Assignment of Semester IV Subject: Strategic Management and Business Policy

Question 1: Define the term Strategic Management. Explain the importance of strategic management Answer:
Strategic management is a level of managerial activity below setting goals and above tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about "strategic consistency" between the organization and its environment or "strategic consistency." According to Arieu, there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." Strategic management includes the management team and possibly the Board of Directors and other stakeholders.

Importance of Strategic Management: (i) Clarity of object and decisions: Strategic management gives clarity of object to the organization, which ultimately facilitate smooth working and proper direction of the working. (ii) Improvement in financial health of organization: Strategic management improves the financial health of the organization, strategic management improves the decision they take and also execution of that decision. So ultimately it results in the cutting of the cost or enhancement of the income. So, financial health of the organization improves. (iii) Offsetting Environmental Uncertainty: Strategic management reduces uncertainty and hence the uncertainty reduces. Management can take good decision and chances of losses are reduced. Strategic management discovers new facts analyze those facts and take decisions on that basis. (iv) Organizational effectiveness: Strategic management increases the effectiveness of the working and decisions they take for the future course of action. Because of the less uncertainty and good decision the working of the organization becomes more smooth and profit are increases. (v) Motivation and Satisfaction: (vi) Improved Quality of decisions: (vii) Discipline:

Question 2: Describe Porters five forces model Answer: Given by: Michel E Porter Five factors needs to be analyzed: (i) Intensity of rivalry among the competitors (ii) The threat of potential entrance to the market. (iii) Bargaining power of supplier (iv) Bargaining power of customer (v) Threat of potential substitutes

Potential Entrance

Buyers

Intensity of rivalry among the existing firms

Suppliers

Substitutes

Porters five forces model

Question 3: Answer:

Define the term Business Policy. Explain its importance.

The management process includes planning. Implementation and evaluation of strategies in most of the organizations. To obtain a effective process in the organization, the management defines the policies that assess the operating environment by forming a sphere to make decisions in the organization.

The following factors needs to be considered before forming business policies:

Resources of the organization. Economic conditions Competition Political and legal forces Technology Internal environment of the organization

Importance of the Business Policies:

Business policy is the guidelines for making decisions and acts as boundary for the personnel and various resources in achieving the objectives. The various factors involved before framing policies are resources of the organization including human resources of the organization, inventories, financial sector, political and legal forces and internal environment of the organization. Business policy interrelates to the objectives of the organization. Business policy judges the current status of the organization which is running according to the strategies. It assists in evaluating the various business activities in the organization. Strategies are implemented in accordance with the government rules. Policies assist top level management to frame strategies based on the policies.

Successful future of the organization completely dependent on the clearly defined policies.

Question 4 What, in brief, are the types of Strategic Alliances and the purpose of each? Supplement your answer with real life examples. Answer:
A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations. This form of cooperation lies between M&A and organic growth.

Types of Strategic Alliance:

Joint Venture: To pool two or more organization in one project to achieve a common goal. Example: The case of China Wireless Technologies. Merger and Amalgamation: To combining two or more organizations to form a single organization and achieve greater efficiencies of scale and productivity. Collaborations and Co-branding: Collaboration is the process of cooperative agreement of two or more organizations which may or may not have previous relationship of working together to achieve a common goal. Technological Partnering: It is the process of associating the technologies of two different companies to achieve a common goal. The two organization works as co-workers in business and share the profits and losses. The technologies of individual organizations are shared to achieve desired outcome. The required resources like knowledge, machinery, and expertise are collaborated between the organizations. Example: Infosys Technologies Limited. Contractual agreements: It is the process of agreement with specific terms between two or more organizations which guarantee in performance in specific task in return for a valuable benefit. Types:(A) Conditional, (B) Joint and several, (C) Implied. Outsourcing: It is the process of entering into the contract with an organization or a person to perform a particular function. Most of the organization outsource the work in numerous ways. The function being outsources is considered to be noncore to the organization. Other methods

Affiliate marketing Technology licencing Product licencing Franchising Sharing R&D Distributors

Question 5: Explain the Concept, need and importance of a Decision Support System. Answer:
Abbreviated DSS, the term refers to an interactive computerized system that gathers and presents data from a wide range of sources, typically for business purposes. DSS applications are systems and subsystems that help people make decisions based on data that is culled from a wide range of sources.
DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, and personal knowledge, or business models to identify and solve problems and make decisions.

Need in
Typical information that a decision support application might gather and present includes:

Inventories of information assets (including legacy and relational data sources, cubes, data warehouses, and data marts), Comparative sales figures between one period and the next, Projected revenue figures based on product sales assumptions. clinical decision support system for medical diagnosis

A growing area of DSS application, concepts, principles, and techniques is in agricultural production, marketing for sustainable development.

Importance:
1. 2. 3. 4. 5. 6. 7. Improves personal efficiency Speed up the process of decision making Increases organizational control Encourages exploration and discovery on the part of the decision maker Speeds up problem solving in an organization Facilitates interpersonal communication Promotes learning or training

8. 9. 10. 11. 12.

Generates new evidence in support of a decision Creates a competitive advantage over competition Reveals new approaches to thinking about the problem space Helps automate managerial processes Create Innovative ideas to speed up the performance

Question 6 (i)Corporate Social Responsibility

Corporate social responsibility is a form of corporate selfregulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.

Potential business benefits

Human resources
A CSR program can be an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering. CSR has been found to encourage customer orientation among frontline employees.

Risk management
Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks.

Brand differentiation
In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group, The Body Shop and American Apparel are built on ethical values. Business service organizations can benefit too from building a reputation for integrity and best practice.

License to operate
Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity, or the environment seriously as good corporate citizens with respect to labor standards and impacts on the environment.

(ii)Business Plan:
A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business plans may also target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture, a 3 to 5 year business plan is required, since investors will look for their annual return in that timeframe. Business plans are decision-making tools. There is no fixed content for a business plan. Rather, the content and format of the business plan is determined by the goals and audience. A business plan represents all aspects of business planning process declaring vision and strategy alongside subplans to cover marketing, finance, operations, human resources as well as a legal plan, when required. A business plan is a summary of those disciplinary plans.