Boards of director’s/ director U/S

2(13)
‘DIRECTOR’ INCLUDES any person occupying the position of
directors what ever name called ‘as per the section 252—public
CO. at lest 3 director

Role/ duties/ function of the board of director: - the BoD. Play

significant role in formulation corporate strategy the ultimate legal
in business is that of the BoD. Bored are held responsible for the
following duties the director are expected to for company as
prudently and as reasonable as they are expected to act in they own
core.
1) they must act bonafied & must constant regard to the best int.
of the company the director should not excises power of any
indirect motive director have to make funk & complete
discloses in any contract in which are directly or indirectly or
concern& can make personal profit for the traction with the
company the director are required full attention to the
company business

2) The director should co duct business upon the footing that the
company would be continue as going concern & accordingly
should balance a long term view against short term int. of the
present members.

3) They cannot delegate there office or authority to any other

person when they are accepted excesses it by law personally
 4) The director owe the duties to the creditors & to the public to
the large

5) They have comply with various statutory& provision

imposed on them by the company act 1956
6) Director are require to be loyal to the company as prestige

7) The directors in fiduciary in regard to the company & must

,therefore ,use there power for the benefit of the company

Power of the BoD./ top management level

Power that is to be board U/S 292 the following power can be
exercise by the BoD.
1) The power to borrow money & to make loans & also to make
calls.
2) The power to invest the fund of the company.
3) The power to issue debenture.
4) The power of appoint additional & alternate directors.
5) The power of grand consent to contract in which any
directors, or his relation, or his partner are interested.
6) The power to received notice of discloser of share holding by
director.
7) Power to invest in company in the same group but beyond in
certain limit.
8) The power to received notice of discloser of share holding by
director.
9) The power appoints a person in as managing director for
manager who is already holding such office in another
company.
Corporate policy /planning
Objective & purpose of corporate policy
1).to set up the soft function.
2). Provide for assistance in relating to other line element.
3) Set up budget & accountability.
4) Show strong corporate leadership.
5) Sustain positive efforts.

Company/ corporate
1) An artificial person.
2) Having separate legal identity/ entity.
3) A perpetual succession.
4) Having a common scale.
5) Comes under jurisdiction.

Outus Corporation

A corporation artificial legal entity (technically juristic person)

while made up of number of natural persons or other legal entity,
has a separate legal entity from them.
Corporation are the most common form of the business
organization & one which is charted by a state & many legal entity
separated form its owner. This form of business is characterized
by the limited liability of its owner, the issuance of share of easily
transferable stock& existence as going concern.

The process a corporation called incorporation.

Corporate planning: - C.P. as the continuous process of the making

present risk taking decision systematically& with the greatest

Making sure the company run does not run out of the money when
its have fine prospect for large jobs. it may need to by supply
before it get .depending of the business, the most valuable planning
could be monthly, quarterly or annually.

Corporate policy & planning office is responsible for the

implementation of aspect of the HR strategy the development of
the corporate policy, the provision /&b analysis of statically
information to senior officers in an organizations, the provision of
advise & support to staff on MIS & the development of the fully
integrated recruitment strategy in corpora ting grading pay &
rewards.

Dated = 20/11/07

Corporate policies & practices / concept of

corporate strategic management
Policies: -- rule and regulation / methods
Practices: -- implementation / measures / execution

Corporate: -- it has two parts 1) industry 2) organization

Corporate strategic management: - A set of decision & actions

which leads to the development of an effective strategy or
strategies to help achieve corporate objective.
• Analysis & diagnosis (swot)
• Choice – next best alternative
• Implementation – develop appropriate policy &
procedure.
• Evaluation --- review

Strategy: -- the determination of basic long term goal & objective

of an enterprises & the adaptation of the courses of action &
allocation of resource necessarily for coming out these goals.
Strategy at corporate level: -- at the top in the corporate, decision is
taken by CEO. In particular three CEO in conjunction of the
boards of directors. They are responsible for providing the vision
of determining where the company wants to and does go. Hey are
also responsible for financial performance, legal structure and for
establishing overall corporate image and social responsibility.
The corporate also establish and over
all strategic prospective across the business of the firm. The
corporate level is also usually responsible for the identification and
implementation of much major acquisition. The corporate level
determines the portfolio balance and pertains of each business with
in it. Set of performance objective, allocate resource and set human
resources polices control system create the reward and section
system.

