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The Difference of Having and Not Having Finance Policy: The Curious Case of CINCOMM*

CASE STUDY, FINANCIAL MANAGEMENT
ET Cases - GSMC, 14 Pages

Case Preview

The Difference of Having and Not Having Finance Policy: The Curious Case of CINCOMM

 

It was around 5 pm on a very hot and humid July evening in Kolkata, India, Prof. Shubhra Biswas (Shubhra) and Anjan Ghosh (Anjan) entered into the cafeteria in IIM  Calcutta, one of India’s best management schools. They came to IIM Calcutta after a review meeting at CINI Community Initiatives (CINCOMM), a private limited company located adjacent to IIM Calcutta (Exhibit I). Anjan resided in IIM Calcutta campus and as Shubhra wanted to visit the campus since a long time, they decided to have the
post-meeting coffee session at IIM Calcutta.

Exhibit I: CINCOMM Office
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They had recently completed an interesting project under the guidance of Prof. Sougata Ray, reputed Professor of Strategic Management at IIM Calcutta who was also a board member of CINCOMM. The project was initiated when Anjan, who was instrumental in conceptualizing and starting CINCOMM detected a paradox during an internal audit at CINCOMM. Although the company was doing extremely well in terms of business volume in 2015 (3rd year of operation), cash flow was gradually turning out to be an issue. Moreover, almost daily there was a tussle between the accounting team members and the production members as the system data never matched the actual shopfloor figures. To Anjan, matters appeared steadily moving towards chaos...........................

Teaching Note Preview

The Difference of Having and Not Having Finance Policy: The Curious Case of CINCOMM

 

Synopsis

The case study is a first-hand narrative from the policy consultants who were appointed by CINCOMM’s Board of Directors to design the finance and accounting policy for the organization. The stage is set with the basic information related to CINCOMM a social venture, which was facing various issues as a result of lack of finance policies. After elaborating issues in finance policy the case study provides a policy manual which can be used to solve these issues.

Expected Learning Outcomes

  • • Understand the need of a sound finance policy and elaborate on various factors involved in the finance policy
  • • Understand the importance of strong internal controls in a company so that executives can manage growth and changing environment

 

Case Positioning and Setting

The case study can be used in Finance Management course to introduce the concept of financial policy in BBA, MBA and MDP Programs. It presents policy as a strategic tool of organizational management and addresses the role of top management in policy-making.

Assignment Questions

  • I. What were the major problems faced by CINCOMM?
  • II. How can the major problems listed in the above question be solved? What measures should CINCOMM take to address these issues?

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Product code: FIN-1-0024, FIN-1-0024A

Abstract

The case study, developed using primary data, portrays the challenges faced by a growing start-up CINCOMM (www.cincomm.in). The focus on entrepreneurial innovation and business growth resulted in limited management attention towards forming the finance policy. As a result, in the third year of operation, the organization was in utter chaos and indiscipline that the management was unable to control. The case study was a first-hand narrative from the policy consultants who were appointed by CINCOMM's board of directors to design the finance and accounting policy for the organization. It captures the challenges faced by an organization for not having a finance policy and provides a step-by-step guide of policy making towards addressing those challenges in short term and smooth functioning of the organization in long term.

Organizational policy is a critical element that gets negligible attention even at the business school curriculums. As a result, young managers and entrepreneurs take lot of time in understanding, realizing and appreciating the value of organizational policy as a controlling tool. Through this case study, the audience/students recognize the necessity, importance and process of policy making. The case study challenges some of the established notions that policy is only meant for large corporations. The case study also vouches for entrepreneurial attention towards organizational policy from the early days of an enterprise in ensuring the smooth, disciplined and  appropriate functioning of the organization.



Pedagogical Objectives

  • To understand the need of a sound finance policy and elaborate on various factors involved in the finance policy
  • To understand the importance of strong internal controls in a company so that executives can manage growth and changing environment

Case Positioning and Setting
The case study can be used in Finance Management course to introduce the concept of financial policy in BBA, MBA and MDP programs. It presents policy as a strategic tool of organizational management. It presents policy as a strategic tool of organizational management and addresses the role of top management in policy-making.


* GSMC 2016, IIM Raipur

This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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