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1. 2. Strategy is the method by which an organisation systematically achieves its future objectives. Strategy is a common direction set for the company and its various components to accomplish a desired position in the future. 3. Strategy is a plan that is aimed to give a competitive advantage to the organisation over rivals through differentiation. 4. The different levels of strategies are as follows: Corporate Strategy: This is regarding the general function and scope of the business to meet the stakeholder's expectations. Business Strategy: This is regarding how a business competes effectively in a particular market. It includes strategic decisions about the selection of products and meeting customer requirements. Operational Strategy: This is regarding how each part of the business is organized and delivered to the corporate and business level. Operational strategy focuses on issues of resources and practices of an organisation. 5. 6. 7. 8. The different concepts of strategy are: It is defined as a plan to direct or guide a course of action It is a pattern to improve the performance over time It is a fundamental way to view an organisations performance It is a scheme to out-maneuver competitor The nature of strategy is as follows: Strategy is intended to grab the opportunities and face the threats provided by the external factors. Strategic proceedings are required for new opportunities which might arise in future. Strategy requires systems and norms for its efficient adoption in any organisation. Strategy provides framework for guiding the project. Strategy is prepared to achieve the mission of the company by long-term and short-term goals. The different scopes of strategies are: 9. To fix mission of the To create constructive internal environment Analysis and assessment of external environment SWOT analysis SWOT is a method used for assessment. To develop an overall strategy To increase resources and facilities Evaluation and control

The internal environment includes business, financial resource and manpower.

10. A strategic plan gives a clear vision of the goals and objectives to the employees of an organisation. 11. SWOT is a tool for auditing an organisation. 12. The main objectives of a business are: Survival The purpose of a business is to survive in the competitive market. Profit maximization to make maximum profit out of the business. Sales growth To increase the sales and expand the business

13. The acronym SMART stands for Specific, Measurable, Attainable, Realistic and Time-based. It is a tool used to set goals to achieve planned results.


14. Tactics are the actual ways in which the strategies are executed 15. Every business enterprise has two fundamental functions marketing and innovation. 16. Objectives are clearly outlined with timelines and budgets. 17. Goals are high level statements that provide overall framework about the purpose of the project. 18. An objective describes tangible products and deliverables that the project delivers. 19. Goals are indefinable and the achievement cannot be measured. 20. A vision statement defines the purpose and principles of an organisation in terms of the values of the organisation. 21. A mission statement is the extensive definition of the mission of an organisation. Mission statement is the responsibility by which an organisation aims to serve its stakeholders. 22. The mission statement focuses on the present position of the organisation and the vision statement focuses on the future of the organisation. 23. A strategic intends is a one-page document that defines the goals of an organisation for a specific period of time in future. 24. A mission statement conveys the purpose of the organisation to employees and public. 25. The aim of vision statement should be rational and achievable. 26. Core competencies are those skills that are critical for a business to achieve competitive advantage. 27. Core Competencies are not fixed. 28. The characteristics of core competencies are: To provide potential access to a wide range of market Should be difficult to imitate by competitors Should make considerable contribution to the customers

29. Critical success factors (CSFs) are used extensively to identify the key features that an organisation should focus on to be successful. 30. Critical Success Factors are associated with the strategic goals of an organisation. 31. The chief areas that affect the business are: Industry - These factors result from specific industry characteristics. The organisation should consider these factors to remain competitive. Environmental these are the factors that are the result of environmental influences on an organisation like the economy, competitors, and technological advancements. Strategic - These factors are the result of particular competitive strategy selected by the organisation. Temporal - These factors are the result of the organization's internal influence like challenges and directions. 32. Core competency is a unique skill or technology that establishes a distinct customer value. 33. They distinctive competencies should be unique and advanced to the competitor capacity. 34. Critical success factor are used to identify the key features that an organisation should focus to be successful.


1. Strategic management is a systematic approach of analyzing, planning and implementing the strategy in an organisation to ensure a continued success. 2. A brief description of need and scope of strategic management is as follows: Strategic management is required to make crucial decisions in an organisation which helps in obtaining a long term goal. Strategic management is required in the organisation to implement any process in a systematic approach and to allocate the resources in appropriate manner. Strategic management is assessed to determine the most crucial issues in the organisation in such a way that it does not harm the mission of the organisation. Strategic management includes strategists who expertise the strategy effectively to obtain desired result. Strategic management commit to the organisations strengths and weakness. Any changes in the organisation can be handled in an organized manner by implementing strategic management. 3. The five main features of strategic management are: 4. 5. 6. 7. Strategic analysis Strategic choice Strategic formulation Strategic implementation Strategic control and evaluation

The first phase of business planning began in the mid 1930. Strategic management considers the strength as the weaknesses of the organisation. Strategists are the silent partners in strategic literature. The various management levels where the roles of strategists can be seen include. Top level management Board of directors Planning staff


Planning staff usually called as planning staff personnel are a group of people assigned by the top level management.


The top level management, board of directors and planning staff are the most significant individuals involved in strategic management.

10. The board of directors is elected by stakeholders of the organisation. 11. The four grand strategies in a corporate level are Stability and expansion strategy Retrenchment Corporate restructuring Combination strategies concept of synergy

12. The further classification of expansion strategy is as follows: Diversification - Diversification is a process of entry into a new business in the organisation either marketwise or technology wise or both


13. The two basic diversification strategies are: Concentric diversification: The organisation adopts concentric diversification when it takes up an activity that relates to the characteristics of its current business activity. It is also called as related strategy. Conglometric diversification: The organisation adopts conglometric diversification when it takes up an activity that does not relate to the characteristics of its current business activity. The organisation chooses to diversify It is also called as unrelated diversification. Concentration: Concentric expansion strategy is the first route towards growth in expanding the present lines of activities in the organisation. 14. The two basic concentration strategies are: Vertical expansion Horizontal expansion

15. Different types of retrenchment strategies are: Turnaround Captive company strategy Divestment strategy Bankruptcy Liquidation

16. The main aspects of business level strategies are related with: Business stakeholders Achieving cost leadership and differentiation Risk factors

17. According to Porters generic strategy, the organisation that succeeds in cost leadership and differentiation often has the following internal strengths: The company possesses the skills in designing efficient products High level of expertise in the manufacturing process Well organized distribution channel Industry reputation for quality and innovation Strong sales department with the ability to communicate successfully the real strengths of the product. 18. Risk is the probability of good or bad things that may happen in the business. Risk will impact the objectives of the organisation. The risk factors in the business strategies include two types - external and internal risks. 19. Tactical decision means involving or pertaining to actions for short term than those of a larger purpose. 20. The different types of strategies at functional level are: Procuring and managing Monitoring and directing resources towards the goal


21. Steps involved in procuring strategy are: Identify the need of purchase and the required quantity. Plan the cost budget of the goods or services being purchased and the procedure of contracting by checking the cost and requirements with various sellers. Select the seller who is matching the cost and requirement criteria as per the organisation. Perform the contract deal with selected seller and monitor the contract. Close the contract once the goods or services are acquired.

22. Managing is the process of monitoring the strategies that are implemented in the business. 23. Monitoring and directing is the essential part of management. Monitoring means knowing what is going on. Monitoring is also called as measuring. 24. Monitoring and directing process of resources sets the organisation to work on the right track by removing all hurdles and produces effective outcome in reaching the goals of the organisation efficiently. 25. Operational level is concerned with successful implementation of strategic decisions made at corporate and business level. The basic function of this level is translating the strategic decisions into strategic actions. 26. The basic aspects in operational level are: Achieving cost and operational efficiency Optimal utilization of resources Productivity 27. Productivity basically means a relative measure of the efficiency of production in terms of converting the ratio of inputs to useful outputs. 28. The basic approach of the stability strategy is to maintain the present status of the organisation. 29. Operational level strategy is concerned with successful implementation of strategic decision made at corporate and business level. 30. Procuring means owing. 31. Strategic management process is a long term process. 32. Considering these issues, the limitations of strategic management are: Resistance to Change Dissatisfaction in employees Time consuming Strategic Non practical planning It gives only a Strategies are only means to achieve the Political pressure Ignorance of other managerial functions

33. Dissatisfaction of employees affects the workflow and hampers the growth in the organisation. 34. Strategic management only guides the employees to work in sequence and achieve the success in a proper direction. 35. The political pressure plays an important role in decision making.


