SIKKIM MANIPAL UNIVERSITY -DDE Subject: Strategic Management and Business Policy Subject code: MB0052 Book ID:

B1699 Model Question Paper Time: 2 hours Max.Marks:140 PART A (50 X 1 mark= 50 MARKS) 1. The concept of Strategic window was introduced by ____________. A. Michael Porter B. Peter Drucker C. Hamel D. Abell 2. In what type of organisation there is a greater focus on growth and development and also diversification in terms of both products and markets? A. Multinational companies B. Public sectors C. Small businesses D. Non-profit organisations

3. In what type of organisations, the focus is more on ideology, social responsibilities and underlying values rather than revenue generation? A. Multinational companies B. Public sectors C. Small businesses D. Non-profit organisations 4. Functional strategies are sometimes called as ________________. A. Process strategies B. Corporate strategies C. Business-unit level strategies D. Operational strategies 5. _______________ is concerned with overall purpose or objective of the organisation; for example, making decision such as mergers, acquisition or going for joint ventures. A. Business-unit level strategies B. International strategies C. Corporate strategies D. Operational strategies 6. The formal-structured approach of SMP is also sometimes called as _______________ mode. A. execution B. planning

C. adaptive D. opportunistic 7. A basic advantage of ___________ approach is that it generates enough information and employs scientific tools of analysis which enable planners and decision makers to find solutions even in complex situations A. formal-structured B. adaptive C. entrepreneurial-opportunistic D. combination 8. The system by which business corporations are directed and controlled is called ________________ A. Corporate Governance B. Corporate Social Responsibility C. Strategic Management D. Organisational Planning 9. Corporate governance is primarily guided by _____________. A. Customers B. Shareholders C. Employees D. Board of Directors

10. The affairs of the company are directed and controlled through the __________________ company A. Board of Directors B. Senior managers C. Middle management D. Managing Director and the Chief Executive Officer 11. The _____________ system should clearly address the three major issues of an organisation the corporate objective, whom the organisation should be serving and finally how best to serve their interests. A. Corporate Governance B. Policy making C. Strategic D. Planning 12. The interrelationship or interdependence between governance and strategy can be seen through ______________________ in the organisation. A. tasks and practices B. a chain in the reporting system C. structure D. processes adopted who represent the shareholders of the

13. _________________ is a new tool for systematic review of strategy by board members without directly involving themselves with management of companies. A. Strategic review B. Management review C. Strategic planning D. Strategic audit 14. In governed corporation, the focus is not on power (i.e., not on monitoring or controlling the managers) but on ________________. A. improving decision making B. talent retention C. social responsibility D. sustainability 15. Management thinkers like Peter Drucker feel that business definition should strongly focus on the _______________. A. Shareholders B. Suppliers C. Customers D. Employees 16. The ____________ of a company is variously called a statement of philosophy, a statement of beliefs and a statement of purpose. A. mission statement

B. vision statement C. quality principles D. policy 17. _________________ involves setting goals or targets which demand stretching of the present resource base and capabilities for their fulfilment. A. Strategic intent B. Strategic objectives C. Social audit D. Strategic plan 18. ________________ can be defined as the alignment of business operations with social values. A. Corporate Governance B. Corporate Social Responsibility C. Business policy D. Sustainability 19. ________________ evaluates or measures a companys performance against planned or laid down social objectives or goals. A. Social audit B. Strategic intent C. Strategic audit D. Strategic review

20. _________________ of a company is one of its special or unique competence which gives that company a clear competitive advantage over its competitors. A. Distinctive competence B. Core competence C. Strategic competence D. Threshold competence 21. Xeroxs competence in photo copying and Canons competence in optics, imaging and laser control are examples of ______ competence. A. Strategic B. Threshold C. Distinctive D. Core 22. _______________ is the unique capability that helps an organisation in capitalizing upon a particular opportunity. A. Core competence B. Distinctive competence C. Strategic competence D. Threshold competence 23. Various competencies and resources of an organisation can be integrated into a chain of activities which an organisation performs to meet customer demand. This is called as ____________.

