Strategic management and project management ( May-2018)

Long Essay

1. What is strategic evaluation and control? What is its importance strategic

control plays major role in strategic management. Comment on it.
Answer-

 Strategy:-
o Strategy is an art and science of combating the many resources available to achieve
the best match between an organization and its environment.
o A strategy is a unified, comprehensive and integrated plan that relates the strategic
advantage of the firm to the challenges of the environment. It is designed to ensure
that the basic objectives of the enterprise are achieve through proper execution by
the organization
o Strategy is determination of long goas and objectives in an enterprise and the
adoption of courses of action and the allocation resources necessary for carrying
out these goals.
 Management:-
o It is defined ‘as a set of activities directed at the efficient and effective utilization
of resources in the pursuit of one or more goals.
o Management is a problem solving process of effectively achieving organizational
objectives through the efficient use of scarce resources in a changing environment.
o Management is an art of knowing what to do, when to do and see that it is done in
the best and cheapest way ‘.
 Strategy management:-
o Strategic management is defined as a set of decisions and actions resulting in
formation and implementation of strategies designed to achieve the objectives of
an institution.
o Strategic management is a system of decisions and actions which lead to the
development of an effective strategy or strategies to help achieve corporate
objectives, the strategic management process is the way in which the strategies
determine objectives and make strategic decisions.
 Strategy Evaluation:-
o Strategic evaluation is a phase of the strategic management process which manager
tries to assure that the strategies choice is properly implemented and is meeting the
objective of the enterprise.
 o Strategic evaluation is the final step of strategy management process. The key
strategy evaluation activities are: appraising internal and external factors that are
the root of present strategies, measuring performance, and taking remedial /
corrective actions.
o Evaluation makes sure that the organizational strategy as well as it’s
implementation meets the organizational objectives.
 Nature of strategic evaluation:-
o To test the effectiveness of the strategies.
o Performs crucial task of keeping the organization activities on the right track.
o Intended towards organization goals and objectives.
o Comparison of actual result with expected result.
 Participation of strategic evaluation:-
o Board of directors
o Chief executive
o Financial controllers, company secretaries and auditors.
o Audit and executive committees.
o The strategic business unit.
o Middle level and other managers.
 Process of strategic evaluation:-
a) Fixing benchmark of performance :-
o While fixing the benchmark, strategists encounter questions such as - what
benchmarks to set, how to set them and how to express them.
o In order to determine the benchmark performance to be set, it is essential to
discover the special requirements for performing the main task.
o The organization can use both quantitative and qualitative criteria for
comprehensive assessment of performance.
o Quantitative criteria include determination of net profit, ROI, earning per share,
cost of production, rate of employee turnover etc. Among the Qualitative factors
are subjective evaluation of factors such as - skills and competencies, risk taking
potential, flexibility etc.

b) Measurement of performance:-
o The standard performance is a bench mark with which the actual performance is to
be compared.
o The reporting and communication system help in measuring the performance.
o For measuring the performance, financial statements like - balance sheet, profit
and loss account must be prepared on an annual basis.
 c) Analyzing Variance:-
o While measuring the actual performance and comparing it with standard
performance there may be variances which must be analyzed.
o The strategists must mention the degree of tolerance limits between which the
variance between actual and standard performance may be accepted.
d) Taking Corrective Action
o Once the deviation in performance is identified, it is essential to plan for a
corrective action.
o If the performance is consistently less than the desired performance, the strategists
must carry a detailed analysis of the factors responsible for such performance.

 Techniques of strategic evaluation:-

a) GAP Analysis:-
o The gap analysis is one strategic evaluation technique used to measure the gap
between the organization’s current position and its desired position.
o The gap analysis is used to evaluate a variety of aspects of business, from profit
and production to marketing, research and development and management
information systems.
o Typically, a variety of financial data is analyzed and compared to other businesses
within the same industry to evaluate the gap between the organization and its
strongest competitors.

b) SWOT Analysis:-
o The SWOT analysis is another common strategic evaluation technique used as a
part of the strategic management process.
o The SWOT analysis evaluates the organization’s strengths, weaknesses,
opportunities and threats.
o Strengths and weaknesses are internal factors, while opportunities and threats are
external factors.
o This identification is essential in determining how best to focus resources to take
advantage of strengths and opportunities and combat weaknesses and threats.

c) PEST Analysis :-
o Another common strategic evaluation technique is the PEST analysis, which
identifies the political, economic, social and technological factors that may impact
the organization’s ability to achieve its objectives.
o Political factors might include such aspects as impending legislation regarding
wages and benefits, financial regulations, etc
 o Economic factors include all shifts in the economy, while socialfactors may
include demographics and changing attitudes.
o Technological pressures are also inevitable as technology becomes more advanced
each day.
o These are all external factors, which are outside of the organization’s control but
which must be considered throughout the decision making process.

d) Benchmarking:-
o Benchmarking is a strategic evaluation technique that’s often used to evaluate how
close the organization has come to its final objectives, as well as how far it has left
to go.
o Organizations may benchmark themselves against other organizations within the
same industry, or they may benchmark themselves against their own prior
situation.
o A variety of performance measures, as well as policies and procedures, may be
evaluated regularly to identify where adjustments are necessary to maintain the
sustainable competitive advantage.

 Importance of Strategic Evaluation:-

o Strategic evaluation can help to assess whether the decisions match the intended
strategy requirements.
o Strategic evaluation, through its process of control, feedback, rewards, and review,
helps in a successful culmination of the strategic management process.
o The process of strategic evaluation provides a considerable amount of information
and experience to strategists that can be useful in new strategic planning.