Me Kinsey’s 7’s framework (strategic implement

program)

Structure

Strategic System
Shared
value

Skills Style
Staff

Strategy implementation:- strategic implementation comes

after strategic formulation the strategy has to be implemented of
the program for not linked that strategic may fail according to Me
Kinsey ‘s.
The following must be properly linked for
strategy implementation according to them a combination of what
they call soft ware & hard ware is required for success as discussed
below or in figure.
HARD WARE:--
1. STARTEGY:- it is a set of alternative action through whose
implemented and an organization aim to gain competitive
advantage.
2. Structure: -- it shows the reporting and division of task for
successful integration.
3. System:-- the various process which are developed under
system to run the operation in affluent manner or routine
basis. These include control, resourcing and evaluation
system.
Soft ware:--
1. Style: - it means that company employee share a common
way of behaving and thinking style is more important
element for success as behavior speak out and
organization up to.
2. Staff: -- it relates the process of hiring, developing
manager show that they attributed to the success of an
org.
3. Skill: -- skills are necessary attributes them employee
should have for success of any strategy.
4. Shared value: -- it means that all employees have same
guiding principle, value and which generally go beyond
and their own narrow goal.
Conclusion
The success of any successful strategy implemented
depends up on the presence, alignment and clear
communication of all these seven factors.
 Qualification of directors:--
The company act does not lays any special qualification for
appointment of a company not even qualification shares but
the article of association of a company generally or may
provide that a certain number of share will have to be held
by each share with in appointed of directors he must obtain
the required number. A director whose first to acquire his
qualification share with in the prescribed period suffers in
two way. 1). His office fall vacant
2). He liable to his penalty if continuous to act as a
directors U/S 207.

Disqualification of directors: - U/S 274

A persons shell not be capable of being appointed directors
of a company in case if---
• He has been found to be off unsound mind
• He is in un discharge solvent
• He is applied to be adjudicated as an insolvent
• He is convicted by a court of any offence involving
moral and sentences to imprisonment for not less than
6 months and 5 years.

Joint venture:-- ‘joint venture are a special case of

consolidator when two or more company form a temporary
partnership for a specific propose.’

Joint venture provides a past and economic

route for gaining increased competitive capability. Joint venture
enhance the competitive and capability of partners to create the
new product reduce cost introduce new technology. Penetrates new
market a prompted competition.
Joint venture is useful to gain excess to a new business mainly
under 4 conditions.
 • When an activities is un economical for an
organization to do it along.
• When the risk of the business has to be shared and
reduce for the participating forms.
• When the distinctive competence two or more
organization can be brought together.
• When setting an organization need to overcome such
obstacles as tariffs, imports cotas nationalist political
interest.
Thus joint venture is an effective
strategy. For share development cost, spreading risk
and expertise to make effective use of resource.

Advantages of joint venture:--

1). the joint venture can be effective methods particularly for the
smaller organization with insufficient finance and specialist
management skills of obtain the necessary resources to enter in the
new market.
2). Joint venture can reduces prejudice against foreign own
corporation.
3). Joint venture may provide specialist knowledge of local market
entry to required channel to distribution and excess to supply of
raw material govt. contracts.
4). Exchange controls may prevent a company from exporting
capital and thus make the funding new overseas subsidiaries
difficult the supply of know-how ( technology ) may therefore use
to enable a company to obtain and equity stake in joint venture,
when the local partner may have excess to the required funds.
 Date: 24/11/07

Merger or acquisition (take over)

A merger means a combination of two or more enterprises in

which one acquire the assets and liability of the other in exchange
for cash or share or both enterprises are dissolved and the assets
and liability are combined and new stock is issued.

Merger: - merger occurs in a cons sensual (occurring by mutual

consent) where executive from the target company help those from
punchers in a process to ensure that the deal is bifacial to both the
parties.
Reasons for merger:--
The buyer’s motive for merger:-
1. to increase the value of the firm stock
2. to increase growth rate
3. to improve the stability of the firms earning and sale
4. to balance complete or diversify product line
5. to reduce competition
6. to take advantageous for tax benefit or concession
7. to acquire needed resources

Seller’s motive of merger:-

1. To increase the value of the owner stock and investor
control.
2. To increase the firm rate by more resources from the
acquiring firm.
3. To acquire resources to established operation.
4. To advantage for tax legislation.
5. To deal with top management succession problem.
 Acquisition or take over
Acquisition can also happen through a hostile take over by
purchasing the majority of O/S share in the open market and
acquisition also known as take over is the buying of one (the
target) by another. Acquisition usually to a purchase to a smaller
firm by a larger one acquisition of Deboo Motors BY G/Motors.
The buyers buy the share and therefore control
of the target company being purchased owner control of the
company in term convince effective control over the assets of the
company but since the company intact as a going business this
form transaction carries with it all of it liability occurred by that
business over its past and all of the risk that company phases in its
commercial environment.

Diversification:- means identify directions of development

that take the organization away from both its current products and
markets at the same time it is not a single strategy but a set strategy
that involve the demission strategy such as internal or external ,
related or unrelated horizontal vertical and active and passive
diversification.
1. Concentric or related when an org. related to its
existing business definition one or more of form
business interims customer group, customer
function or alternative is called concentric
diversification.
2. Conglomerate diversification; -- conglomerate are
corporation that no apparent strategy fit with
between the activities of there consistent business. It
is define at as business sale as in which no one
business accounted for 70% and which there was no
readily apparent relationship between the activities.
It is totally unrelated diversification and has no
common thread all with firm present position . for
ex. Ponds INDIA a leader care products during later
 1970 and early 1980 diversify into leather products,
thermometers and massorms which is quiet
unrelated product existing business.

Schooling

NIIMT group

Example of concentric or related diversification

Date: -- 28/11/07

Divestment/ divestiture: -- is the reduction of some kind

of assets for either financial goals or ethical objectives. A
divestment is the opposite of an investment. Often the term is used
as means to financially in which a company self off a business unit
in order to focus their resources on a market it judges to be more
profitable or promising.
Definition: - “To sell off often referred to in the context of
company selling off divisions that are either a poor fit within the
overall corporate strategy or showing poor financial performance.
The policy of disinvestment has evolved through
of investment of finance minister in budget speech. In the interim
budget 1991-92, it was announced that the gov. board disinvest up
to 20% of its equity in selected public sectors under taking in favor
of Mutual Fund and financial intuition in the public sector to
improve mgt. enhance ability of resources for the public under
taking like defiance equipment arms, and in other industries coal
and mining railway, goal and diamond iron and steel.

How to divest:--
PROACTIVE DIVESTMENT PROGRAME
1. Prepare the organization
2. identify candidates
3. structure the deal
4. communicate the decision
5. create a new business

Corporate strategy is concert with his choice of direction that the

form takes in order to achieve its objective. They are basically
about decision relating to allocation of resources. Among the
different business of a firm, transferring resources form one
business to another & managing a port folio of business so that the
corporate strategy is attain.
The generic strategy alternatives are to
expense, stability or retrenchment with respect to the pace or the
business of the products, market or function. These generic
strategies are defined along four sets of internal / external related/
unrelated horizontal/ vertical and active/ passive dimension.

Date: 30/11/07
EXTERNAL ENVIRONMENT ANAYSIS (SWOT analysis)

Includes – direct- action indirect-action

1). Customers 1). Economic factors
2). Government regulatory 2). Technological factors
Bodies / units
3). Suppliers 3). Socio- cultural
4). Competitors 4). Political development
5). Financials firms

FACTORS FOR ENVIROMENTAL ANALYSIS

Org. employee a variety of method and techniques to monitors the
environment and to collect data to derives information about the
opportunities and threats that affect their business this process is
known as environmental scanning

Factors:-
1. Influences:- envo. Influences affect strategy of org.
2. events:- are important and specific occurrences taking
places in different environmental sectors
3. trends :- are the general tendencies along which events
takes places
4. issues:- issues are current concern that arise in response
invent& trends
5. Expectation: - are demands of int. groups in view of their
concern for issues.

EXTERNALENVIRROMENTAL FACTORS ANALYSIS

SOURCES OF INFORMATION
VERBAL:- radio, television, interest.
Written:- newspaper, journal, magazines
External:- association, govt. agencies customers
Internal :- company document, MIS, database, co. employees
Formal studies:- surveys, market studies, consulentanats.
Spying:- competition suppliers, customers, professional spy.

TECHNIQUE FOR ENVIROMENTAL ANALYSIS

1. information gathering
2. spying
3. forecasting
4. Delphi methods
 5. brain storming technique
6. morphological analysis
7. benchmarking

Delphi methods:- this technique is more formal version of the

juries of opinion in this technique experts from a vide varieties of
related filed both for inside and out side on org. ranked are
approached to fill the details questionnaires about the problem
under consideration with disclosing their identity. This opinion are
then complied and the summaries of the responses is sent again to
the experts who are to review and possibly their estimate if it out
of line with other to explain the resign for this.. This process
reputed several times until a concuss predication arrive at.

Brainstorming technique; -- the BS is a process where

inparticipents are encourage to be open, inventive and as
imaginative as possible. The issues are discuses from different
angle and ideas allowed to build by them self. The ideas generated
during separated evaluated from point of view of cost, benefit,
implication.