A. value chain B. product life cycle C. innovation D. business process 24. In order to secure or sustain competitive advantage, __________ may have to be continuously developed and adjusted to competence levels. A. skills B. talent C. resources D. equipments 25. In order to improve the competitive position, companies are adopting _____________, that is, moving one or more of the functions in the value chain outside. A. strategic outsourcing B. Business process re-engineering C. Corporate restructuring D. subcontracting 26. The national income, the manufacturing and service sector, capital or financial sector, investment, savings, etc., constitute the __________ environment. A. Economic

B. Sociological C. Micro D. political 27. Prevailing tendencies, course of action or events taking place over time like movements in national income, inflationary tendencies, growth in industrial production, etc., are known as ___________. A. Patterns B. macro activities C. Trends D. fluctuations 28. A ________________ is a detailed and probable view of how the business environment of an organisation may develop in the future based on the analysis of key environmental influences and factors of change about which there is a high degree of uncertainty. A. Scenario B. Vision C. Mission D. Policy 29. In addition to environmental analysis, organisations need to assess their internal strengths and weaknesses. This is done through ______________. A. SWOT analysis B. Scenario building

C. PEST analysis D. Benchmarking 30. The focus of _____________ is on developing and maintaining competitive advantage consistent with present resources and market requirements. A. dynamic strategy B. stability strategy C. competitive strategy D. generic strategy 31. In the BCG model, BCG stands for ______________. A. Boston Consulting Group B. Business Communication Group C. Business Consulting Group D. Benchmark Consulting Group 32. The BCG model is also known as ______________. A. Johari Window B. evaluation matrix C. Generic strategy model D. portfolio matrix

33. In Michael Porters theory, the four generic strategic options available to companies are cost leadership, focused cost leadership, differentiation and _____________. A. diversification B. focused differentiation C. uniqueness D. mass customization 34. Porters theory is based on the concepts of ___________ and mass marketing and product proposition to be offered by different companies. A. niche marketing B. differentiated marketing C. customised marketing D. innovation 35. The manner in which the corporate headquarters manages and nurtures individual businesses or SBUs is called ______________. A. Corporate parenting B. Management nurturing C. Corporate cultivation D. Corporate education 36. ________________ businesses fit well with parenting characteristics but do not provide enough opportunities to the parent for improvement.

A. Value trap B. Ballast C. Heartland businesses D. Alien territory 37. To ascertain the acceptability and commercial viability of a new product, it is necessary to conduct ____________ before launching the product. A. User Acceptability test B. test marketing C. pilot study D. survey 38. Market development for existing products can take place in two ways: first is through geographic expansion in the existing market segments and second is through ___________________. A. coming up with new features for existing products B. new marketing techniques C. developing new market segments D. more advertisements 39. The kind of diversification in which new business has commonalities with the core business or core competence of the company is called ___________________. A. Related diversification

B. unrelated diversification C. concentric diversification D. conglomerate diversification 40. __________________ is less related to the present business and skills and resources (except financial) and may mean venturing into an entirely new area. A. Related diversification B. Unrelated diversification C. concentric diversification D. conglomerate diversification 41. _____________________ is defined as cooperation between two or more organisations with a common objective, shared control and contributions (in terms of resources, skills and capabilities) by the partners for mutual benefits. A. Strategic alliance B. Joint venture C. Merger D. Acquisitions 42. A ______________ may be defined as a business venture in which two or more independent companies join together, contribute to equity capital in equal or agreed proportion and establish a new company. A. Strategic alliance

B. Joint venture C. Merger D. Acquisitions 43. The basic objective behind all strategic alliances is to

_____________. A. secure competitive advantage in the market B. increase sales C. increase market share D. improve operational processes 44. ___________________ is a type of merger which takes place when there is combination of two or more companies in the same business or product group or product. A. Vertical merger B. Horizontal merger C. Synergic merger D. Concentric merger 45. _______________ is a type of merger which takes place when there is a combination of two or more companies which are NOT in the same business but in related businesses or products. A. Horizontal merger B. Vertical merger C. Synergic merger D. Concentric merger