 Strategic control: -
o Strategic control is a term used to describe the process used by organizations to
control the formation and execution of strategic plans. 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.
o The strategic control are early warning signals or warning systems which differs
from post action controls and that evaluate only after the competition of
implementation stage.
o Strategic controls take into account the changing assumptions that determine a
strategy, continually evaluate the strategy as it is being implemented, and take the
necessary steps to adjust the strategy to the new requirements.
 Types of Strategic Control :-
a) Premise control
b) Implementation control
c) Strategic surveillance
d) Special alert control

a. Premise control:-
o Every strategy is founded on certain assumptions relating to environmental and
organizational forces.
o Premise controls a must to identify the key postulations and keep track on any change in
them in order to assess their impact on strategy and therefore its implementation.
o For example, this presumption may relate to changing the environment policies, market
competition. Change composition due to sudden killing virus or widespread war
conditions or natural calamities and organizational factors such as improvising of
production technology.
o The responsibilities for premise control is generally assigned to the corporate planning
department that identifies the key assumptions and keep a regular check on their validity.

b. Implementation Control:
o In order to implement a chosen strategy, there is need for preparing quite good numbers
of plans, programs and projects.
o Again resources are allocated for implementing these plans, programs and projects.
o The purpose of implementation control is to evaluate as to whether these plans,
programs and projects are actually guiding the organization towards its pre-determined
goals or not
o Implementation control is nothing but rethinking or strategic rethinking to avoid waste
of all kinds.
o Tools of implementation control is the millstone review through which critical points in
strategy implementation are identified in terms of events, major resource allocation or
event time it is similar to the PERT and CPM.
o Once the milestones are identified, a comprehensive review of implementation is made
to reassess its continued relevance to attain the objectives.

c. Strategic Surveillance :-
o Strategic surveillance is designed to monitor a broad range of events inside and outside
the company that are likely to threaten the course of the firm's strategy.
o Strategic surveillance appears to be similar in some way to "environmental scanning."
Strategic surveillance is designed to safeguard the established strategy on a continuous
basis.
 d. Special Alert Control:-
o Another type of strategic control is a special alert control.
o A special alert control is the need to thoroughly, and often rapidly, reconsiders the firm's
basis strategy based on a sudden, unexpected event
o The analysts of recent corporate history are full of such potentially high impact surprises
(i.e., natural disasters, chemical spills, plane crashes, product defects, hostile takeovers
etc.).
o An example of such event is the acquisition of competitor by an outsider. Such an event
will trigger an immediate and intense reassessment of the firm's strategy. Organization
need to form crisis teams to handle its initial response to the unforeseen events.

e. Operation Control
o It is aimed at the allocation and use of organizational resources through an evaluation of
the performance of organizational units
o It is concerned with action or performance
o The evaluation process for operation control deals with –
 Setting standards for performance
 Measurement of performance
 Analysis variances
 Taking corrective action

 Role of strategic control in strategic management process:-

o When strategic evaluation and control is undertaken properly, it contributes in three
specific areas:
a) Measurement of organizational progress:-
o Evaluation and control measures organizational progress towards achievement of its
objectives. When a strategy is chosen, it specifies the likely outcomes, which are
relevant for achieving organizational objectives.
o The strategy is not an end in itself; it is a means for achieving something valuable to
organizational success.
o Therefore, measuring this success as a result of strategy implementation is a prime
concern for every strategist.
o This measurement should be undertaken during the process of strategy implementation
as well as after implementa-tion to ensure the progress as quickly as possible so that
remedial actions are taken at appropriate time.

b) Feedback for future actions:-

o Strategic management being a continuous process with no apparent beginning and end.
o Strategic Evaluation and control provides clues for recycling various actions, which are
relevant for achieving organizational objectives.
o This is possible only when strategic planning and control are well integrated.
o Thus, control activities are undertaken in the light of criteria set by a strategic plan. But
at the same time, control provides inputs either for adjusting the same strategic plan or
taking future strategic plans.
o This is the way organizations progress over the period of time. They take a strategic
action, implement it, and find its results. If the results are in tune with what were
intended the similar types of strategic actions are taken in future.
o Thus, there is a chain of strategic plan actions and control.

c) Linking performance and rewards

o This is the most crucial aspect of strategic evaluation and control but many
organizations fail in linking performance and reward.
o This happens not only at the level of different organiza-tions but even for a country as a
whole. The dispersion of part of the rewards by the organizations without regard to
performances is more common in the less modem parts of the country than in the more
advance ones and in less developed than in more developed countries.
o It is one of the reasons why organizational control is less effective in less developed
countries. Thus, linking perfor-mance and reward is a big issue.
Short Essay

1. Define strategy. Discuss the strategic decision making process. Briefly

explain the levels at which strategy operates.
Answer:-
 Introduction:
o The word “strategy” is derived from the Greek word “stratçgos”; stratus (meaning army)
and “ago” (meaning leading/moving).
o Strategy is an action that managers take to attain one or more of the organization’s goals.
o Strategy can also be defined as “A general direction set for the company and its various
components to achieve a desired state in the future. Strategy results from the detailed
strategic planning process”.
o A strategy is all about integrating organizational activities and utilizing and allocating
the scarce resources within the organizational environment so as to meet the present
objectives.
o Today, the term strategy is used in business to describe how an organization is going to
achieve its overall objectives. Most organizations have several alternatives for achieving
its objectives.
o Strategy is concerned with deciding which alternative is to be adopted to accomplish the
overall objectives of the organization.
o Strategy is a Comprehensive long term plan. It tries to answer three main questions:
 What is the present position of the firm?
 What should be the future position of the firm?
 What should be done to attain the future position?
 Definition:
o “Strategy is a plan of action or policy designed to achieve a major overall aim”- Oxford
Dictionary.
o “Strategy is the determination of the basic long-term goals & objectives of an enterprise
& the adoption of the course of action and the allocation of the resources necessary for
carrying out these goals”- Alfred D Chandeler.
o “Strategy includes the determination & evaluation of alternative paths to achieve an
organization’s objectives & mission & eventually, a choice of the alternative that is to be
adopted”- Lloyd L. Byars
 Nature and characteristic of strategies:

Objective
oriented
Future
Universal oriented
applicability

Characteristics

Unified,
Applicable to comprehensive
all functional and integrated
area

Allocation Related to the

of resources enviironment

o Objective Oriented: Strategies are developed in order to achieve the objectives of the
organization. To formulate strategies, one has to know the objectives that are to be
pursued & also the policies that must be followed.

