1) Explain GEs 9vell model.

(10m) General Electric with the assistance of McKinsey and Company developed this matrix. This matrix includes 9 cells based on long-term industry attractiveness(on Y-axis) and business strength/competitive position (on X-axis). The industry attractiveness includes 1. Market growth rate 2. Market size 3. Market profitability 4. Pricing trends 5. Competitive intensity / rivalry 6. Overall risk of returns in the industry 7. Entry barriers 8. Opportunity to differentiate products and services 9. Demand variability 10. Segmentation 11. Distribution structure 12. Technology development Business strength and competitive position includes 1. Market share 2. Strength of assets and competencies 3. Relative brand strength (marketing) 4. Market share growth 5. Customer loyalty 6. Relative cost position (cost structure compared with competitors) 7. Relative profit margins (compared to competitors) 8. Distribution strength and production capacity 9. Record of technological or other innovation 10. Quality 11. Access to financial and other investment resources 12. Management strength

Plotting the Information: 1. Select factors to rate the industry for each product line or business unit. Determine the value of each factor on a scale of 1 (very unattractive) to 5 (very attractive), and multiplying that value by a weighting factor. Industry attractiveness = factor value1 x factor weighting1 + factor value2 x factor weighting2 . . . + factor valueN x factor weightingN 2. Select the key factors needed for success in each of the product line or business unit. Determine the value of each key factor in the criteria on a scale of 1 (very unattractive) to 5 (very attractive), and multiplying that value by a weighting factor. Business strengths/competitive position = key factor value1 x factor weighting1 + key factor value2 x factor weighting2 .

. . + key factor valueN x factor weightingN 3. Plot each product line's or business unit's current position on a matrix. 4. The individual product lines or business units is identified by a letter and plotted as circles on the GE Business Screen. 5. The area of each circle is in proportion to the size of the industry in terms of sales. The pie slice within the circles depict the market share of each product line or business unit. 6. Plot the firm's future portfolio assuming that present corporate and business strategies remain unchanged. This is shown as an arrow which starts from the circle representing the current position and the tip of the arrow will be the tentative center of the future circle.

2) What are the three components of building a capable organization?(3m) 1. Structure - the basic way in which the firm's different activities are organized. 2. Leadership - the need for direction and building a team to execute the strategy. 3. Culture - the shared values that create the norms of individual behavior. (3) Write short notes on the three ways by which functional tactics are considered to b different from business strategy(7m)

(4) Critically evaluate different types of organizational structure and their relevance in strategy implementation?(7m) The five basic primary structures are: 1. Functional 2. Geographic 3. Divisional or Strategic Business Unit

4. Matrix 5. Product Team Functional organizational structure It is predominant in firms with a single or narrow product focus. It provides well-defined skills and areas of specialization to build competitive advantages in providing products or services. Dividing tasks into functional specialties enables the personnel of these firms to concentrate on only one aspect of the necessary work. This also allows use of latest technical skills and develops a high level of efficiency. Product, customer, or technology considerations determine the identity of the parts in a functional structure. e.g. A hotel may be organized around housekeeping, the front desk, maintenance, restaurant operations, reservations and sales, accounting and personnel Challenges Effective coordination of the functional units. The narrow technical expertise achieved through specialization can lead to limited perspectives and to differences in the priorities of the functional units. Specialists may see the firm' strategic issues primarily as "marketing" or "production" problems. Integrating devices (such as project teams or planning committees) are frequently used in functionally organized firms to enhance coordination and to facilitate understanding across functional areas. Geographic organizational structure Structuring by geographic areas is required to accommodate the different approaches needed in different geographic areas in producing, providing and selling products. e.g. Holiday Inn is organized this way as differences exist in traveling requirements, lodging regulations and customer mix. Divisional or Strategic Business Unit structure e.g. HUL When a firm diversifies its product/service lines, utilizes unrelated market channels or begins to serve heterogeneous customer groups, a functional structure becomes inadequate. A new structure is often necessary to meet the increased coordination and decision-making requirements that result from increased diversity and size. A divisional or strategic business unit (SBU) structure is the most suitable form. A SBU structure allows management to delegate authority for the strategic management of distinct business entities - the SBU. A division/SBU is usually given profit responsibility, which facilitates accurate assessment of profit and loss. Matrix organizational structure As organizations grow and diversify into numerous products and projects there arises a need for providing skills and resources where and when they are most vital. People and other r resources have to be put temporarily in product development and projects as and when they are needed. Matrix is a structure where subordinates are assigned both to a basic functional area and to a project or product manager. It provides dual channels of authority, performance responsibility, evaluation and control. This for of structure is intended to make the best use of talented people within a firm by combining the advantage of functional specialization and product-project specialization.

