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Q1. How do you differentiate between strategy and strategic management? What
is your understanding of ‘Policy’? Write down source definitions of strategic
management.
Strategy is defined as the unified plan designed to achieve goals and objectives. This plan is
conducted after understanding the environment and system. Strategy is the process of
providing a trick so as to reach the destination with saving in time, cost, resources and
energy. Strategy is all about providing a course of action and every strategy is how to beat
the competition. Strategy is all about providing a right set of tools and techniques to make
sure that the process of success is well defined. Strategy is a tool in every initiative we take
up with. It starts with proper understanding o environment and creating a strategy requires
providing a option for understanding the decision and providing solutions for each of the
type. Strategies are done at corporate, business and functional level.
The term strategy is derived from Greek word ‘Strategos’ which means ‘Generalship’ i.e. The
science or art of planning and directing large scale military movements and operations. In
business parlance strategy may be defined a stream if management decisions that
determine the purpose and direction if the enterprise. These management decisions serve
as a route may to guide the enterprise towards its desired destination as specified in its
mission statement. Example of strategic decisions include:-
Strategy is the directions and scope of an organization over the long term which achieve
advantages for the organization through its configuration if resources within a changing
environment, to meet the need of market and to fulfill stake holder expectations.
“What is our business? What will it be? And what should it be?” Are the basic concerns in
strategic management? Finally, at the level if choosing the strategy, the senior
managements chooses from among a number of strategic alternative in order to adopt one
specific course if action which would make the company achieve its objective and realize its
mission. Senior management has to make important strategic decisions with regard to
environmental threat and opportunities, company’s strength and weakness, resource
allocation etc. Thus, strategic decision making joins the cores of strategic management.
2. Strategic decisions are normally about trying to achieve some advantage for the
organization over competition. For e.g. The merger was expected to give manager
advantage in the music industry to the extent that it could transformer the way in
which music was sold and distributed and how artists received payments. In other
situations advantage may be achieved in different ways and may also mean different
things. For e.g. In the public sector, strategic advantage can be thought of as
providing better value for money services than other providers thus attracting
support and funding from the government. Strategic decisions are sometimes
conceived of, therefore, as the search if effective positioning in relation to
competition so as to achieve advantage.
4. Strategic decisions are likely to affect operational decisions. They are extremely
difficult, complicated and, at times intriguing and enigmatic process specially in
organization with wide geographic scope such as multinational firms or in firms with
wide ranges if products and services. Strategic decisions can involve a high degree
of uncertainty.
Hofer and others considered strategic management as the process which deals with
fundamental organizational renewal and growth with the development if strategies,
structures and systems, necessary to achieve renewal and growth within the organizational
system needed to effectively manage the strategic formulation and implementation
process.”
Strategic mgt can also be defined as the formulation and implementation of plans and
carrying out if activities related to the matters, which are if vital and continuing importance
to the total organization.
Q2. What is vision and mission? Enumerate its elements. Write down your
company’s vision and mission statements and discuss whether they fit into your
definitions. What are goals and objectives? What are the main features of
objectives? State factors affecting objectives. Distinguish between official and
operative objectives.
Mission The corporate mission statement describes the firm’s basic purpose i.e., why
it exists, how it sees itself, what it wishes to do, its beliefs and its long term aspirations. The
mission statement therefore informs everyone if the corporate vision and purpose, the firm’s
core values and its role in the society. It should also provide a good statement of the
business definition if the firm by specifying the products, functions and markets it expects to
serve. A clear business definition provides a better focus when top management considers
various strategic alternatives with respect to products, service or markets.
1. Tata Information System – “To be India’s most successful and most respected
IT Company’.
Objectives: Objectives are the ends which the organization strives to achieve in order to
fulfill its mission. Examples are:-
Objectives should be specific, measurable, attainable and time bound. They provide
standards against which to measure organizational performance. When expressed in
specific terms objectives become goals. Objectives are open ended attributes whereas
goals are closed ended attributes. The objectives if a firm is formulated by the top
management.
1. The forces in the environment which are represented by the firm’s stockholders.
These comprise the owners, shareholders, governments, trade unions, competitors
and suppliers.
2. The enterprise’s resources. Larger firms have nine resources to combat forces in the
environment.