o Future Oriented: Strategy is a future oriented plan. It is designed to attain future position
of the organization. Through Strategy, management studies the present position of the
organization & their aims at attaining the future position of the organization. The strategy
provides answer to certain questions relating to-
 Profitability of the present business
 Continuity of the present business
 Entry into difference businesses in future
 Effectiveness of the present policies of the organization.
 Growth & expansion of the business in the long run.
o Unified, Comprehensive and Integrated: A Strategy is not Just plan. It is a unified,
Comprehensive & integrated plan. It is unified as it unifies all the parts of sections of the
organization together. It is comprehensive as it covers all the major aspects or areas of the
organization. It is integrated as all the parts of the plan are compatible with each other
and fit together well.

o Strategy Alternatives: Organizations need to frame alternative strategies. It is not

sufficient to frame one or two strategies. Small organizations survive with one or two
strategies due to fewer complexities in their business. However, large organizations need
to frame alternative strategies in respect of growth & survival of the organization. It can
be into four broad groups-
 Stable Growth Strategy
 Growth Strategy
 Retrenchment Strategy
 Combination Strategy

o Relates to the Environment: The internal and external environment affects the strategy
formulation &implementation. The internal environment relates to mission& objectives
of thefirm, the labor management relations, and the technology used, the
physical,financial & human resources. The external environment relates
Competition,Customer, Channel, intermediaries, Government policies & other social,
economic& political factors.

o Allocation of Resources: For effective implementation of Strategy, there is a need for

proper allocation ofthe resources. Proper allocation of resources is required to undertake
the variousactivities so as to attain objectives. The resources can be broadly divided into
3groups:
 Physical resources such as plant & machine
 Financial resources i.e. Capital
 Human resources i.e. Man Power

o Universal Applicability: Strategy is universally applicable. It is applicable to business

organization as wellas to non-business organization. This is because every organization
needs toframe strategies for their growth & survival. The presence of Strategies keeps
theorganizations moving in the right direction.
 o Periodic Review: Strategies need to be reviewed periodically. Such review is required to
revise thestrategies depending upon the changing needs of the business. Periodic review
of strategies is required to gain competitive advantage in the market.

o Applicable to all functional areas: Strategies are applicable to all functional areas. The
functional areas includeproduction, marketing, finance, human resources management,
etc. Strategiesaid in planning, organizing, directing & controlling activities in all
functional areas.

 Strategic decision making process:

 Introduction:-
o Decision making is the art of selecting a course of action from many alternatives.
o Decision making is the most important function of any manager. Strategic decision-
making is the top priority task of the senior/top management.
o Both these decision- making processes are identical but they take at different levels at
which they operate.
 Fundamental of strategic decision
 Elements of result:-
o There cannot be a non-gal-oriented or directed organization or organizational process in
which decision making is an essential part.
o The value of decisions and the related actions have meaning only when they bring about
desired result.
o This result element is a specifically defined objective or clearly spelt out statement of
desire attainment that contribute to the company’s overall purpose.
 Element of action:-
o Elements of result or purpose have little or no meaning unless it is followed by action or
action program.
o Strategic decisions are action oriented and signaled towards the controlling aspect of
environment-internal to that of external.
o Strategic decision specifies that what is expected to be done? At what time?and how?
So as to get best fit match set of result.
 Element of commitment-
o Any managerial decision cannot be called as strategic unless it is able to transform into
a set of actions decisions committing the organizational resources for a given course of
action.
 o Commitment of resources includes the allocation of resources on various actions as
these resources are used for the relevant actions.

 Strategic decision making:-

o The following are the seven key steps of the decision making process.
1. Identify the decision: The first step in making the right decision is recognizing the
problem or opportunity and deciding to address it. Determine why this decision will
make a difference to your customers or fellow employees.
2. Gather information: Next, it’s time to gather information so that you can make a
decision based on facts and data. This requires making a value judgment, determining
what information is relevant to the decision at hand, along with how you can get it.
Ask yourself what you need to know in order to make the right decision, and then
actively seek out anyone who needs to be involved.
3. Identify alternatives: Once you have a clear understanding of the issue, it’s time to
identify the various solutions at your disposal. It’s likely that you have many different
options when it comes to making your decision, so it is important to come up with a
range of options. This helps you determine which course of action is the best way to
achieve your objective.
4. Weigh the evidence: In this step, you’ll need to “evaluate for feasibility, acceptability
and desirability” to know which alternative is best, Managers need to be able to weigh
pros and cons, and then select the option that has the highest chances of success. It
may be helpful to seek out a trusted second opinion to gain a new perspective on the
issue at hand.
5. Choose among alternatives: When it’s time to make your decision, be sure that you
understand the risks involved with your chosen route. You may also choose a
combination of alternatives now that you fully grasp all relevant information and
potential risks.
6. Take action: Next, you’ll need to create a plan for implementation. This involves
identifying what resources are required and gaining support from employees and
stakeholders. Getting others onboard with your decision is a key component of
executing your plan effectively, so be prepared to address any questions or concerns
that may arise.
7. Review your decision: An often-overlooked but important step in the decision making
process is evaluating your decision for effectiveness. Ask yourself what you did well
and what can be improved next time.
 Levels of strategies:
 Introduction:-
o Strategy can be formulated at three levels, namely, the corporate level, the business
level, and the functional level.
o At the corporate level, strategy is formulated for your organization as a whole. Corporate
strategy deals with decisions related to various business areas in which the firm operates
and competes.
o At the business unit level, strategy is formulated to convert the corporate vision into
reality.
o At the functional level, strategy is formulated to realize the business unit level goals and
objectives using the strengths and capabilities of your organization.
o There is a clear hierarchy in levels of strategy, with corporate level strategy at the top,
business level strategy being derived from the corporate level, and the functional level
strategy being formulated out of the business level strategy.

