edge in the decision -
making;
 Total Employee involvement in planning and sharing the
information;
 Standardising human capital metrics needed to comply with the
legislation as well to the top managers;
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 Publishing online employee newsletters, the corporate social
reporting to enhance the company’s reputation and
communicate important information;
 Seeking ways to further improve “people management” to
achieve results.
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A.8 Key Elements
The fundamental building block of innovation is identifying key elements of
success, oftentimes referred as Critical Success Criteria. Additionally, defining
the key elements focuses the organisation on the measures and rewards that
are mission oriented. Spending resources on items which do not relate to the
mission success, finding and implementing innovations for the projects or
programs that are not on success path and measuring processes which are
not key to the core success waste time, talent and measure.
For example, sustained record of capacity utilization, consistent safety
records, and cumulative energy reduction are the key elements of success for
the complex manufacturing.
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B.1 A Systemic View Of Organisational Behaviour
First of all, it is the aim of the managers to drive the resources and efforts of
the organisation into one direction to take all the chances that help to get an
economically important output. That means most of the time is invested for
problems instead of chances. Traditional managers are oriented to operative
decisions and measures directly connected to profit and growth. So operative
dimension of the company can be better, but it becomes dangerous when
strategic situations get worse.
Second, the main problem is the confusion about the distinction between
effectiveness and efficiency, which lead people to do things right instead of
doing the right things. The main tools of the organisation concentrate on
bookkeeping and data collection (operative aims), which are both connected
to efficiency.
“What a company needs is a way to identify fields of effectiveness and a
method to concentrate on this.”
Rites of the traditional management culture often force the managers to give
priority to operative aspects, especially to periodical business transaction.
Thus, innovations will not be paid attention in the way that would be
necessary.
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The Innovative manager has to take into account all aspects of organisational
tasks, operational as well as strategic. However, the complexity of living
systems has to be accepted, it is barely possible for the manager to know
everything that has to be known to have solutions for emerging problems. Top
down directives have very limited effects and disregard the momentum of the
system. The development of the organisation is widely determined by the
adoption of innovation. The managers are increasingly accepting the fact that
to manage a company means to deal with complex systems. The continuous
necessity to adapt to changed conditions and the permanent pressure to
develop into unknown areas are the problems, which are beyond operative
leadership of the company and put special demands on the management.
The ‘I’. manager knowing the company, as a complex system does not
function by “Cause and Effect thinking” solves problems in a broader sense.
The functions also include
 Creating knowledge in ecological issues,
 Improving emotional intelligence as a basis for social
competence,
 Taking into account having an uncomfortable state,
 Serving the community permanently,
 Motivating all members of a team and strengthen people’s
personal resources.
XLVII

The ‘I’. Manager has to be team oriented, communicative, visionary,
internationally oriented, ecologically oriented, socially oriented, better
risk behaviour than the manager of the “old school”, integrity,
multicultural, intuitive and last but not least customer orientation.
XLVIII

B.2.1 An Overview
Indian Petrochemicals Corporation Limited was incorporated in March 1969,
by the Government Of India at a time when the petrochemical industry was still
in its nascent stages of development. Today, IPCL is one of the largest
organisations in the petrochemical business.
IPCL’s Baroda based Complex went into production in 1973. IPCL
accomplished the unprecedented feat of setting 14 allied plants under one
roof, now known as Baroda Complex. The proven experience of IPCL in
building and managing the large integrated complex at Vadodara let the GOI
to entrust the IPCL with the responsibilities of establishing the first giant grass
root complex at NAGOTHANE in Raigad district of Maharashtra state. Now,
we operate three petrochemical complexes at Vadodara, Gandhar and
NAGOTHANE.
In 2002, GOI offloaded 26% shares in the market as a part of the divestment
agenda. The biggest private corporation ‘Reliance Industries Limited’ bought
the same as a strategic partner. Presently RIL has management control with
46%stake, increased after purchasing 20% through open offer.
The will to face challenges and a determination to overcome all barriers is a
hallmark of us. This truly reflects in the manner in which technologies were
L

