MS-91

Management Programme

ASSIGNMENT SECOND SEMESTER 2013

MS-91: Advanced Strategic Management

School of Management Studies INDIRA GANDHI NATIONAL OPEN UNIVERSITY MAIDAN GARHI, NEW DELHI 110 068

ASSIGNMENT

Course Code Course Title Assignment Code Coverage

: : : :

MS-91 Advanced Strategic Management 91/TMA/SEM-II/2013 All Blocks

Note: Attempt all the questions and submit this assignment on or before 31 st October, 2013 to the coordinator of your study centre.

Q1.

a) What is the significance of corporate policy in todays changing scenario? b) Select an organization of your choice (Name and describe the organization) and briefly discuss the various types of policies it has adopted.

Q2.

a) Identify the unique competencies of Ranbaxy Laboratories. b) Discuss in detail the various modes of entry adopted by Ranbaxy. (Refer to the case study given in Block 3)

Q3. Q4. Q5.

How can creativity be encouraged within an organization? Discuss with the help of an example of a creative organization. No business can exist without ethics. In the light of this, explain the importance of ethics for a business. Write short notes on the following: a) Need for Corporate Governance b) Strategic Choice c) Knowledge Management.

ANSWERS

1. A. Corporate policies and procedures may sound heavy and cumbersome. At their very least, they don't sound progressive. However, corporate policies are important even to companies looking to do things differently. They bring order, fairness and most importantly, protection against lawsuits. Although policy making may not be the most fun part of running a business, it's something every owner, executive and manager must take seriously to promote organizational success.

1. Functionality
o

It takes coordination to get all the members of an organization to work together toward common goals. Managers play an important part of directing these efforts; however, managerial communication and support isn't enough. Policies help employees understand how a company works and wants things done. They provide guidance and information that organization members can self-access at any time. In this way, policies are an invaluable resource that help people do their jobs.

Legal Protection
o

Few, if any, businesses operate without legal and regulatory challenges. Lawsuits are an unfortunate part of operating and companies have to find ways to prevent them whenever possible and win them when necessary. Written policies are firm descriptions of how companies operate and in many cases demonstrate how their managements address important issues and maintain fairness in their conduct of business. For example, if a company faces a complaint of discrimination in hiring through the EEOC, having a diversity policy can be helpful in demonstrating that the organization is not biased.

Customer and Clients

o

Despite best efforts, it's hard to please everyone. Customers and clients often want things done their way and on their timeline, even when it's not possible or fair to other customers. Companies sometimes have to reshape customer expectations and in some cases say "no." When this happens, it helps to point to a policy that shows the company and its representatives aren't acting arbitrarily. While it's not foolproof, many customers and clients have a better time accepting what they don't want to hear when they can see it stems from a company's considered standard of operation.

Employee Management
o

Progressive discipline is one of the least pleasant parts of managing people. However, when a company has a problematic employee and discipline becomes necessary, company policies are very helpful. Employees need to understand the standards to which they are held and the reasons they are disciplined. Additionally, when managers need to take action against an employee, they should do so in accordance with well-considered human resources policies designed to promote fairness while simultaneously empowering managers to take action in the face of serious and dangerous misconduct.

Are Policies and Procedures important? We certainly think so, unfortunately many companies have old, outdated Policy and Procedure manuals while some have none at all. As companies are planning projects for 2013, consideration should be given to reviewing and updating the Corporate Policies and Procedures. Policies and Procedures are a companys way of documenting and communicating managements vision into instructions for employees on how to handle issues as they arise and how employees should be executing their job responsibilities in a consistent manner.