 3 Levels of strategies:-

 Corporate level strategy:

o Corporate level strategy defines the business areas in which firm will operate.
o It deals with aligning the resource deployments across a diverse set of business
areas, related or unrelated.
o Strategy formulation at this level involves integrating and managing the diverse
businesses and realizing synergy at the corporate level.
o The top management team is responsible for formulating the corporate strategy.
The corporate strategy reflects the path toward attaining the vision of
organization.
o For example, your firm may have four distinct lines of business operations,
namely, automobiles, steel, tea, and telecom. The corporate level strategy will
outline whether the organization should compete in or withdraw from each of
these lines of businesses, and in which business unit, investments should be
increased, in line with the vision of your firm.
 Business Level
 o Business level strategies are formulated for specific strategic business units and
relate to a distinct product-market area.
o It involves defining the competitive position of a strategic business unit.
o The business level strategy formulation is based upon the generic strategies of
overall cost leadership, differentiation, and focus.
o For example, A firm may choose overall cost leadership as a strategy to be
pursued in its steel business, differentiation in its tea business, and focus in its
automobile business. The business level strategies are decided upon by the heads
of strategic business units and their teams in light of the specific nature of the
industry in which they operate.
 Functional Level
o Functional level strategies relate to the different functional areas which a strategic
business unit has, such as marketing, production and operations, finance, and
human resources.
o These strategies are formulated by the functional heads along with their teams
and are aligned with the business level strategies.
o The strategies at the functional level involve setting up short-term functional
objectives, the attainment of which will lead to the realization of the business level
strategy.
o For example, the marketing strategy for a tea business which is following the
differentiation strategy may translate into launching and selling a wide variety of
tea variants through company-owned retail outlets. This may result in the
distribution objective of opening 25 retail outlets in a city; and producing 15
varieties of tea may be the objective for the production department. The
realization of the functional strategies in the form of quantifiable and measurable
objectives will result in the achievement of business level strategies as well.
2. Describe the steps involved in strategic planning process. Mergers are the
key part of corporate growth strategy. Discuss.
Answer

 Introduction :-
o The strategic planning process means defining the organization’s strategy.
o It is also defined as the process by which management make a choice of a set of
strategies for the organization will enable it to achieves the business and industries in
which the organization is involved, appraise its competitors and fixes goals to meet
the present and future competitors and then reassess each strategy.
o The firm must engage in strategic planning that clearly defines objectives and
assesses both the internal and external situation to formulate strategy, implement the
strategy, evaluate the progress, and make adjustments as necessary to stay on track.

 Stretegic planning process:-

 Mergers are the key part of corporate growth strategy:
o A merger occurs when two firms join together to form one. The new firm will have an
increased market share, which helps the firm gain economies of scale and become more
profitable. The merger will also reduce competition and could lead to higher prices for
consumers.
o Mergers and acquisitions are a key part of a corporate growth strategy. However, during
tough economic times, many companies are reluctant to pursue other entities.
o Reasons for Merging-
1. Synergies: By combining business activities, overall performance efficiency tends
to increase and across-the-board costs tend to drop, due to the fact that each
company leverages off of the other company's strengths.
2. Growth: Mergers can give the acquiring company an opportunity to grow market
share without doing significant heavy lifting. Instead, acquirers simply buy a
competitor's business for a certain price, in what is usually referred to as a
horizontal merger. For example, a beer company may choose to buy out a smaller
 competing brewery, enabling the smaller outfit to produce more beer and increase
its sales to brand-loyal customers.
3. Increase Supply-Chain Pricing Power: By buying out one of its suppliers or
distributors, a business can eliminate an entire tier of costs. Specifically, buying
out a supplier, which is known as a vertical merger, lets a company save on the
margins the supplier was previously adding to its costs. Any by buying out a
distributor, a company often gains the ability to ship out products at a lower cost.
4. Eliminate Competition: Many M&A deals allow the acquirer to eliminate future
competition and gain a larger market share. On the downside, a large premium is
usually required to convince the target company's shareholders to accept the offer.
It is not uncommon for the acquiring company's shareholders to sell their shares
and push the price lower, in response to the company paying too much for the
target company.
o Benefits of merger strategy:-
1. Increase market share
2. Enhance product offerings and/or diversify product line
3. Vertical integration of supply chain
4. Gain access to patents, R&D or technology
5. Potential tax benefits and shareholder value enhancement
6. Development and communication of concise policies and guide decisions.
o Types of merger:- merger are classified on the basis of activities that are added in that
process to existing product or service lines. The possible types of mergers are-
 Horizontal merger:- a horizontal merger calls for uniting of two or more firms in
the same field.
 Vertical merger:- vertical merger refers to the integration of companies having
supllementary relationships- either production or distribution of products and
services or both.the amalgamation of Mafatlal Industries Ltd.(MIL) And Matalal
Fine Spinning and manufacturing Ltd.(MFL) is an example of this kind.
 Circular merger:- a circular merger involves the bringing together of production or
services that are unrelated but marketed through the same channels allowing shared
dealership. The case of merger of McLeod Russel (a tea company) with Everydy
Industries (batteries) illustrates the circular rationale for merger.
 Conglomerate mergers:- it means the unification of different kinds of business
under one flagship company. This is more or less similar to the vertical integration.
There are countless examples of such mergers. Its Godrej, Tatas, HLL, reliance
Industries, etc.
 Concentric merger: It refers to combination of two or more firms which are related
to each other in terms of customer groups, functions or technology. For eg.,
combination of a computer system manufacturer with a UPS manufacturer.
  Forward merger: In a forward merger, the target merges into the buyer. For e.g.,
when ICICI Bank acquired Bank of Madura, Bank of Madura which was the target,
merged with the acquirer, ICICI Bank.
 Reverse merger: In this case, the buyer merges into the target and the shareholders
of the buyer get stock in the target. This is treated as a stock acquisition by the
buyer.
 Subsidiary merger: A subsidiary merger is said to occur when the buyer sets up an
acquisition subsidiary which merges into the target.