3. The internal power relationship amongst the top managers. The extent of support
management enjoys if others in the organization e.g. Employees, stockholders etc
will determine the degree if influence.
4. The past objectives of the firm. These are generally taken as reference by top
managers to set current objective. The changes to the past objectives may be
incremental in nature depending on the competing claims presented by the stake
holders.
Q3. What are the basic social obligations of a business organization? Do these
conflicts with the profit objective of the business? What is social audit? Analyze
the mission and objectives of your own organization. Evaluate and write down to
what extent does the organization follows social responsibility and its objectives?
Corporate social responsibility demands that firms behave as ‘good citizen’ while pursuing
purely commercial goals. The firm should conduct themselves on the basis of certain
fundamental principles. Source of the commonly accepted principles are :-
Many large, profitable firms, however, opt to behave in socially responsible ways as co-
operation and support of the community is vital to their long term survival and commercial
success. Source of the benefits that accurse from such involvement are:-
1. Projection of a ‘green’ image which is good for business and leads to higher soles.
2. Sponsorship of charitable and community events attracts valuable publicity.
3. Firm’s image as a good employer helps to attract and retain high caliber workers.
4. Use of energy conservation and anti pollution environmental methods leads to
reduced production.
5. Cost and increased corporate efficiency.
Q4. What is the concept of environment? Search the library and other sources of
information to predict the type of environment managers are likely to face ten
years hence. Analyze the environment scanning process in your own organization
and evaluate how it will face the environment which is fast developing as per your
analysis above?
To a business firm environment means the sum total of conditions, events and influences
that surround and affect it.
The environment in which a business firm exists may either be internal or external. The
internal environment refers to all factors (players) within an organization which could
provide strengths or weaknesses of a strategic nature.
The players in the internal environment comprises if stakeholders i.e. Owners, share holders,
competitors etc, and the influences exerted by them.
The external environment on the other hand consists of various forces which may either
present an opportunity or pose a threat to the firm. Typically these external forces exist in
the following sectors:-
• Political
• Social
• Demographic
• Economic
• Supplier
• Technology
• Physical.
Characteristics of environment
A wide range of methods and techniques are used in conduct of environmental survey and
forecasting in strategic planning. As the main purpose of environmental survey is
forecasting the future state of environmental factors, most of the techniques are based on
the statistical methods used in forecasting.
Q5. Explain the role of SWOT analysis as the tool of facilitating strategic choice at
the business level. How is it similar/dissimilar to the grand strategy matrix and
the matrix of grand strategy clusters?
SWOT is the acronym for ‘strengths, weakness, opportunities and threats’. Typically strength
and weaknesses exists within the organization whereas opportunities and threats and
normally encountered in the external environment.
1. International market.
2. mergers or acquisition of competing fairs.
3. Introduction of new production/ services.
4. Development of new markets on penetration of existing one.
5. Control of distribution network.
6. improvement of relation with suppliers
1. Competitions.
2. Governments legislations
3. Technical obsolescence.
4. Sudden changes in customer preferences
5. Over- dependence on main suppliers in margin customers.
6. Volatility in on collapse of the stock market.
A few examples of sources of strength and weakness existing within the form
jerm are :-
1. Customer’s relations.
2. Production efficiency
3. R &D skills. (e.g. New product development)
4. Quality control and quality assurance.
5. Distribution network.
6. Advertising and sales promotions.
7. Market researches facilities.
8. Cash flow management.
9. Organization culture.
10. Human resource potential.
11. Corporate image, social responsibility and brand equity.
SWOT ANALYSIS :- The two projects ETOP and SAP, can be merged and analyzed to
narrow down the strategic alternative to once which feasible.
By way of illustration of SWOT profile, of a hypothetical firm in the software business is show
as:-
Based in the above information it may be such that the firm has definite strength in the
functional areas of corporate capabilities and resources. The environment shown the
domestic market to be sluggish. As government policies are favorable and international
market shown potential, the firm should intensify marketing efforts to attract orders from
abroad. The expansion strategy appears to offer a feasible approach competence and
financial and personnel resources.
Firm may also consider suitable merger acquisitions, as a part of the expansion strategy,
provided substantial synergy benefits are likely to accrue. Any strategy formulated through
the SWOT analysis technique will depend on certain other factors as well. A strategy of
expansion will only be selected provided to management has an inclination for risk-taking.
Prior to making a strategic choice various subjective factors will need to be considered when
analysis that emerge from the SWOT analysis
ASSIGNMENT ‘B’
Q1. What is core competence? Explain with some examples. Can you list your
company’s core competencies? What is organizational culture? Why is it
important?
Core competencies are the basis upon which as organization achieves strategic advantage
in terms of activities, skills or know show which distinguish it from competition and provide
value to customers or clients. On the basis of its resources and behavior, an organization
develops certain strengths and weaknesses which when combined lead to synergistic
effects. Such effects manifest themselves in terms of organizational competencies.
Competencies are special qualities possessed by an organization that make them without
and pressures of competition in the market place. In other words, the net results of the
strategic advantages and disadvantages that exist for and organization determine its ability
to compete with its revolts. Other terms frequently used as being synonymous to
competencies are unique resources, core capabilities, invisible assets embedded knowledge,
and so on. To identify a cone competence, Prahalad and Hamel prescribe three tests:-
2. It should make a significant contribution to the perceived customers benefits of the era
product
The idea of core competence is brilliant way to focus upon the latent strength of and
organization yet they cannot be taken for granted. Over reliance, on core-competence to the
extent of becoming prisoners of one’s own excellence my result in strategic- myopia.
Core competency save a useful purpose if they are used to develop sustained strategic
advantages though building up organizational capability, which is such total of resource and
behavior, strength & weakness, synergistic efforts occurring in and the competence of any
organization
Organizational culture: This is a dimension of climate that leaders help to develop. The
culture of an organization consists of customary ways of doing things and its members
shared perceptions of issues that affect the organization. A firm’s culture evolves gradually.
It affects:-
• Leadership styles
• Individual perceptions of colleagues and situations.
• Assumption about how work should be performed.
Culture is a strength that can also be a weakness. As a strength, culture can facilitate
communication, decision making and control, and create cooperation and commitment. As a
weakness, culture may obstruct the smooth implementation of strategy by creating
resistance to change. Politicized organizational environment, promoting bureaucracy in
preference to creativity and entrepreneurship and unwillingness to look outside the
organization for best practices.
There are three factions that seen to contribute to the building up of a strong
culture there are:-
Glueck has defined Strategic choice as the decision to select from among the alto nature
grand strategies considered the strategy which will best meet the enterprise’s objective.
Strategic choice is an analytical as well as judgmental task. So performer the task the frail
relies heavily on its marketing research and marketing information systems. This is so
because strategies choice finally boils down to choice of products and markets that the
fearing will play in. The selection factions’ car is classified as objective and subjective
factions. The objective factors which are based our analytical technique are also referred to
as rational normative is prescript facts. The subjective factors, on the other hand, are
qualitative in nature and based on personal judgment. These factions are also referred to as
intuitive or descriptor faction. The strategic alternative generated are armload our basis of
the objective and subjective selection faction.
Corporate or core value are of paramount importance when building or lasting firm. These
are small set of guiding principle not to the comp outlined for financial gain or short their
expediency values run deep they are timeless guiding principles that drive the way a their
operates. Corporate values are the fundamental beliefs on which the farina is built. They
are the essence of a just identity. They are long lasting and serve as a beacon for firm to
chain their business course values and nouns and nouns are truly invisible and often an
firm’s employees are not very aware of their culture or the role they play in helping to
maintain it.
However every fern does have it’s our culture and its own set of values sometimes these are
not clear to outsiders in ever to those within value drives business firm must articulate their
values clearly so that the stakeholders understand what the organization stands for.
Centralization:-The organization is dominated by either a very powerful individual or a
dominate small group strategic decisions and many operational Owen are made by the
centre and very few are devolved to other managers. Such an organizations ability to
respond to environmental change becomes limited. There is power culture in centralized
organization power culture is common in small entrepreneurial organization.
Decentralization- The organization is run by rules and laid down precedence’s. These
organizations resound slowly to change due to slow decision making process. it has role
culture which is common in traditional bureau races such as government departments. The
task of management in a role culture is to manage procedures.
It is said, “People are not like other resources” take a position and defend it Distinguish
between ‘power’ and ‘polities’. Consisting of board of directors the CEO or managing
director, and executive committee could decide the requirements and distribute resources
accordingly.