Corporate Policies communicate:

Company Rules in simple language Delegation of Authority Enforcement and consequences if not followed Impartial administration of company-wide Policy Evidence for Governance, if legally approved and followed

Corporate Procedures communicate:

Clear guideline on how to implement a policy Establish boundaries for employees

While Policies are general in nature, Procedures provide the details as to what to do, often with examples and forms. Sometimes procedures include emergency steps. By creating a Policy and Procedure Manual, the company provides a source for all employees to turn for guidance on standard matters and have management focus on exception handling and not need to waste time on day-to-day operations. Successful Policy and Procedure Manuals require reviews and updates as laws and company environments change. Their dynamic nature requires work but overall it eliminates the redundant need for repeated instructions through time consuming meetings, memos or other correspondence. Policies and Procedures should be assigned to a position within the company, for example the Finance Manual should be owned by the highest Finance position within the company, such as the CFO, and the Employee Handbook by the highest HR position such as the HR Director, etc. Policies should cover the key activities which need to be customized for each organization. The objective is to create easy to understand policies and procedures that provide clear guidelines for everyone to follow.

B. Types of policies
There are different types of policies in an organization, such as HR Policies, Finance Policies, IT Policies, Information Security Policies and Information Management Policies.

HR policies focus on issues such as leave, safety and health, smoking, sexual harassment and HIV/AIDS Information security policies focus on managing and protecting and preserving data belonging to the organization which is generated by those employees in the course and scope of their employment;

IT policies are closely related to information security policies, but focus on the supporting processes (e.g. procurement policies) and supporting systems; Information Management policies focus managing data such as its retention and destruction.

There is an overlap between HR policies and information security policies to the extent that the human factor is common to both of them and both therefore cover issues involved in the employer and employee relationship. In our experience, the HR and IT Departments are not good at speaking to one another the end result being that a lot of important information security related risks posed by employees through their use of technology are not dealt with and fall through the cracks. We draft information security and information management policies through a legal lens focusing on legal compliance and legal risk issues.

Information security policies

As part of our information security service offering, we draft or review information security policies in accordance with our Information Security Policy Framework. Based on discussions we have had with information security experts, we have identified 22 essential policies. These are some of the more important ones:
1. Access control; 2. Acceptable usage; 3. Bring your own device (BYOD); 4. Computer usage; 5. E-mail usage; 6. Incident response (or breach management policy under POPI); 7. Internet usage; 8. Mobile technology; 9. Monitoring; 10.Physical and environmental; 11.External facing and internal facing Privacy policies; 12.Social media.

We advocate an approach which clearly differentiates between issue specific, operational policies, standards and procedures, each of which should be set forth in separate documents. However, certain clients specifically want one policy that covers several areas that we normally cover in separate policies. For them we have developed an Electronic Communications Policy (or ECP).

Information management policies

The following are examples of the types of policies we draft or review:

Records Management Policy

A top level policy which deals with the retention and destruction of business records and cross-refers to other related policies and documents which include:
1. retention schedules (a listing of the records maintained by an organisation as required by law or for business purposes, together with the period of time that each series is to be maintained and by when such series may be reviewed for destruction or archival retention) * 2. a records migration policy (to cover those situations where the technologies upon which records are dependent become obsolete and the records need to be migrated to new technology in order to ensure their continued accessibility and readability); 3. records conversion policy (to cover those situations where records need to be converted from one form or format to another i.e. scanning which is a form of analogue/paper to digital conversion otherwise known as digitisation); 4. record retention and destruction procedures (to ensure that records are destroyed in a legally compliant manner - not all records are equal and should not be destroyed in the same way and different record characteristics such as volume, media and sensitivity classifications need to be taken into account when determining the destruction procedures and mechanisms); 5. records hold policy and procedures (inter alia cover those situations where an organisation has to stop document destruction that ordinarily takes place when legal proceedings are contemplated or instituted).