Morphological analysis:-- it is an extension of the brain storming

process in this additional dimension are added to the original ideas
to generate still further ideas each ideas then critically evaluated
learning only the best critical investigation.

SWOT analysis (internal environment analysis)

Potential strength potential weakness

) core skill & adequate finance
) good customer perception
) high market share/productivity
) high product / service quality
) low production cost
) superiors R& D
) lack of strategic direction
) obsolete plant & machinery
) weak IT & control system
) lack of finance
) lack of mgt. skills
) internal power struggle
) high innovation reiosd ) weak mkt. skill
) good top mgt. ) lack of material access
) Proprietary ) poor access of distribution
) Political protection ) high cost structures
) Others ) poor product quality
) poor record of innovation
) others

Internal environment analysis determines its performance

capability based on existing resources. It identify the strength of
the org. & considers such as determine the quality & quantity
available to the org. and considers such issues as determine sources
of available a company strength let to supper in these area where as
accompany weak ness translate into inferior performance the
peruse of generating strategic alternative by a SWOT analysis on a
company strength in order a. TO THE DEMAND ENVIROMENT
IN WHICH THE COMPANY OPERATE

External environment analysis

Potential opportunities potential threats

) entry to new market ) new law cost competitors

) diversification to related activities) technological substitutes
) high growth prospective ) slow growth
) exports market ) bargaining power of customer
) weak competitors ) changing customers needs
) government contracts ) foreign exchange rates
) others ) others

Implementation of strategy
Resources allocation at corporate level
It involves:- physical, technical, human and financial for strategic
planning activity peeved need for change.
Extent of central direction
Perceived need for changes
Low high
Formula Imposed priorities
Free bargaining Open competition
Approaches – top-down approach.
 bottom – up approach
 mix approach

Resources allocation for business level

1. resources identification
2. fit with existing resources
3. fit between resources

• Few changes in overall resources base.

• Growth in overall resources base.
• Decline in overall resources base.

Resource allocation is an important aspect of strategy

implementation. It occur at two level with in i.e. the resources
allocation at corporate level alloctes resources between division ,
service department function or business. It focus on how resources
should be allocated to the various part of the org. in order to
support the overall strategy of the org.
The choice of the approach from many to
resources allocation depends on the degree of change & the extent
to which priorities to be determined at the centre.
This excess office strategy also depends on a detail consideration
of the resources required at the operational level. the org. value
chain in assists identifying the resources need for any strategy.
Most commonly used planning tools includes budget, financial
plan, man power plan, and network analysis despite all these, the
successful implementation of the resources plan depends on the
people with in the org. the role of people in the implementation of
strategy and the implication for a org. design & mgt. of chain.
1). In top- down approach resources are allocated through a
process of segregation down to the operational level. The top mgt.
consists of the BOD. The CEO. And executive committee
considers.
2). In bottom up approach resources are allocated after a process of
aggregation from the operational level.
3). A mixed of these two approach involve a from of strategic
decision making between different level of mgt. This approach has
been strategic budget. In addition to strategic budget their other
technique of resources allocation.

STRAEGIC EVALUATION AND CONTROL

EFFICIENCY
QUALITY
INNOVATION
CUSTOMER RESPONSIVENESS
Who participates in evaluation?
1. chief executive
2. board of directors
3. financial controllers
4. share holders
5. middle level managers

WAY OF EFFECTING VALUATION

1. controls should involve meaningful activities
2. Control should be timely.
3. Long term and short term control should be used to adopt a
balanced approached.
4. Control should involve only the minimum amount of
information that can give a true picture of event. Too many
controls create confusion.
COMPRISION STRATEGIC OPERATIONAL
CONTROL CONTROL
1. basic “Are we moving to “How we are performing.
question right direction”.
2. aim Proactive continuous Allocation & use of org.
questioning. resources.
3.main concern “Steering the org. in Action control.
future direction”.

4.focus External environment. Internal environment.

5. time horizon Long term. Short term.

6. Exercise of Exclusively by top Middle level

control. management. management.

7. Main Environment Budgets, schedule &

technique. scanning information MBO.
gathering, questioning
And review.

PROCESS OF EVALUATION
1). Establishment standards and targets measurement of actual
performance.
2). Measurement of actual performance (how manager judge the
R&D performance).
3). Company actual performance against the standards.
• To match the actual performance once as per the standards.
• Deviation of positive and negative over the standards.
4). Imitate corrective action.
• Checking of performance.
• Checking of standards.
 • Reformulating strategies plans & objectives.