 Matrix structure increases the number of middle managers who exercise general management responsibilities, thus overcoming a key deficiency of a functional structure while at the same time retaining the advantages of functional structure. Challenges It is difficult to implement because of the dual chain of command. Negotiating shared responsibilities, use of resources ad priorities can create misunderstanding among subordinates. To avoid these deficiencies, some firms are accomplishing particular strategic tasks, by means of a "temporary" or "flexible" overlay structure. This overlay structure is meant to take temporary advantage of a matrix-type while preserving an underlying divisional structure (6) Explain in detail the stake holders approach to social responsibility( 7m) Corporate Social Responsibility is the idea that a business has a duty to serve society in general as well as the financial interests of its stockholders. While some stakeholders like customers, society and government expect organizations to give priority to general good ahead of the organization's good; the insiders expect to balance the claims of outsiders in a way that protects the company's mission. E.g. water pollution by textile mills The insiders also feel that the tax money given by organizations should be good enough as a social responsibility. The issues of CSR are numerous, complex and contingent on specific situations. Each firm regardless of its size must decide how to meet its perceived social responsibility. Strategic managers can consider four types of social commitments which will help them to understand the nature and range of social responsibilities and plan. 1. Economic responsibilities 2. Legal responsibilities 3. Ethical responsibilities 4. Discretionary responsibilities Economic responsibilities y It is the most basic responsibility of a business. y It requires managers to maximize profits whenever possible. y It is the essential responsibility of business to be providing goods and services to society at a reasonable cost. y The company becomes socially responsible by providing productive jobs for its workforce and tax payment for the state and central governments. Legal responsibilities y It reflects the firm's obligations to comply with the laws that regulate business activities. y The consumer and environmental movements were helpful in laws that govern business in the areas of pollution control and consumer safety. y Setting up consumer courts, printing of MRP, quantity, date of manufacture and date of expiry are results of consumer movement. y Protection of environmentally sensitive areas by not allowing any industry to be set up is a result of the environmental movement. Ethical responsibilities y It reflects the company's notion of right and proper business behavior. y They are obligations that transcend legal requirements.

Firms are expected, but not required, to behave ethically. Some actions that are legal might be considered unethical. e.g. selling of cigarettes is legal but is considered unethical by many Discretionary responsibilities y These are responsibilities that are voluntarily assumed by a business organization. y They include y public relations activities Through public relations activities managers attempt to enhance the image of the companies products and services by supporting worthy causes. E.g. sponsoring marathons to build health consciousness This form of discretionary responsibility has a self-serving dimension. y good citizenship Companies that adopt the good citizenship approach activity support ongoing charities or issues in the public interest. E.g. Colgate collaborates with IDA for zero cavity y full corporate social responsibility. A commitment to full corporate responsibility requires strategic managers to attack social problems with the same zeal in which they attach business problems. E.g. Green building by Godrej, green initiatives taken by ITC y y

