MB 0052 STRATEGIC MANAGEMENT AND BUSINESS POLICY

1) Explain the corporate strategy in different types of organization?

Answer : Corporate strategy is a continuous ongoing process and extends companywide over a diversified companys business. It is a boundary spanning planning activity considering all the elements of the micro and macro environments of a firm. Definition:- Systematic process of determining goals to be achieved in the foreseeable future. It consists of: (1) Management's fundamental assumptions about the future economic, technological, and competitive environments. (2) Setting of goals to be achieved within a specified timeframe. (3) Performance of SWOT analysis. (4) Selecting main and alternative strategies to achieve the goals. (5) Formulating, implementing, and monitoring the operational or tactical plans to achieve interim objectives. A growth strategy is when an organization expands the number of markets served or products offered, either through its current business(es) or through new business(es). A stability strategy is a corporate strategy in which an organization continues to do what it is currently doing. When an organization is in trouble, something needs to be done. Managers need to develop strategies, called renewal strategies The following are the key tasks of the process of developing and implementing a corporate strategy in different organizations Exploring and determining the vision of the company in the form of a vision statement. Developing a mission statement of the company that should include statement of methodology for achieving the objectives, purposes, and the philosophy of the organization adequately reflected in the vision statement. Defining the company profile that includes the internal analysis of culture, strengths and capabilities of an organization. Making external environmental analysis to identify factors as threats, opportunities etc. Finding out ways by which a company profile can be matched with its environment to be able to accomplish mission statement Deciding on the most desirable courses of actions for accomplishing the mission of an organization Selecting a set of long term objectives and also the corresponding strategies to be adopted in line with vision statement. Evolving short term and annual objectives and defining the corresponding strategies that would be compatible with the mission and vision statement. Implementing the chosen strategies in a planned way based on budgets and allocation of

resource, outlining the action programs and tasks. Installation of a continuous comparable review system to create a controlling mechanism and also generate data for selecting future course of action

2) What is the role consultants play in the strategic planning and management process of a company? Is it an essential role?

Answer:- A consultant is usually an expert or a professional in a specific field and has a wide knowledge
of the subject matter. The role of consultant outside the medical sphere (where the term is used specifically for a grade of doctor) can fall under one of two general categories:

Internal Consultant - someone who operates within an organization but is available to be consulted on areas of specialism by other departments or individuals (acting as clients); or External Consultant - someone who is employed externally (either by a firm or some other agency) whose expertise is provided on a temporary basis, usually for a fee. As such this type of consultant generally engages with multiple and changing clients.

The overall impact of a consultant is that clients have access to deeper levels of expertise than would be feasible for them to retain in-house, and may purchase only as much service from the outside consultant as desired Strategic planning is driven at the highest levels of an organization, usually formulated by a board of directors with input from expert third parties and executed by the executives. These are the men and women who strategic planning consultants work with.

The Role of the Strategic Planning Consultant

In a broad sense, the strategic planning consultant will endeavor to clarify an organizations objectives and the outcomes required for all key stakeholders including customers, shareholders, staff and community. The strategic plan will be formulated within a given framework of corporate policies and procedures and against economic and regulatory backdrops.

The process requires a blend of skills:

Relentless focus on clarity of corporate objectives Vision and imagination to consider and select the most appropriate approaches to achieve these objectives Pragmatic planning and organization skills to create the financial, risk management and operational plans that will organize and focus the resources needed to execute the strategic plan Proven experience in business model design to be able to give clear direction on the blueprint for the business that will be required in order that the strategy can be realized and the 3-5 year business plans achieved

3) What is strategic audit? Explain its relevance to corporate strategy and corporate governance? Answer: The Strategic Audit is the most important process to identify your companys
strengths, weaknesses, opportunities and threats. Specifically, it is a tool that has been designed through our patented method to determine a companys objective per person contribution to the company dollara brokerages most significant metric. Once this information has been calculated, the Strategic Audit goes on to compare the objective per person contribution to the actual; there is phenomenal value of knowing how your company performs and what aspects are working and which arent. From here, strategies and tactics will be defined and an audit created specifically for your company, outlining a 5-year financial forecast analysis or a target to focus on.

Importance of strategic audit

Internal audits serve various purposes. Some audits assess compliance with laws and regulations. Others measure compliance with the organization's internal policies and procedures. A strategic audit helps small-business owners assess whether internal processes move the needle toward their strategic goals. Based on audit results, management adjusts operations to maximize progress toward the goals.

Role of corporate governance

One of the most important roles of corporate governance is to ensure that strategic decisions are made in the interest of those with a stake in successful outcomes. Boards have increasingly become more focused on corporate shareholders, but a shift may be beginning to occur.The interests of stakeholders, such as customers, potential customers and non-customers impacted by the decisions of a company, may begin to get attention as corporate governance plays an increasingly strategic role.

Establishing Corporate Strategy

An organization's corporate board must be intimately involved with establishing a clear definition for the organization's purpose and desired outcomes. If a company sets the goal to become the global leader in telecom technology for the military market, for instance, then corporate objectives, strategic plans, financial allocations and measurable outcomes should all be measured against their ability to move the company toward that goal. If resources are being allocated to places that do not support this strategic goal, then the board's due diligence must identify the reason why and give input into which is off-strategy: the strategic goal itself or the resource actions that appear initially to be out-of-sync.