Unit: 3 1. Environmental Appraisal and Scanning Techniques 2. 3. Need for environmental appraisal Environmental Scanning techniques Competitive and industry analysis

Organizational Position and Strategic Advantage Profile BCG business portfolio matrix Igor Ansoff growth matrix McKinsey/GE growth pyramid

Strategy analysis is defined as a process of conducting research on the business environment within which an organisation operates to formulate strategy.

4. 5.

Strategy analysis is a key aspect of strategic management. The importance of strategic analysis is as follows: It gives an understanding of what drives risks, profitability and competitive advantage. It provides a basis for forecasting future performance. It gives an idea of how to measure the success of an organisations action.

6. 7. 8. 9.

Strategic analysis is a process to formulate and implement strategy. Vision, mission, goal and strategy objectives form the basis for competitive advantage Strategic analysis forms a basis for competitive advantage. True Environmental scanning is the monitoring, evaluation and circulation of information from the external and internal environments to the key people within the organisation.

10. The societal forces are as follows: Economic force - Regulates the exchange of material, money, energy and information. Technological force - Generates problem solving inventions Political-legal force - Allocates power, regulates and protects the laws Socio-cultural force - Regulates the values and customs of the society

11. The types of external scanning techniques are as follows: SWOT analysis ETOP analysis(environment threats and opportunities profile) PEST analysis(political, social, environmental and technological)

12. SWOT is an acronym for strength, weakness, opportunities and threats which are strategic factors of an organisation. 13. Strategic Advantages Profile (SAP) 14. Political factors that have an impact on organisations are the following: Legislation on employment laws Voluntary codes and practices Environment regulations Trade restrictions and tariffs Tax policy and political stability


15. Some technological factors are the following: Research and Development Automation Technology incentives Rate of technological change

16. The strengths of an organisation are its resources and capabilities that can be used as a basis for developing competitive advantages. 17. ETOP provides a summary of the environmental factors that are most critical to the company. 18. Political factors create benefits and opportunities for organisations. 19. Michael Porter introduced the concept of value chain analysis in his book, The Competitive Advantage. 20. Primary activities are those that are concerned with creating and delivering the end product. Operations Outbound logistics Marketing and sales Services

21. The support activities aid the primary activities in helping the organisation achieve its competitive advantage. Procurement Technology development Human resources Firm infrastructure

22. Some of the important financial ratios are the following Liquidity ratio Profitability ratio Activity ratio Leverage ratio

23. Some of the non-financial ratios are: Employees Attrition or turnover operational Assets Customer Number of customers retained and new ones added Supplier Core competency

24. The idea of core competency was coined by Prahalad and Gary Hamel. The three tests to identify core competence are: Provide potential access to a wide variety of market Should make a significant contribution to the benefits of the end products A core competence should be difficult for the competitor to imitate

25. Vellore Institute of Technology (VIT). 26. Quality management aims to reduce costs and improve quality. 27. Benchmarking is a process of systematic evaluation of organizational processes and performance to create new standards or to improve process.


28. The Balanced Score Card (BSC) is a framework that allows organisations to manage and measure the delivery of their strategy. This concept was introduced by Robert Kaplan and David Norton in 1992. 29. The four perspectives identified by Kaplan and Norton are as follows: Learning & growth perspective Internal process perspective Financial perspective Customer perspective

30. The factors to consider while conducting competitor analysis are as follows: Who the competitors are Competitors strategies and planned actions How competitors react to the actions of the organization How to influence competitive behavior to the firms advantage

31. The aspects of a competitor on which the Porters framework is based on are: Competitors objective Competitors assumption Competitors strategy Competitor capabilities

32. Michael E. Porter developed the Five Force Model in his book, Competitive Strategy. 33.

34. Forces driving industry competitions are: Threat of new entrants Suppliers Rivalry among existing firms Buyers Buyers Threat of substitute products and services Other stakeholders

35. Value change analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. 36. Industry is a group of companies producing a similar product or service. 37. The objective of benchmarking is to understanding and evaluating current position of a business or organisation. 38. The BCG matrix is a portfolio management tool used in product life cycle.


39. BCG Growth Share Matrix

Question Marks (high growth, low market share) Stars (high growth, high market share) Cash Cows (low growth, high market share) Dogs (low growth, low market share)

40. Limitations of BCG matrix: The use of highs and lows to form four categories is too simple The correlation between market share and profitability is questionable. Low share business can also be profitable. Product lines or business are considered only in relation to one competitor: the market leader. Small competitors with fast growing shares are ignored. Growth rate is the only aspect of industry attractiveness Market share is the only aspect of overall competitive position

41. The Ansoff Growth matrix is a tool that helps organisations to decide about their product and market growth strategy.

42. The McKinsey/GE matrix is a tool that performs a business portfolio analysis on the Strategic Business units in an organisation. 43. McKinsey/GE growth pyramid matrix works with 3*3 grids while BCG matrix is 2*2 matrixes. 44. External factors that determine market attractiveness are the following: Market size Market growth Market profitability Pricing trends Competitive intensity/rivalry Overall risk of returns in the industry Opportunity to differentiate products and services



Segmentation Distribution structure (e.g., retail, direct, wholesale)

45. Internal factors that affect competitive strength are the following: Strength of assets and competencies Relative brand strength Market share Customer loyalty Relative cost position (cost structure compared to competitors) Distribution strength Record of technological or other innovation Access to financial and other investment resources

McKinsey/GE Growth Pyramid

47. Cash cow has higher market value. 48. Market development is a growth strategy where the business seeks to sell its existing products into new markets. 49. Market attractiveness replaces market growth in Mckinsey/GE Growth matrix. 50. The steps involved in strategic planning model are as follows: Environmental scanning analysis Strategy formulation Strategy implementation Strategy evaluation and control

51. Strategic management model is as strategic planning model. 52. Strategic formulation is the process of determining suitable course of action to achieve organizational objectives, and thereby achieve the organizational purpose. 53. Strategy implementation is concerned with the planning of how to apply the choice of strategy in organisation. True



Unit: 4 1. 2. Strategic decision making is a tool to do business in a smarter way. steps of decision making process:

a. Creating a constructive environment b. Generating good alternatives c. Exploring the chosen alternatives d. Choosing the best alternative e. Checking and confirming your decision f. Communicate your decision and move to action
3. issues involved in taking difficult strategic decisions are: 4. Uncertainty Complexity High-risk consequences Irrelevant alternatives Interpersonal

The features of strategic choice are as follows: Focusing on decisions and judgments made in a particular planning situation Highlighting judgments involved in handling uncertainties Creating a framework which explicitly balances present and future decisions Creating a framework for communication and collaboration between different people with different backgrounds and skills.

5. 6. 7. 8.

Strategy formulation is the development of long range plans. Strategic decision making influences the strategy formulation to a considerable extent. Process in Strategy Formulation Stimulate the identification Utilization and transfer of useful information as per the business strategies The factors are as follows: Processes Data Detachment


Henry Mintzberg believes that management is about applying human skill to system.