(7) What are functional tactics?(3m) Functional tactics are key activities that must be undertaken in each functional area to provide the business products. They translate grand strategies into action designed to accomplish specific short term objectives. (8) is culture an ally or obstacle to strategy execution. Explain (or) what is organization culture? Why is it important(7m) Organizational culture is a set of important beliefs and values that members of an organization share in common. It is intangible, yet ever-present theme that provides meaning, direction and the basis for action. It influences the opinions of members. The member becomes fundamentally committed to the beliefs and values when he or she internalizes them. Beliefs and values are shared through internalization among the organization's individual members. Some of the ways to manage and create distinct culture are: Emphasize key themes or dominant values y E.g. Ethics at MindTree, Customer care at Toyota, Low price at Wal-Mart Encourage dissemination of stories and legends about core values y E.g. Customer satisfaction at Toyota Institutionalize practices that systematically reinforce desired beliefs and values y E.g. innovation at 3M and Google Adopt some very common themes in their own unique ways y E.g. Common uniform and canteen at Honda Managing organizational culture in a global organization Managing the strategy-culture relationship

y y y y

Link to mission E.g. IBM changing its business to network centric Maximize synergy E.g. Holiday Inn focusing on Manage around the culture E.g. Bajaj setting up new plant for manufacturing bikes Reformulate the strategy or culture E.g. AT&T and Merrill Lynch

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( 9) Explain different types of strategic control(10m) The four basic types of strategic control are: Premise control Strategic surveillance Special alert control Implementation control Premise control Premises are assumptions or predictions. Premise control is designed to check systematically and continuously whether the premises on which the strategy is based are still valid. If a vital premise is no longer valid, the strategy may have to be changed. E.g. Many software companies postponing the joining dates of new recruits during slowdowns The sooner an invalid premise can be recognized and rejected, the better are the chances that an acceptable shift in the strategy can be devised. Planning premises are primarily concerned with environmental and industry factors. Environmental factors Some of the factors are inflation, technology, interest rates, regulation, etc. Environmental factors exercise considerable influence over the success of a firm's strategy as strategies usually are based on key premises about them. y E.g. All the polluting industries in the vicinity of Taj Mahal at Agra were asked to use cleaner fuel like natural gas. Some of the more polluting industries like tannery were asked to shift their base. Industry factors The performance of the firms in a given industry is affected by industry factors. Competitors, suppliers, product substitutes, and barriers to entry are a few of the industry factors about which strategic assumptions are made. It would not be possible to the manager to monitor all the premises as it would be very costly and time consuming. Managers must select premises whose change Is likely Would have a major impact on the firm and its strategy Strategic Surveillance Premise controls are focused controls; strategic surveillance are unfocused. Strategic surveillance is designed to monitor a broad range of events inside and outside the firm that are likely to affect the course of its strategy. The basic idea behind strategic surveillance is that important yet unanticipated information may be uncovered by a general monitoring of multiple information sources. Strategic surveillance must be kept as unfocused as possible.

