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Derick Terry Dsouza 531110297 Global Institute Master of Business Administration MB 0052 Strategic Management & Business Policy Fourth Finance 28th January
Directorate of Distance Education Sikkim Manipal University II Floor, Syndicate House Manipal – 576104
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Master of Business Administration - MBA Semester 4 MB0052 - Strategic Management & Business Policy Assignment Set- 1
Q.1 what do you understand by the term Strategy in the context of Business Management and Policy? And what are the stages in the formulation of a Strategy? Ans Strategy It is a common direction set for the company and its various components to accomplish a desired position in a future. A meticulous planning process results in strategy. It is the comprehension of the goals which has logical step by step process. It defines a general mission and vision of an organisation. It is important to consider that the decisions taken by an organisation are likely to affect the employees, customers and competitors. Business strategy is used to achieve competitive advantage. The efficient development and implementation of strategy depends on the capability of the organisation. This includes the ability to prepare the strategic goals and implement the plans through strategic management. Strategy exists at different business levels. The different levels are: 1. Corporate strategy:- This is regarding the general function and scope of business to meet the stake holders expectations. As it is significantly influenced by the investors in the business, it is also called the critical level strategy. 2. Business strategy:- This is regarding how a business competes effectively in a particular market. It includes strategic decisions about the selection of a product and meeting customer requirements. 3. Operational strategy:- This is regarding how each part of the business is organised and delivered to the corporate and business level. Operational strategy focuses on issues of resources and practices of an organisation
Strategy formulation is the development of long term plans. It is used for the effective management of environmental opportunities and for the threats which weaken corporate management. Its objective is to express strategical information to achieve a definite goal. The following are the features of strategy formulation:1. 2. 3. 4. Defining the corporate mission and goals. Specifying achievable objectives Developing strategies Setting company policy guidelines
The main process involved in strategy formulation is as follows: 1. Stimulate the identification:- Identifying useful information like planning for strategic management, objectives to achieve the goal of the employees and the stakeholders.
Example The China Wireless Technologies. They contribute in successful implementation of strategic plan because it is strategic in nature. The joint venture between the two companies is to gain profits and provide affordable mobile phones to the market that consists of advanced features and aims to earn 8 billion dollars in the next 5 years. They are obtained by the co-operation between the companies. The questions that arise during utilisation and transfer of information are the following Who has the requested information? What is the relationship between the partners who holds the requested information? What is the nature of the requested information? How can we transfer the information? Q. It reduces production time as the organisations are into joint venture. 2.A number of question arising during utilisation and transfer of information have to be solved. VERTICAL MERGER – This involves the union of a customer with the vendor. An individual partner in joint venture may offer time and services whereas the other focuses on investment. . Mergers and Acquisitions :. A smart organisation‟s merger helps to enter into new markets. In a joint venture both the organisation invest on the resources like money. The new mobile consists of dual SIM smart phones with 3G technology at a cheaper rate. Joint Venture :. Ans Strategic alliance is the process of mutual agreement between the organisations to achieve the objectives of common interest. and excel among the competitors in the market. It increases integrity by teaming with other reputable and branded organisation. Strategic alliance involves the individual organisation to modify its basic business activities and join in agreement with similar organisations to reduce duplication of manufacturing products and improve performance. This pools the resources among the organisations and helps each other in achieving the objectives. It helps in gaining new customers and in investing little or no money. A long term relationship is built among the participating organisation.2 What. a mobile handset maker is getting into an agreement with the Reliance Communications Limited (RCom) to launch its new mobile.It is the process of combining two or more organisations to form a single organisation and achieve greater efficiencies of scale and productivity.It is the most powerful business concept that has the ability to pool two or more organisation in one project to achieve a common goal.2. It is stronger when the organisations involved have balancing strengths. The different types are listed below:1. More new products and services can be offered to the customers. time and skills to achieve the objectives. Utilisation and transfer of useful information as per the business strategies:. acquire more customers. in brief. The main reason to involve into merger is to join with other company and reap the rewards obtained by the combined strengths of two organisations. It provides relationship between organisations to plan various strategies in achieving a common goal. The different types or mergers are: HORIZONTAL MERGER – It takes place when two organisations competing in the same market join together. are the types of Strategic Alliances and the purpose of each? Supplement your answer with one real life example of each. It provided the capability to compete in the market with other organisations.