10. strategy implementation in the following three aspects: Organizational structure and systems Resource procurement Functional and operational plans

11. The three forms of common organizational structure are as follows: Tall Flat Hierarchical



12. The following are some of the procurement steps: Recognition of need for goods/services Qualify the specifics of the services Evaluation of potential suppliers Taking possession of the desired good or service

13. Project detailing is the first step towards resource procurement process. The steps involved in it are as follows: Analyze the needs Find the right designer Establish priorities Perform a mock-up Implement the feedback Perform test Prepare the final design Implement marketing and promotions Plan for updates or changes

14. The features of procedural issues are as follows: Setting up guideline development groups Defining the scope of the groups Scheduling time for events Setting up proper strategic planning process for every group

15. The resource allocation process deals with two steps. They are as follows: Breaking up the project and extracting the task Assigning the task to the resources

16. Core competence is a management tool that enables an organisation to deliver a unique value to its customers. 17. The benefits of core competencies are as follows: Designs competitive positions and strategies Helps employees to understand management priorities Decides where to allocate resources Enhances image and builds loyalty of custom A company interested to develop its core competencies should consider: Creating an organizational road map that sets goals for competence building Encouraging communication standards and involvement in core capability development Preserving its core strengths

18. Critical Success Factor (CSF) is the critical factor required to ensure proper success in a business. CSF is a variable element. 19. The types of CSFs are as follows: Industry CSF Strategy CSF Environmental CSF Temporal CSF



20. The five key sources of CSFs are as follows: The industry Competitive strategy and industrial position Environmental factors Temporal factors Managerial position

21. The key aspects of a company while working on its CSFs can be listed as follows: Develop a mission statement Develop high level goals Develop a hierarchy of goals and their success factors List the requirements, problems and assumptions Implement analysis matrices Implement problems versus requirements matrix

22. Resource procurement comes after three processes project detailed, procurement issues and resource allocation. 23. Core competence is a management tool that enables the business to deliver a fundamental customer benefit. 24. Major reasons for strategy failure Improper communications Lack of effective leadership No plan behind the idea Passive management Lack of motivation and personal ownership

25. The consequences of financial crisis are the following: Gradual declination in the growth of the organisation Systemic instability Fewer employment opportunities or increased salary cut-offs Loss of reputation in the global market

26. Methods to overcome strategic failure Defining your system value Defining your Defining your mission Live from choice Change management and strategic planning Employees and managing workers Create a plan and take substantial action Turn-around Replacement of the committee with a mastermind group

27. The major effect of strategic failure is the financial crisis of the organisation. 28. Strategic failure leads to decline in productivity of an organisation.



29. Types of Leadership: Direct Leadership: Sub-ordinates are in close contact Organizational Leadership: Requires staff support Strategic Leadership: Utilizes power wisely 30. A strategic leader possesses the following qualities: Loyalty and compassion Judicious use of power Wider perspective or outlook Motivation and reliability Skillful communication Quality of understanding the moods and emotions 31. Strategic leadership is the potential to express a strategic vision. 32. The factor that distinguishes successful strategy implementation from failed attempts is the competent leadership at the top. 33. SBU is a business tool whose main concept is to serve a clear and defined market segment with a defined strategy. 34. The features of SBU are as follows: SBU contains all the needs and corporate capabilities of its organisation. There is managerial and capital resource allocation for serving the overall interest of the organisation. SBU segments the activities of the company in a strategic manner and allocates resources competitively. 35. For an organisation to have an SBU, it must fulfill the following criteria: Possess different missions Set up original plans Have a definable group of competitors Administer resources in key areas 36. Functions or roles of an SBU Encourages new ways of thinking and acting as a separate autonomous unit Reduces the affect of bureaucracy in the organisation Follows the corporate strategic plan but differs in significant aspects. Planning steps include mission, market opportunity analysis, target market evaluation, marketing program and impact analysis. 37. Benefits of SBU to parent company/MNCs Optimization of the competitive advantages lies within the company's global network of business units and people. Reforming the business model and achieving the objective Serving a defined external market where it can conduct strategic planning in relation to products and markets 38. SBU is an autonomous unit which deals with specific business concerns. 39. The SBU adds value through parenting advantages by defining its roles and strategic priorities. 40. Autonomous: A self governing body which works independently



1. The core aim of strategic management succeeds only if it generates a positive outcome. 2. The five step process of strategic evaluation and control Recognize the activity to be measured Create the pre-established standards Measure actual performance Status of actual performance Take remedial action

3. The most common negative side effects of strategy evaluation are: a. Short term arrangement b. The top management doesn't realize its importance. They believe that short term considerations are sufficient and more important. Lack of time to conduct a long term analysis.

Goal displacement The two types of goal displacement are:

Behavior substitution Sub-optimization

4. The three most widely used techniques for international performance evaluation are return on investment, budget analysis and historical comparisons. 5. The methods to evaluate strategies through Return on Investment (ROI) and Earnings per Share (EPS) are becoming outdated these days. 6. The present value of the predictable future stream of cash flows from the business plus the value of the company if liquidated. The most popular methods to measure the share holder's wealth are: Economic Value Added (EVA) - EVA measures the difference between the pre-strategy and post-strategy value of a business. EVA = after tax operating income (total cost of capital) Market Value Added (MVA): MVA is the difference between the market value of an organisation and the capital contributed by the shareholders and lenders. 7. The firms MVA is positive if its market value exceeds the total capital. This means that the management is creating wealth. Negative MVA means that the management is destroying wealth. 8. Robert Kaplan and David Nortons approach of balanced scorecard is especially useful when the non-financial assets contribute 50 to 80 percent of a firm's value. The balanced scorecard is also a collection of procedures used to analyses difficulties. 9. These four areas are as follows: Financial Customer Internal business perspective Innovate and Learning



10. The term scorecard indicates quantified performance measures and balanced indicates that the system is balanced between: Short term objectives and long term objectives Financial and non-financial measures Lagging and leading indicators Internal and external performance perspectives

11. The evaluation process stops if the results of actual performance are within the tolerance range. 12. The most popular methods to measure shareholders wealth are EVA and MVA. 13. Information of the strategic evaluation activities needs to be elaborate and over informative. False 14. The three types of strategic control are: Feed forward/input controls Concurrent/behavior controls Feedback/output controls

15. The guidelines for effective strategic control are: It should contain only the most important information. It should examine only meaningful activities and results. It should be well-timed. It should use long-term and short-term controls. It should be able to identify the activities that do not fall within the tolerance range. It should determine the rewards for meeting or exceeding standards.

16. Strategic control is about tracking the strategy as it is being planned, implemented and takes necessary actions when it indicates any negative performance. 17. Behavior control focuses on resources like knowledge, skills, abilities, values and motives of employees. False 18. Input, behavior and output controls are not interchangeable. True 19. Operational control is designed for the internal activities of the organisation. 20. The data of strategy control concentrates on the performance result of the future. 21. Operational control focuses on the recent events. 22. Operational control is mostly limited to the information within an organisation. 23. Walt Disney was an entrepreneur with creative skills. 24. According to Goold and Campbell, synergy can take place in 1 to 16 forms. Some of them are: Shared know-how Coordinated strategies Shared tangible resources Economies of scale or scope Pooled negotiating power New business creation

25. Combining multiple products, business lines or markets is an attempt of the organisation to achieve synergy. 26. Synergy is always positive and does not have any negative influences. false 27. Downsizing and the divestiture may result in negative synergy. 28. Key Stakeholders are a subset of Stakeholders who can leave a direct impact on the organisation and can influence the success or failure of the organisations activities.



29. A stake holder table should include the following information. List and identify all potential stake holders. Identify the different unconcealed and hidden interests of the stake holders that could affect the objectives of the project. Briefly analyze the impact of their interests on the project. Specify the relative importance of each stake holder's interests.

30. As the project proceeds, draw a communication strategy that recognizes how, when and what to communicate to each stake holder group. 31. Share holders are the key stake holders of an organisation. False 32. Stake holders should always be analyzed at the beginning of the project. True 33. Spending a long time buried in the details with stake holders will benefit both the parties. False 34. Synergy : Combined effect 35. Lagging : Delayed, too slow 36. Operational : Functional 37. Concurrent : Simultaneous, synchronized 38. Sub-optimization : Achieving average or less than average



Unit: 6
1. 2. Business policies are the instructions laid by an organisation to manage its activities. Following are the features of an effective business policy: 3. 4. 5. 6. Specific Clear Uniform Policy Appropriate Policy Comprehensive Policy Flexible Policy Written Stable Policy serves

Policies are developed to assist the organisation to achieve its objectives efficiently. Procedures are written in an outline format. Business process occurs at all levels of an organization. Business policies are important due to the following reasons: Coordination Quick decisions Effective control Decentralization

7. 8. 9.