obtained, absorbed and operated, new markets and products explored and
developed, new projects envisaged and commissioned.
Today, our product portfolio includes petrochemicals that form the basic raw
material for almost every section of the Indian industry as
 Plastics,
 Synthetic rubbers,
 Synthetic fibers and fiber intermediates,
 Solvents,
 Industrial chemicals,
 Catalysts.
We also offer Corrosion and Inspection consultancy and external training
contracts.
B.3 Maharashtra Gas Cracker Complex
MGCC is situated on the bank of river Amba, Nagothane at a distance of 110
Km from Mumbai on the Mumbai – Panjim National Highway numbered as
NH17.
At MGCC, we have production plants having the capacity to produce 450
thousand tons of products per annum. The complex is equipped with Utilities
LI

to supply air, water, steam, nitrogen and power and Integrated Waste Water
Treatment Plant to take care of effluents discharged from the Units. The
complex is also provided with solid and liquid warehousing to cater supply of
raw materials and dispatch of the products.
Reliance Group Of Securities Services looks after security of the complex.
LII

B.3.1 Product Flow Diagram
Catalyst
Plant
To Sale
Low Density
Polyethylene
Plant
Ethylene
Linear Low
Density
Polyethylene
Plant
Gas
Cracker
Plant
Propane
Butene - 1
Ethylene
Oxide Plant
Monoethylene
Glycol Plant
LIII

B.3.2 End Uses At A Glance
LDPE – Film for packaging textiles, milk, shopping bags and heavy duty bags,
canal lining, cap covers, shopping baskets, toys, cable components
LLDPE – Garbage bags, drip laterals, heavy-duty films, overhead tanks,
injection-moulded toys
HDPE – Injection moulded caps, heavy-duty crates, and paints, bins, textile
bobbins, and thermowares, storage bins
PP – Monofilaments, strapping, raffia tapes, BOPP films, industrial moulded
items like motor cooling fans, kitchenwares, medical wares, electro wares
MEG – Polyester staple fibres, polyester filament yarns, polyester resins,
chips, explosives, coolants
Propylene
Polypropylene
Plant
To Sale
Wire & Cable
Compounds
Plant
LIV

E0 – Emulsifier, glycol ethers for heavy duty brake fluids, sterlising agents,
fumigant for foodstuff and textiles, MEG and pharmaceuticals manufacturing
B.3.3 Organisation Structure
The complex has a classical and efficient organisational structure. It has full -
fledged departments as
 Operations,
 Technology,
 Finance & Accounts,
 Human Resources,
 Central Engineering Services,
 Health, Safety, Environment &Fire,
 Logistics,
 Information Technology and
 Security.
All departments have a pool of qualified professionals. The departments are
given due weightage and status in almost all activities of the complex.
LV

Qualified and experienced senior members of the organisation head the
departments. They, in turn report to the Site President. The president is highly
responsible and authorized position to discharge all duties efficiently. Having
Quality Policy and HSE Policy of the organisation, the Management Agenda
drives the complex.
The President is the factory manager too. Hence, the President fulfills the
statutory obligations with the help of the departments. The management has
procedural and process approach. Because we believe the elaboration of
procedures and simple job description are indispensable tools. We have
released various manuals in which roles and responsibilities of employees,
contractors and managers are clearly defined. Brainstorming sessions are the
ways to bring together employees and help the managers to maintain the
organisation’s common vision.
Safety is given the utmost importance and evident from policies and
management actions. All necessary resources are provided to achieve safety
excellence.
LVI

B.3.4 Application Development
We view application development as a major thrust area to increase the
consumption of petrochemicals in India. Preserving scarce natural resources
with superior synthetic substitutes is one of the key areas on which we focus
our attention.
We conceive, develop and test the products at modern and well-equipped
laboratory center.
The center interacts with institutions, end users, processors and machinery
manufacturers to develop applications. On occasions, training programs and
workshops are organized to share the knowledge with the industry.
LVII

B.3.5 Research And Technology
In the ongoing task of assimilating and improving technologies, the focus is on
safety, reduction in energy consumption and operating costs. The steps taken
include reduction in raw materials, utilities and catalyst consumption,
improvement in quality and introduction of new grades and understanding
constraints of existing production units to operate on stretched capacities.
LVIII