4. achieve synergies in the operations. The function being outsourced is considered as noncore to the organisation. merged to consolidate their position in a fast growing market. and expertise are collaborated between the organisations.It is the process of associating the technologies of two different companies to achieve a common goal. The capacity of CUDA is expected to multiply fifty times the performance of existing computing and reduce the run time to advance user enterprise. Most of organisations choose to grow by acquiring other organisations to increase market share. Most of the organisations outsource the work in numerous ways.Most of the organisations execute product extension merger to sell different products of a category CONGLOMERATE MERGER. Example – Transocean and GlobalSantaFe. The contractual agreement is the heart of business dealings. The required resources like knowledge.It is the process of co-operative agreement of two or more organisations which may or may not have previous relationship of working together to achieve a common goal.It is the process of entering into a contract with an organisation or a person to perform a particular function. GPU inventor and the world‟s visual technologies giant. It is the beginning to pool resources like knowledge. Infosys Technologies Ltd. Outsourcing:. This will enable certain applications to achieve high performance.It is the process of agreement with specific terms between two or more organisations which guarantee in performing a specific task in return for a valuable benefit. encryption and policy enforcement. The software helps the developers of various applications to tap into the previously uncultivated power of the GPU. They have become the major entity for growth in market these days. The two organisations work as coowners in business and share the profits and losses.The software giant. The purpose of this partnering is to develop NVIDIA CUDA (Compute Unified Device Architecture). and to obtain control of undervalued assets. Example:. Massive growth can only be achieved in less time by buying other organisations. Google acquire Postini to introduce services of message security. 3. Has entered into partnership with US based NVIDIA. The technologies of individual organisations are shared to achieve desired outcome. the top oil drilling companies. This technology is viewed as the next big revolution in the field of technology in lending high performance in computing. 5. Contractual Agreements:. Technological Partnering:. Archiving.This merger involves organisations alliance with unrelated type of business activities Acquisition is the process of purchasing an organisation by another organisation either through the purchase of its shares or assets. The newly introduced digital audio player and portable CD players of Philips will be unveiled with the Nike logo to enhance profits in the market share in United States. gain access to new technologies. PRODUCT EXTENSION MERGER. to develop distribution channels. Collaborations and Co-Branding:. Example:. experience and sharing skills of team members to effectively contribute to the development of a product rather working on narrow tasks as an individual team member in support to the development. Usually organisations adopt this concept to carry out narrow functions . The Philips electronic product will contain Nike‟s logos and it is mainly marketed in United States since the market share of Philips is not much impressive. It is the most significant areas of legal concern and involves variations in certain situations and complexities.The sportswear giant Nike formed co-branding agreements with Philips Consumer electronic products.MARKET EXTENSION MERGER – It is the process of merging two organisations that sells same products in different geographical areas. 6. machinery.
and reliable business systems. Since most organisations lack in many resources. Product licensing – This is similar to technology licensing. The license allows selling the products within the prescribed boundary. The only difference is that it deals with manufacturing and selling of certain products. billing. The organisation pays certain amount of fee in setting up franchise and agrees to constant payments so that the process is financially risk free for the organisation. facilities and trained personnel. The key benefits of outsourcing are cost efficiency. Franchising – It is a quick process of achieving a successful objective nationwide. scalable. Sharing R&D – The organisations set up strategic alliances to venture into research field. availability of trained staff. The organisations owning the product license is provided with an opportunity to sell products within certain geographical area. and risk minimisation. and data entry.The various other methods are: Affiliate marketing – It is the process of revenue sharing between the website owner and the online merchant. . it outsources these processes to other organisations which consists of specialised tools. there are chances of exploitation. Technology licensing – It is the contractual agreements where trademarks. This ensures the effective distribution of products and provides employment opportunities in various geographical areas.such as payrolls. flexible manpower utilisation. intellectual property and trade secrets are licensed to an external organisation. Distributors – Most of the organisations market their products by outsourcing it to various companies. 7.Tatvasoft is an Indian outsourcing company that offers software development services to its clients in United States. Other Methods:. When it belongs to other organisation. They provide software outsourcing services and solutions with the focus on secure. These companies act as distributors where each one is located in different geographical areas. This process includes the website owner to advertise the merchant‟s products or send the potential customers to the merchant‟s website. The main disadvantage is the loss of control over the technology. Example:. The main purpose of the organisation is to embark in the field of research and development to form a new entity. Canada and Australia.
attract additional businesses to the area and fill a gap in existing retail services. how you will do it. Employment Creation – A new business venture may create job opportunities for community residents or the constituency served by your organization. You may need to find a use for a vacant commercial property that blights a strategic area of your neighbourhood. Revenue Generation – Your organization may hope to create a business that will generate sufficient net income or profit to finance other programs. 3 What is a Business Plan? What purpose does it serve? Ans A business plan is a detailed description of how an organization intends to produce.Local Market Study . activities or services provided by your organization. a good business plan describes to others and to your own board of directors. A good business plan will help attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. It can also establish benchmarks to measure the performance of your business venture in comparison with expectations and industry standards. Depending on the goals you have set. A bad or insufficient market study could encourage your organization to pursue a business destined to fail. 5. Or your business might focus on the rehabilitation of dilapidated single family homes in the community. management and staff the details of how you intend to operate and expand your business.Whether your goal is to revitalize or fill space in a neighbourhood commercial district or to rehabilitate vacant housing stock. Neighbourhood Development Strategy – A new business venture might serve as an anchor to a deteriorating neighbourhood commercial area. what financial resources are necessary to carry it out. . Through a market study you will be able to identify gaps in existing products and services and unsatisfied demand for additional or expanded products and services. 4. And most important. Whether the business is housing.Once you have identified goals for a new business venture. and assess the capacity of the area to support existing and additional commercial or home-ownership activity. the next step in the business planning process is to identify and select the right business. 3. And most important. what you do. Many organizations may find themselves starting at this point in the process. A well-written plan will serve as a guide through the start-up phase of the business. A good business plan serves the following purposes: 1. market and sell a product or service. A solid business plan describes who you are. you should conduct a local market study.Q. you might take several approaches to identify potential business opportunities. with potentially disastrous results for the organization as a whole. commercial or some other enterprise. a good business plan will help to attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. Establish Goals . and how you intend to secure those resources. your capacity to do it. Business opportunities may have been dropped at your doorstep. A well-written plan will serve as a guide through the start-up phase of the business. 2. It can also establish benchmarks to measure the performance of your business venture in comparison with expectations and industry standards. A good market study will measure the level of existing goods and services provided in the area. a good business plan will help to attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task.