TURNAROUND STRATEGIES AND MANAGEMENT

Factor leading to decline
1. poor management
2. Inadequate financial management.
3. competition
4. high cost structure
5. flu action in market demand
6. adverse movement in market prices
7. inefficient marketing
8. large size of projects
9. acquisition
10. financial policy

Successful turnaround strategies

• change the leadership
• strong financial control
• growth via acquisition
• assets reduction
• organizational change and schedule
• debt restructuring
• Redesign strategic focus.

DATE:- 13/12/07
COMPETITION ANALYSIS:- it is step that must be taken to
find out what you need to do to take a top position but which also
should be performed periodically to detect your competition efforts
to taken back this former position.
“ it is a wide range of technique and
analysis that seek to summarize a business overall competitive
position”.
 Potential new entrants Absolute cost advantage
Brand loyalty
Differentiation

Bargaining Rivalry among competing

power of sellers
suppliers Bargaining power of
buyers

What the rivalry is Threats of substitute product

based on likely to

Porter’s five forces models

GOAL AND OBJECTIVE

GOAL:- “ the end towards which an effort is directed”
Goal are statement describing what your org. whishes to
accomplish they should related to the mission and purpose of org.
OBJECTIVE:- the objective means which belongs to or proceeds
from, the object known and not from the subject knowing and thus
denote what is real, in opposition to what is which is ideal-----
what exists in nature in contrast to what exists merely thought of
the individuals. this definition given by SIR W. HAMITAL
An objective is specific statement of the out come you for learning
activities you to state objective in measurable way to that you can
evaluate whether met them.

Steps for setting goal and objective

1. brain storm a list of potential as a group
2. chose from a the brain storm those who want to on
3. priorities
4. Determine objective for each goal and plan of action for each
objective.
 5. Move into action, fallow through (many group fails to
evaluate and revise does their goal are never achieve).

DEVELOPING AN ACTION PLAN:-

1. what is to be done
2. how will it be accomplished
3. what are the resources in terms of people, money and
materials
4. Who is responsible for completing the task?
5. what is the ad line / time limit
6. How will you know when it is accomplished how will you
measure the results.

BUSINESS GOAL:-
1. Reduce cost to business by making staff productive and
improve on core task.
2. Ensure that these central administrative sections of the
org. can disseminate org. wide information effectively.
3. Provide specialize and tailored content for specific key
groups with in the org.
4. Ensure control and corporate risk management is
maintained.
5. Ensure information for local condition and policies is
consistence and specific.
6. Ensure the employee fell valued, promote the employer
value proposition.

FIVE FORCES MODALS:-

1. entry of potentials competitor:- potential competitor
companies that currently are not completing in an industries
but have the capabilities to do so if they choose establish
company in an industries try to destroy potentials from
entering, since the more enter an industry the more difficult it
becomes for establish company to hold here share of the
market and to generate net profit. on the other hand, if the
 risk of new entry is low, establish company could take
advantage of this opportunity to raise prices and earn grate.
2. rivalry competing sellers in an industry:- rivalry competing
sellers company will also be concern with the extent among
competing sellers in an industries they have to think upon the
question likes
• What the rivalry based on.
• Is the rivalry likely to increase and decrease
• How it can be influence?
The rivalry among the competing sellers an
1010 substitute threats

Pricing, quality feature services, marketing campaign the use of

distribution the extent of rivalry also determine the org.
performance. The weak competitive force among companies with
an industry encourage company to charge higher price and earn
greater profit. The intensity of rivalry within an industry is mainly
a function of three factors.
1. demand function
2. the height of exit barriers
3. industry competitive structure

3). Buyers can become a threat when they force down prices or
demand higher quality and better service to do this, they may
decide to play produces against or refuse to buy form any single
producers alternatively, weak buyer give a company the
opportunity to raise price and earn greater return. Weather
Buyers able to make demand on an company depends on there
power elative of the company. The extent t which buyers can threat
and industries is influence by a number of factors.
1. When the buyers are concentrated (they are few in number
and large in size). This allows the buyers to dominate
suppliers.
 2. when the buyer purchase in bulk they can bargain for price
reduction
3. when the buyers buy large % of the total order of the supply
industry
4. if the quality of the product is not particularly important

4). The bargaining power of suppliers:- suppliers proof to be a

threat they can influence by raising prices by reducing the quality
of the product or service supply delivery scheduling. By damaging
a company reputation. Alternatively weak supplier’s
company1010.
5). The threat of substitute the product of industry that serve
similar consumers need as those of the industry being analysis are
thought to be substituted