Top-Down approach - is usually adopted in an entrepreneurial mode of strategy
implementation.
Bottom-Up approach - Resources are allocated after a process of aggregation from the
operating level.
Strategic budgeting - It is a mix of the above approaches and involves an iterative from of
strategic decision making between different levels of management. Besides the strategic
budget, there are several other means of resource allocation such as BCG matrix, PLC and
so on.
Power is defined as “the ability to influence others” and power within an organization is
derived from five types of sources.
• Reward Power arises from the ability of managers to reward positive outcomes.
• Concise Power arises from the ability of managers to penalize negative
outcomes.
• Legitimate Power arises from the ability of managers to use position to influence
behavior.
• Referent Power arises from the ability of the managers to create a liking among
subordinates due to charisma or personality.
• Expert Power arises from the manager’s competence, knowledge and expertise that
is acknowledged by others.
Strategists use one or nine of these power to influence the behavior of organizational
members.
Politics is concerned with the use of power and relates to managing coalitions, consensus –
building, and the creation of commitment to organizational purpose and mission. The
nature of organization itself creates the conditions for corporate politics to manifest itself.
Corporate politics is “the carrying out of activities not prescribed by policies for the purpose
of influencing the distribution of advantages within the organization”.
For everyone manger that considers corporate politics and the use of power as bad, there
could be another manager who feels that it is good. So, despite source well-meaning
managers shunning it, politics remains a part of the organization. Political considerations
and use of power, therefore, are a part of behavioral implementation by strategists. Politics
is related to the use of power but it is not similar to it. Politics and power may be thought of
as a means for the achievement of organizational objectives. They affect the way a strategy
is formulated and implemented.
ASSIGNMENT ‘B’
CASE STUDY
Question: It has been observed that “WS industries strategic success has been
the synergy it was able to establish with its competencies to supply core
components and its competitive advantage in terms of price’.
Yes, I agree with the view that ‘WS industries strategic success has been the synergy it was
able to establish with its competencies to supply core-components and its competitive
advantage in terms of price? Since competing for end products like lightening conductors,
surge arrestors and capacitors was impossible on the multinational’s home territory for WS
industries. WS industry adopted the strategy to join the competitors and make them
partners instead of competing with them. WS industry identified its core-competency which
was their knowledge of the physical and chemical process involved in mass production of
electrical insulating porcelain, which was their major strength. Insulators being labor
intensive product, WS could often international quality at competitive prices. WS industry
decided to supply their core components to the original equipment manufacturers and end
users.
Mr. V Srinivasan, vice Chairman and Managing Director of the company, made personal
visits to companies in Europe, where he found that executive were open to the idea of
buying insulators from India, as they were faced with rising costs at home and WS
represented the opportunity to lower their production costs.
This strategy was successful and it was evident from the company’s exports turnover. The
company repeated the performance in the US market after which the company entered into
a collaboration to set up a plant in Canada.
ASSIGNMENT ‘C’
Q1. Yes
Q2. Yes
Q3. Yes
Q4. Yes
Q5. Yes
Q6. Yes
Q7. No
Q8. Yes
Q9. No, Skills and abilities required will be mental ability, analytical ability, oral and
written communication skills.
Q11. Yes
Q12. Yes
Q13. No
Q14. Yes
Q15. No
Q16. No
Q18. No
Q19. Yes
Q21. No
Q22. Yes
Q23. No
Q25. Yes
Q26. No
Q27. Yes
Q28. Yes
Q29. Yes
Q30. Strategic control continually monitors strategy in the context of organizational and
environmental change and take necessary steps to adjust the strategy to the new
requirements. The two techniques used to evaluate strategic control are:-
Q31. Operational Control is aimed at allocation and use of firm’s various resources. The
evaluation techniques for this type of control system are based on internal analysis neither
than environmental scanning. These include financial analysis ratio, budgetary control,
MBO, network techniques like PERT and CPM etc.
Q33. Yes
Q34. Yes
Q35. Performance gap is the gap between the expected outcomes of continuing with the
existing strategy and the desired outcomes which could result in the future if the new
strategy were to be implemented.
Q36. Yes
Q38. No
Q39. Yes
Q40. Yes
Q41. Yes, Structure of a firm can influence its strategy formulation process.
Q42. Yes
Q43. Yes
Q44. No
Q45. Yes