Your organization may wish to draw upon this internal expertise in selecting potential business opportunities.6. office supplies. Q.Another method of investigating potential business opportunities is to research local and regional business and industry trends. It is necessary that an appropriate administrative structure be put in place to effectively deal with crisis management. 7. Internal Capacity . after a major crisis event.The board. metropolitan area or region. including readiness. Implementation and maintenance: It gives the details of tasks required for the Business Continuity Plan to be maintained as a living document. transportation services. The purpose of the business continuity plan is to prepare to face the unthinkable situations that may threaten an organization‟s future. response. catering services. Analysis of Local and Regional Industry Trends . and other products. You may be able to identify which business or industrial sectors are growing or declining in your city. and most importantly. accidentally. It is no longer enough to draft a response plan that anticipates naturally. property management services. If nearby affiliate organizations also use this service or product. In the simplest of terms. The Business Continuity Plan is a tool to allow organizations to consider the factors and steps necessary to prepare for a crisis (disaster or emergency) so that it can manage and survive the crisis and take all appropriate actions to help ensure the organization‟s continued viability. Today‟s threats require the creation of an on-going. The advisory portion of the plan is divided into two parts: Planning process . Organizations now must engage in a comprehensive process best described generically as Business Continuity.It provides step-by-step Business Continuity Plan preparation and activation guidance. during. and recovery/resumption. This new challenge goes beyond the mere emergency response plan or disaster management activities that we previously employed. travel services. Ans. or intentionally caused disaster or emergency scenarios. the organization frequently purchases a particular service or product.Perhaps. . CEOs and shareholders must be prepared to budget for and secure the necessary resources to make this happen. 8. The regional or metropolitan area planning agency for your area is a good source of data on industry trends. Examples of such products or services include printing or copying services. Internal purchasing needs / Collaborative Procurement . interactive process that serves to assure the continuation of an organization‟s core activities before. Explain in a sentence or two as to how it is different from a Business Plan. staff or membership of your organization may possess knowledge and skills in a particular business sector or industry. this may present a business opportunity. changing and growing with the organization and remaining relevant and executable. prevention.4 What is the chief purpose of a Business Continuity Plan and what are its components for effective implementation. it is good business for a company to secure its assets.
a necessary Administrative structure is put in place to effectively deal with crisis management. The following factors can trigger are view and should otherwise be examined once a review is scheduled: Risk Assessment Sector/Industry Trends Regulatory Requirements Event Experience Test/Exercise Results 5. Education and training are necessary components of the BCP process.Following steps are required to be fulfilled for effective implementation of the business continuity plan: 1.(disaster or emergency). Maintenance can be either planned or unplanned and should reflect changes in the operation of the organization that will affect the BCP. Check lists of critical actions and information to be gathered are valuable tools in the education and response processes. Educate and Train All Personnel: All personnel should be trained to perform their individual responsibilities in case of a crisis. A Business continuity plan is a tool which allows organisations to consider the factors and steps necessary to prepare for a crisis. and documentation of their view should be maintained as necessary. testing and maintenance. Review of BCP: The BCP should be regularly reviewed and evaluated. 3. arrangements at alternate worksites. A Business plan is a detailed description of how an organisation intends to produce. Maintenance of BCP Regular maintenance of the BCP cannot be overemphasized. and ensure the continuity of operations through personnel training. They require a time commitment from the Crisis Management Team. Educate and Train Teams: The Crisis Management and Response Teams should be educated about their responsibilities and duties. 2. Educate and Train: The BCP is only as valuable as the knowledge that others have of it. plan. b. and the handling of media inquiries by the company. and the general employee population. c. whereas.Whereas a business plan is not prepared for such type of disaster or emergency. check-in processes to account for employees. market and sale a product or service. . no such administrative structure is available. Reviews should occur according to a pre-determined schedule. Difference between a Business plan & Business continuity Plan a. 4. Such training could include procedures for evacuation. shelter-in-place. A Business continuity plan is an ongoing process supported by senior management and funded to ensure that the necessary steps are taken to identify the impact of potential losses. Clear responsibility for BCP maintenance should be assigned. maintain viable recovery strategies and plans. In a business continuity plan. the Response Teams. in a business plan.
the balance sheet. Annual Budget: It is really a business plan. 2. what his real cash situation is – as opposed to the theoretical cash situation which includes accounts payable and account receivable in the form of expenses and income. The budget allocates amounts of money to every activity and/or department of the firm. However. During the year. It enables the Manager to instantly analyse dozens of important aspects of the functioning of his company. The most important statement is that of the cash flow. Following are the three components of a Decision Support System 1.5Take any three examples of the components of a Decision Support System and explain how they help decision making Ans. these four documents are the formal edifice of the firm‟s finances. the firm generates its financial statements: the income statement. interest coverage ratio and other liquidity and coverage ratios Valuation price ratios And many others . cash flow. The Daily Ratios Report: This is the most important part of the decision support system. or at the end of the fiscal year. Where there is a strong deviation from historical patterns. the actual expenditures are compared to the budget in a feedback loop.Q. The Manager can review these financial and production ratios. how efficiently assets are used Tax burden and interest burden ratios Compounded leverage Sales to fixed assets ratios Inventory turnover ratios Days receivable and days payable Current ratio. 3. or where the ratios warn about problems in the future – management intervention may be required. The manager should be able to know. and a balance sheet. they cannot serve as day-to-day guides to the General Manager. It also allows him to compare the performance of his company to the performance of his competitors. other firms in his branch and to the overall performance of the industry that he is operating in. It allows him to compare the behaviour of these parameters to historical data and to simulate the future functioning of his company under different scenarios. at each and every stage. the cash flow statement. As time passes. When putting together. quick ratio. Daily Financial Statements: The Manager should have access to continuously updated statements of income. Examples of the Ratios to be Included in the Decision System SUE measure – deviation of actual profits from expected profits ROE – the return on the adjusted equity capital Debt to equity ratios ROA – the return on the assets The financial average ROS – the profit margin on the sales ATO – asset turnover.