The policies are articulated by the management. Cooperation helps in ensuring uniformity of action throughout the organisation. Policies help in decentralized as the executive roles and responsibility are clearly identified.

10. Policy is a predefined course of action set up by top level management to provide guidance towards business strategies and objectives. 11. A procedure is a specific method to achieve a goal. It consists of a series of steps to be followed regularly or in a cycle to achieve the end result 12. A process is a specific event in a series of business activities. 13. A programme lays down the principle steps to attain a specific objective. 14. Programme provides a sequence of activities in the order in which it is implemented 15. Procedures are a systematic way of handling routine activities. 16. Policies provide a backbone for organizational behavior. The different types of policies in an organisation are: General and specific policies Written and implied policies Originated, imposed and appealed Organizational and functional policies

17. Functional policies are intended for specific departments of business. 18. Originated policies are formulated by top level managers on their ideas to guide the actions of their subordinates. 19. Imposed policy is formulated from the influence of external factors.



20. The following are the steps to develop a policy statement: The first step in developing a policy statement is to gather information. The policy statement should have simple words and the concept should be understood by all departments regardless of their functionality A pilot group is selected to review the policy. This group tests and focuses on questions. Before publishing, a legal review of the policy is conducted to make sure that all legal implications of controversial nature are deleted or rephrased. It should be decided whether the implementation of the policy requires employee signatures or it will be added to the current policy manual without signatures The policy statement is included in the employee handbook and is updated every six months. 21. The general guidelines to be followed while writing a safety policy are: Identify the risks associated with your workplace. Certain risks are common to many businesses, such as fire or medical emergencies. Conduct a meeting with employee and senior management to address the different types of risks. Write the introduction of the safety policy statement in a simple and clear language. Focus on each safety risk that is identified and discuss different methods to handle the risk such as exiting the building, calling the fire department and such other action plans. Explain the activities that the employees must routinely follow to keep the workplace safe and secure.

22. The three principle parts of a policy statement are as follows: General statement of intent Organisation Arrangements

23. Policy statement is a formal document that outlines the methods in which an organisation intends to perform the activities. 24. The information in the policy statement is arranged in a clear and readable form. 25. Companies with top down management pattern tend to delegate the policy making. 26. The different features of corporate culture are Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability

27. The hindrances due to corporate culture are: Cultural difference Loss of Existence of Communication breakdown

28. Corporate culture is the common set of attitude, values and standards that are accepted among organizational members. 29. Belief, values and norms are shared to create corporate culture. 30. Strategic implementation is about change management.



Unit: 7

1. The different resources in the organisation are: The property possessed by the organisation The human resources in the organisation Inventories of product and material

2. The three types of competitions are: Competition among the organisations which produce similar products Organisations produce products that are substitute of another product The general competition that arise between the organisations like consumer goods, acquiring customers etc

3. The growth rate of economy in the country lays a heavy impact on the organization's effort. 4. The shaping of business policy depends upon the internal environment of the organisation. 5. Technology includes the use of machinery, processes and products. 6. The process of framing policies consists of the following steps: Definition of purpose Preparation of strategic intelligence policy alternatives Policy analysis Strategic choice Policy review

7. Policy formulation is the process of designing policy. True 8. Strategic analysis is the process of selecting the policies that is best suited for the organisation. False 9. The major function of designing the policy relies upon the managers. True 10. Policy cycle



11. The policy cycle consists of the following stages: Setting the policy agenda: Policy agenda is the process of describing the sequence of business activities in the organisation and planning the measures to frame a policy. Writing policy: It is the process of drafting the policy for the organisation. The policy is drafted based on the various factors discussed in the meetings. Implementation of policy: The implementation process is necessary to effectively communicate the drafted policies. Policy implementation tasks are: Policy legitimating The proposed policy must obtain authenticity from the team implementing the policy. Constituency structure The policy must be marketed in such a way that it promotes the relationship between the beneficiaries. Resource allocation The resources that are supporting the implementation of policy must be acquired or reallocated depending on the implementation of the strategy. Organizational design and modification The existing organisation must be reengineered or modified according to the new policy. Resource mobilization The resources in the organisation must be redirected to provide the capacity to conduct action as per the implemented policy. Enforcing policy: Enforcing policy is the process of applying the drafted policies in situations that are in compliance between the organisation and the employees Reviewing the policy: Reviewing the policies is the process of checking whether the policies are matching the business activities in the organisation. Updating policy: If any changes are made in the process of the business activities then the existing policies also must be changed.

12. The implementation phase includes the process of making the policy visible to the employees in the organisation. 13. The change in the organization's resources such as human resource, privacy issues, safety concerns, finance, etc affects the policy change. 14. The policy decision maker is the key persons to implement new ideas. 15. The policies are developed more clearly based on the underlying principles of the organisation. 16. The policy decision makers hold the authority to alter the existing policies and create a new one according to the changes in organisation. 17. Policies are unacceptable statements for decision making. False 18. Business policy acts as the linkage between physical factors and personnel. True 19. Business policy does not interrelate to the objectives of the organisation. False 20. Strategy is the process of determining the goal and methods to achieve them. 21. The separation of strategy and policy generates the risk of obtaining unachievable strategic objectives.



22. steps involved in implementing policy change: Steps 1 The first step involves analyzing the existing policy in the organisation. Step 2 In this step the top level decision makers select a subordinate group of decision makers for the new policy. Step 3 This step involves gathering data about the changes that relates to taxation, research on new tax laws. Step 4 The top level management initializes to form a policy developing team after the decision makers informs regarding the policy change. Step 5 This step deals with developing the detailed policies based on the underlying principles of the organisation. Step 6 Once the new policies are developed by the policy development team, the next step involves in presenting the proposed policy change to the top level management for the approval. Step 7 The top management approval is obtained when the new policy is ready for release. The copies of the new policies are published and distributed to all the internal stakeholders.

23. Ambiguity : Confusion, no clarity 24. Amendments : Revision, corrections, improvements 25. Disruption : Disorder, trouble



Unit: 8

1. Steps in Business Continuity Plan Initiation Business impact analysis (BIA) Disaster readiness strategies Develop and implement the plan Maintenance and testing

2. Business continuity plan (BCP) is a process followed by an organisation to survive in an event that causes disruption to normal business processes. 3. According to the Business Continuity Institute, a Business Continuity Plan (BCP) is defined as:

A document containing the recovery timeline methodology, test-validated documentation, procedures, and action instructions developed specifically for use in restoring organisation operations in the event of a declared disaster. 4. BCP is a collection of procedures which is developed, recorded and maintained in readiness for use in the event of an emergency or disaster. 5. BCP restores business organisation in the event of an emergency or disaster. True 6. BCP is a collection of procedure and information to be used in event of disaster 7. BCPs require testing. True 8. BCP is very important due to the following reasons: Advanced planning Threats

9. Every company needs a detailed contingency planning that ensures continuous business operations in case of any unforeseen. 10. Hackers could destabilize an organizational entire operation. 11. Business Continuity Plans must cover IT, data, voice communication, essential personnel and offsite location. 12. BIA reveals the financial and operational impact of a major disruption. BIA report describes the potential risks specific to the organisation. 13. The disaster readiness strategies include the following activities: Define business continuity alternatives Estimate cost of business continuity alternatives Recommend disaster readiness strategy



14. Develop and implement the plan includes the following activities: Emergency response and operations Develop and implement a business continuity plan Apply business unit plans for each department.

