Strategic management and Business policy Q1). Explain the corporate strategy in different types of organization? Ans.

A well formulated strategy is vital for growth and development of any organization whether it is a small business big private enterprise, a public sector company a multinational corporation or a non- profit organization. But the nature and focus of corporate strategy in the are different types of organization will be different, primarily because of the nature of their operation and organization objectives and priorities. Small businesses, for example generally operate in a single market or a limited number of markets with a single product rlimit4edb range of products. The nature and scope of operation are likely to be less of a strategic issue than in larger organization are likely to be less of a strategic issue than in larger organization. Not much of strategic planning may also be required or involved and the company may be content with making and existing himself forms the senior management and his wisdom gives direction to the company. In large business or companies whether in the private sector public sector or multinationals the situation is entirely different. Both internal and external and the organization objectives and different. For all large sector enterprise, there is a growth perspective, because the stakeholders want the companies to grow increase market share and generate more revenue and profit. For all such companies both strategic planning and strategic management play dominant roles. In public sector companies, objectives and priorities can be quite different from these in the private sector. Generation of employment and maximizing output may be more important objectives than

Maximizing profit Stability rather than growth may be the priority many times. Accountability system is also very different in public sector from that in private sector. There is also greater focus on corporate social responsibility. Accountability system is also very different in public sector from that in private sector. There is also greater focus on corporate social responsibility. The corporate planning system and management have to take into account all these factors and evolve more balancing strategies. In non-profit organization the focus on social responsibilities is even greater than in the public sector. In these organizations ideology and underlying values are of central strategic significance. Many of the organization have multiple service objectives, and the beneficiaries of service are not necessarily the contribution to revenue or resource. All these make strategic planning and management in the organization quite different from all other organization.

Q2. What is the role consultants play in the strategic planning and management process of a company? Is it an essential role? Ans. Role of consultants: Management consultants can play very useful roles in the strategic planning process of a company. Consultants render services in different functional areas of management including the strategic planning and process. In companies with no separate planning division of unit consultants can fill the gap. They can undertake planning and exercises as and when the company management feels the for such exercises or and strategy exercise as and when the company management feels the need for such exercises or consultancies. There are many international consultants who are in demand in different countries. There are also national consultants. Leading international consultants, in addition to Mc and company are Boston consulting Group Arthur companies are Ferguson, Tata consultancy services and ABC consultants. Consultants, sometimes have a difficult or delicate role to play. In many companies a situation develops when the chief executive or the top management needs to bank upon the support of an external agency like a consultant to a strategic change in the organization structure or management system of the company. It may be for growth and development or downsizing. In both cases many internal resistance to change if may by for growth and development or downsizing. In both cases, many companies face internal resistance to change. The resistance is more if it is downsizing even when it is required for around a company. This happens always Consultants are to support or sub the company point.

Q3).What is the strategic audit? Explain its relevance to corporate strategy and corporate governance. Answer. With increasing pressure on boards from external stakeholders to be more active many directors are seeking more practical ways to conduct strategic overview of company management without getting directly involved in it. Donaldson (1995) has suggested strategic audit as a new tool for systematic review of strategy by board members without directly involving themselves with management of companies. Strategic audit is a formal strategic review process which imposes its own discipline on both the board and the management very much like the financial audit process. But it is different from management audit which is undertaken in many companies by the senior top management on the progress and outcome of important. To understand strategic audit in the correct one needs to s this in terms of its various elements Donaldson has specified five elements of strategic audit. These are:

1). Establishing criteria for performance 2). Database design and maintenance 3). Strategic audit committee 4). Relationship with the CEO 5). Alert to duty (by board members) The performance should simple well understood and accepted measures of financial performance. A number of measures of financial performance are available. One command measure used by many company is return on investment. The ROL can be like this profit per unit of sales per unit of capital employed capital employed per unit of equity invested these three rations multiplied together the resultant ration will give profit per unit of equity. The criterion would two objectives. First sustainable rate of return on shareholder investment and second to decide whether the return is less or equal to or more than returns on alternative investments with comparable whether the company chosen strategy is justifiable or not To calculate different performance ratios and monitor performance a proper database is essential. This has to be a regular and an ongoing process. Data on financial performance can sometimes be sensitive to the managers of company. It is therefore suggested that financial and related data design maintenance and analyses should be entrusted. For effective strategic audit committee should be constituted. According to Donaldson outside directors should select three of their own members to form the committee.