* Much confusion exists as to what a retention schedule should contain and the way in which it should be formatted. Many organisations make use of a document produced by Deloittes and Metrofile and are under the mistaken assumption that this document is a retention schedule. This document is not a retention schedule. It is a (very useful) listing of some of the legal retention periods that apply to business records.):

Digitisation (or document imaging) policy E-mail archiving policy Electronic signature guidelines

2.
A. Drive Results & Excellence Applies and inspires a results-driven approach, focuses on

processes while delivering results; Drives accountability within team and areas of influence Competency Elements

Drive Results Process Excellence Ownership & Accountability Quality Mindset

Strategic Thinking Sees connections, patterns or trends in the information available; Understands key business drivers within Ranbaxy, the industry, market and customer segments and identifies links between situations and information to generate business opportunities Competency Elements

Strategic Agility Business Intelligence Commercial Acumen

Collaboration & Trust Able to identify, build and maintain strong and sustainable partnerships with different stakeholders across teams, business units, functions and geographies to meet business objectivesCompetency Elements Build Strong Network Leverage Partnerships

Live by Values

Nurture Talent Committed for development of self and others; Offers frequent and constructive feedback; inspire team members to take higher responsibilities within the organization. Shares own knowledge and expertise to improve teams performance Competency Elements Develop Self Develop Other Customer Centricity Reinforces the importance of being customer focused; encourages a culture that values customers; monitors and acts on feedback from customers; Focuses on delivering solutions that meet the needs of customers Competency Elements Understand Customers Deliver Customer Value Executive Effectiveness Understands and articulates information to customers, peers and managers; Able to win support, gain cooperation and overcome objections and barriers; Maintains calm, stable performance when under pressure or in a crisis Competency Elements Effective Communication Impact & Influence

Resilience & Positivity

Leading Change Sets the change agenda, adapts & aligns efforts and resources towards organizational goals; Shows sensitivities towards diverse perspectives and culture while driving change Competency Elements Embrace Change Respect for Diverse Perspective Solution Orientation Takes action to promote or implement innovative ideas; Generate innovative solutions in work situations; try different and novel ways to deal with work problems and opportunities Competency Elements Openness to New Ideas Problem Solving & Decision Making

B. solved

3. Great organizations encourage and promote a culture of creativity. They want their team dreaming up the next iPad or ways of capturing the imagination of their audience. And yet the question remains: How do you encourage your team to think creatively? That question is one most companies have trouble answering. They become worried that it will cut into productivity. Encourage goofing off. Or create havoc. In reality, thats not what happens. What really happens is a blockbuster team is formed. Lets take Google as an example. Theyre knocking it out of the park with the innovation coming out of the company. Youve got

Android OS Google.com Google Labs Gmail

Thats not the whole list but you get the idea. Ideas are birthed and brought to life by the creative minds at Google. Creativity is encouraged. Its part of their culture. The same can go for Apple, Amazon, Patagonia, or Kickstarter. They encourage their employees to get creative. How can you encourage creative thinking within your company? Lets look at 5 ways. 1. Allow failures to happen: Look at any successful company and youll see a list of failures that will rival their successes. Google failed with Google Answers, Google Wave, and Google Coupons. Dont let a failure be the end of creative thinking. When faced with a failure, break down the process and discover why it failed. Take that knowledge with you into the next project.

2. Give your employees time to explore their personal interests: The successful companies allow and encourage their employees to discover and explore personal interests. Some even allow up to 20% of their workday to be filled with such pursuits. Why? Because it renews their energy. Allows them to relax. Frees their minds to discover new solutions to problems. Have you ever been stuck on a problem? Focusing so much time and energy on the issue and not being able to resolve it? Only to leave work, relax, and discover the answer? This is why allowing your employees to explore personal interests can be to your benefit.

