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SUBJECT: Strategic Management

The Indian Institute of Business Management & Studies

Marks: 100

CASE – 1

MANAGING HINDUSTAN UNILEVER STRATEGICALLY

Unilever is one of the world’s oldest multinational companies. Its origin goes back to the 19 th century when a group of companies operating independently, produced soaps and margarine. In 193 , the companies merged to form Unilever that diversified into food products in 19! s. "hrough the ne#t five decades, it emerged as a ma$or fast%moving consumer goods &'()*+ multinational operating in several businesses. In , !, the Unilever , 1 strategic plan was put into action with the mission to -bring vitality to life’ and -to meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good, and get more out of life’. "he corporate strategy is of focusing on bore businesses of food, home care and personal care. Unilever operates in more than 1 countries, has a turnover of . 39./ billion and net profit of . 3./01 billion in , / and derives !1 per cent of its income from the developing and emerging economies around the world. It has 129, employees and is a culturally%diverse organisation with its top management coming from ,! nations. Internationalisation is based on the principle of local roots with global scale aimed at becoming a -multi%local multinational’. "he genesis of 3industan Unilever &3U4+ in India, goes back to 1000 when Unilever e#ported 5unlight soap to India. "hree Indian, subsidiaries came into e#istence in the period 1931%1931 that merged to form 3industan 4ever in 191/. (ergers and ac6uisitions of 4ipton &192,+, 7rooke 7ond &190!+, 8onds &190/+, "9()9 &1993+, 4akme &1990+ and (odern 'oods &, ,+ have resulted in an organisation that is a conglomerate of several businesses that have been continually restructured over the years. 3U4 is one of the largest '()* company in India with total sales of :s. 1,,,91 crore and net profit of 1011crore in , /. "here are over 11 employees, including more than 13 managers. "he present corporate strategy of 3U4 is to focus on core businesses. "hese core businesses are in home and personal care and food. "here are , different consumer categories in these two businesses. 'or instance, home and personal care is made up of personal wash, laundry, skin care, hair care, oral care, deodorants, colour cosmetics and ayurvedic personal and health care, while food businesses have tea, coffee, ice creams and processed food brands. ;part from the two product divisions, there are separate departments for specialty e#ports and new ventures. 5trategic management at 3U4 is the responsibility of the board of directors headed by a chairman. "here are five independent and five whole%time directors. "he operational management is looked after by a management committee comprising of <ice )hairman, )=9 and managing director and e#ecutive directors of the two business divisions and functional areas. "he divisions have a lot of autonomy with dedicated assets and resources. ; divisional committee having the e#ecutive director and heads of functions of sales, commercial and manufacturing looks after the business level decision% making. "he functional%level management is the responsibility of the functional head. 'or instance, a marketing manager has a team of brand managers looking after the individual brands. 7esides the decentralised divisional structure, 3U4 has centralised some functions such as finance, human resource management, research, technology, information technology and corporate and legal affairs. Unilever globally and 3U4 nationally, operate in the highly competitive '()* markets. "he consumer markets for '()* products are finicky> it’s difficult to create customers and much more difficult to retain them. 8rice is often the central concern in a consumer purchase decision re6uiring producers to be on continual guard against cost increases. 5ales and distribution are critical functions organisationally. 3U4 operates in such a milieu. It has strong competitors such as the multinationals 8rocter ? *amble, @ivea or 4’9real and formidable local companies such as, ;mul, @irma or the "ata '()* companies to contend with. :ivals have copied 3U4’s strategies and tactics, especially in the 1

competitive products may also suffer at the cost of Unilever’s emphasis on premium priced. called the 3 power brands in . in one market segment after another. In line with the shift in corporate strategy.. @et profit is down. . high end products sold through modern outlets. a competitor pushes ahead. Unilever has formulated a new global realignment under which it will develop brands and streamline product offerings across the world and the subsidiaries will sell the products.t the corporate level. . . "here in tab web . 3U4 has e#perimented with new ideas suited to the local conte#t. . 3. 3U4 is known for its capabilities in rural marketing. 9ther subtle indications of the shift of decision%making authority could be the appointment of a 7ritish )=9 after nearly forty years during which there were Indian )=9s. 7ut. "here are some dark clouds on the horiBon. input costs have been rising and new food products introduced in the market have yet to pick up. these might still be minor events developments in a long history that needs to be taken in stride.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 area of marketing and distribution. *ive your opinion on whether the shift in strategic decision%making from India to Unilever’s head6uarters could prove to be advantageous to 3U4 or not. sales are sluggish. 3U4’s latest financials are not satisfactory. It has an impeccable record in corporate social responsibility.ll this while. 3U4 does not have a strong position in the food business in India though the food processing industry remains 6uite attractive both in terms of local consumption as well as e#port markets. "he shift in the strategic decision%making power from the subsidiary to head6uarters could however. 3U4’s own strategy of offering low%price. 7ut this focus on India seems to be changing. they could also be pointers to what may come. effective distribution systems and human resource development. "here is an element of nostalgia associated with brands like 4ifebuoy &introduced in 1091+ and Aalda &1932+ for senior citiBens in India.n e#ample could be of 3U4 adopting Unilever’s global strategy of focussing on a limited number of products. it could also be an attempt to leverage global scale while retaining local responsiveness to some e#tent. 3U4 has attempted to align its strategies in the past to the special needs of Indian business environment. Questions: 1. "here is a ring of truth to its vision statement> -to earn the love and respect of India by making a real difference to every Indian’. 5tate the strategy of 3industan Unilever in your own words. Unilever derives half its revenues from food business. prove to be double%edged sword. "hen there are the statistics to deal with> 3U4 has nearly 0 per cent of sales and 01 per cent of net profits from the home and personal care businesses.. In a company of such a big siBe and over%powering presence.t what different levels is strategy formulated in 3U4C )omment on the strategic decision%making at 3U4. 'or instance. pessimistically. the focus of strategic decision%making seems to have moved from the subsidiary to the head6uarters. Its innovations such as new style packaging or distribution through women entrepreneurs are much valued but also copied relentlessly. 7ut one conse6uence of that was the 3U4’s strong position in the niche soap and detergent markets suffering owing to neglect and the competitors were 6uick to take advantage of the opportunity. !. hurting its competitive advantage. )onse6uently Indians have always perceived 3U4 as an Indian company rather than a multinational. 7e it marketing or human resource management. the changed focus on a limited number of international brands rather than a large range of local brands developed over the years and the name%change from 3industan 4ever to 3industan Unilever. . "hat seemed a perfectly sensible strategic decision aimed at focusing managerial attention to a limited set of high%potential products. . "his might indicate a change in the strategic posture as well as recognition that Indian markets have matured to the e#tent that they can be dealt with by the global strategies of Unilever. 3U4 is identified closely with India. . *lobally.

(ost central banks around the world were established around the beginning of the twentieth century. 1931 in accordance with the provisions of the :eserve 7ank of India . 9b$ectives set for managing financial sector developments such as supervision of systems and information access and assisting banking and financial institutions to become competitive globally.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 CASE: 2 THE STRATEGIC ASPIRATIONS O THE RESERVE !AN" O INDIA "he :eserve 7ank of India &:7I+ is India’s central bank or -the bank of the bankers’. financial management and human resource management. "he ma$or functions performed by the :7I are> • .’ "he mission states that -:7I seeks to develop a sound and efficient financial system with monetary stability conductive to balanced and sustained growth of the Indian economy’. :7I gradually strengthened its institution%building capabilities and evolved in terms of functions from central banking to that of development. integrity. "he history of :7I is closely aligned with the economic and financial history of India.pril 1. It was established on . 3. transparent.ct. restructuring and creation of specialised institutions to cater to emerging needs. "he )entral 9ffice of the :7I. .. independence of views and responsiveness and dynamism. "he 8reamble of the :7I describes its basic functions like this> -F. systems. e#cellence. 1. is at (umbai. human resource development and adoption of modern technology. 9rganisational development ob$ectives such as development of economic research facilities.cting as the monetary authority • .cting as the regulator and supervisor of the financial system • Aischarging responsibilities as the manager of foreign e#change • Issue currency • 8lay as developmental role • :elated functions such as acting as the banker to the government and scheduled banks 3 . "he corporate values of underlining the mission statement include public interest. 9rganisational support such as structure. (onetary policy ob$ectives such as containing inflation and promoting economic growth. "he three areas in which ob$ectives of the :7I can be stated are as below. =volving the legal framework to support the thrust areaG 3.fter independence. "he 7ank was established on the basis of the 3ilton Eoung )ommission. initially set up at Dolkata. It began its operations by taking over from the *overnment the functions so far being performed by the )ontroller of )urrency and from the Imperial 7ank of India. creating information system for supporting economic decision%making. 5trategic actions taken to realise the ob$ectives fall under four categories> 1. "here have been several attempts at reorganisation.to regulate the issue of 7ank @otes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage. the management of *overnment accounts and public debt.’ "he vision states that the :7I -F.aims to be a leading central bank with credible. 1931. )ustomer service for providing support and creation of positive relationshipG and !. proactive and contemporaneous policies and seeks to be a catalyst for the emergence of a globally competitive financial system that helps deliver a high 6uality of life to the people in the country. . management of foreign e#change reserves and making currency available.. "he :7I is fully owned by the *overnment of India. "he thrust area of monetary policy formulation and managing financial sectorG .

"here are four local boards based at )hennai. "here are about . 3istorically. working in . Dolkata. large body of competent officers and staffG access to key data on the economyG wide organisational network with .. the :7I adopted the time%tested techni6ue of responding to e#ternal environment in a pragmatic manner and making piecemeal changes. 5hould the :7I go for a systematic and comprehensive strategic plan in place of its earlier pragmatic approach of responding to environmental events as and when they occurC HhyC T#e$e in T%& %''$ess &%$ ! . • Heaknesses 5tructural rigidity.1 departments and training colleges.. with the assistance of a private consultancy firm. Questions: 1.. 9ver the years. the :7I. . ob$ectives and policy. employees at :7I. "here have been sweeping changes in the economic. "he strategic planning e#ercise was buttressed by departmental position papers and documents on various sub$ects such as technology. regional officesG established infrastructureG ability to attract talentG and financial self sufficiency. )onsider the vision and mission statements of the :eserve 7ank of India. "he dilemma in adoption of a comprehensive strategic plan was the risk of trading off the fle#ibility of the pragmatic approach to creating rigidity imposed by a set model of planning. "he strategic plan reiterates anticipation of evolving e#ternal environment in the medium%termG revisiting strengths and weaknesses &evaluation of capabilities+G and doing away with the outdated mandates for enhancing efficiency in operations in furtherance of best public interests. "he strategic plan of the :7I emerged with four sections dealing with the statement of mission. all of whom are appointed by the government.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 "he management of the :7I is the responsibility of the central board of directors headed by the governor and consisting of deputy governors and other directors. realisation of shared sense of purpose. "he ob$ective was to establish a roadmap to redefine :7I’s role and to review internal organisational and managerial efficacy. address the changing e#pectations from e#ternal stakeholders and reposition the bank in the global conte#t. optimising resource use and build%up of momentum to achieve goals. In 199. social and political environment. the :7I has evolved in terms of structure and functions. "he day% to%day management of :7I is in the hands of the e#ecutive directors. human resources and environmental trends. )omment on the 6uality of both these statements. lack of accountability and slow decision%makingG eroded specialist know%howG strong employee unions with rigid industrial relations stanceG surplus staffG and weak market intelligence. • 5trengths . "he :7I identified its strengths and weaknesses as under. reinforced proficiency. embarked on a massive strategic planning e#ercise. a review of :7I’s strengths and weaknesses and strategic actions re6uired with an implementation plan. in response to the role assigned to it.. "he :7I has had to respond to it even in the absence of a systematic strategic plan. (umbai and @ew Aelhi. "he results of these efforts are likely to manifest in attaining a visible focus. managers at various levels and the support staff.

"he *roup is known for its impressive internationalisation achievements. is claimed to be state%of%the%art. 'or instance. "hese are mentioned below> • 'ocussing on core businesses to ma#imise growth potential • .utomotive . U5.. Dalyani "hermal 5ystems. U5. with about 0 per cent share in a#le and engine components. supply%chain management and marketing of products. non%conventional energy and specialty chemicals. =picenter and 5ynise "echnologies "he emphasis on internationalisation is reflected in the vision statement of the *roup where two of the five points relate to the *roup trying to be a world%class organisation and achieving growth aggressively by accessing global markets. a#le aggregates. cam%shafts. Dalyani $oined the *roup in 192.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 CASE: ( THE INTERNATIONALISATION O "ALYANI GROUP "he Dalyani *roup is a large family%business group of India. when the total *roup turnover was barely :s. it has established $oint ventures with many global companies such as . the *roup has tried to move up the value chain instead of providing $ust the raw forgings. 3ayes 4emmerB. it undertook a restructuring e#ercise to trim its unrelated businesses such as television and video products and concentrate on its core business of auto components.@. )hina. U5. front a#le beams. wheels and alloy steel. "he flagship company of the *roup is 7harat 'orge 4imited that is claimed to be the second largest forging company in the world and the largest nationally. "he foreign partners are not intended to provide e#pansion in capacity. "he *roup’s emphasis on technology can be gauged from the fact that in the 199 s. reducing production and product development time. Information technology is applied for product development. In the 199 s. 9ver the years. 3ikal 4imited. It has nine manufacturing locations spread over si# countries. "he *roup is led by (r. auto components. employing more than 1 employees. steering knuckles. . Dalyani 4emmerB.3 crore. who is considered to be the ma$or force behind the *roup’s aggressive internationalisation drive. It has diverse businesses in engineering.. and '. forgings.1 billion. In achieving its successful status. but to enable the Dalyani *roup to e#tend its global marketing reach. e#tending from the upstream steel making to downstream machining for auto components such as crank%shafts. 'our factors are supposed to have influenced the growth of the *roup over the years. "he *roup lays high 1 . "he corporate strategy of the *roup is a combination of concentration of its core competence in its business with efforts at building. it took the risky decision of investing :s. 7' Utilities. "he annual turnover of the *roup is over U5I. (r. )arpenter "echnology )orporation. when it was a small%scale diesel engine component business. 7. "he *roup invests in forging technology to enhance efficiency. Dalyani )arpenter 5pecial 5teels. nurturing and sustaining mutually beneficial partnerships with alliance partners and customers. "he other ma$or companies of the *roup are Dalyani 5teels. connecting rods and rocker arms. Dalyani.ttaining aggressive cost savings • =#panding geographically to build global capacity and establishing leading positions • . "he technology used by the *roup in its mainline business of auto components and other businesses.H )orporation. the *roup claims to be number one in forging and machined components. "he value of these partnerships essentially lies in collaborative product development with the partners who are the original e6uipment manufacturers..rvin(eritor. 1 crore in the then latest forging technology. In all these products. the Dalyani *roup has followed the path of integration. steel.chieving e#ternal growth through ac6uisitions "he *roup companies are claimed to be positioned at either number one or two in their respective businesses.#les. . production 6uality and design capabilities.

7eing a top%driven group. the *roup was $ust a wind farm operator and supplier of components. with *erdau 5.. Hhich type of international strategy is Dalyani *roup adoptingC =#plain.. 2. 8rior to the ac6uisition. Questions: 1. Hhat is the motive for internationalisation by the Dalyani *roupC Aiscuss. a *roup company.1 page book / . . :ecent strategic moves include Dalyani 5teels. advanced metallurgical analysis and latest testing e6uipment in tandem with its high%class manufacturing facilities.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 emphasis on research and development for providing engineering support. . . 7raBil for installation of rolling mills. the pattern of strategic decision%making within seems to be entrepreneurial.n attempt to move out of the mainstream forging business was made when the *roup strengthened its position in the prospective business of wind energy through 1 per cent ac6uisition of :57consult *mb3 &:57+ of *ermany. 7ut no much is mentioned in the business press about that collaborative strategic decision%making after that. entering into a $oint venture agreement in may . with the participation of the company e#ecutives. "here was an attempt to formulate a five%year strategic plan in 1992..

uncomfortable with the status%6uo. "hese organisations typically need a bouti6ue sort of consultancy that can offer customised services dealing with a broad range of practices related to strategy. 'or instance. "o him.fter a semester at a well%known university there. It was established in 199. settled in a small town in :a$asthan. nearly half of the assignments it has worked on have been for mid%siBed. It was risky. Hord%of%mouth publicity led them from one pro$ect to another for the first three years till 1991. "he consulting firm is an entrepreneurial venture started by Urmish 8atel. . while another has e#pertise finance. 3e left his comfortable position there to venture into the management consultancy industry. also having e#perience in dealing with government matters. 5ynergos took up whatever came its way. . yet an e#citing step to take.. he lost interest and switched to pursue an (7. Urmish is a creative individual. 3is accumulated capital was limitedK$ust enough to rent office space. 5ynergos fits in with their re6uirements owing to its personalised service and reasonable commission structure.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 CASE ): THE STORY O SYNERGOS UN OLDS 5ynergos is a young management and strategy consulting firm based at (umbai. 5ynergos started gaining presence in the competitive management consultancy industry and attracting attention from the people whom they worked for. each member of the team specialising in services rendered to the clients. came the urge to Urmish to chuck his $ob and be on his own. organisation design. .nother differentiation platform 5ynergos offered to its client was a fully%integrated consultancy service where it got involved right from the stage of planning down to its implementation and monitoring. at a time when there were a lot of e#pectations among the industry people from the liberalisation policies that were started the previous year by the *overnment of India. but were apprehensive to approach the big firms on account of their limited outlay and ine#perience of dealing with such firms. mergers and ac6uisitions and operational matter such as logistics and supply%chain management. Urmish comes from an upper middle%class *u$arati family. 8resently. "he motivation was to be -the master of his own destiny’ rather than being an employee working for others. 3is mother is a housewife. 7ut an ac6uaintance soon came to his aid. family%owned businesses. "he opportunity came in handy though the returns were nothing to write home about. team of four had formed by now. 3is father was a government servant who retired with a meagre pension. 3e liked it and soon settled down to work with an . upcoming. 3is other siblings are all educated and well%settled in their respective careers and professions. Auring his student days at a college at Jaipur. one of the members is a specialist in engineering pro$ects. 3e studied biotechnology and then went to the U5 on a scholarship to do his (asters. buy a few computers and hire an assistant. 5ome%how. "here were no consultancy assignments for the first three months. In 199. these were perfectly achievable ideas. 2 . working for industries ranging from auto components to financial services and for manufacturing organisations to service providers.merican consultancy firm and toured several countries on varied assignments during the seven years he worked there. he was continually coming up with bright ideas that some of his friends found to be preposterous. serving clients in India and abroad. "he phase of rapid growth started some time in 1991 when the 5ynergos team decided to focus on the small and medium enterprises &5(=s+. however. 5ynergos has grown to be a medium%siBed consultancy firm. "hat pro$ect was the first step to many more that came gradually. "hese were firms that realised they had problems needing specialist advice. introducing him to the )'9 of a ma$or family business group who needed advice on a performance improvement pro$ect they wanted to launch. delivering a cost%effective solution to its clients. a dynamic person who worked with a multinational consulting firm at the time. a niche it has served well. 5ynergos came to their aid by tailoring their services as near as possible to their needs. "he third one is a service sector specialist.

=mphasis is given to the ability of the prospective staff to undertake multi% tasking and work with documentation and word processing and presentation software packages. may have worked to provide supply%chain management services and developed e#pertise in handling operational assignments for medium%siBed food and beverage firms.mong these are research assistants. "he compensation system consists of a base salary with commission and bonus depending on performance. while trying to maintain the fle#ibility that has made it successful till now. a professional may have I" skills. the performance appraisal is informal. a need%based approach is followed. consisting of seven people. in arts. including the four founding members and three independent directors. depending on the workload at a particular time. "here are other usual elements such as medical reimbursement.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 "he organisational structure at 5ynergos has a board at the top. based on an interplay of the three categories> skill. with at least one of the four founding members being part of the evaluation committee for a professional. sciences and commerce. broad range of professional interests. also heads an e#ecutive management committee with each of the founding members. though at times they do talk about deciding on a niche such as 5(= organisations as clients and enterprise solutions as the core competence. with good degrees from reputed institutions. 0 . "hey are assigned to taskforces based on their 6ualifications. Urmish. "here are not many training opportunities e#cept the on%the%$ob learning. such as direct supervision. 5o are the other founder members. loan facility and gratuity and retirement benefits. "he fle#ibility that such an organisational arrangement affords seems to have been the ma$or reason for the evolution of the organisation structure at 5ynergos over the years. intellectual acumen. 5ynergos typically looks for a good combination of education and e#perience and lays much emphasis on the compatibility of the prospective employee with the shared values. )reativity. @ew professionals are assigned to a mentor for some time till they are ready to handle assignments autonomously. "he rest of the employees are referred to as the staff. the founding member closest to the work area of the employee is involved in determining the rewards to be given. "he professional group has young women and men who are graduates from some of the best institutions in India and abroad. to utilise the wide range of skills and special e#pertise that the professionals have. 'or instance. "here is a lot of multi%tasking however. Urmish is a strong proponent of the emergent strategy and is not in favour of tying 5ynergos to a fi#ed strategic posture. "he management team is called the professional group. "he departmentation at 5ynergos is fle#ible. service management and e#ecutive recruitment. 'or administrative matters. team% working and physical fitness to undertake demanding tasks and work for long hours are the criteria for hiring. :ecruitment for professionals is stringent. as the founder )=9. "he staff members are usually recruited from fresh graduates. the professionals are assigned to client%service departments of industry solutions. "he staff group of employees consists of the support people who provide a variety of services to the professionals. enterprise solutions and technology solutions. 9ne of the independent directors is the chairman of the board. "he time% cycle for appraisal is one year. e#perience and interests. In the highly fragmented consultancy industry where it is possible for even one person to set up an office in a commercial area and leverage connections to secure pro$ects. "he staff positions are also open for persons wanting to work on part% time or pro$ect%bases. service and specialty. "here is no set pattern for assignment of staff to the administrative departments and generally. 5ynergos is open to opportunities as they emerge. industry analysts. . leading three other top%level committees dealing with business portfolio. Usually. (anagement control is discreet and performance%based rather than behaviour%based. documentation e#perts and secretarial staff. "he means for control are informal.

control and reward systems available in the case. 7ased on the information related to the information. . 9 . e#amine whether these systems are appropriate for the type of strategy being implemented.. 3. Hhat are the benefits of using this type of structureC Hhat are the pitfallsC =#press your opinion about whether the structure is in line with the recruitments of the strategy that 5ynergos is implementing. Identify the type of organisation structure being used at 5ynergos and e#plain how it works.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 Questions: 1.