46. ___________________ takes place when a company enters into a downstream activity with respect to the same product line/ flow for example, a garment manufacturer starts its own retail chain. A. Backward integration B. Horizontal integration C. Acquisition D. Forward integration

47. ___________________ takes place when a company acquires a competing business or when two or more companies in competing businesses merge. A. Forward integration B. Joint venture C. Horizontal integration D. Vertical integration 48. A __________________ is characterized by the existence of a large number of small and medium units and no single company has any significant market share. A. Emerging industry B. Mature industry C. Declining industry D. Fragmented industry

49. A ______________ is one which has passed through transition from period of fast growth to more modest or stable growth. A. Fragmented industry B. Emerging industry C. Mature industry D. Declining industry 50. The competitive threat model or the five forces model was developed by ______________ A. Michael E Porter B. Hamel C. C K Prahlad D. Peter Drucker

PART B (25 x 2 marks = 50 marks) 51. In many respects, business strategy is similar to military strategy. Business strategy is formulated, implemented and evaluated with an assumption of ____________, but military strategy is based on the assumption of __________. A. competition, conflict B. plans, rivalry C. business environment, prediction of war

D. scarcity of resources, opponents plan

52. Strategies exist at different levels in an organisation. The three different levels of organisation strategy are corporate level, _______________ and _____________ strategies. A. Operational level, division level B. business-unit level, functional level C. process level, divisional level D. scarcity of resources, opponents plan

53. What is the concept of Strategic window? A. It denotes the direction and control of affairs of the company B. process of defining organisations direction, and making decisions on allocating its resources to pursue this strategy C. There are only limited periods during which there is a fit between market requirements and firm competencies. Companies should make use of such optimum opportunities D. It is an aspirational description of what an organization would like to achieve or accomplish in the long-term future

54. State True (T) or False (F): (1) Strategic windows arise as a result of business or market evolution (2) For single-business companies, corporate-level strategies and business-unit level strategies are generally same. A. 1F, 2F

B. 1T, 2T C. 1T, 2F D. 1F, 2T

55. The strategic management process consists of four distinct steps or stages. They are (a) defining organisational mission, (b) formulation of strategy, (c) ______________ and (d) ___________ A. (c) implementation of strategies, (d) strategy evaluation & control B. (c) preparation, (d) execution C. (c) monitoring, (d) strategy evaluation D. (c) execution, (d) strategy monitoring

56. In __________________ approach, the strategy is to move forward with unusual leaps or discontinuous growth for achieving success or profit and this kind of approach is suitable for organisations in which the key strategists are ____________. A. combination, planners B. entrepreneurial-opportunistic, visionaries C. formal-structured, imitators D. adaptive, great leaders

57. The ____________ approach of strategic management process is essentially a balancing strategy and is more of remedial, reconciliatory and reactive approach. It suits ____________ where the focus is more on accountability. A. formal-structured, non-profit organisations

B. adaptive, large public sectors C. entrepreneurial, small companies D. combination, multinational companies

58. Output (outcomes) and activities like organizing and accomplishing the plan are classified as mix of both ___________ and ___________ factors.

A. policy making, governance B. strategic, governance C. strategic, tactic D. operational, tactic

59. Mission is concerned more with the _____________ whereas the vision is concerned more with the ________________

A. present, future B. future, present C. direction, purpose D. strategic path, principles

60. Four types of mergers are (i) horizontal merger, (ii) vertical merger, (iii) ____________ and (iv) _____________.

A. concentric merger, conglomerate merger B. synergic merger, concentric merger C. synergic merger, conglomerate merger D. consolidation merger, amalgamation merger

61. Companies which wish to compete globally generally adopt one of the following four strategies (i) Global strategy, (ii) multi-domestic strategy, (iii) _____________ and (iv) _____________.