3. Create controlled chaos: Mix introverts with the extroverts. Put a Debbie Downer with the energetic and positive team. Stir up a little chaos.The team will have to come up with solutions on how to deal with each other. Allow them this opportunity. And then have the team bring their solution back to the whole company. Look for ways to apply this to other aspects of the business. If its a great principle, it will be transferable. 4. Encourage a focus on execution: When Apple released the iPhone, other phone companies said there was nothing new that could be done with cell phones. Apple stepped in and focused on executing a killer product. The iPhone had an easy to use interface, great apps, and a catchy name. Then Steve Jobs nailed it with his execution of the reveal. By focusing on the execution, creativity flourished. 5. Reward those who take risks: Sometimes team members will be scared to take risks because of failure, even if youre a company that allows failures to happen. They need a bigger push. They need to know theres a reward. Give them a reason to push through the risk. The reward could be huge like a new car or it could be as simple as recognition in front of the whole company. Find out what motivates them and reward them. If they take the risk and pull it off. Creative and innovative companies have figured out they cant be stagnant. They have to push the boundaries to see what can be done. They have to take the chance. And they must encourage their employees to do the same. By following the suggestions above, you can improve the creative thinking within your company. Are you willing to take the chance? You can help your firm innovate by creating a culture in which all employees are actively encouraged to put ideas forward. But how do you get the best from people and encourage them to be at their most creative? 1. Stress the importance of creativity. Ensure all your staff know that you want to hear their ideas. Unless they understand how innovating your business processes can keep your firm competitive, your efforts at encouraging creative thinking risk falling flat. 2. Make time for brainstorming. Allocate time for new ideas to emerge. For example, set aside time for brainstorming, hold regular group workshops and arrange team days out. A team involved in a brainstorming session is likely to be more effective than the sum of its parts. Individuals within the team can feed off each other exploring, testing and refining ideas. You should also give individuals the space to reflect privately on their work if you think they need it. 3. Actively solicit ideas. Place suggestion boxes around the workplace, appeal for new ideas to solve particular problems and, quite literally, keep your door open to new ideas. 4. Train staff in innovation techniques. Your staff may be able to bounce an idea around, but be unfamiliar with the skills involved in creative problem-solving. You may find training sessions in formal techniques such as brainstorming, lateral thinking and mindmapping worthwhile. 5. Cross-fertilise. Broadening peoples experiences can be a great way to spark ideas. Short-term job swaps and shadowing in-house can introduce a fresh perspective to roles.

Encourage people to look at how other businesses do things, even those in other sectors, and consider how they can be adapted or improved. 6. Challenge the way staff work. Encourage employees to keep looking anew at the way they approach their work. Ask people whether they have considered alternative ways of working and what might be achieved by doing things differently. 7. Be supportive. Respond enthusiastically to all ideas and never make someone offering an idea, however hopeless, feel foolish. Give even the most apparently outlandish of ideas a chance to be aired. 8. Tolerate mistakes. A certain amount of risk-taking is inevitable with creative thinking. Allow people to learn from their mistakes. Never put off the creative flow by penalising those whose ideas dont work out. 9. Reward creativity. Motivate individuals or teams who come up with winning ideas by actively recognising creativity, for example through an awards scheme. You could even demonstrate your recognition that not all ideas work out by rewarding those who just have a rich flow of suggestions, regardless of whether they are put into action at work. 10. Act on ideas. Creative thinking is only worthwhile if it results in action. Provide the time and resources to develop and implement those ideas worth acting upon. Failure to do so not only means your firm will fail to benefit from innovation, but flow of ideas may well dry up if staff feel the process is pointless. 4. Ethics concern an individual's moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit. Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may:

attract customers to the firm's products, thereby boosting sales and profits make employees want to stay with the business, reduce labour turnover and therefore increase productivity attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees attract investors and keep the company's share price high, thereby protecting the business from takeover.

Unethical behaviour or a lack of corporate social responsibility, by comparison, may damage a firm's reputation and make it less appealing to stakeholders. Profits could fall as a result. Along with good corporate governance, ethical behaviour is an integral part of everything that Cadbury Schweppes does. Treating stakeholders fairly is seen as an essential part of the company's success, as described here: 'A creative and well managed corporate and social responsibility programme is in the best interests of all our stakeholders - not just our consumers - but also our shareowners, employees, customers, suppliers and other business partners who work together with us. *'