5. Discuss the inter-relationship between formulation and implementation.

Write a note on the role of structural implementation in strategic
implementation.
Answer

 Introduction :-
 Strategy formulation:-
o Strategy formulation refers to the process of choosing the most appropriate course of
action for the realization of organizational goals and objectives and thereby achieving the
organizational vision.
o The process of strategy formulation basically involves six main steps. Though these steps
do not follow a rigid chronological order, however they are very rational and can be
easily followed in this order.
o Process of strategy formulation:-
 Setting Organizations’ objective
 Evaluating the Organizational Environment
 Setting Quantitative Targets
 Aiming in context with the divisional plans
 Performance Analysis, Choice of Strategy.
 Strategy implementation:-
o Strategy implementation is the translation of chosen strategy into organizational action
so as to achieve strategic goals and objectives.
o Strategy implementation is also defined as the manner in which an organization should
develop, utilize, and amalgamate organizational structure, control systems, and culture to
follow strategies that lead to competitive advantage and a better performance.
o Process of strategy implementation:
 Developing an organization having potential of carrying out strategy successfully.
 Disbursement of abundant resources to strategy-essential activities.
  Creating strategy-encouraging policies.
 Employing best policies and programs for constant improvement.
 Linking reward structure to accomplishment of results.
 Making use of strategic leadership.

Strategy formulation vs. strategy implementation:-

Sr.No Strategy formulation Strategy implementation

1 Strategy formulation includes Strategic implementation involves all

planning and decision making
involved in developing
organization’s strategic goals and
plans.
2 In short strategy formulation is
placing a forces before the action
those means related to executing the
strategic plans.
In short, strategy implementation is
managing forces during the action.

3 Strategy formulation emphasizes on Strategy implementation is emphasizes on

effectiveness efficiency

4 Strategy formulation is a rational Strategy implementation is an operational

process process

5 Strategy formulation involves Strategy implementation requires

coordination among few individuals. coordination among many individuals.

6 Strategy formulation requires a great Strategy implementation requires specific

deal of initiative and logical skills motivation and leadership traits.

7 Strategy formulation precedes Strategy implementation follows strategy

strategy implementation formulation

 Interrelationship between strategy formulation and strategy implementation:-

o In order to achieve its objectives, an organization must not only formulate but also
implement its strategies effectively.
o The Figure represents the importance of both tasks in matrix form and suggests the
probable outcomes of the four possible combinations of these variables:
 Success is the most likely outcome when strategy is appropriate and implementation
good.
 Roulette involves situation wherein a poor strategy is implemented well.
 Trouble is characterized by situations wherein an appropriate strategy is poorly
implemented.
 Failure involves situations wherein a poor strategy is poorly implemented.
o Diagnosing why a strategy failed in the roulette, trouble, and failure cells in order to find
a remedy requires the analysis of both formulation and implementation.
o Five-stage model of the strategy implementation process:
 determining how much the organization will have to change in order to implement the
strategy under consideration
 analyzing the formal and informal structure of the organization
 analyzing the culture of the organization
 selecting an appropriate approach to implementing the strategy
 Implementing the strategy and evaluating the results.
 Implementation is successfully initiated in three interrelated stages:
 Identification of measurable, mutually determined annual objectives.
 Development of specific functional strategies.

 Role of structural implementation in strategic implementation:-

 Structural implementation:-
o Arrangement of tasks and sub tasks required to implement a strategy

o Diagrammatic representation could be organizational chart but administrative
mechanism provides flesh and blood to the organization structure.
o Kinds of structure:-
 Horizontal structure
 Vertical structure
 Horizontal structure:-
o Process of Integration among members in an organization, cross functional systems and
teamwork. Dominates:
 Shared tasks.
 Flexible rules and regulation.
 Horizontal communication.
 Decentralization decision making.
 Emphasis on learning.
o It’s also called lean and mean organization or flat structure.
o Liberal exchange of information among different layers and across departments.
o On Negative side, such structure has loss of control and high cost in coordination.
 Vertical structure :-
o It involves Division of Labor and Specialization.
o Dominates:
 Specialized tasks
 Hierarchy of authority
 Rules and regulation
 Vertical communication
 Centralised decision making
 Emphasis on efficiency
o Also called as Tall structure.
o Best suited for standardized products and services in large volumes.
o Established technologies, wide market, seeking customer on undifferentiated items.

 Structure and strategy:-

o There is a 2 way relationship among the strategy and structure. Strategy determines how
the organization structure has to be formed.
 o And structure influences present strategy implemented and in future.

 Types of organizational structure:-

o Entrepreneurial structure
o Functional structure
o Divisional structure
o SBU structure
o Matrix structure
o Network structure
 Role of structural implemenatation :
1. Structuring Activities
o To prevent their staff from spending time on activities not directly related to achieving
companies' strategic goals, managers identify tasks that can be outsourced to third-party
vendors.
o Structuring work this way allows experts to perform these jobs, typically at a lower cast,
while employees focus on their core competencies supporting main businesses

2. Aligning Functions to Strategic Objectives

o Before corporate leaders can implement new strategies, they need to ensure that all
personnel in the organizational structure possess the necessary skills, knowledge and
resources to accomplish the tasks.
o Work must flow from one function to another so leaders should establish clear processes
with policies and procedures that define roles and responsibilities.
o The strategy must be consistent across all departments, adaptive to changes,
competitively advantageous and technically feasible.

3. Establishing Authority
o Successfully implementing a new strategy requires that managers and employees
understand what activities require executive approval and which decisions employees
have the empowerment to make without further approval. Ideally, decision makers
should be those people who are closest to the situation and most knowledgeable about
the impact.
o By avoiding micro-managing the organization, managers streamline operations and
eliminate wasteful tasks. If the organization is structured to allow employees the
flexibility to make critical decisions, they must also be held accountable for their
actions.