A. transformational strategy, local strategy B. domestic strategy, international strategy C. universal strategy, transnational strategy D. international strategy, transnational strategy

62. Fill up the blanks (1) ________________ is a process of identifying, understanding and adopting outstanding practices either from same organisation or from other organisations to help improve performance. (2) _______________ is the decision which selects from among the alternative grand strategies which will best meet the enterprises objectives.

A. (1) Best practices, (2) Strategic intent B. (1) Strategic window, (2) Strategic planning C. (1) Benchmarking, (2) Strategic choice D. (1) Benchmarking, (2) Strategic review

63. State True (T) or False (F) (1) Strategic Position and Action Evaluation (SPACE) matrix or framework can be considered an improvement over the portfolio analysis and more comprehensive as a technique for evaluating strategies. (2) SPACE matrix is also called as BCG matrix.

A. 1T, 2T B. 1F, 2F C. 1T, 2F D. 1F, 2T

64. State True (T) or False (F) (1) Strategic budget is different from conventional accounting budget (2) Strategic capability is concerned with how the resources are deployed, managed and controlled in a harmonious way to produce a synergetic effect.

A. 1T, 2T B. 1F, 2F C. 1T, 2F D. 1F, 2T

65. State True (T) or False (F) (1) Structure of an organisation defines the levels and roles of management in a hierarchical way. (2) An organisational structure is presented through the organisational chart A. 1T, 2T B. 1F, 2F C. 1T, 2F D. 1F, 2T

66. Fill up the blanks:

(1) The ________________ structure represents an organisation which is owned and managed by a single individual. (2) A _______________ structure is based on differentiation and allocation of primary functions such as production, marketing, finance and HR along with certain delegation of powers.

A. (1) Divisional, (2) SBU B. (1) Entrepreneurial, (2) functional C. (1) Entrepreneurial, (2) matrix D. (1) Project-based, (2) divisional

67. State True (T) or False (F) (1) The fundamental factor in the SBU structure is to identify independent product/ market segment which requires distinct strategies. (2) A matrix structure is a need-based structure which does not follow the conventional lines of hierarchy or control.

A. 1F, 2F B. 1T, 2T C. 1T, 2F D. 1F, 2T

68. Fill up the blanks: (1) A __________ organisation is an organisation without a formal structure and is like an extended network. (2) The objective of _______________ is to nurture individual managers and build human capital.

A. (1) matrix, (2) Motivation system B. (1) virtual, (2) Management Development System (MDS) C. (1) functional, (2) Evaluation system D. (1) virtual, (2) Management Control System (MCS)

69. State True (T) or False (F) (1) In ethical damage control approach of business ethics, the objective is to protect the company from adverse publicity. (2) In ethical culture approach, the top management believes that high ethical principles embedded in the corporate culture should guide the managers and staff.

A. 1F, 2F B. 1T, 2T C. 1T, 2F D. 1F, 2T

70. State True (T) or False (F) (1) Managers in organisations use different types of power to influence operations, choice of strategy and its implementation. (2) Political view of strategy development relates to the proposition that strategies develop as the outcome of process of bargaining and negotiation among powerful internal or external interest groups.

A. 1T, 2F B. 1F, 2T C. 1F, 2F D. 1T, 2T

71. Choose the right option: For pre-implementation assessment of strategies, which of the following interrelated evaluation criteria are generally used: (1) Suitability (2) Manageability (3) Feasibility (4) Acceptability (5) Accountability A. Only 1, 3 and 4 B. Only 1, 2 and 3 C. All the criteria (i.e., 1,2,3,4 & 5) D. Only 3 and 4

72. State True (T) and False (F): (1) Critical Success Factors (CSF) are those aspects of strategy in which a company must excel to outperform competitors. (2) CSF analysis highlights the important relationship between resources, competences and choice of strategy.