. It is completely compatible with western accounting methods and derives all the data that it needs from information extant in the company. b. which would support business good practice in restructuring situations. CSR is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” as they are increasingly aware that responsible behaviour leads to sustainable business success. Following are the different ways in which company's CSR can be expressed. in particular. It forces the management to rationalize the depreciation. The decision system is an integral part of financial management in the West. non cash outlays are controlled. through the European Employment Strategy. Employment and Social Affairs Policy Within a business CSR relates to quality employment. It specially helps in following areas: a. tax liabilities are minimized and cash flows are maintained positive throughout. the establishment of a decision system does not hinder the functioning of the company in any way and does not interfere with the authority and functioning of the financial department. In its document "Anticipating and managing change: a dynamic approach to the social aspects of corporate restructuring". The Commission has called upon the social partners to give their opinion in relation to the usefulness of establishing at Community level a number of principles for action. life-long learning. integration of people with disabilities anticipation of industrial change and restructuring. 1. for how long (for which maturities) and in which interest rate. consultation and participation of workers. the EU Disability Strategy and the Health and Safety Strategy. Deeply rooted societal changes such as increasing participation of women in the labour market should be reflected in CSR. the Commission has stressed that properly taking into account and addressing the social impact of restructuring contributes to its acceptance and to enhance its positive potential. Profits go up. adapting structural changes and changing the work environment in order to create more balanced conditions for both genders acknowledging the valuable contribution of women as strategies which will benefit the society as well as the enterprise itself. but in fact helps the manager to take quick decisions and make profit to the company Q. So. It has been proven that without proper feedback. an initiative on socially responsible restructuring.6 Name and explain any three ways in which a Company’s CSR can be expressed Ans. inventory and inflation policies. The management knows exactly how much credit it could take. the European Social Inclusion Strategy. Social dialogue is seen as a powerful instrument to address employment-related issues. Employment and social policy integrates the principles of CSR. If companies succeed in managing change in a socially responsible manner. information. A decision system allows for careful financial planning and tax planning. initiatives to promote equality and diversity in the workplace. equal opportunities. managers tend to take too much credit and burden the cash flow of their companies.A decision system has great impact on the profits of the company.CSR is also about managing change at company level in a socially responsible manner. It warns the management against impending crises and problems in the company. this will have a positive impact at the macro-economic level.
strong lines of communication between enterprises and consumers need to be created. Consumer Policy CSR has partly evolved in response to consumer demands and expectations. which supports the Lisbon objective of becoming the world‟s most dynamic knowledge-driven economy. social and environmental dimensions. such as environmental and social concerns. If CSR is therefore to continue to serve its purpose. . are being taken into account. The role of enterprise policy is to help create a business environment. Its objective is to ensure a balanced approach to sustainable development. which maximises synergies between its economic.2. in their purchasing behaviour. supports entrepreneurship and a sustainable economic growth. 3. Consumers and their representative organisations have an important role to play in the evolution of CSR. Enterprise policy Only competitive and profitable enterprises are able to make a long-term contribution to sustainable development by generating wealth and jobs without compromising the social and environmental needs of society. increasingly require information and reassurance that their wider interests. Consumers.
Following are the steps for implementing the business strategy 1. even transnationals adopt strategies. These include 1. even to their global strategies. Environment scanning 3. Thus. A company may view downsizing as a strategy in a competitive market to render cost-effective services. the process of strategy implementation calls for an integrated set of choices and activities. what are the steps in its implementation? Explain each in a sentence or two. and thus. which department is sanctioned how much of money and resources. There source allocation decisions. Ans. Allocation of resources and formulation of organizational structure 7. An individual company may formulate its own strategy to bring out the desired results. Identification of mission and objectives 2. Evaluation and control. . Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives. Generic strategy alternatives 4. Implementation of a strategy is a crucial task as the formulation of it. planning and control.MBA Semester 4 MB0052 . together with its implementation. After formulating a business strategy.Strategic Management & Business Policy Assignment Set. The eventual success of the organization depends upon strategy formulation and implementation. to motivate the employees to provide their best.2 Q. to increase production. the organizations. the corporate mission. Strategy refers to the course of action desired to achieve the objectives of the enterprise. Strategy variations 5. To win over in a given complex situation. Managers use strategies for different purposes such as to overcome competition. It is necessary for the manager to be very tactful to involve the members of his group in the formulation of strategy to facilitate the implementation process. in the name of the budget. constitutes an integral part of the management activity. Strategy is a way of life both at the macro as well as micro levels for everyone. whether it is a nation or a company. and soon – set the operative strategy of the firm. and so on. There may be a lot of resistance during the implementation process. Strategies are very much useful in organizations for guiding.1Having formulated a Business Strategy.Master of Business Administration . to increase sales. policies. Strategic choice 6. strategy provides a framework to guide thinking and action. Formulation of plans. They make changes. Allocating Resources: A good strategy with effective implementation has a higher probability of success. if necessary. programmes and administration 8. Formulation. such as. A strategy is an operational tool to achieve the goals.