4. Developing Partnerships
o Strategic implementations require personnel to work together to achieve specific,
measurable, attainable, relevant and time-constrained goals and objectives.
o Establishing a common balanced scorecard prevents groups from competing against
each other to succeed individually at the expense of the whole company.
o If company executives foster a cooperative environment between departments,
managers share resources, personnel and knowledge effectively.
o Additionally, the organizational structure should encourage new employees to seek out
coaching and mentoring from corporate executives. By encouraging learning and
development, company leaders establish a framework for sustainable growth.
 6. Define the project management. Briefly discuss the phases of project
management. What is a work breakdown structure (WBS) &how it is
useful for project planning?
Answer

 Project:-
o A project is a one-time activity that produces a specific output and or outcome, for
example, a building or a major new computer system.
o A project is an activity that :
 is temporary having a start and end date
 is unique
 brings about change
 has unknown elements, which
 therefore create risk
o It is also described as “a combination of human and non-human resources pooled together
in a temporary organization to achieve a specific purpose.”
 Characteristics of projects:-
o A project has a owner:- the project is initiated by the owner-an individual, a company,
public/private sector company, a joint sector company.

o Has definite objective:- like construction of a factory, road, a house a bridge or a

nuclear plant.

o Has definite life span: - once the specific objective is achieved, the personnel, working
on the project will be moved on to some other project. E.g.- workers and engineers
engaged in a particular bridge/road construction work will be moved to a different
project area or may be terminated if the company has no further plans.

o Requires coordination among different departments:- this is the main task of the project
manager. He is the person who coordinates the work of all the persons in the project.

o Involves original work: - since each project is built according to specific requirements,
it involves original work to suit the requirements of the client.
 o Has well defined specification on time, cost and performance with emphasis on
accountability. These are balanced to get optimum results.

 Project management:-
o Project management is the application of knowledge, skills, tools, and techniques to project
activities to meet the project requirements.
o Project management is the planning, organizing and managing the effort to accomplish a
successful project.
o It is the application of knowledge, skills, tools and techniques to project objectives to meet
stake holders’ needs and expectations.
o It is planning , monitoring and controlling of all aspects of a project and motivation of all
involved to achieve project objectives of safety and within a defined time, cost &
performance.
 Phases of project management:
o Dividing a project into phases makes it possible to lead it in the best possible direction.
Through this organization into phases, the total work load of a project is divided into
smaller components, thus making it easier to monitor.
o It includes six phases:
1. Initiation phase
2. Definition phase
3. Design phase
4. Development phase
5. Implementation phase
6. Follow-up phase
 Initiation phase:
o The initiation phase is the beginning of the project. In this phase, the idea for the project is
explored and elaborated.
o The goal of this phase is to examine the feasibility of the project.
o In addition, decisions are made concerning who is to carry out the project, which party (or
parties) will be involved and whether the project has an adequate base of support among
those who are involved.
o In this phase, the current or prospective project leader writes a proposal, which contains a
description of the above-mentioned matters.
o Examples of this type of project proposal include business plans and grant applications.
o The prospective sponsors of the project evaluate the proposal and, upon approval, provide
the necessary financing. The project officially begins at the time of approval.
o Questions to be answered in the initiation phase include the following:
 Why this project?
 Is it feasible?
 Who are possible partners in this project?
 What should the results be?
 What are the boundaries of this project (what is outside the scope of the project)?

 Definition phase
o After the project plan (which was developed in the initiation phase) has been approved,
the project enters the second phase: the definition phase.
o In this phase, the requirements that are associated with a project result are specified as
clearly as possible.
o This involves identifying the expectations that all of the involved parties have with regard
to the project result.
o How many files are to be archived? Should the metadata conform to the Data
Documentation Initiative format, or will the Dublin Core (DC) format suffice? May files
be deposited in their original format, or will only those that conform to the ‘Preferred
Standards’ be accepted? Must the depositor of a dataset ensure that it has been processed
adequately in the archive, or is this the responsibility of the archivist? Which guarantees
will be made on the results of the project? The list of questions goes on and on.
 Design phase
o The list of requirements that is developed in the definition phase can be used to make
design choices.
o In the design phase, one or more designs are developed, with which the project result can
apparently be achieved.
o Depending on the subject of the project, the products of the design phase can include
dioramas, sketches, flow charts, site trees, HTML screen designs, prototypes, photo
impressions and UML schemas.
o The project supervisors use these designs to choose the definitive design that will be
produced in the project.
o This is followed by the development phase. As in the definition phase, once the design
has been chosen, it cannot be changed in a later stage of the project.

 Development phase
o During the development phase, everything that will be needed to implement the project is
arranged.
o Potential suppliers or subcontractors are brought in, a schedule is made, materials and
tools are ordered, and instructions are given to the personnel and so forth.
o The development phase is complete when implementation is ready to start. All matters
must be clear for the parties that will carry out the implementation.
o In some projects, particularly smaller ones, a formal development phase is probably not
necessary. The important point is that it must be clear what must be done in the
implementation phase, by whom and when.
 Implementation phase
o The project takes shape during the implementation phase. This phase involves the
construction of the actual project result.
o Programmers are occupied with encoding, designers are involved in developing graphic
material, contractors are building, the actual reorganization takes place.
o It is during this phase that the project becomes visible to outsiders, to whom it may
appear that the project has just begun.
o The implementation phase is the ‘doing’ phase, and it is important to maintain the
momentum.
 Follow-up phase
o Although it is extremely important, the follow-up phase is often neglected.
o During this phase, everything is arranged that is necessary to bring the project to a
successful completion.
o Examples of activities in the follow-up phase include writing handbooks, providing
instruction and training for users, setting up a help desk, maintaining the result,
evaluating the project itself, writing the project report, holding a party to celebrate the
result that has been achieved, transferring to the directors and dismantling the project
team
o The central question in the follow-up phase concerns when and where the project ends.
o Project leaders often joke among themselves that the first ninety per cent of a project
proceeds quickly and that the final ten per cent can take years.
o The boundaries of the project should be considered in the beginning of a project, so that
the project can be closed in the follow-up phase, once it has reached these boundaries.

