1. Policy management covers a company-wide range of activities aimed at implementing mid to long-term management plans and annual management policies based on the company’s business philosophy. Policy management is essential if a company is to effectively develop new products, improve and manage quality, reduce costs, and strengthen its constitution.
2. Policy management involves several actions:
First the company establishes its business philosophy and, on the basis of this philosophy, it develops long and mid-term management plans.
Then at the beginning of each fiscal year the CEOs establish the presidential policies for the fiscal year – the company’s annual and other short-term targets, based on these long and mid-term plans, with the concrete measures needed to achieve them.
Presidential policies are deployed – they are forwarded to the departments and sections that they concern. There the managers examine the policies, consider the problems that they themselves have to deal with, and then decide on their own policies and targets. They in turn deploy their policies and targets to the departments and sections below them in the form of policies and implementation plans. These lower organizational units then implement them.
Various employees will be assigned to use control graphs (see Text D) and other reference materials to inspect, on a weekly or monthly basis, if:
(1) The measures in the implementation plans are being implemented as prescribed
(2) These measures are having the anticipated effects
If any abnormalities appear, (i.e. any result of implementing the plans that was not expected) countermeasures should be taken quickly and the results of the countermeasures reported to superiors. If necessary, subsequent implementation plans should be modified.
At the middle and end of each fiscal year, department managers, section managers or CEOs diagnose
(1) The status of policy implementation
(2) The achievement level of management items
(3) The status of general quality management
At the end of each fiscal year, the actions implemented during the previous twelve months are appraised and reflected on. Summary reports should be prepared to enable activities such as setting up a team that will specialise in important quality problems.
3. It is important to set up a system to manage the establishment, expansion, implementation, confirmation, and disposal of policies.