2How do we cope with crises and how do we use the Business Continuity Plan to manage and recover from crisis? Ans. Corrective actions are required wherever the evaluation reveals deviations between the actual performance and the projected one. For this purpose. Formulation Of Policies. The implementation of plans and policies is designed in accordance with the strategy chosen. The control process requires identifying a set of parameters for evaluating and measuring the performance at the individual level and also at the department level. which fits into the organizational environment. Budgets may be of different types: corporate budgets. departmental budgets. capital budgets. 2. The control and evaluation take place not only at the SBU level but also at the corporate level.Budgets are formulated after a series of negotiations across different levels in the organization. To provide a conducive environment in the organization through proper administration to achieve the given objectives directly and indirectly. Programmes And Administration: The resources allocated are said to be well-utilized only when they are well-monitored. The corporate success lies ultimately in the ability to convert corporate strategy into plans and policies that are compatible and workable. it is essential: To develop policies and plans. and others. Organising: An effective co-ordination and efficient division of labour requires an appropriate organizational structure. Appropriate changes in the organization structure may be initiated to ensure strategic implementation of the proposed strategy. This process may involve the participation of all the executives at all levels. Effective strategic management practices suggest that organization structure should also change if the strategy changes or if the organization experiences any bottlenecks in this regard 3. over a given period of time Q. There should be a built-in mechanism to examine the deviations and initiate corrections as and when required. sales budgets. This assures that the chosen strategies will be implemented properly. Evaluation And Control Of Strategy: Evaluation is the last phase of the strategic management process. To assign and reassign leaders the tasks and decisions to support the chosen strategy. expense budgets. The performance has to be evaluated to identify deviations and take corrective action. The Business Continuity Guideline is a tool to allow organizations to consider the factors and steps necessary to prepare for a crisis (disaster or emergency) so that it can manage and survive the crisis and take all appropriate actions to help ensure the organization‟s continued viability. and these make the chosen strategies work. The best structure is one. 4. Also its internal characteristics should give rise to an effective strategy. The firm creates plans and policies to guide managerial performance. The advisory portion of the guideline which helps us to cope with the crisis and to manage and recover from the crisis is divided into two parts: . Plans. It is at this stage that the success of the programmes can be assessed.
Successful Implementation And Maintenance . Crisis Management and Response Team Development vi.provides step-by-step Business Continuity Plan preparation and activation guidance.details those tasks required for the Business Continuity Plan to be maintained as a living document. including readiness. changing and growing with the organization and remaining relevant and executable. Damage and Impact Assessment xvi. Avoidance.1. The following steps are important: i. Develop BCP Review Schedule iv. Financial Issues and Insurance xiii. Educate and Train ii. prevention. and recovery/ resumption. Mutual Aid Agreements xv. Develop BCP Maintenance Schedule In order to use the Business Continuity Plan to manage and recover from the crisis. Has the person responsible for critical systems and business processes been identified? . The Planning Process . the following checklists on the basis of the above advisory portion of the guideline needs to be checked and necessary requirements as per the same. Perform Risk Assessment iii. Test the BCP iii. Does your organization‟s policy include a definition of crisis? 2. Mitigation Strategies vii. Communications x. Assign Accountability ii. needs to be kept in ready mode for immediate applications. Accountability: 1. Return to Normal Operations 2. Resumption of Critical and Remaining Processes xvii. The various steps involved are: i . Service Providers xiv. Deterrence and Detection viii. Potential Crisis Recognition ix. response. Conduct Business Impact Analysis (BIA) iv. Financial Support xii. Agree on Strategic Plans v. Resource Management xi.
tested. Has the BCP been communicated throughout the organization? 5. and does it include senior business function leaders? 4. high)? 3. Have plans and procedures to respond to any incident been developed? 3. and equipment? 3. Deterrence. Has a person been assigned with the responsibility to update the BCP? Risk Assessment: 1. been assessed? 4. Has a BCP Team been appointed. Are the strategies attainable.3. Have the systems and resources that will contribute to the mitigation process been identified. has the impact. Have facility security programs to support avoidance and deterrence and detection been established? . Has the likelihood for each type of risk been rated? Business Impact Analysis: 1. Have the systems and resources been monitored to ensure they will be available when needed? Avoidance. in terms of human and financial costs. Have the resources required for resumption and recovery been identified? Strategic Plans: 1. medium. facilities. including personnel. Have the types of risks that may impact your organization been identified and analyzed? 3. Have methods to mitigate the risks identified in the Business Impact Analysis and Risk Assessment been identified? 2. Has the length of time your organization‟s business processes could be non-functional been determined? 6. Have the business processes been ranked (low. Have compliance audits been conducted to enforce BCP policy and procedures? 2. Have the recovery time objectives been identified? 7. Are employees motivated to be responsible for avoidance and deterrence and detection? 2. Have strategies that address short and long term business interruptions been selected? 4. and Detection: 1. technology. and cost effective? Compliance with Corporate Policy & Mitigation Strategies: 1. Has your organization conducted a Risk Assessment? 2. Have the critical business processes been identified? 2. If a crisis were to happen. Have the maximum allowable outage and recovery time objectives been determined? 5.
relocation. been assigned? Declare a Crisis: 1. including notification. and maintain customer relations? 3. Have the severity of the crisis and the appropriate response been determined? Communications: 1. etc? Execute the Plan: 1. Have operational policy and procedures to protect the facilities been developed? 4. Have the criteria been established for when a crisis should be declared? 2. reduce the length of the interruption. Has consideration been given to developing the BCP around a „„worst case scenario?‟‟ 2. Is it ensured that sufficient physical security systems and planning are in place to protect the facility? Response: Potential Crisis Recognition and Team Notification: 1. including notification of when the next update will be issued? . Have personnel been trained to observe warning signs of an imminent crisis? 4. Has an assessment process to address the severity and impact of the crisis been developed? 2. Have the danger signals been identified that indicate a crisis is imminent? 3. protect reputation. Has the BCP been prioritized to save lives. Have the activities that will be implemented in event of a crisis been identified. protect assets. control media coverage. restore critical business processes and systems. Has a notification system been put in place. Are communications timely. Is it ensured that there is an alternate means of warning if the alert network fails? 5.3. Will the response program recognize when a crisis occurs and provide some level of response? 2. team deployment. Are communications with all employees occurring at approximately the same time? 4. Has the responsibility for declaring a crisis been clearly defined and assigned? 3. operational changes. Are regular updates provided. Has a crisis communications strategy been developed? 2. including redundant systems? 5. Has the responsibility for declaring a crisis. evacuation. honest. alternate site activation. Has an alert network for BCP Team members and employees been established? 4. with first and second alternates. Is the notification contact list complete and up to date? Assess the Situation: 1. and objective? 3.