Ensuring that employees understand the company's corporate values is achieved by the statement of 'Our Business Principles' which makes clear the behaviour it seeks from employees. Cadbury Schweppes' good practice was recognised when it was voted one of the 'most admired companies for community and environmental responsibility' by Management Today magazine in 2003. It was also ranked second in the Food and Drink sector in the Business in the Community 'Per Cent Club' Index of corporate giving for 2003, with an investment in the community of around 3of its UK pre tax profits. The Ethics Resource Center reports that non-unionized employees perceive stronger ethical cultures within their organizations than their unionized counterparts. The non-profit organization also reports that young workers are more likely to perceive weak ethical cultures within their companies than older ones. Managers also tend to value stronger ethical cultures than employees in non-management positions. It is your duty as a manager to incorporate and manage a strong ethical culture within your business. Workplace ethics are significant to your business and provide numerous benefits.

Asset Protection
A strong ethical culture within your business is important in safeguarding your assets. Employees who abide by your workplace ethics would be able to protect and respect your businesss assets. For example, they would avoid making personal long distance calls using the businesss lines. Workers can only respect company property when you treat them with respect and dignity, which makes them feel proud to be working for your business. Ensure that your workers perform in an environment with integrity and strong ethics. It increases employee pride and discourages them from stealing supplies or equipment.

Productivity and Teamwork

Workplace ethics is integral in fostering increased productivity and teamwork among your employees. It helps in aligning the values of your business with those of your workers. Achieving this alignment requires that you encourage consistent dialogue regarding the values of your business, which enhances community, integrity and openness among employees. Ethics enable your workers to feel a strong alignment between their values and those of your business. They show such feelings through increased productivity and motivation.

Public Image
You earn a lot of respect and cultivate a strong image in the public domain when you make ethical choices. For instance, you can fulfill your corporate social responsibility by reducing waste discharge from your business. The public would consider your business to be operating with honor and integrity while valuing people over profits. Building a strong public image through ethical conduct also earns you more clients. Customers would develop trust in you and do business with your organization.

Decision-Making
Ethical conduct in the workplace encourages a culture of making decisions based on ethics. It also enhances accountability and transparency when undertaking any business decisions. During turbulent times, a strong ethical culture guides you in managing such conflicts by making the right moves. It can help you to introduce change successfully in your organization, which can be

a challenge. Ethical conduct within the business sensitizes you and your staff on how to act consistently even in difficult times. Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose. Of course all of us want businesses to be fair, clean and beneficial to the society. For that to happen, organizations need to abide by ethics or rule of law, engage themselves in fair practices and competition; all of which will benefit the consumer, the society and organization. Primarily it is the individual, the consumer, the employee or the human social unit of the society who benefits from ethics. In addition ethics is important because of the following: 1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices. 2. Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into. 3. Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the employees and the decision makers on a common platform. This goes a long way in aligning behaviors within the organization towards achievement of one common goal or mission. 4. Improving Decision Making: A mans destiny is the sum total of all the decisions that he/she takes in course of his life. The same holds true for organizations. Decisions are driven by values. For example an organization that does not value competition will be fierce in its operations aiming to wipe out its competitors and establish a monopoly in the market. 5. Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in the short run they may seem to lose money. Tata group, one of the largest business conglomerates in India was seen on the verge of decline at the beginning of 1990s, which soon turned out to be otherwise. The same companys Tata NANO car was predicted as a failure, and failed to do well but the same is picking up fast now. 6. Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is often found acting as a mute spectator, unable to save the society and the environment. Technology, for example is growing at such a fast pace that the by the time law comes up with a regulation we have a newer technology with new threats replacing the older one. Lawyers and public interest litigations may not help a great deal but ethics can. Ethics tries to create a sense of right and wrong in the organizations and often when the law fails, it is the ethics that may stop organizations from harming the society or environment. 5. A. Corporate governance refers to the system by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers,