15. Maintenance and testing includes the following activities: Establish a plan exercise program Awareness and training plans Sample emergency response exercises Audit and update the plans regularly

16. An estimation of the resources is necessary for successful resumption of recovery and restoration. True 17. Regular auditing of plans is not required. False 18. Business impact areas can be classified as: 19. Technical impact factors: Loss of confidentiality Loss of integrity Loss of availability

20. Business impact factors: Financial damage Reputational damage Loss of privacy

21. Loss of confidentiality includes loss of critical or sensitive data. 22. Reputation damage effects on stakeholders. True 23. Loss of information commercial sensitive data or intellectual property may result in legal liabilities. 24. A good BCP program fails to identify storage for vital records within the organizational budget. False 25. Logistical difficulties are associated when relocating and accommodating recovery team members. True 26. The cost of implanting and testing a BCP program is high. 27. The steps to formulate BCP policy are as follows: Ensure that the BCP program supports the objectives and culture of the organisation Decide on the scope of BCP program



28. The contents of BCP policy are as follows: Introduction Precursors: It gives an organizational understanding of BCM and its importance. Purpose Concepts and assumptions Process Methods and techniques Outcomes and deliverables Review

29. BCP policy provides guidelines for developing, maintaining and exercising BCP. 30. BCP policy is a set of policies and procedures for formalizing business continuity program. True 31. Research on external sources for guidance is one of the methods in BCP policy. True 32. Contingency planning is a planning strategy that deals with uncertainty by identifying specific responses to possible future conditions. 33. Some of the best practices for contingency planners are as follows: Consider the widest possible range of possible solutions. Identify which solution helps to address which type of problems. Identify the full cost, benefits and ease of implementation of each possible solution, and rank them based on cost effectiveness. Establish potential implementation plans for each individual strategy, so they are ready to be quickly deployed as needed.

34. Contingency plans should overcome the failures and continue the function of the organisation. True 35. Backup plan is capable of remaining functional as long as it takes time to restore primary plan. 36. Whacking : Use of wireless network without authorization to obtain information 37. Espionage: Use of illegal means or deceptive practices to gather information.



Unit: 9
1. A business strategy is largely dependent upon long-term goals and the risk involved during investment. 2. A business plan is a complete internal document that summarizes the operational and financial objectives of a business. 3. The strategies for creating a business plan are as follows: Define your business vision Make a list of your goals Certain things must be kept clear before setting up your goal. Understanding the customer Learn from your competitors Resolving financial matters Identify your marketing strategy

4. The roles played by a proper business venture in business profits are as follows: Attracts a business partner and assist in getting financial support from a bank or a private investor. Improves distribution channels by extending market positions. Diversifies product offerings by developing new technologies and utilizing the resources. 5. Creating a plan and establishing business ventures are vital initial steps for a beginner to start his business. 6. A business plan is a complete internal document which contains the detailed plans to accomplish the objectives. 7. Profit of a company depends upon its risk appetite. 8. Some elementary ideas which will help you to make effective business investments are: Use of income to eliminate debt Reinvestment of funds to nurture the business Investment in other businesses 9. Following are the ways to invest successfully: Leave a margin of safety Invest in business which you understand Make assumptions Measure your success Have a clear disposition towards price Allocate capital by opportunity cost 9. Risk might arise during development, execution, administration and making profit. 10. The following are the factors which affect the investment strategies of a new business: Accurate addressing of subjects in the guide Developing certain character Be focused and alert during sudden declination with immediate solutions Available resources 11. The factors implemented by an existing business are as follows: Targeting long-term revenue growth Driving profits by revenue synergies Enhancing geographical footprints Increasing exposure to develop markets globally Consistent growth by acquisition activities 26


12. Internal methods to rectify faulty investment strategies Internal transformation Corporate restructuring and reorganization Financial restructuring Divestment strategy Expansion strategy Diversification strategy Vertical and horizontal integration strategy Building core competencies and critical success factors 13. Internal transformation takes place in an organisation to sustain constant growth, survival and maintain profitability. 14. The following are the reasons for internal transformation of a company: Pressure on owner to decrease costs Overstaffing Large and complicated company structure Low flexibility of staff Financial instability 15. The main objective of a company which adopts internal transformation is to increase efficiency by reaching the standards in the global market. This is achieved by holding high quality level of productivity. 16. The essential components of a successful business transformation are as follows: Achievement Improved synergy Aliveness Shared future Corporate restructuring and re-organisation Layoffs and employee termination 17. Corporate restructuring deals with the following factors: Correction of inadequate authority patterns Creation of a more focused diversification strategy Augmentation of strategic control Reduction of trust on bureaucratic control through reduced corporate staff Development of the performance of the firm and shareholder wealth 18. Layoffs mean that the employee would be eligible for rehire or to be brought back to its position if conditions change or improve in the organisation. 19. The following are the reasons which depict how layoffs and downsizing influences the growth of the organisation: Employee layoffs allow the organisation to cut costs while preserving the relationship with its most critical and valuable employees. It motivates and maintains positive morale of the employees who survive the layoffs. It creates a better workplace and increases productivity as the future outcome. Employee downsizing and layoffs prepares the dismissed employees to rectify their mistakes and minimize the damages in the workplace. 20. Driving forces of restructuring are as follows: Globalization of organisation, consumer preferences, supply chains and financial flows Rapid technological changes Changing capital ownership Changing expectations and value systems Growing direct foreign investment Changing demographics



21. Objectives of restructuring are as follows: Optimizing management processes Enhancing performance Reducing costs Increasing productivity Increasing sales and improving services Controlling costs Maximizing utilization of critical resources 22. Divestment is a form of economizing strategy used by businesses when they downsize/right-size the scope of their business activities. 23. The following are the reasons which make an organisation to divest: Too small market Availability of better Need for increased investment Lack of fit strategy Legal pressures to divest 24. The following are the ways by which a firm implements divestment strategies: Developing a portion of the business and allowing it to operate as an independent business entity. Selling a portion of the business to another organisation. Closing a portion of the firms operations. 25. Expansion strategy is a business strategy in which business proliferation is achieved by increasing the stores/services and productivity. 26. The four types of expansion strategy are as follows: Legal restructuring Franchising Strategic alliances Mergers and acquisitions 27. The following are the ways by which the expansion of an organisation occurs: Market concentration Innovation Penetration Export Diversification 28. The diversification strategy is a corporate strategy planned to increase profits by increasing sales volume. 29. There are three different types of diversification strategies which are explained as follows: Concentric diversification In concentric diversification strategy, the technology used in the industry remains the same, but the marketing plan changes to a significant extent. Horizontal diversification In horizontal diversification strategy, the applied technology is not related to the existing business of the company. Lateral diversification The lateral diversification strategy focuses on the products which are not related to the existing line of products. 30. Benefits of vertical integration strategy are: Reduces transportation costs Improves supply chain coordination Captures upstream or downstream profit margins Expands core competencies Facilitates sound investment



31. Factors favoring vertical integration strategy are: Taxes and regulations on market transaction Obstacles to the formulation and monitoring of contracts Sufficiently large production quantities 32. Benefits of horizontal integration strategy are: Achieves economies of scale by selling more of the same product Achieves economies of scope by sharing resources common to different products Market power increases 33. Developing core competencies and critical success factors rectify the faulty investment strategies in the following ways: Better human resource planning More effective training programs Help with outsourcing options Guidance for development or change Developing vision of the whole organisation. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. Investment is defined as the commitment of money in order to generate future returns. Faulty and poor investment strategies decline the growth of any organisation. Internal transformation is one of the methods to rectify faulty investment strategies. True Controlling costs is a part of which strategy? financial restructuring Downsizing means that the employees are terminated from job but can be rehired if the conditions change in the organisation. False Financial restructuring is the re- organization of the financial assets and responsibilities of a corporation. Divestment strategy is commonly the result of a growth strategy. Franchising is type of expansion strategy. True Diversification is the most risky strategy. The three types of vertical integration strategies are forward, backward and balanced. A backward vertical integration strategy is implemented when a company establishes subsidiaries to supply product inputs. A forward vertical integration strategy controls the distribution and marketing of a product. A balanced vertical integration strategy is a strategy in which a firm owns the subsidiaries that produce inputs and also distributes outputs. Venture : Endeavor or undertaking Obsolete : Entity which is currently not in use or outdated Restructure : Rearrange Diversify : Expand and bring variety Divest : Disassociate or separate