4) What is Corporate Social Responsibility(CSR) ? Which are the issues involved in analysis of CSR? Name three companies with high CSR rating.

Answer: The term "corporate social responsibility" came into common use in the late 1960s and early
1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984.[2] Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Some of the drivers pushing business towards CSR include:

1. The shrinking role of government

In the past, governments have relied on legislation and regulation to deliver social and environmental objectives in the business sector. Shrinking government resources, coupled with a distrust of regulations, has led to the exploration of voluntary and non-regulatory initiatives instead.

2. Demands for greater disclosure

There is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees, communities, investors, and activist organizations.

3. Increased customer interest

There is evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers. In a recent survey by Environics International, more than one in five consumers reported having either rewarded or punished companies based on their perceived social performance.

4. Growing investor pressure

Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns. The Social Investment Forum reports that in the US in 1999, there was more than $2 trillion worth of assets invested in portfolios that used screens linked to the environment and social responsibility.

5. Competitive labour markets

Employees are increasingly looking beyond paychecks and benefits, and seeking out employers whose philosophies and operating practices match their own principles. In order to hire and retain skilled employees, companies are being forced to improve working conditions.

6. Supplier relations
As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner. Some are introducing codes of conduct for their suppliers, to ensure that other companies' policies or practices do not tarnish their reputation.

Companies having high CSR rating : Ballarpur industries HDFC Infosys

5) Distinguish between core competence, distinctive competence, strategic competence and threshold competence. Use examples.? Answer:- Competency refers to the ability of a firm to carry out an activity well. It is built and
developed by firms consciously through experience and learning. A competency reside in people in the firm and not in physical assets. A core competency is a concept in management theory that originally advocated by C. K. Prahalad and Gary Hamel, In their view a core competency is a specific factor that a business sees as being central to the way the company or its employees work. It fulfills three key criteria: 1. It is not easy for competitors to imitate. 2. It can be reused widely for many products and markets. 3. It must contribute to the end consumer's experienced benefits. The importance of the product/service to its customers. A distinctive competency is a competitively valuable activity that a firm performs better than its competitors. These provide the basis for competitive advantage. These are cornerstone of strategy. They provide sustainable competitive advantage because these are hard to copy. Acquisition of any competency is process that requires sustained and deliberate effort over extended periods to gradually build up real proficiency in performing an activity. It often entails: Strategic Competence refers to a persons ability to keep communication going when there is a communication breakdown or to enhance the effectiveness of the communication. It means being able to get one's message across through use of repetition, volume, or many of the other ways listed below.

This ability is especially important to lower level English language learners. Typical examples are:

Threshold competencies define the minimum standard or floor of the acceptable candidate. Below this level anyone will be eliminated from consideration based on resume screening. Intellect, the ability to think, sound judgment and the technical and conceptual skills to be successful in the job usually determined by the college attended, major and grade point average, and all your specialized training and work experience is critical. In some instances a company may want to dig deeper into intellect with requests as far back as SAT scores. In short, Threshold Competencies can include information about the following:

Academic training-college, major, grade point average Specialized training or skill development Experience (if necessary)

6) What is global industry? Explain with examples, international strategy, Multi domestic startegy, global strategy and transitional strategy Answer:- Global industries are industries that result from globalization and liberalization around the world. Liberalization is the process of organizations reaching outside national boundaries and conducting business in the international arena. Globalization is integration of economic, political, and cultural systems across the globe International strategy is the continuous and comprehensive management technique designed to help companies operate and compete effectively across national boundaries. While companies' top managers typically develop global strategies, they rely on all levels of management in order to implement these strategies successfully. Multi domestic strategy :McDonalds In 1955, McDonald's opened its first restaurant in Des Plaines, Illinois. Today, 2008, it operates over 31,000 restaurants worldwide, in 119 countries, on six continents, employing more than 1.5 million people all over the world. McDonalds a multi domestic company adjust to the cultures of their host countries. This is most seen in their branch in India. Cows are held sacred in the Indian religion of Hinduism which is why McDonalds India doesnt serve beef. Can you imagine? A McDonalds restaurant without beef? Indian McDonalds burgers are purely vegetarian and they serve several other products that are 100% beef free like several kinds of wraps and pans. We see this aspect of McDonalds even here in the Philippines where they serve rice burgers.

Global strategy 'Global Strategy' is a shortened term that covers three areas: global, multinational and international strategies. Essentially, these three areas refer to those strategies designed to enable an organization to achieve its objective of international expansion. For example, the highly successful multinational company PepsiCo dominates savoury snack products around the world. However, it still has local brands like Walkers Crisps in the UK. Transitional strategy :Nokia Nokia is currently the number one manufacturer of mobile devices in the world. With a market share of about 38% in 2007 and with net sales of up to 51.1 billion Euros, theres no doubt about the companys significance and success. From Africa to the Asia Pacific to Europe, Latin America, Middle East and North America, Nokia provides us with cellular phones that are both stylish and functional. They are set to launch a global marketing campaign this year with the theme 1,001 reasons for mankind. Though their marketing strategy is worldwide and their products basically uniform, I consider the company a transnational because of the conscious effort they put into understanding the different needs and tastes of their consumers all over the world.