Has a damage assessment been performed as soon as possible? 3. Has the appropriate insurance coverage been identified and obtained? 2. Have mutual aid agreements been established? 6. Have critical and vital records been stored at an offsite storage facility? 4. and does it have necessary life support functions. to speed the forward recovery to the present time? Resource Management – Financial Issues and Insurance. How long can each business function operate effectively without normal data input storage processes? 5. Suppliers/Service Providers. and Return to Normal Operations 2. properly documented. Has business process recovery been prioritized to recover the most critical business processes first? 5. Has a designated Crisis Management Centre been identified. What must be done to restore data to the same previous point in time within the recovery time objective? 6. .5. including uninterruptible power supply and communications equipment? 2. Process Resumption. is there documentation of when the processes were resumed? 7. Damage and Impact Assessment. Has the Damage Assessment Team been mobilized to the site? 4. are they legally sound. Has the organization returned to normal operations? 8. Has the decision to return to normal operations been documented and communicated? The preparation and readiness of the resources as per the above checklists on the basis of the Business Continuity Plan helps us to manage and recover from the crisis in a successful manner. after the initial data recovery. Can any alternate data storage processes be used. Has a primary spokesperson and back-up spokespersons been designated who will manage and disseminate crisis communications to the media and others? Resource Management – Logistics: 1. Is the schedule of the processes to be restored in accordance with the prioritization schedule? 6. If so. and Mutual Aid: 1. and understood by all parties? Recovery and resumption: 1. Transportation. Are cash and credit available to the BCP Team? 3. Have transportation alternatives been arranged in advance? 4. Have critical vendor and service provider agreements been established? 5. Have alternate worksites for business resumption and recovery been identified? 3.
Product or Service-Focus on the feature that distinguishes from rest of market and what will attract consumers to your product or service. what financial resources are necessary to carry it out.Market Description: A key composition of the operation of your business will be your sales and marketing strategy. so one must describe how you will inform your target market about your product or service and how you will convince customer to purchase. A history of the company (if you're already in business) or a history of the idea development. geography and socio economic status. Provide statistical data to describe the size of target customer base and its growth potential. Describe where this price positions you in the market place: at the high end. With this clearly spelled out. demographics. Place-Describe the location and its advantages where you will produce or distribute your product or provide your service. your capacity to do it. A business plan is a detailed description of how an organization intends to produce. A description of the products or services you plan to develop and sell. A well-written plan will serve as a guide through the start-up phase of the business. explaining the role of each in the Plan? Ans. what you do. Company and Product Description: In this component one should provide type of business. Also it will help with investors and bankers in that they can clearly understand what your. a good business plan will help to attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. 3.e. reason of creating business unit. A good business plan will help attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. how you will do it. Sales Projections-Present an estimate based on size of your market. Price-Provide realistic price estimate and discuss the rationale behind that price. Competition-Explain the reason for entering in the new venture and what differentiate your proposed venture from existing business. Customers-Providing detail description of the customer base depending upon their characteristics i. both management and employees can focus their efforts.3What are the main components of Business Plan. And most important. and how you intend to secure those resources. A business plan should contain the following components: 1. low end or in the middle of the existing range for a similar product or service.Q. the characteristic of your customers and the share of market you will gain over your competition. It should include the following information. referencing the goal and attach references of business plan. A solid business plan describes who you are. market and sell a product or service. It can also establish benchmarks to measure the performance of your business venture in comparison with expectations and industry standards. Executive Summary: The purpose of this component is to provide direction and help you establish your goals as clearly as possible. 2. .
Income statement-Prepare a multiyear statement of projected revenue. Staffing:-Describe the type of staff. An investor or banker must know this because each form has certain legal and tax implications. Equipment and Material: In this component one must describe the special type of machines and materials required to purchase. The typical forms are: • Sole proprietor. Cash flow projection-Provide month to month schedule of estimated cash inflow and outflows from the business for the first year. amount of expected return and explain any commitment or investment that you may have already secured. • Partnership. Production Description:-Describe the steps from raw material to finished goods. . Ownership. Types of requirement of funds are. This should be supported by documents of growth pattern of similar companies or studies that forecast an industry wise forecast. Discuss the product„s feature you plan to emphasize to gain the attention of your target market. Management and ownership: Providing a brief description of the different financial statements of the business to be attached such as: Start-up budget-Describe the initial expenses which may incur to get your business up and running. • Sub-Chapter S Corporation 6. Balance sheet-Provide a copy of balance sheet of sponsoring organization. their cost and source. informing or educating customers about your product or service and convincing them to buy it. packaged and ready for distribution and sale. Operations: In this component company must highlight the senior manager responsible for overseeing the start-up and operation of your business. their qualification. specialized features if any are to be described. 7. Avoid using industry jargon to describe the production process. 5. capital expenditure and cost of goods sold. Market Description:-Strategy for locating your target market. expenses. • Limited Liability Company • Corporation. 4. skill. their background and their responsibility in the business. Financial information and timeline: Capital Requirement. Facility:-Facilities and other infrastructure required for the company.Describe the Requirement of type of capital for financing and repayment period. other benefitand how they will be recruited. This include how much money and when. salaries.Potential investors and lenders will be interested in ownership stake of the board of directors and also in what portion of the company„s equity is available.