Unit: 10 1. Techniques of employed by MNC to manager markets: Franchising: Franchising is the process of granting the franchisee permission to use a name, method, process or trademark. The firm helps the franchisee with the operations like supplies of raw materials and operations of franchise. Management contracting: Management contracts are the contracts under which the firm rents its expertise or knowledge to a government or company. Contract manufacturing: Contract manufacturing is a method which firms use to enter the foreign market. Licensing: Licensing is a process, in which a firm (licensor) grants some type of rights like rights to a process, a patent, a program, a copyright, or expertise to a foreign entity (licensee). Direct investment: In a direct investment, a firm invests directly within foreign boundaries and makes a real commitment of its capital, personnel and assets beyond domestic frames. 2. A multinational corporation is a business organisation that has its facilities and assets in more than two countries other than its home country, the purpose being to successfully manage production and deliver products and services. 3. A multinational corporation (MNC) is an enterprise operating in different countries but is managed from one home country. The main company which controls other business units from the home country is called as parent company. 4. A MNC is a firm that is structured in such a way that the business is conducted across several countries. 5. The headquarters of the corporation is usually called the parent company and its branches are

called the subsidiaries. 6. Multinational corporations are managed at international level.

7. An advantage of MNCs is the patented technical knowledge which enables them to compete internationally. 8. By accessing raw materials in foreign countries many MNCs lower the input production costs. 9. MNCs are able to influence this brand image by standardized their product lines in different countries. 10. The limitations of MNCs are as follows: 11. Business risks Host country regulations Direct legal systems Political risks

Major variations in exchange rates can affect the entire profit drastically.



12. In the short run, market mechanisms like and currency swaps and forward contracts allow MNCs to minimize the movement of exchange rates. 13. 14. Inability to respond properly to local culture has led to failure of products of MNCs. Globalization is the process of integration of the world community into a common economical or social system. 15. 16. In a domestic country scenario, the control is decentralized. Globalization scenario is a linear systematic process which progresses depending on each countrys market structure. 17. TransNational Corporation (TNC):TNC is an enterprise comprising of entities in more than one country which operates under a system of decision-making that permits rational policies and a common strategy. 18. 19. 20. Global are companies that have invested and are operating in many countries. TNC have investments in foreign operations. MNC operate directly in the foreign country by setting up of partners and through the

ownership of assets located abroad.

UNIT: 11

1. Types of strategic alliances and business decisions: Joint venture: Joint venture is the most powerful business concept that has the ability to pool two or more organisations in one project to achieve a common goal. Joint venture has been the hallmark for most successful organisations in the world. Merger and acquisition: Merger is the process of combining two or more organisations to form a single organisation and achieve greater efficiencies of scale and productivity. Collaboration and co- branding: Collaboration is the process of cooperative agreement of two or more organisations 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. Contractual agreements: It is the process of agreement with specific terms between two or more organisations which guarantee in performing a specific task in return for a valuable benefit. Outsourcing: It is the process of entering into a contract with an organisation or a person to perform a particular function.



2. Strategic alliance is the process of mutual agreement between the organisations to achieve objectives of common interest. 3. The various characteristics of strategic alliances are: The two independent organisations involving in agreement have a similar idea of achieving objectives with respect to alliances. The organisations share the advantages and organize the management of alliance until the agreement lasts. To develop more areas in alliances, the organisations contribute their own resources like technology, production, R&D, marketing etc to increase the performance. According to Faulkner (1995) Strategic alliance is the inter-organizational relationship in which the partners make substantial investment in developing a long-term collaborative effort, and obtain common orientation. 4. different stages of strategic alliances: Strategy development: It is the process of identifying the objectives of forming

alliances, analyzing the advantages of entering into alliances, observing the major issues, challenges and development of resource strategies for production. Partner assessment: This process involves selecting the appropriate partner to join into alliance. Contract negotiation: It is the process of determining the two partys realistic objectives such that a high calibre is formed in negotiating between the two organisations. Alliance operation: This phase involves the commitment of senior management in the organisation towards forming alliance. Alliance termination: It is the process of ending the alliance between the organisations when the objectives are met. 5. Synergy and competitive advantage act as the elements that lead businesses to greater success. 6. The different types of mergers are: Horizontal merger The horizontal merger takes place when two organisations competing in the same market join together. Vertical merger This involves the union of a customer with the vendor. It is the process of combining assets to capture a sector of the market that it fails to acquire as an individual organisation. Market-extension merger It is the process of merging two organisations that sell same products in different geographical areas. Product-extension merger Most of the organisations execute product extension merger to sell different products of a related category.


MB- 00 52 STRATEGIC MANAGEMENT AND BUSINESS POLICY Conglomerate merger This merger involves organisations alliance with unrelated type of business activities. The organisations under conglomerate merger are not related either horizontally or vertically. 7. Acquisition is the process of purchasing an organisation by another organisation, either through the purchase of its shares or assets. 8. The four stages involved in the process of outsourcing are: Strategic thinking role of business activity outsourcing. evaluating and contractual agreement outsource management

9. Affiliate marketing It is the process of revenue sharing between the website owner and the online merchant. 10. The process of combining two or more organisations to form a single organisation is called merger. True 11. Collaboration is the process of cooperative agreement of two or more organisations to work together in achieving a common goal. True 12. Affiliate marketing is the process of revenue sharing between the website owner and the customer. False 13. The lack of trust between the organisation leads to poor performance. 14. The conflicts between the organizations are due to internal issues like personnel, resources. 15. The organisation suffers benefits due to incoherent goals. 16. Alliance : Agreement or coalition 17. Affiliate : Associate or partner 18. Conglomerate : Business Corporation



UNIT: 12 1. Creativity can be defined as an act of turning new and imaginative ideas into reality. Creativity includes two processes - thinking and then producing. 2. Innovation can be described as an action or implementation of new ideas which results in gain or profit. 3. According to The Courage to Create written by Rollo May, creativity is defined as, Creativity is the process of bringing something new into being...creativity requires passion and commitment. Out of the creative act is born symbols and myths. It brings to our awareness what was previously hidden and points to new life. The experience is one of heightened consciousnessecstasy." 4. Creativity is a core competency for managers. 5. Creativity is a process that can be managed and a skill that can be developed. 6. The components of creativity are as follows: Forging It is to gather information. Information can be gathered by exploring the environment, getting educated on ideas and developing the abilities and talents. Reflecting It is to generate ideas. Reflecting the ideas can be done by questioning the information which is gathered, thinking, pondering and brainstorming and using your imagination. Adopting It is to accept or implement ideas. Ideas can be adopted by selecting among the generated ideas, borrowing ideas from others, and inventing innovative ideas. Nurturing It is to improve the ideas. Ideas can be improved by evaluating an idea and simplifying a complicated idea. Knuckling down- It is to never give up the ideas. Knuckling down means marketing the ideas, dealing with critics, maturing with courage and patience, and survive the success. 7. The steps in creativity are as follows: Preparation Incubation It involves working on the issue or the problem. Illumination Verification

8. Creativity requires passion and commitment. 9. Reflecting the ideas requires questioning, pondering and brainstorming using your imagination. 10. Preparation is based on study and observation.




Innovation is the production or implementation of ideas. Innovation can be described as an

action or implementation which results in an improvement; a gain, or a profit. The National Innovation Initiative (NII) defines innovation as "The intersection of invention and insight, leading to the creation of social and economic value."

