MGT703:

Assignment Number 2:

Solution Part 1:

Answer 1:

It was suggested that the more successful company like ITA would use self-organizing
management and emergent strategy making processes in this complex/turbulent environment.
Following are the findings which were being observed, how ITA became successful in this
dynamic environment.

1. The top management of ITA used open, democratic, independent iron fisted control and
entrepreneurial actions which encouraged them to develop short term plans for three to six
months in order to tackle the daily business changes.
2. As ITA has a strong culture of acceptance and encouragement of change which allows
them to adapt more flexible environment to flourish critical abilities inside and outside the
company.
3. ITA’s management are so proactive in making strategies and decisions making, also having
positive attitude towards risk in order to gain competitive advantages over competitors. For
this ITA continuously try to enter into new markets and try to gain the dominant position
as early as possible.

It was suggested that, in this complex/turbulent environment, the less successful company like ITB
would use traditional management and slow strategy making processes. Following are the findings
which were being observed, how ITB became less successful in this dynamic environment.

1. ITB’s management is not so proactive generally that’s why they change slowly and appear
to resist change.
2. ITB’s management adopts long term planning horizon i.e. three years plan in order to gain
experience and try to maintain the status quo, so, by doing this ITB avoid change and don’t
welcome or encourage change in this way, ITB can’t survive in this dynamic environment
because of high risk.
 3. ITB’s management adopts conservative and formal strategic planning style which
restricted their strategic vision. So, by planning this way, they planned airy and fairy plans
about which no one knows how to accomplished it and get the desired result.

Answer 2:

Successful companies use strategic planning in order to meet the changing conditions in the
complex and dynamic environment because of the following reasons:

1. Successful companies planed short term planning as quick responses are required for this
purpose many people will be involved in the strategy making process in order to dictate
the strategy tactics in line.
2. Successful companies used trial and error process in order to delegate those people who
are closest to customers by using cross-functional teams and these teams evolved the
discovery of works done.
3. Successful companies try to be flexible but disciplined with their strategies. These
strategies require a defined set of strategic rules which help the managers to cope up with
opportunities and rapidly facing the threats without consulting with top command or by
doing sluggish actions.

Strategy making should use democratic and bottom up approach because in strategic making
environmental changes take ample amount of attention in order to maintain the improvisation
between balance structure and chaos. There are following reasons which must be keep in
consideration when a strategy is being proposed:

1. When democratic and bottom up approach is used during strategy making, spontaneous
self-organizing process conclave the groups of managers easily in order to discuss the
strategic issues.
2. Democratic and bottom up approach helps in monitoring the environmental changes
rapidly, communicates with problems and provides help in grasping the opportunities
which empowers the employees to make correct decisions during strategic planning.
3. Democratic and bottom up approach provides vision or identity in strategy making because
democratic and bottom up approach merges all the necessary components like structure
 balance between rapid change through flexibility or rapid change through adaptability. It
also initiate changes despite of being reacting to environmental changes.

Solution Part 2:

Answer 1:

A Journey from traditional family groups to big private businesses of TATA Group and Japan
Suzuki group became possible because of their good entrepreneurial activities i.e. a project start-
up and development, good structure of governance and ownership, and relationship concerning
with local culture and management practices. They paid a great amount of attention to their
strategic issues in the organizations. Following are the main possibilities how these companies
shifted their gear from traditional family groups to private businesses:

1. They believe in their core competences and competitive advantages which they have
possessed from traditional family groups to private businesses. Their ownership focus was
strongly on moderating effect on product innovation, both short and long term planning,
and strong relationship between several types of information from critical resources which
provide these firms comprehensive competitive advantages.
2. They continue their best exercise of trans-generational leadership and entrepreneurship i.e.
they transfer leadership from one generation to the next from timely manner. In this way
family business easily identify their most promising candidate who play a pertinent role in
the success of the company by his/her charismatic leadership style.
3. They keep their alliance strong with their partners by diversifying performance criteria
which influences the private start-up companies to attain a rapid growth. They test their
relationship between partner diversify and performance from start-up firms and found that
this will help them to enhance their performance by enabling them to gain critical resources
and skills.
4. They have an opinion that the influence of institutional change on the base of outside
directors instead of family members opens the door towards risk also it might have
weakened the firm if it goes to public. So they give their prime attention on the relationship
between informal finance and performance of the firms in order to allocate the resources
mechanisms.
Answer 2:

There has been very little research conducted in Asia Pacific region about strategic management
of private and family business because in Asia Pacific Region contexts are been very long
traditions of the state authoritative and convincing structures, late comer status in industrialization,
diversity of religious beliefs, variety of political systems and mix of transition versus emerging
economics. These contextual factors are supposed to lead the pre-set preferences and constraints
on the firm strategy in its formation and execution, especially in private and family businesses.
Following are the main challenges through which Asia Pacific Region is being encountering in the
field of strategy management research of private and family business:

1. Less efficient and well-organized markets.

2. Dominance and supremacy of governments as both rule makers and performers are
involved in economic activities.
3. Preferences for network-based behaviors into the markets.
4. High risk and uncertainty due to high instability and impulsiveness of key factors like
economic, political and institutional variables.
5. Ineffectiveness of resource allocation mechanisms and control of organizational actions.