a single day. a single supplier. personal knowledge. They are too detailed and. Be sure to record stage as on today also. need for and importance of a Decision Support System. Typical information that a decision support application might gather and present are: • An inventory of all of your current information assets (including legacy and relational data sources. • Projected revenue figures based on new product sales assumptions. However. It is also explained as a class of information systems (including but not limited to computerized systems) that support business and organizational decisionmaking activities. Typical information that a decision support application might gather and present are: • an inventory of all of your current information assets (including legacy and relational data sources. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data. documents. personal knowledge. Concept: Decision support systems constitute a class of computer-based information systems including knowledge-based systems that support decision-making activities. and data marts). cubes. the following phenomena could happen: systems including knowledge-based systems that support decision-making activities.4 Explain the concept. 8. documents. data warehouses. Risks and their mitigation: Although it is impossible to know exactly what will go wrong in staring and running your business plan. Seed Capital Fixed asset financing Working Capital Initial Start-up timeline-Provide a timeline of task and events necessary to get your business operational. thus. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data. • Comparative sales figures between one week and the next. data warehouses. He must be alerted to unusual happenings. Q. As things stand now. . disturbing financial data and other irregularities. cubes. Ans. There may be several reasons to delay the project which are in not ones hand but explain in details. and data marts). thinking upon different challenges will strengthen plan. tend to obscure the true picture. these reports – which are normally provided to the General Manager – should not be used by them at all. It is also explained as a class of information systems (including but not limited to computerized systems) that support business and organizational decision-making activities. or business models to identify and solve problems and make decisions. Describe any asset that will be allocated to the start-up of the business. Set realistic dead line to capacity to complete these tasks. or business models to identify and solve problems and make decisions. A General Manager must have a bird‟s eye view of his company. Need: Many companies in developing countries have a very detailed reporting system going down to the level of a single product.
these reports – which are normally provided to the General Manager – should not be used by them at all. Q. • That the wrong cash flow picture will distort the decisions of the management and lead to wrong (even to dangerous) decisions. disturbing financial data and other irregularities. It forces the management to rationalize the depreciation. • projected revenue figures based on new product sales assumptions. the following phenomena could happen: • That the management will highly leverage the company by assuming excessivedebts burdening the cash flow of the company. inventory and inflation policies. managers tend to take too much credit and burden the cash flow of their companies. However. • That a false Profit and Loss (PNL) picture will emerge – both on the single product level – and generally. Licensing is a good way for an owner to benefit from their work as they retain ownership of the patented invention while granting permission to others to use it and gaining benefits. A General Manager must have a bird‟s eye view of his company. Importance: A decision system has great impact on the profits of the company.5 Explain the importance of any five aspects of a Licensing Agreement that you will look for when negotiating the right to use an Intellectual Property Ans. A licence is a grant of permission made by the patent owner to another to exercise any specified rights as agreed. Profits go up. So. it normally requires . It specially helps in following areas: The management knows exactly how much credit it could take. such as financial royalties. It has been proven that without proper feedback. They are too detailed and. the establishment of a decision system does not hinder the functioning of the company in any way and does not interfere with the authority and functioning of the financial department. As things stand now. tax liabilities are minimized and cash flows are maintained positive throughout. tend to obscure the true picture. non cash outlays are controlled. Need: Many companies in developing countries have a very detailed reporting system going down to the level of a single product. a single day. He must be alerted to unusual happenings. a single supplier. However. from that use.• comparative sales figures between one week and the next. • That the inventory will not be fully controlled and appraised centrally. A decision system allows for careful financial planning and tax planning. for how long (for which maturities) and in which interest rate. It warns the management against impending crises and problems in the company. based on wrong data. • That the company will pay excessive taxes on its earnings. thus. This could lead to wrong decision-making. The decision system is an integral part of financial management in the West. It is completely compatible with western accounting methods and derives all the data that it needs from information extant in the company.
2. the sole licensee. A sole licence means that the licensor grants a licence to only one licensee. or other information. but may be other forms of benefit). made by the licensee. The Parties To The Licence: The „parties‟ to the licence are the entities (individual people. An exclusive licence means that the licensor agrees not to grant another licence to any other party. the licence is not directly signed (think of the „I Agree‟ block which you are often asked to click when installing a software package on a computer). you might choose to sell a half-share to a commercial partner. The parties can be individual persons. but they are normally legal entities such as a research institution. contractual obligations can arise even without a formal signed document. So the licensor might permit the licensee to use a technology that is covered by a patent – and if there was no license. . biological material. companies or institutions) that are bound by the licence as a legal contract. Exclusive Or Non-Exclusive Licences: The choice taken among these options is very important. and agrees not to use the licensed rights (in other words. and the scale of royalties or other payments. The basic idea of the licence is that the person granting the licence (the „licensor‟) is giving another person (the „licensee‟) the right to do something that they could otherwise prevent them from doing. and in maintaining and enforcing the underlying IP right. Licences is often limited to specific rights. in exchange for some kind of benefit (this maybe financial. and the patent holder retains ownership and control of the basic patent. the licensor grants the licensee a right to use the technology. Sole. The kind of license granted will depend on several factors. but the licensor retains the right to use the technology itself. under a non-exclusive licence. Some of the important aspects of a Licensing Agreement that we will look for when negotiating the right to use an Intellectual Property are explained below: 1. The person receiving the licence – the „licensee‟ – is the party which is seeking to use or exploit that material. A lot of aspects are to be taken care of very carefully while negotiating or making a licensing agreement to give right to use an intellectual property.the owner of the invention to invest time and resources in monitoring the licensed use. territories and time periods. the licensor cannot become a competing user of the licensed technology). and in the national law of many countries. know-how. IP rights. They normally sign (or „execute‟) the licence to confirm in a legally clear-cut way that they agree to comply with its terms. and will do much to influence the pattern of use. Portions of a patent right can also be assigned – so that in order to finance your invention. 3. It is important to ensure that the licence is signed in a way that is legally binding. A licence is merely the grant of permission to undertake some of the actions covered by intellectual property rights. but the licensor can still give the same rights to other licensees. they could assign (or sell)these patents to five different owners in each of those countries. the licensor could take legal action under the patent to prevent this use of the technology. If an inventor owns patents on the same invention in five different countries. a university or a company. In some cases. and by a person authorized to sign for their institution. Licensor and Licensee: The person granting the licence – the „licensor‟ – typically holds rights to technology.