12. The components of innovations are as follows: Implementation Creativity Architectural innovation This innovation defines the basic configuration of the product and the process. Market niche innovation This innovation involves development of new marketing methods for the existing products. Regular innovation This innovation involves the change that is applied on established technical and production competence of the existing markets and customers. Revolutionary innovation: This innovation disrupts and renders established technical and production competence that out of date, yet it is applied to existing markets and customers. 14. Business practices used to create and build a creative and innovative business cultures are as follows: Select the most promising innovators, but encourage unexpected surprises Create buffer zones for the most innovative people Give room to innovators to play Resist the temptation to look for immediate results Commitments to drive the best ideas to implement

13. The types of innovation are as follows:

15. Managers should promote business practices. True 16. Buffer zones are protective cossets around the creative people within an organisation. 17. The practices that are generally adopted by organisations to promote creativity and innovation are: Brainstorming Mind mapping and mind revolution Out of the box thinking Rewarding best ideas Using metaphors/jargons/slogans



18. Brainstorming is an effective way to generate lots of ideas on a specific issue. Brainstorming works best with a varied group of people. Creativity and relaxation exercises or other fun activities can help participants to relax their minds before the session. 19. The four important characteristic of mind map are as follows: The central image represents the subject. The main ideas of the subject branch out from the central image as main branches. Minor ideas are linked to the main ideas. All the branches are connected to form a nodal structure.

20. Mind revolution is used for creative purpose. It relies on the following three conscious thought movements: Going to extremes Establish relationship between Construct the thought 21. Out of the box thinking can be defined as a thinking that moves in diverging directions so as to involve a variety of aspects which leads to novel ideas associated with creativity. It describes nonconformal creative thinking. The 'box', implies rigidity and symbolizes constrained and unimaginative thinking. This is in contrast to open the mind for unrestricted 'out of the box' or 'blue-sky' thinking. 22. Peter Drucker introduced the successful cases of out of box thinking to the management world. 23. Rewards are motivational tools. 24. The types of rewards are as follows: Recognition Small gifts for every idea Slightly bigger rewards for more creative

25. Metaphor is a figure of speech and does not literally represent real things. 26. Metaphor is the map and it guides you to find a solution on your own ability. 27. Jargon can be described as a technical language used by a particular profession, group or trade. 28. Slogans are the unsung heroes of an organisation in the business world. Slogans represent an organisation, a new product, or a client's website. 29. Brainstorming works best with an individual. False 30. Slogans represent an organization's new product. True



31. The importance of creativity and innovation in business management are as follows: Keeping minds open for new opportunities Securing competitive advantage Creativity is a part of a successful innovation Improving organizational culture Removing strategic barriers Changes attitude towards risk Improves learning and knowledge transfer 32. Creativity is a powerful tool that can improve the performance of an organisation in an amazing way. 33. The creativity culture of organisation actively encourages interaction. 34. Increased emphasis on exploration and assessing opportunities means that activities can be undertaken with more risk. False 35. The big challenges for companies over next generation are: Adaptability Innovation Engagement Hostility Isolation The process of creating a new idea has four stages. They are as follows: Gather stimuli Multiply Create customer concepts Optimize practicality Implementing cost saving ideas includes evaluation the following criteria: How much will it save Problems faced by cost saving Effect on the quality Organisations must give more priority to customers than feasibility. True Organizational change focuses on the changes in policies, direction and culture of an organisation. Buffer : Shield or cushion for protection Metaphor : Representation or a simile Entrepreneurship : Starting an own enterprise Isolation : Being or working alone without any involvement challenges involved in creativity and innovation: Feasibility, time frame and practicality of the ideas Cost involved in implementing ideas Technical aspects involved in innovation Acceptance of innovation in the market



38. 39. 40. 41. 42. 43. 44.


MB- 00 52 STRATEGIC MANAGEMENT AND BUSINESS POLICY UNIT: 13 1. Ethics and corporate social responsibility are essential factors which influences business undertakings and its functional operations. 2. Corporate Social Responsibility (CSR) means operating a business that meets or exceeds the ethical, legal, commercial and public expectations. 3. Values are the image of, what an organisation stands for and are the basis for the behavior of its members. 4. Ethics is defined as the rules or standards which govern the conduct of an individual or an organisation. 5. The roles of ethics management program are as follows: 6. Establishing ethics committee at the board level Establishing ethics management committee Assigning an ethics officer The code of ethics is the written guidelines issued by an organisation to its management which assists in conducting its actions according to the ethical standards. 7. The following are the guidelines to develop the code of ethics in an organisation: 8. 9. 10. Reviewing the values that must adhere to the relevant laws and regulations in an organisation Reviewing the values which produce the best traits of a highly ethical and successful product or service Identifying values that address the current issues in the workplace Identifying values which needs to undergo proper strategic planning Considering the ethical values that are appreciated by stakeholders

Roles of business ethics and business values: Maximizes profit Efficient utilization of business resources Creates goodwill in the market Values provide the basis for judgments about important factors. Way of execution of ethical codes creates the difference between ethical and unethical

conduct. 11. 12. Improving professional competence is an unethical conduct. False Unethical conduct decreases productivity and increases misconduct in an organisation.



13. Some of the measurement tools which help an organisation in the analysis of ethical conduct are as follows: 14. Employee surveys Interviews and reviews Independent audits Helpline analysis

According to Robert Haas, the Chairman of Levi Strauss, an organisation should have its

ethical principles. It should be capable of making profits and making the world a better place to live. 15. Ethical conduct has a positive impact on employee behavior and employee perceptions. 16. An independent audit is a measurement tool which helps in the analysis of ethical conduct in an organisation. True 17. Business policies are the guidelines developed by an organisation to govern its actions. 18. Corporate Social Responsibilities (CSR) 19. The meaning of CSR has two folds. On one hand, it exhibits the ethical behavior that an organisation exhibit towards its internal and external stakeholders. And on the other hand, it denotes the responsibility of an organisation towards the environment and society in which it operates. 20. CSR makes a significant contribution towards sustainability and competitiveness of the

organisation. 21. CSR activities include commitment to product quality, fair pricing policies, providing correct information to the consumers, resorting to legal assistance in case of unresolved business problems, so on. 22. The following are the features of CSR: Improves the quality of an organisation in terms of economic, legal and ethical factors Builds an improved management system Contributes to countries by improving the quality of management Enhances information security systems and implementing effective security measures Creates a new value in transportation Creates awareness towards environmental issues

23. CSR is the continuing obligation by an organisation to behave ethically. 24. CSR denotes the responsibility of an organisation towards the environment and the society in which it operates. True 25. CSR does not improve the relations with the investment community. False 26. Business profits must be earned with proper adherence to the ethical standards and business values. True 27. Ethical obligation is one of the business obligations. True



28. An organisation should follow the environment management process as an environment obligation. True 29. The following are the areas in which social auditing is performed: Individuals and their well-being Community and its social capital Environment and economy

30. The following are the methods to perform a social audit: Identify key areas to assess the community, economy and environment. Agree appropriate indicators and draw a plan to obtain such information. Use appropriate supporting tools. Carry out your audit in a participatory way. Check its legalization by an external assessor.

31. Corporate governance is the reflection of the business culture, policies, relationship with the stakeholders and the organization's commitment to its values. 32. Good corporate governance is the key to the integrity of corporations, financial institutions and markets. 33. Social audit considers the impact of a business on the community. 34. Social audit is performed in a community environment. True 35. Corporate governance is influenced by the internal and external factors. 36. Obligation : Responsibility to perform some task 37. Dysfunction : Deviation of a process from its original behavior



1. advantages of global competitiveness are: efficiency strategies risks learning

2. The field of strategic management has significantly improved in gathering information about the operational and financial performance 3. The organisation must follow certain value that act as the foundation to growth. 4. A well designed strategy management helps the organisation to attain global competitiveness. 5. Strategic change refers to non-routine, non-incremental and discontinuous change which alters the overall direction and components of the organisation. 6. The various methods to manage strategic change are: External interface Mission Strategy Managing organizational mission/strategy processes Task Prescribed Organizational process

7. Flexibility is a necessity to cope with complexity and dynamics. 8. The various modes of competencies are: Cognitive flexibility for alternative strategic Cognitive flexibility for alternative management processes Coordination flexibility to configure and deploy resources Flexibility of resources to be used in alternative operations Operating flexibility in applying skills and capabilities to available resources

9. According to James Brien Quinn, most of the large organisations emerge with iterative process in realizing the probes of future, experiments, and learn from a series of incremental commitments rather than global formulations of total strategies.



10. It helps the strategic leaders to: Improve the quality of information used in corporate strategic decisions. Deal with personal resistance and political pressure if a strategic change encounters. Create organizational awareness, understanding, and psychological commitment for effective implementation. Reduce uncertainties and allow interactive learning between organisation and its various environments. Improve the quality of strategic analysis and choice by involving relevant people and avoid incorrect decisions. 11. Quinns approach includes appreciative impact upon people and culture and practically searches better ways to take up right decisions. 12. Few types of uncertainties are:

Demand uncertainty Supply uncertainty Competitive uncertainty and externalities

13. Few types of crises are: Sudden crises Smoldering crises It is defined as a serious problem which is generally not known to the organisation. Economic cycle refers to recurring and fluctuating levels of economic activity experienced over a long period of time. It is also called as a business cycle. The four stages of economic cycle are economic expansion, slowdown, recession and recovery. These phases depend upon changing employment, industrial productivity, and interest rates. 14. Environmental issues are in diverse disciplines as economics, sociology, education and psychology. 15. The term strategic flexibility is referred as the systemic ability of an organisation to change in strategically important ways. True 16. Smoldering crises occurs due to a sudden disruption occurred in the organisation without any warning. False 17. Supply uncertainty arises due to internal operations and external developments in the technology. True 18. The process of liberalization privatization and globalization are contributing to the increasing applications of strategy management in organisations. 19. Liberalization refers to relaxation of government restrictions in the areas of social and economic policies. 42


20. Privatizations refers to transfer of service functions or assets from public to private ownership and the opening of certain closed areas to private sector entry. 21. Electronic commerce refers to a broad range of online business activities of various products and services. 22. The processes enhanced in e-business are as follows: Production process Customer focused process Internal management process

23. science, technology, engineering, and mathematics (STEM) 24. The major challenges over next generation are: Adaptability It is the process of building an environment that suits various conditions. Innovation Mobilizing the imagination of each individual in the organisation. Engagement It is the process of creating an environment that emotionally and intellectually makes individuals to apply their capabilities at work. 25. Information management strategy refers to managing any kind of information. 26. The technological aspects of innovation focus on research to create ideas. 27. Knowledge management: Generates value from information assets

Information management: Strengthens information usage Intellectual property management: Subject to laws and rights

28. Crises : Calamities or emergencies

29. Chaos : Disorder or confusion



UNIT: 15

1. Strategic thinking is the concept of broad innovative thinking on a daily basis to achieve overall goals in the team and organisation. 2. Features of strategic thinking are as follows: Clarifying the direction and vision of the organisation along with its critical success measures Identifying relationships that support the whole organisation and its vision Identifying influential points within the organisation

3. Features adopted by an individual through proper strategic thinking are as follows: Develop abilities to observe the challenges in the organisation Apply new concepts and skills Increase an individuals and organization's competency Find value in the learning experience Earns motivation and modify the functions

4. The critical success factors for strategic thinking are as follows: Use of wider boundaries for thinking, planning, executing and evaluating the task Precise thinking about what is to be done for the task and how to execute the task Prepare all objectives satisfying the ideal vision and mission of an organisation

5. Strategic thinking assists in enhancing the synergy of the people working together in an organisation to achieve a common goal. 6. Strategic thinkers have broader boundaries to think, plan, perform, analyze and evaluate. True 7. Organizational culture is a collection of organizational values and norms shared by the personnel in an organisation. 8. An organizational design includes the structure, processes and behaviors practiced in an organisation which holds the key for the progress of business strategies. 9. The redesigning programme methodology includes the following steps:

Strategic assessment Defining the criteria Defining the options Model possibilities Defining new behaviors Implementation



10. Redesigning of a process occurs when there is a problem with the current state in an organisation. True 11. Diagnosing organizational development process involves the following steps:

Planning for the goal Deciding the need Gathering senior management data Gathering the staffs data Giving priorities to the feedback Perform the action plan Implementing the process Reviewing the process

12. The characteristics of an organizational development process are as follows: Focusing on the culture of an organisation Encouraging relationship between the organizational leaders and members Focusing on the social issues of an organisation Focusing on universal change in an organisation Focusing on imparting problems and solving skills to the organisation

13. Sustainable competitive advantage is the central fact of a corporate strategy in an organisation. 14. According to stakeholder theory, the aim of a firm is to maximize its value by taking interest in stakeholders including supplier, customer, and employee and also considering the shareholders. 15. Organizational development focuses primarily on the human and social side of the organisation. 16. Innovation gives an organisation a sustainable competitive advantage. 17. Change management is an organized approach to deal with change, from the viewpoint of an organisation and an individual. 18. The principles of change management are: Senders and receivers Resistance and comfort Authority for change Incremental versus radical change Change is a process

19. The different approaches to change management are: Behavioral approach Cognitive or intellectual approach Psychodynamic approach



20. The psychodynamic approach is used by the managers who want to understand the reactions of their team members during the change process. 21. CM is an organized approach to deal with change, both from the viewpoint of an organisation and an individual. 22. Every change can be considered from the point of view of a sender and receiver. 23. The following leadership styles implemented by leaders under different circumstances indicate its model of effectiveness on influence: Autocratic leadership In autocratic leadership, leaders have complete power over their team members. Bureaucratic leadership Bureaucratic leaders follow rules rigorously and ensure that their staffs also follow the procedures accurately. Charismatic leadership In charismatic leadership, leaders adds a lot of passion in their team and is very energetic in driving the members forward. Democratic leadership or participative leadership A democratic leader invites team members to contribute in decision making process. Laissez-faire leadership Laissez-faire is a French phrase describing leadership in which the leaders leave their team members to work on their own. People oriented leadership or relations oriented leadership In people-oriented leadership, leaders are totally focused on organizing, supporting, and developing the people in their teams. Servant leadership It describes a leader who is not often recognized. Task oriented leadership Task oriented leaders focus only on completing their tasks and are autocratic in nature. Transactional leadership Transactional leadership starts with the idea that the team members totally agree to obey their leader when they accept a job. Transformational leadership People with this type of leadership style are true leaders who constantly inspire their teams with a shared vision of the future. 24. The following are the disciplines of a learning organisation: Systemic thinking To be personal mastery Implementing mental models Building shared visions enhancing team learning



25. Learning organisations are healthier places to work because of the following reasons: Collects independent thoughts Increases the ability to manage change Improves quality Develops a committed work force Encourages the people Extends recognized limits

26. The process of creating a learning organisation is as follows: Creating a communication system Developing an atmosphere that garners learning Creating a vision for the organisation Establishing training and awareness programs Integrating human and technical systems Emphasizing team learning by initiating new practices Allowing employees to question key business practices and assumptions Developing workable expectations in the organisation Developing

27. The three aspects of leadership leading a learning organization are as follows: Leader as a designer Leader as a steward A leader becomes a steward of the vision of an organisation and their task is to manage the vision for the benefit of the organisation. Leader as a teacher

28. Servant leadership is not a type of leadership style followed by leaders. False 29. Task-oriented leaders focus only on getting the job done and they can be autocratic. True 30. The three dimensions of strategic management in a globalised economy are: Strategy context Every strategy background is unique and flexible to analysis in terms of policies, structure and boundaries. With increasing globalization, the traditional ways of approaching strategy context has also changed Strategy content Strategy content is the product of strategy process. This is expressed in documented plans as the four levels of the organisation which are functional, business, corporate and network levels. Strategy process Due to the realities of global economy, the strategy process in seriously challenged. 31. A global economy is considered as a world economy with a combined market for all goods produced across the world.



32. Autocratic : Dominating and dictatorial 33. Bureaucratic : Administrative and rigid 34. Cognitive : Related to mental processes and thinking abilities 35. Steward : Helping agent