shareholders, creditors, auditors, regulators, and other stakeholders) and specifies the rules and procedures for making decisions in corporate affairs. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations. Governance involves the alignment of interests among the stakeholders.[1][2][3] There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 20012002, most of which involved accounting fraud. Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance. In the U.S., these include Enron Corporation and MCI Inc. (formerly WorldCom). Their demise is associated with the U.S. federal government passing the Sarbanes-Oxley Act in 2002, intending to restore public confidence in corporate governance. Comparable failures in Australia (HIH, One.Tel) are associated with the eventual passage of the CLERP 9 reforms. Similar corporate failures in other countries stimulated increased regulatory interest (e.g., Parmalat in Italy). With increased global competitiveness, the growing market in Yemen is faced with the challenge of attracting and retaining investment in order to participate more fully in the global economy and address mounting demographic concerns. Increasing awareness and implementation of good corporate governance practices can improve the investment climate and promote the development of a vibrant private sector and capital market. However, in order to advance corporate governance, stakeholders must find and coordinate ways to implement principles that produce internationally acceptable standards and reflect local business realities such as the predominance of family-owned firms. The interest in corporate governance is due to globalization, as investors are now reaching out to foreign countries to establish businesses. Foreign investors are depending on corporate governance because it is building legal protocol that is ensuring businesses to be accountable. Businesses are becoming aware of the benefits corporate governance and responsibility provides their company and their nation. The regions demographic demonstrates that 50% of the Arab population is between the age of 15-20, making them the future labor force. By creating effective corporate governance and responsibility in the region, businesses are ensuring that future generations will have jobs as well as protecting their economies. Developing the role of the board of directors is a strategic tool for sustainable business development to overcome obstacles in the MENA region along with corporations' responsibilities and issues related to sustainable development. Effective corporate governance and responsibility are becoming central to achieving success in the global business environment and the development of the MENA region economic structure. Following on the concept that business environment in the MENA region is unique in the sense of cultural structure and needs, global concepts such as corporate governance and responsibility, developed and implemented abroad need to be localized to be effective tools. The success of the endeavor to create a localized approach to global concepts is dependent on understanding the local environment and empowering stakeholders to take an active role in the shaping of effective corporate governance and responsibility practices. B. Strategic choices involve the options for strategy in terms of both the directions in which strategy might move and the methods by which strategy might be pursued. For instance, an

organisation might have to choose between alternative diversification moves, for example entering into new products and markets. As it diversifies, it has different methods available to it, for example developing a new product itself or acquiring an organisation already active in the area. Typical options and methods are covered in the five chapters that make up Part II of this book. A strategic choice is one that aligns your company with its competitive edge. For example, if you're company tells its prospective and current customers they will always get the lowest price, then every decision made on behalf of the company should be in adherence to that. So you always choose the lowest cost vendor, etc. Strategic choice is a systemic theory of strategy. This theory is built on a notion of interaction in which organizations adapt to their environment in a self-regulating, negative-feedback (cybernetic) manner so as to achieve their goals. The dynamics, or pattern of movement over time, are those of movement to states of stable equilibrium. Prediction is not seen as problematic. The analysis is primarily at the macro level of the organization in which cause and effect are related to each other in a linear manner. Micro-diversity receives little attention and interaction is assumed to be uniform and harmonious. C. Knowledge management (KM) comprises a range of strategies and practices used in an organisation to identify, create, represent, distribute, and enable adoption of insights and experiences.[1][not in citation given] Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organisations as processes or practices.[2][3] More recently, other fields have started contributing to KM research; these include information and media, computer science, public health, and public policy.[4] Many large companies and non-profit organisations have resources dedicated to internal KM efforts, often as a part of their business strategy, information technology, or human resource management departments (Addicott, McGivern & Ferlie 2006).[5] Several consulting companies also exist that provide strategy and advice regarding KM to these organisations.[5] Knowledge management efforts typically focus on organisational objectives such as improved performance, competitive advantage, innovation, the sharing of lessons learned, integration and continuous improvement of the organisation.[6] KM efforts overlap with organisational learning, and may be distinguished from that by a greater focus on the management of knowledge as a strategic asset and a focus on encouraging the sharing of knowledge.[1][7] It is seen as an enabler of organisational learning[8] and a more concrete mechanism than the previous abstract research.