corporate citizenship. responsible business. Diligence And Milestones: The licensee may be relying on the license as the principal mechanism for recovering its investment in research and for deriving benefits from the patent or other IP. especially if the sub-licensee has no direct relationship with the original licensee 5. If a licensee gains an exclusive licence. and to continue to make the product available to the public on reasonable terms. These obligations may also be built into sub-licenses granted under the licence. to who. sustainable responsible business(SRB). or valuable access to other facilities or resources. It is not unusual to see a mixture of both. Ideally. Payments And Pricing: A licence will normally involve a valuable „consideration‟ –something of value which is given in exchange for the right to use this technology. is a form of corporate self-regulation integrated into a business model. Sub-Licences: A „sub-licence‟ is a further licence. or corporate social performance. Q. then the whole value of the IP is lost to the licensor. and may be an effective way of exporting the technology to new overseas markets. The original licence may need to make clear whether sub-licences can be granted. The sub-licence may extend to some or all of the rights granted under the original licence. self-regulating mechanism whereby business would monitor and ensure its adherence to law. Where ever possible. subject to a royalty payment on profits. also known as corporate responsibility. or the interests of the licensor in granting direct licenses to the same third parties. consumers.6What is Corporate Social Responsibility? Why is it becoming increasingly relevant in today’s Business? Ans. The options boil down to lump sum payments. The license could require the licensee to bring the product to the market as soon as practicable. The original licensor might retain an entitlement to a share of any royalties or other payments paid by the sub-licensee. as it will increase the scope of use of the licensed technology. and royalties based on the extent of use of the technology. Corporate social responsibility (CSR). and if so. and on what terms or conditions. The original licensor might retain the right to investigate and approve the eligibility of a sub-licensee. and international norms. There are many potential models for payment. There may be issues such as protecting the confidentiality of licensed material. certain defined points or milestones should be identified – possibly based on the business plan originally proposed by the licensee. liability for use of the technology. It is always difficult to establish a value for intellectual property. CSR policy would function as a built-in. A sublicensing program may be of considerable benefit to the licensor.4. 6. So licenses will frequently include obligations on the licensee to develop and apply the licensed technology diligently and to meet specific deadlines. Business would embrace responsibility for the impact of their activities on the environment. So it may be important to the licensor to ensure that the licensee does everything they can to develop and commercialize the licensed IP. It need not be financial consideration – it could be a right in exchange to use another technology (a „cross-licence‟). ethical standards. and then decides to shelve the technology for several years because its immediate interests lie elsewhere. when the licensee of the original licence itself grants a licence to a third party. even more so if it relates to unproven technology that will require a licensee to take a considerable commercial risk. .
g. descriptive approaches are also taken.g. Essentially.Business ethics can be both a normative and a descriptive discipline. CSR is the deliberate inclusion of public interest into corporate decision-making. stakeholders and all other members of the public sphere. today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.employees. the field is primarily normative. the demand for more ethical business processes and actions (known as ethicism) is increasing. Proponents argue that there is a strong business case for CSR. . and voluntarily eliminating practices that harm the public sphere. was used to describe corporate owners beyond shareholders as a result of an influential book by R Freeman in 1984. Whilst there is no recognized standard for CSR. business would proactively promote the public interest by encouraging community growth and development. businesses may not be looking at short-run financial returns when developing their CSR strategy. The practice of CSR is subject to much debate and criticism. In academia. In some cases. Critics argue that CSR distracts from the fundamental economic role of businesses. others argue that it is nothing more than superficial window-dressing. though there is a large body of literature exhorting business to adopt measures beyond financial ones. Simultaneously. interest in business ethics accelerated dramatically during the 1980s and 1990s. corporations have re-branded their core values in the light of business ethical considerations (e.g. others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. after many multinational corporations formed. Some companies may implement CSR-type values without a clearly defined team or programme. meaning those impacted by an organization's activities. However. communities. both within major corporations and within academia. In the increasingly conscience-focused marketplaces of the 21st century. although it was seldom abbreviated. pressure is applied on industry to improve business ethics through new public initiatives and laws (e. in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate.The term CSR came in to common use in the early 1970s. Historically. and the honouring of a triple bottom line: People. higher UK road tax for higher-emission vehicles). social responsibility charters). For example. business development or public relations departments of an organisation. Furthermore. CSR may be based within the human resources. Corporate Social Responsibility has been redefined throughout the years. or may be given a separate unit reporting to the CEO or in some cases directly to the board. The UN has developed the Principles for Responsible Investment as guidelines for investing entities The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise. The term stakeholder. Planet and Profit. BP's "beyond petroleum" environmental tilt). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. and are difficult to quantify. short-term profits. However. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include charitable efforts and volunteering. regardless of legality. As a corporate practice and a career specialization. it essentially is titled to aid to an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. ethics codes. public sector organizations (the United Nations for example) adhere to the Triple Bottom Line (TBL). The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Relevancy In Today‟s Business: Business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment.