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ASSIGNMENT

Course Code : MS - 11
Course Title : Strategic Management
Assignment Code : MS-11/TMA/SEM - II/2016
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 31st October, 2016
to the coordinator of your study centre.
1. What do you understand by a ‘Mission Statement’? Can there be a strategy without a
mission statement? Justify giving examples.
2. What determines the intensity of competition as per Porter’s Model? Identify the hey
strategic factors of the firm you are acquainted with, in its external environment.
3. Describe corporate culture. Do you think that a corporate culture can be changed? Justify
your answer with the help of suitable examples.
4. Explain with the help of relevant examples expansion through integration.
5. Suppose you are a Manager (Strategy). Try to develop a model for evaluation and control
process of your organization.

Answer
1. What do you understand by a ‘Mission Statement’? Can there be a strategy without a
mission statement? Justify giving examples.
Ans.: A mission statement is a statement which is used as a way of communicating the
purpose of the organization. Although most of the time it will remain the same for a long
period of time, it is not uncommon for organizations to update their mission statement and
generally happens when an organization evolves. Mission statements are normally short and
simple statements which outline what the organization's purpose is and are related to the
specific sector an organization operates in.
Properly crafted mission statements serve as filters to separate what is important from what is
not, clearly state which markets will be served and how, and communicate a sense of
intended direction to the entire organization. A mission is different from a vision in that the
former is the cause and the latter is the effect; a mission is something to be accomplished
whereas a vision is something to be pursued for that accomplishment. Also called company
mission, corporate mission, or corporate purpose.
The mission statement should guide the actions of the organization, spell out its overall goal,
provide a path, and guide decision-making. It provides "the framework or context within
which the company's strategies are formulated." It is like a goal for what the company wants
to do for the world.
We have all been told countless times that a “mission statement” is critical to the success of
an organization. I am sure you have heard that “if you don’t know where you are going, any

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direction will do.” However, the evidence and research shows that many successful
companies do not have either a business plan or a mission statement. How many times have
you seen a mission statement that said “We want to be the best” or “We highly value our
employees”? We tend to just take these for granted. They are generic and vanilla statements
and most employees simply ignore them. In fact, in even the best companies, the mission
statement (if it exists) is virtually unknown by most employees if not most of management. I
have visited dozens of companies wherein most of management could not begin to tell you
what their mission or vision is for their organization.
In my seminars on strategic planning, I have conducted numerous debates between
proponents of mission statements and opponents. The score is somewhat tied at about 50-50.
Often the judges select the arguments of the proponents but equally as often the opponents
win the debate. Why? How can so much wisdom exhorting the power of a mission statement
be wrong? When one adds the time to develop such statements in planning workshops
usually attended by senior executives, there seems even less justification for spending
precious hours and resources on these statements. My partner and I have developed a more
balanced view of the value of such statements and when and how they should be developed
and deployed.
Let’s look at three possibilities. 1.) The mission statement is in the head of the founder. 2.)
The mission statement is boring and unmemorable. 3.) The mission statement is inspiring
and motivating.
In the first case, you probably do not need a mission statement as long as the founder or
leader is at the helm of the organization. However, what if every employee also had a
“personal” mission statement for their role in the organization? What if their mission
statement aligned with the founders’ mission statement? Every employee coming to work
each day would have a purpose linked to the overall purpose of the organization but inspired
by their own goals and related to what they personally wanted to accomplish. Would you
mind having a workforce filled with such people. Then why keep the founders statement or
vision a secret? Why not expand the entire concept of creating a vision to a vision and
mission for each employee in the organization?
The mission statement is boring and unmemorable. This second situation applies to about 80
percent of the missions that I have seen. Cookie cutter statements are not going to inspire
anyone. Worse, they fail to provide any strategic direction. What is missing in these
statements is imagination. Think of the imagination that inspired the Wizard of Oz, Alice in
Wonderland, Avatar, the IPOD, the Moon Landing, and Facebook. I am not talking about
“Pie in the Sky” type thinking and planning. I am talking about words, visions and missions
that inspire and excite us. Adventures and goals that take us out of our mundane everyday
lives and help make us part of something bigger than ourselves. We all want to be part of
something great, something memorable. Whether it is simply by supporting our sports team,
developing a new innovative product or joining the church choir, we need to be part of
something bigger than ourselves. However, we must believe that this “bigger’ thing is doing
somewhere exciting or has the potential to be a winner. It has to be bigger than we are. It has
to embody deep seated hopes and dreams that are inherent in every human being. As Kelly

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Cutrone , the writer and fashion publicist has said in her new book: “Normal Gets You
Nowhere.” Normal is average. Average is middle of the road. Do you aspire to be an
average company with average employees? If so, you will probably not survive long in
today’s marketplace.
The third possibility is what we want to create. A mission statement that is inspiring,
memorable and actionable. We want a mission statement that will embody the hopes and
dreams of the founder and the employees that are hired by the organization.
2. What determines the intensity of competition as per Porter’s Model? Identify the hey
strategic factors of the firm you are acquainted with, in its external environment.
Ans.: Renowned business management expert and author Michael Porter discussed a number
of critical factors that impact competitive intensity and rivalry within industries in presenting
his famous Five Forces model of competition. In his model, Porter discussed factors that
impact the number of companies that compete within an industry. He also noted those factors
that impact rivalry.
The intensity of rivalry among competitors in an industry refers to the extent to which firms
within an industry put pressure on one another and limit each other’s profit potential. If
rivalry is fierce, competitors are trying to steal profit and market share from one another. This
reduces profit potential for all firms within the industry. According to Porter’s 5 forces
framework, the intensity of rivalry among firms is one of the main forces that shape the
competitive structure of an industry.
Porter’s intensity of rivalry in an industry affects the competitive environment and influences
the ability of existing firms to achieve profitability. High intensity of rivalry means
competitors are aggressively targeting each other’s markets and aggressively pricing
products. This represents potential costs to all competitors within the industry.
High intensity of competitive rivalry can make an industry more competitive and decrease
profit potential for the existing firms. On the other hand, low intensity of competitive rivalry
makes an industry less competitive and increases profit potential for the existing firms.
Several factors determine the intensity of competitive rivalry in an industry. If the industry
consists of numerous competitors, Porter rivalry will be more intense. If the competitors are
of equal size or market share, the intensity of rivalry will increase. If industry growth is slow,
the intensity of rivalry will be high. If the industry’s fixed costs are high, competitive rivalry
will be intense. If the industry’s products are undifferentiated or are commodities, rivalry will
be intense. If brand loyalty is insignificant and consumer switching costs are low, this will
intensify industry rivalry. If competitors are strategically diverse – they position themselves
differently from other competitors – industry rivalry will be intense. An industry with excess
production capacity will have greater rivalry among competitors. And finally, high exit
barriers – costs or losses incurred as a result of ceasing operations – will cause intensity of
rivalry among industry firms to increase.
And of course, if the opposite is true for any of these factors, the intensity of Porter rivalry
among competitors will be low. For example, a small number of firms in the industry, a clear
market leader, fast industry growth, low fixed costs, highly differentiated products, prevalent

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brand loyalties, high consumer switching costs, no excess production capacity, lack of
strategic diversity among competitors, and low exit barriers all indicate that the Porter
intensity of rivalry among existing firms is low.
When analyzing a given industry, all of the aforementioned factors regarding the intensity of
competitive rivalry Porter placed among existing competitors may not apply. But some, if not
many, certainly will. And of the factors that do apply, some may indicate high intensity of
rivalry and some may indicate low intensity of rivalry. The results will not always be
straightforward. Therefore it is necessary to consider the nuances of the analysis and the
particular circumstances of the given firm and industry when using these data to evaluate the
competitive structure and profit potential of a market.
3. Describe corporate culture. Do you think that a corporate culture can be changed? Justify
your answer with the help of suitable examples.
Ans.: Corporate culture is the pervasive values, beliefs and attitudes that characterize a
company and guide its practices. To some extent, a company's internal culture may be
articulated in its mission statement or vision statement. Elements of corporate culture include
a company's physical environment, human resources practices and the staff itself. Corporate
culture is also reflected in the degree of emphasis placed on various defining elements such
as hierarchy, process, innovation, collaboration, competition, community involvement and
social engagement. A corporate culture that reflects the broader culture is usually more
successful than one that is at odds with it. For example, in the current global culture, which
values transparency, equality and communication, a secretive company with a strictly
hierarchical structure may have a public relations problem.
There are a variety of terms that relate to companies affected by multiple cultures, especially
in the wake of globalization and the increased international interaction of today's business
environment. As such, cross culture refers to “the interaction of people from different
backgrounds in the business world”; culture shock refers to the confusion or anxiety people
experience when conducting business in a society other than their own; and reverse culture
shock is often experienced by people who spend lengthy times abroad for business and have
difficulty readjusting upon their return. To create positive cross-culture experiences and
facilitate a more cohesive and productive corporate culture, companies often devote in-depth
resources to combating the occurrence of the above, including specialized training that
improves cross-culture business interactions.
Changing an organization’s culture is one of the most difficult leadership challenges. That’s
because an organization’s culture comprises an interlocking set of goals, roles, processes,
values, communications practices, attitudes and assumptions.
The elements fit together as an mutually reinforcing system and combine to prevent any
attempt to change it. That’s why single-fix changes, such as the introduction of teams, or
Lean, or Agile, or Scrum, or knowledge management, or some new process, may appear to
make progress for a while, but eventually the interlocking elements of the organizational
culture take over and the change is inexorably drawn back into the existing organizational
culture.

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Changing a culture is a large-scale undertaking, and eventually all of the organizational tools
for changing minds will need to be put in play. However the order in which they deployed
has a critical impact on the likelihood of success.
In general, the most fruitful success strategy is to begin with leadership tools, including a
vision or story of the future, cement the change in place with management tools, such as role
definitions, measurement and control systems, and use the pure power tools of coercion and
punishments as a last resort, when all else fails.
4. Explain with the help of relevant examples expansion through integration.
Ans.: Expansion through integration means combining activities related to present activity of
a firm. This is a growing by either acquiring a business in the same product line or expanding
by acquiring businesses which used to be either their input supplier or helped them in
manufacturing or did the distribution and selling for them. In other words expansion through
integration means to do something new but not drastically different. Whatever new things are
done are in line with the existing business. There are 2 types of integration.
Horizontal integration: When an organization takes up the same type of products at the
same level of production or marketing process, it is said to follow a strategy of horizontal
integration. Years back when Jet Airways acquired Air Sahara it was an example of
Horizontal integration. Here the company expands by integrating into itself another business
entity which is in the same business.
Vertical integration: every organisation in order to operate purchases inputs from some
other businesses or outsources the distribution and sales part of the business. However they at
times might find out that if they acquire any other such business which serves their need in
the main business, they go ahead and acquire. When an organization starts making new
products that serve its own needs, Expansion by integration through vertical integration takes
place. It is of 2 types.
 Backward: It means relating to the sources of raw materials. If a newspaper
publishing house starts manufacturing newsprint or acquires a company who
manufactures newsprint, it will be known as backward vertical integration as the
business is moving one step back from the process of editing and printing newspaper
and doing it on its own.
 Forward: Here the organization moves closer to end-user. If the same newspaper
publishing house decides to have their own newspaper selling outlets or at least have
branded newspaper corners in shops instead of selling it from general vendors, they
would be practicing forward vertical integration as they are going one step forward
from the process of editing and printing newspaper and doing the sales also on its
own.
Think about the idea of integration as either a multidisciplinary approach or an
interdisciplinary approach. A multidisciplinary approach focuses primarily on the disciplines.
Teachers who use this approach organize standards from the disciplines around a theme. In
an interdisciplinary approach, teachers organize the curriculum around common learnings

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across disciplines. They chunk together the common learnings embedded in the disciplines to
emphasize interdisciplinary skills and concepts.
5. Suppose you are a Manager (Strategy). Try to develop a model for evaluation and control
process of your organization.
Ans.: The final stage in strategic management is strategy evaluation and control. All
strategies are subject to future modification because internal and external factors are
constantly changing. In the strategy evaluation and control process managers determine
whether the chosen strategy is achieving the organization's objectives. The fundamental
strategy evaluation and control activities are: reviewing internal and external factors that are
the bases for current strategies, measuring performance, and taking corrective actions.
Strategic management is a broader term that includes not only the stages already identified
but also the earlier steps of determining the mission and objectives of an organization within
the context of its external environment. The basic steps of the strategic management can be
examined through the use of strategic management model.
The strategic management model identifies concepts of strategy and the elements necessary
for development of a strategy enabling the organization to satisfy its mission. Historically, a
number of frameworks and models have been advanced which propose different normative
approaches to strategy determination. However, a review of the major strategic management
models indicates that they all include the following elements:
 Performing an environmental analysis.
 Establishing organizational direction.
 Formulating organizational strategy.
 Implementing organizational strategy.
 Evaluating and controlling strategy.
Strategic management is a continuous and dynamic process. Therefore, it should be
understood that each element interacts with the other elements and that this interaction often
happens simultaneously.
Evaluation is an important tool for improving management. Through organizational
assessment - commonly known as evaluation - the effectiveness of an organization is
measured in terms of its functioning, problems and achievements from both the behaviourial
and social system points of view (Lawler, Nadler and Cammann, 1980). Organizational
assessment thus involves "measurement of variables related to patterns of organizational
behaviour and effectiveness" (Nadler, Mackman and Lawdler, 1979). It can play an important
role in helping managers improve the efficiency and effectiveness of their operations and can
be an instrument for creating public support for the research programmes and outreach
activities.

Depending upon when evaluation is conducted, it may be ex ante, current or ex post. Ex ante
evaluation is conducted prior to implementation. It involves analysis of internal and external
consistency of plans, programmes and projects before their implementation. Current or

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progress evaluation is conducted during implementation. It measures the extent of use of
resources and materials, the execution of activities and the partial results reached in relation
to the set plans. It is also known as monitoring or concurrent evaluation, since it takes place
at many points during implementation. Ex post evaluation is conducted after implementation.
It involves evaluation of the results and impact in relation to the set objectives.
The control process involves carefully collecting information about a system, process, person,
or group of people in order to make necessary decisions about each. Managers set up control
systems that consist of four key steps:
 Establish standards to measure performance: Within an organization's overall
strategic plan, managers define goals for organizational departments in specific,
operational terms that include standards of performance to compare with
organizational activities.
 Measure actual performance: Most organizations prepare formal reports of
performance measurements that managers review regularly. These measurements
should be related to the standards set in the first step of the control process. For
example, if sales growth is a target, the organization should have a means of gathering
and reporting sales data.
 Compare performance with the standards: This step compares actual activities to
performance standards. When managers read computer reports or walk through their
plants, they identify whether actual performance meets, exceeds, or falls short of
standards. Typically, performance reports simplify such comparison by placing the
performance standards for the reporting period alongside the actual performance for
the same period and by computing the variance—that is, the difference between each
actual amount and the associated standard.
Take corrective actions. When performance deviates from standards, managers must
determine what changes, if any, are necessary and how to apply them. In the productivity and
quality‐centered environment, workers and managers are often empowered to evaluate their
own work. After the evaluator determines the cause or causes of deviation, he or she can take
the fourth step—corrective action. The most effective course may be prescribed by policies or
may be best left up to employees' judgment and initiative.