making it an end%to%end I" and I"=5 service provider.L%listed U5%based corporation. "he corporate strategies of i*. (alaysia. of which the top 1 account for 2 per cent of its business. it was set up in India in 1993. enterprise systems."= )orporation. i*. Dnown earlier as (ascot 5ystems. !.SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 CASE: * E+ERCISING STRATEGIC AND OPERATIONAL CONTROLS AT iGATE GLO!AL SOLUTIONS "he 7angalore%based i*. Its service portfolio includes consulting. with some participation by institutional and public investors. In the I" and I"=5 industry. data analytics. It ac6uired business process outsourcing &789+ and contact centre businesses in . processes and services. attracting and retaining well%6ualified and e#perienced 1 . an e#%Infosys I" professional and their partners hold a ma$or stake. )hairman. this ratio was 11>!1 and in . to offer staffing services. /%. "he business strategy is focused differentiation based on the focal points of testing.. infrastructure management and enterprise solutions.2>23. Hith pro$ect consulting assignments from off%shore clients. :s. !9."= has nearly half of its more than 1 clients from 'ortune 1 companies. India. i*. where the revenues are typically higher. "he industry norms for I"=5 are U5I10%. 2. i"985 is based on transaction%based pricing for services and supporting the clients by providing the platform.shok "rivedi and )=9 8haneesh (urthy./ crore. 2 are over :s."= *lobal 5olutions is the flagship company of i*. . 7illing rates> :evenue charged from clients on assignments. . "he business definition is serving large customers and staying away from sub%contracting work. I" services. 3.5A. it has improved to ."= has over 1 active clients and centres based in )anada. 789M758. i*. indicating a much higher revenue generation from off% shore business. "he competitive tactic is avoiding head%on competition with the formidable larger players in the industry by carving out a niche. the UD and the U5. a @. "he functional and operational implementation is aimed at achieving four sets of ob$ectives> &a+ 5hifting from small customers to large customer &'ortune 1 companies+ &b+ 5hifting away from stocking to pro$ect%consulting assignments &c+ Horking directly with clients rather than with system integrators &d+ (oving from a local to international markets 5ome illustrations of the performance indicators that reflect these ob$ectives are> 1. the realisations from billing have to be higher. 3. )ontrolling employee costs> "his is an area where concerted effort is re6uired from the 3: and finance functions. 0 1 crore and net profits. 3iring less e#perienced employees lowers the compensation bill. "he strategic evaluation and control has both the elements of strategic as well as operational controls."= are offering integrated I" services and divesting the legacy I" staffing business and possibly making ac6uisitions in the domain e#pertise for financial services businesses. 9n%shore versus off%shore mi# of business revenues> In . )hina. "he revenues for . !. "he number of large clients from 'ortune 1 companies> 8resently."= adopts a differentiation business model based on an integrated technology and operations model which it calls as the i"985 model. with lower costs and higher productivity in India. "his is an advancement over the prevalent model in the I"=5 industry based on low%cost arbitrage model.1 per hour for off%shore and U5I 11%/1 per hour for on%shore assignments. contact centre and infrastructure management services.

. per cent presently at i*."= has an integrated people management model focusing on developing technical. "he human resource management function being critical in an industry where so many challenges e#ist. the human resource metrics such as hiring and attrition rates are critical indicators. which disadvantage it tries to trade%off offering a more challenging work environment. 11 .SUBJECT: Strategic Management The Indian Institute of Business Management & Studies Marks: 100 1. 6uicker promotions and chances for practising innovation. )ritics say that that i*. 3. implementation control. autonomy and attractive incentives. "he attrition of . needs a strong emphasis on training and development."= lacks the big%brand appeal of the larger players such as Infosys and Hipro.. though. given the environmental conditions in the I"MI"=5 industry in India at present. "he three metrics by which the 3: function is assessed are> human capital inde#. strategic surveillance and special alert control. cannot compete on scale and is still under the shadow of its original business of body%shopping I" personnel. employees is a critical success factor. 3uman resource metrics such as the hiring and attrition rates> In the I" and I"=5 industry. behavioural and leadership competencies. work culture and employee affective commitment.nalyse and describe the process of setting of standards at i*. Increasing the number of employees and lowering the attrition rate by retaining the employees is a big challenge. Questions: 1. "he reward system at i*. *ive your opinion on the effectiveness of the role of reward system in e#ercising 3: performance management at i*. thus providing an incentive to remain with the company till they become due. 7ut such attrition is common in the industry where the employee mobility is high and employee pinching a widespread trend. is an average paymaster. motivation. "he performance indicator for this ob$ective is the cost per employee. i*."=."= case to highlight how it could apply some of the strategic controls such as premise control."= and suggest what improvements are possible.nalyse the i*. "here are presently about 10 employees."= is on the higher side."= consists of meritorious employees across all levels being granted restricted stock options. likely to go up to 01 in the ne#t two years. . . "he company.