B.3.6 Human Resources
For IPCL, its real wealth is its employees. At MGCC, we have a planned
approach to human resource development. Training happens to be an integral
component of the development strategy. Well maintained residential complex,
school, recreational centers, transport and other facilities ensure a better
quality of life for the employees paving way for healthier industrial relations.
Other aspects include
 Conducting training programs on regular basis. Nearly a third of its
workforce receives refreshers trainings each year.
 Launching the educational scheme to equip the employees with higher
skills in association with IITs, Ministry of labour and state governments.
 IT based measures to make day – to –day activities online.
LIX

B.3.7 Community Outreach
Several rural development programs include:
 Facilities like school building, books, and furniture for libraries,
playgrounds, wells, approach roads and bus service for school children
 Training to people in primary health care.
 Potable drinking water to the nearby villages.
 Camps for social welfare and family welfare.
 Flood affected areas rehabilitation.
 Awareness among nearby villages as a neighbourhood friendly
organisation.
LX

B.3.8 Environmental Conservation
We believe that development should be in tune with environment protection
and not at the cost of it. In line with this approach, we have modern facilities
for effluent treatment, air monitoring systems and hazardous waste handling
mechanism.
Environmental measures include:
 Horticulture and gardening programs.
 More than 260 hectares of land covered by over 17 lakh trees.
 Zero garbage disposal programs.
LXI

 On going development programs to achieve zero effluent discharge.
B.3.9 Safety
Safety performance is the one of the key result area for the complex. It carries
considerable weightage in assessing the performance of individuals and
departments.
The practices to achieve zero accident, to comply statutory requirements and
to create an environment of safe working are
 Exhaustive and authorized work - permit system to carry any job in the
complex.
LXII

 Well-established procedure of Field Change Order for addition,
alternation and modification of the process.
 HAZOP study for all FCOs.
 Conducting risk assessments.
 Toolbox talk prior to any job.
 Encouraging reporting of near miss incidents and unsafe condition.
 Pre startup and shutdown safety review.
 Task Observation program by all supervisory employees.
 Internal safety inspections.
 Third party safety audit every year.
 Reward schemes for extemporary safety performance, safety
competition programs to motivate employees.
 Conducting regular refresher fire and safety training programs.
 Trained fire fighting crew and modern fire fighting installations.
 Conducting regular mock drills to check emergency preparedness.
 Finding root cause of all type of accidents as injury, fire, gas leak,
explosion, dangerous occurrence and immediate implementation of
recommendations of the committee.
 Plant and departmental safety committee comprising members of all
levels to gather at regular frequency to discuss safety related issues.
LXIII

B.3.10 Beyond Business
We have tradition of supporting activities related to arts and sports.
Some key features are
 A beautiful piece of contemporary sculpture park in the residential
township. It is also symbolic of our deep commitment to promote art
and culture.
 A modern theatre in the residential township sponsoring musical
programs, cultural shows and other events.
LXIV

 A sport development committee sponsoring various sport events and
promoting, encouraging employees and their family members to
participate at state and national levels in various sports.
C. METHODOLOGY
LXV

C.1 The Problem
There is a lack of single process based framework to identify, measure and
adopt commonly accepted practices that would be working best in the long
run. There are regulatory requirements, company added specific requirements
and inexact interpretation of customers to come up with improvement in the
current practices. These are often burdensome and prone to change from
project to project. Hence, we are in difficult position of not knowing why and
how to use the best practices.
LXVI

There is the need of documenting and demonstrating the best practices.
Because so many practices existed and more and more work is getting
framed. It is expected to develop a single, easier and stress free process
framework to innovate practices.
C.2 The Scope
This project study applies to all who are involved and can be involved in
improving and maintaining standards, process, productivity and eliminate
status quo concepts.
LXVII

C.3 The Objective
Now days, the customers acquainted with world class organisations’ products
and services don’t put up longer with the organisation lagging in resolution of
their complaints. The organisation as well as its managers can’t afford to
ignore the customers at any moment. The organisation has to strive for the
excellence and adoption of the innovations remains the key. Hence, the
organisation always looks for and searches the best practices to be
LXVIII

meaningful in the present context. We have to develop the process - based
framework to identify and improve the prevailing practices to move from good
to better, not forgetting the results.
There are customers for each process and department in the organisation.
The new manager posted in the organisation has to understand and know the
whereabouts, basics used in the organisation. As discussed earlier, the
objectives are
 To provide much needed information about management practices and
innovations
 To use as an easy reference
 Awareness about tools, methods and facilities to maximize quality and
efficiency of work with minimum efforts
To fulfill the objective, the methodology adopted is as follows:
 Preparation of questions to be studied
 Assessment of the presentation, proposals and reading materials
 Data collected from the information given by management addressing the
management practices
 Discussion with plant personnel
LXIX

D. Conclusions/
Recommendations
LXX

I conclude that adoption of innovations are at spotty best by large in many
organizations. The project highlights a number of important issues in the study
of ‘I’ practices. The existing literature has painted a picture of making online/ IT
based services. While a primary purpose of IT based information was to add
the edge in the management decision-making, the goal of ‘I’ cannot be not
fully realized by IT alone. Today, organizations have complex applications like
SAP that can streamline processes and give lots of transactional data, but the
human component necessary for these processes has often been neglected.
LXXI

There is a greater need to generate meaningful intelligence about effect of HR
processes on business performances.
A sizable challenge for a manufacturing complex is to be inward looking when
it comes to process definition. The undefined vision of practices adds to a
situation where practices are not readily discussed, congealed, agreed upon
and migrated. Identifying and quantifying the best practices & adoption of
practices from the corporate parent and among the affiliates done on a
consistent and regular basis allows the organisation to stay in the mainstream
and competitive.
There are mechanisms for ranking the performance of technical staff,
regardless of seniority. The annual performance reviews with respect to staff
highlight strengths and weaknesses & areas in which the person(s) needed to
be counseled/encouraged. These mechanisms should be made completely
transparent.
The ‘I’ practices studied are cited in tabular form in the Appendix G.2.
Organizations should think Assessment of Output, Benchmarking and
Openness as an element in the culture to inculcate and encourage innovations
into the complex.
The other important leading management practices are
To maintain an open door policy for the employees
To delegate decisions to the key employees
LXXII

To maintain an organized, disciplined time management program
To allow employees to have the time to participate in the events
focusing on the future
To use involved, hands on experience
To drive strategy from the top
To minimize the number of management levels and to use new
management models that will lead to increased idea creation and
employee partnering both within and external to the organisation
To carefully design the practices related to the performance measures
that are simple metrics to examine the efficiency with which desired
outcomes are achieved.
I recognize the recommendations will take time; both from a cultural and
implementation perspective. But “world class” organisations constantly
measure themselves against the best and incorporate the best of the best
practices.
LXXIII

Considering the restricted resources of the study, the checking and crosschecking of
gathered data was limited. Thus, the reputation of participants and their presentation
on practices served to reassure us the pertinence of their contributions. Admittedly,
any such evaluation process is highly subjective. However, we stand by the
relevance and potential benefits of this information for the readers.
As the definition of the management practices oscillates greatly, undertaking a study
of ‘I’ best practices of effective management is rather difficult. A best practices
LXXV

identified as ‘Innovative’ for one organisation, may be quite commonplace for another
organisation. It is this paradox that this study strives to navigate.
F. Bibliography
LXXVI

Reference Books Name Of Author
Principles & Practices Of Management LM Prasad
Management SP Robbins
Business & Innovations James Anderson
Total Quality Management Joel E. Ross
LXXVII

G.1 Study Questions
1. What is management?
2. What does management practices mean?
3. How to identify an innovative best management practice?
4. What are management practices?
5. What are the problems in adopting innovations?
6. What are the practices viewed as the most transferable to others?
LXXIX

7. What practices have managers introduced that motivate people to work
towards institutional culture and achieving long - term goals?
8. What are the best practices to adopt that relate to budget and performance
integration and human capital management?
9. How can the behaviour and background of the organisation be described?
10. Does someone in the organisation maintain a best practices file?
G.2 The List
Sr. # Title Of Practices
1 Benchmarking
2 Drive To Excellence
3 Openness In The Culture
4 Standards Based Management System
5 Quality Circle and suggestion scheme
6 Six Sigma
LXXX

7 Assessment Of Output
8 SAP
9 5 S Work Station Cleanliness Management
Exercises
LXXXI

Innovative management practices

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