 Trade magazines, The Wall Street Journal, trade conferences, intended and unintended observations are all subjects of strategic surveillance. Strategic surveillance provides an ongoing broad-based vigilance in all daily operations that may uncover information relevant to the firm's strategy. e.g. Citicorp benefited significantly from a Brazilian manager's strategic surveillance of political speeches by Lula Da Silva, Brazil's new president, who said Brazil would not pay interest on its debt as scheduled. Citicorp raised its annual default charges to 20 percent of its $2.5 billion Brazilian exposure. Xerox could know from its surveillance that the photocopying market was shifting from black and white to color prints. This helped them to focus on earning higher revenues by selling color photocopying machines. Special Alert Control A special alert control is the thorough, and often rapid, reconsiderations of the firm's strategy because of a sudden, unexpected event. y E.g. Change in the firm's strategy in events like SARS, bombing of twin towers, etc. Such events should trigger an immediate and intense reassessment of the firms strategy and its current strategic situation. Crisis teams and contingency plans can handle the firms initial response to unforeseen events that may have an immediate effect on its strategy. Implementation control Strategy implementation takes place as a series of steps, programs, and moves that occur over an extended time. Managers implement strategy by converting broad plans into concrete incremental actions and results of specific units and individuals. Implementation control is the type of strategic control that must be exercised as those events unfold. Implementation control is designed to assess whether the overall strategy should be changed in light of the results associated with the incremental actions that implement the overall strategy. There are two basic types of implementation control: 1. Monitoring strategic thrusts 2. Milestone reviews Monitoring strategic thrusts or projects As a means of implementing broad strategies, many small projects are undertaken which represent what needs to be done if the overall strategy is to be accomplished. These strategic thrusts provide managers with information that helps them determine whether the overall strategy is progressing as planned or needs to be adjusted. One of the approaches to monitor strategic thrusts is to agree early in the planning process which thrusts or which phases of thrusts are critical factors in the success of the strategy. Managers responsible for these implementation controls will single them out from other activities and observe them frequently. Another approach is to use stop/go assessments that are linked to a series of meaningful thresholds (time, cost, research and development, success) associated with particular thrusts or projects. e.g. A program of regional development via company owned inns in the rocky mountain area was a monitoring thrust that Days Inn used to test its strategy of becoming a nationwide motel chain. Problems in meeting time targets and

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unexpectedly large capital needs led Days Inn's executives to abandon the overall strategy and eventually sell the firm. Milestone reviews Milestones like critical events, allocation of a major resource or passage of a certain time can be used to monitor progress. The milestone reviews usually involves a full scale assessment of the strategy and of the advisability of continuing or refocusing the firm's direction. y e.g. Boeing had plans to develop supersonic transport airplanes. Initial investment was made considering the potential and because another competitor, Concorde, was doing it. But when another invest was to be made Boeing did a thorough analysis and found that the project would be very costly to develop, there would not be much demand to this service considering the cost and the reason why Concorde would be able to do would be because of the huge government subsidies. These factors led Boeing to abort this project even though millions of dollars were already invested. Implementation control is also enabled through operational control system like budgets, schedules and key success factors. They provide post-action evaluation and control over short periods. To be effective, operational control systems must take four steps common to all post-action controls: Set standards of performance Measure actual performance Identify deviations from standards Initiate corrective action

(11) Explain the dimensions of effective leadership of the strategy execution process(10m) Organizational Leadership Why is leadership important? The organizations of the twenty first century will increasingly depend on the skills of the CEO and a host of subordinate leaders. The accelerated pace and complexity of business will continue to force corporations to push authority down through increasingly horizontal management structures. Organization leadership involves action on two fronts. 1. Guiding the organization to deal with constant change. This requires CEOs who embrace change and do so by clarifying strategic intent. The strategic intent had to build their organization and shape their culture to fit with opportunities and challenges change affords. 2. Providing the management the skill to cope with ramifications of constant change. This means identifying and supplying the organization with operating managers prepared to provide operational leadership and vision. Strategic leadership: Embracing change

y y y

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The blending of telecommunications, computers and internet combined with globalization has increased the pace of change exponentially. Change has become an integral part of what leaders and managers deal with daily. The leadership challenge is to galvanize commitment among people within an organization as well as stake holders outside the organization to embrace change and implement strategies intended to position the organization to do so. This can be done through three interrelated activities: Clarifying strategic intent Building an organization Shaping organizational culture Building an organization Leaders spend considerable time shaping and refining their organizational structure and making it functional effectively to accomplish strategic intent. Since embracing change often involves overcoming resistance to change, leaders have to address a few concerns like: y Ensuring a common understanding about organizational priorities y Clarifying responsibilities among managers and organizational units. y Empowering newer managers and pushing authority lower in the organization. y Uncovering and remedying problems in coordination and communication across the organization. y Gaining the personal commitment to a shared vision from managers throughout the organization. y Keeping closely connected with "what's going on in the organization and with its customers". (12) Explain McKinseys 7S framework(7m) Refer handbook page no(184)