Q4). What is corporate social responsibility (CSR)? Which are the issues involved in analysis of CRS? Name three companies with high CSR rating. Answer. The mentioned above external stakeholders of an organization are too many and varied and many of them represent different sections or social groups. This implies that organizations should be socially responsible that is in addition to the interest of the shareholders businesses or companies should also serve the society. This is corporate social responsibility (CSR) corporate social responsibility can be defined as the alignment of business operations with social values. The conflict between internal and external st5akeholders can go much than mentioned so far. Some feel that this is the most problematic issue in deciding company responsibility. External stakeholders argue that internal stakeholders demand be made secondary to the greater need of the society that is greater good of the external stakeholders. Many of them feel that issues like pollution waste disposals environmental safety and conservation of natural resources should be the considerations for formulation of policy and strategic

decision making. Internal stakeholders on the other hand think that the competing or social claims of external stakeholders should be balanced in such a way that is protects the company mission objectives and profitability. CSR practices in corporate:Worldwide companies are trying to integrate corporate social responsibility their business operation and strategies. Microsoft, coca-cola, McDonalds FedEx, IBM some of the leading companies. In India also many companies are integrating CSR into their business and making significant contribution to society. Companies like Hero Honda, ITC and Tata steel are the foremost among them. Some of these companies have also established foundations to cater to the needs of society. At the global companies in terms of their .l level CSR initiative of companies re observed with interest. The wall street journal has rated top 15 companies in terms of the social responsibility. These companies are:1 Johnson & Johnson 2 Coca-cola 3 Wall-mart 4 Anheuser bush 5 IBM 6 UPS.

Q5 Distinguish between core competence, distinctive competence strategic competence and threshold competence. Use examples. Ans. Four major types or levels of competence may be distinguished. 1. 2. 3. 4. Core competence Distinctive competence Strategic competence Threshold competence Core competence:Core competence of a company is one of its special or unique internal competences. Core competence is not just a single strength or skill or capability or a company technology and skills capability or a company it is interwoven resources technology and skill or synergy culminating into a special or

core competence. Core competence gives a company a clear competitive advantage over its competitors. Sony has a core competence in miniaturization. Distinctive competence:Core competence may not be enough because it focuses predominantly on the product or process and technology or as Hamel and put it. The combination of individual technologies and production skills. There are two problems with this. First strong and aggressive competitors May developments wither through parallel innovations or limitations similar products or processes which are highly competitive. This is what Japanese companies have in this fields of electronics and auto s and now south Korea is doing to second to secure competitive advantage on product process or technology or technological innovation may not be enough this has by amply supported by special capabilities in the related vital areas like resource or financial management cost management marketing logistics, etc Strategic competence:Strategic competence coexists with or supports core competence and distinctive competence. Strategic competence is the competence level required to formulate implement and produce results with a particular strategy for example to outwit competitors. Hindustan lever this in the mid and the late 80s. They used their strategic competence to out and reestablish their leadership in the detergent market. Threshold competence:Threshold competence is the competence level required just for survival in the market or business. The competence level of a company may be weaker than many of it competitors. Threshold competency may be adopted by no.5 or no 6 player in the market or those lines to survive. Companies with threshold competence can over time graduate to a higher level of competence.

Q6).What is global industry? Explain with examples international strategy multi-domestic strategy global strategy and transnational strategy? Answer. Global industry:In global industry the strategic position of companies in different countries or national market are governed by their overall global positions. For example IBMs strategic position in competing for computer sales in France and Germany has improved significantly because of technology and marketing kills development in other countries and a worldwide manufacturing system which is well coordinated. To be called a global industry an industry economics and competitors in different national markets should be considered jointly rather than individually.

International strategy:-

International strategy can be adopted for those products and services which are not available in some countries and can be transferred from other countries. These are standard products with little or no differentiation. International strategies are not very common or popular. Some examples are Kelloggs Indian software and Indian handicrafts. Multi domestic strategy :- Multi domestic strategy is almost opposite of international strategy. Multi domestic strategy involves high degree of local responsiveness or local content. Products are customized to suit local requirements or conditions. Because of high customization cost pressure is less cost effectiveness may be also difficult to9 achieve because of lack of scale economies. Examples Asian Paints Indian garments.