A. 1T, 2T B. 1F, 2F C. 1T, 2F D. 1F, 2T

73. State True (T) and False (F):

(1) The balanced scorecard approach combines both quantitative and qualitative criteria/ measures of evaluation. (2) The balanced scorecard approach is also called as benchmarking. A. 1T, 2T B. 1F, 2F C. 1T, 2F D. 1F, 2T

74. Fill up the blanks: (1) ______________ is conventionally known for minimizing errors or defects in manufacturing or quality improvement. (2) In DMAIC method of Six-sigma, DMAIC stands for Define, Measure, Analyse, Improve and __________. A. (1) Kaizen, (2) Communication B. (1) TQM, (2) Communication C. (1) Six-sigma, (2) Control D. (1) Balanced scorecard, (2) Compute

75. State True (T) and False (F): (1) Liquidation means closing down a company and selling its assets. (2) Corporate turnaround may be defined as organisational recovery from business decline or crises.

A. 1T, 2T B. 1F, 2F C. 1T, 2F D. 1F, 2T

PART C (4 X 10 marks = 40 marks)

76. Describe Porters Competitive threat model with relevant examples. (Refer Unit 11) 77. Write short notes on the following: (a) Core Competence (b) SWOT Analysis (Refer Unit 6, 7)

Case Study: (Read the case study given below and answer the questions 78 and 79)

Strategy of Hindustan Unilever (HUL) Hindustan Unilever (HUL) is a partly owned (majority holding) subsidiary of Unilever Ltd. For quite some years, Unilever was on the lookout for expansion opportunities for its group companies/ businesses in India. When the opportunity came its way with Indias economic liberalization in the 1990s, Unilever acted fast, achieved a big expansion in each of its major businesses in the country, regrouped and integrated its companies. Unilever worked out its corporate strategy for India in line with its objectives. To achieve its objectives, HUL formulated a strategy which had three distinct components: 1. A strategy for expansion of businesses 2. A strategy for regrouping and integrating the group companies

3. A strategy for consolidation of ownership and control by the parent company in the Indian operations by acquiring majority equity in them. For expansion of its business, HUL exploited a whole range of strategic possibilities. It used takeovers/ acquisitions, mergers, strategic alliances and joint ventures. In some cases, it employed the start-up route as well. It, however, relied heavily on the takeover route for its expansions. There were valid reasons for this. By relying on the takeover route for its expansion, Unilever was in a position to avoid the time lags. Along with the expansion of its various businesses, Unilever carried out the regrouping/integration of its existing businesses/companies in the country. Its idea was to integrate all its companies in India into a single mega firm. It used mergers for accomplishing the objective and carried it out in stages. It took two companies at a timetwo companies of the group which enjoyed the closest synergy were merged at a time into a single entity, and the merged entity in turn was subsequently merged with another company of the group to form a much larger entity. The process continued till it reached the stage where Unilever had just a single company in India. Unilever merged four companiestwo of its existing companies, Doom Dooma India and Tea Estates India, two taken-over companies, Kissan and Kothari General Food (KGF), into Brooke Bond. The merging of Doom Dooma and Tea Estates served two purposes. It furthered the objective of integrating the group companies. It also helped Unilever to acquire majority equity in Brooke Bond with an incremental new investment. Unilever then merged Brooke Bond and Lipton into a single entityBrooke Bond Lipton India Ltd (BBLIL). Then TOMCO, which had been taken over earlier, was merged with HLL. Subsequently, the combined entity, Brooke Bond Lipton India Ltd (BBLIL) was merged with Hindustan Lever. Consolidation of ownership and control by the parent company was the third part of Unilevers strategic process with respect to its Indian operations. Unilever acquired majority stake and consolidated its position in all its companies in India. The company

acquired 51 per cent or more equity in each of its companies in India, and it managed this at attractive prices and with minimal new investment. This was accomplished through a chain of moves involving mergers of companies and incremental new investments.

78. Describe Strategic Management Process in terms of the strategic management model. Why did HUL formulated the three distinct strategies? 79. How did HUL implement the strategies formulated? Did the company follow the strategic management process rigidly as per the strategic management model? Justify your answer.