 Work breakdown structure:

Introduction:-
o Dividing complex projects to simpler and manageable tasks is the process identified as
Work Breakdown Structure (WBS).
o Usually, the project managers use this method for simplifying the project execution. In
WBS, much larger tasks are broken down to manageable chunks of work. These chunks
can be easily supervised and estimated.
o WBS is not restricted to a specific field when it comes to application. This methodology
can be used for any type of project management.
o Following are a few reasons for creating a WBS in a project:

 Accurate and readable project organization.

 Accurate assignment of responsibilities to the project team.

 Indicates the project milestones and control points.

 Helps to estimate the cost, time and risk.

 Illustrate the project scope, so the stakeholders can have a better understanding of
the same.
o Work breakdown structure, WBS in short, is a technique which breaks down a work
into its components and at the same time establishes the connections between the
components on the line of family tree.

 Beauty Of The WBS:-

o Total project can be thought out in advance.
o Costs and budgets can be established.
o Responsibility assignments can begin to take shape.
o Can be used to begin putting together schedule.
o All items are potential risks. Therefore it’s essential to defining risk.

 Why use a Work Breakdown Structure?

o The work breakdown structure has a number of benefits in addition to defining and
organizing the project work.
 o A project budget can be allocated to the top levels of the work breakdown structure,
and department budgets can be quickly calculated based on the each project's work
breakdown structure.
o By allocating time and cost estimates to specific sections of the work breakdown
structure, a project schedule and budget can be quickly developed.
o As the project executes, specific sections of the work breakdown structure can be
tracked to identify project cost performance and identify issues and problem areas in
the project organization. For more information about Time allocation, see the 100%
Rule.
o Project work breakdown structures can also be used to identify potential risks in a
given project.
o If a work breakdown structure has a branch that is not well defined then it represents
a scope definition risk.
o These risks should be tracked in a project log and reviewed as the project executes. By
integrating the work breakdown structure with an organizational breakdown structure,
the project manager can also identify communication points and formulate a
communication plan across the project organization.
o When a project is falling behind, referring the work breakdown structure will quickly
identify the major deliverables impacted by a failing work package or late sub-
deliverable.
o The work breakdown structure can also be color coded to represent sub- deliverable
status. Assigning colors of red for late, yellow for at risk, green for on-target, and blue
for completed deliverables is an effective way to produce a heat-map of project
progress and draw management's attention to key areas of the work breakdown
structure.
 How to use WBS:-
o Identify the primary requirement or objective. This should be clear item, based on
customer requirements, to which the entire team agrees. Write this requirements at top
of the chart.
o Subdivide the rwuirement statement into major secondary categories. These branches
should represent requirements, products or activities that directly lead to the primary
objective or that are directly required to fulfill the overall requirement. The team should
continually ask, “what happens next? And what is required to meet this condition?
Write the secondary categories below the primary requirement statement. Using sticky
notes at this stage makes later changes easier to accomplish.
o Break each major heading into greater detail:- as we move from top to bottom in the
WBS, products and activities should become more and more specific. Stop the
breakdown when each task is tiny enough to easily completed and evaluated for
accuracy. If the team does not have enough knowledge to continue at the same point
 identify the individuals who can supply the information and coordinate the breakdown
later with those individuals present.
o Review the WBS for logic and completeness. Make sure that the subheading and path
has a direct cause and effect relationship with the….before. Examines the paths to
ensure that no obvious product or….have been left out. Also ensure that the
development of listed product completion of listed actions will indeed lead to the
anticipated results.
 Advantages/Importance of WBS: the work breakdown structure (WBS) is a powerful;
tool for expressing the scope or extent of a project in simple graphic term.it represents
the project in terms of hierarchy of deliverables and services it will produce.
 Easy to define, organize and manage the project.
 Improves the efficiency of the project.
 Helps to estimate the resources required, such as cost, time, staff, etc.
 Easy allocation of resources based on the importance of the task/sub-task
 Helps to set up milestones in the project.
 Gives a better understanding of the project to the stakeholders.
 Easy to identify potential risks in a given project.
 Helps in identifying communication points and formulating communication plan
across the project team.

5. What is feasibility study of the project? Write note types of feasibility.

Answer

 Introduction:-
 Feasibility study-
o It is an analysis of the viability of an idea.
o is an analysis of all possible solutions to a problem and a recommendation on the best
solution to use.
o is a formal study to decide what type of system can be developed, which best the needs
of the organization.
o A feasibility study is essentially a process for determining the viability of a proposed
initiative or service and providing a framework and direction for its development and
delivery.
 Why do feasibility studies?
o To find a solution that is cost effective from a business perspective.
o To Find a solution that is well recognized
o To find out the probable market for the products
 o To find out the opportunities and threats as presented by environment
o To determine the probable income of operating the project

 Benefits of conducting a feasibility study:-

o Narrows the business alternatives
o Gives project teams more focus and provides an alternative outline.
o Identifies a valid reason to undertake the project.
o Enhances the success rate by evaluating multiple parameters.
o Aids decision-making on the project.

 Dimensions/types of feasibility study

 market analysis
 technical analysis
 financial analysis
 economic analysis
 ecological analysis
 legal and administrative

 Market analysis/feasibility:-
o Market research is the systematic gathering, recording and analyzing of data about
problems relating to the marketing of goods and services.
o Market research is the means by which those who provide goods and services keep
themselves in touch with the needs and wants of those who buy these goods and services.

 Financial analysis:-
o Financial analysis seeks to ascertain whether the proposed project will be financially
viable in the sense of being able to meet the burden of servicing debt and whether the
proposed project will satisfy the return expectations of those who provide the capital.
o The aspects which have to be looked into while conducting financial appraisal are:
 Investment outlay & cost of project.
 Means of financing
 Project profitability
 Break-even-point
 Cash flows of the project
 Investment worthwhileness judged in terms of various criteria of merit
 Projected financial position
 Technical analysis:
o The technical analysis of a project idea can be scrutinized in detail to evaluate its
technical feasibility.
o Technical analysis distinct from commercial, financial, economic and managerial
feasibility.
o Technical feasibility is one of the first studies that must be conducted after a project has
been identified.
o In large engineering projects consulting agencies that have large staffs of engineers and
technicians conduct technical studies dealing with the projects.
o Technical analysis factors:
 Location and site
 Plant size
 Layout
 Machinery & Equipment
 Environment impact assessment
 Inputs
 Infrastructural facilities
 Manpower

 Economic feasibility:-
o Economic feasibility is where Analysis of a project's costs and revenues in an effort to
determine whether or not it is logical and possible to complete.

 Operational feasibility:-
o Operational feasibility determines if the human resources are available to operate the
system once it has been installed
o Users that do not want a new system may prevent it from becoming operationally
feasible
o Is a measure of how well a proposed system solves the problems, and takes advantages
of the opportunities identified during scope definition and how it satisfies the
requirements identified in the requirements analysis phase of system development.

 Ecological feasibility:-
o Characterized by the interdependence of living organisms in an environment; "an
ecological anything ecological relates to the science of ecology, which is the study of
how living things and the environment do their thing.
o Issues like preserving rain forests, saving endangered species, and keeping drinking water
safe, you're interested in ecological issues.
 o Ecological things have to do with how plants and animals relate to each other, in good
and bad ways, in specific environments — from the impact of floods on river insects to
how smog harms humans.

 Administrative analysis:-
o Administrative relating to the management of a company, school, or other organization
or has held a position with significant secretarial or clerical duties.
o Someone who has administrative experience either holds administrative experience
comes in a variety of forms but broadly relates to skills in communication, organization,
research, scheduling and office support- What are managerial needs of the project? Does
organization have the ability to get the managerial skills needed? Is timing of project
consistent with quantity and quality of management?

6. Discuss the importance of pert and CPM in project management.

Answer:-

 Introduction
o PERT and CPM are techniques of project management useful in the basic managerial
functions of planning, scheduling and control.
o PERT stands for “Programme Evaluation & Review Technique” and CPM are the
abbreviation for “Critical Path Method”.
o The techniques of PERT and CPM help greatly in completing the various jobs on
schedule. They minimize production delays, interruptions and conflicts.
o These techniques are very helpful in coordinating various jobs of the total project and
thereby expedite and achieve completion of project on time.

 PERT/CPM can answer the following important questions:-

 How long will the entire project take to be completed?
 What are the risks involved?
 Which are the critical activities or tasks in the project which could delay the entire
project if they were not completed on time?
 Is the project on schedule, behind schedule or ahead of schedule?
 If the project has to be finished earlier than planned, what is the best way to do this at the
least cost?
 PERT(Project Evaluation Review Technique):-
 o PERT is one of the management techniques which are considerably useful to some
managers than to others. It is one of the tested took management in industrially-
developed countries.
o Steps in PERT:-

STEP-I: Planning:

The planning phase is started by splitting the total project into small projects. These smaller
projects, in turn, are divided into activities and are analysed by the depart-ment or a section. The
relationship of each activity with respect to other activities are defined and established and the
corresponding responsibilities and the authority are also stated. Thus, the possibility of over-
looking any task necessary for the completion of the project is reduced substantially.

STEP-II: Scheduling:

The ultimate objective of the scheduling phase is to prepare a time chart showing the start and
finish time for each activity as well as its relationship to other activities of the project.
Moreover, the schedule must pinpoint the critical path activities which require special attention
if the project is to be completed in time.

For non-critical activities, the schedule must show the amount of slack or float times which can
be used advantageously when such activities are delayed or when limited resources are to be
utilized effectively. In this phase, it is possible to resource requirements such as time,
manpower, money, machines etc.

STEP-III: Allocation of Resources:

Allocation of resources is performed to achieve the desired objective. A resource is a physical

variable such as labour, finance, equipment and space which will impose a limitation on time
for the project.

When resources are limited and conflicting demands are made for the same type of resource, a
systematic method for allocation of resources become essential. Resource allocation usually
incurs a compromise and the choice of this compromise depends on the judgement of managers.

STEP-IV: Controlling:
The final phase in project management is controlling. Critical path method facilitates the
application of the principle of management by exception to identify areas that are critical to the
completion of the project.

By having progress reports from time to time and updating the network continuously, a better
financial as well as technical control over the project is exercised. Arrow diagrams and time
charts are used for making periodic progress reports. If necessary, new courses of action are
determined for the remaining portion of the project.

o PERT deals with the problem of uncertain activity time by the application of statistical
analysis to the determination of estimated time for each activity of the project.
o This technique, as a manager’s tool, defines and coordinates what must be done to
successfully accomplish the objectives of a project on time. It aids the decision- makers
but does not make decisions for him.
o In PERT, time is the basic measure. It is usually expressed in calendar weeks. The project
should be completed within the stipulated optimistic time.
o In order to arrive at the most reliable estimate of time, three time estimates are usually
employees under this technique as given below:-
1. The optimistic time :- it is the shortest time possible if everything goes perfectly well
with no complications, the chance of this optimum actually occurring might be one in
hundred.
2. The pessimistic time:- it is longest time conceivable:it include time for usual delays and
thus the chance of its happening might be only one in a hundred.
3. The most likely time>- it would be the best estimate of what normally would occure. The

The difference in these three times give a measure of the relative uncertainity invo;bed in the
activity.

 Advantages of Pert:
o The following advantages are derived from the pert:
o It compels managers to plan their projects critically and analyses all factors affecting the
progress of the plan. The process of the network analysis requires that the project
planning be conducted on considerable detail from the start to the finish.
o It provides the management a tool for forecasting the impact of schedule changes and be
prepared to correct such situations. The likely trouble spots are located early enough so
as to apply some preventive measures or corrective actions.
o a lot of data can be presented in a highly ordered fashion. The task relationships are
graphically represented for easier evaluation and individuals in different locations can
easily determine their role in the total task requirements.
o The PERT time is based upon 3-way estimate and hence is the most objective time in
the light of uncertainties and results in greater degree of accuracy in time forecasting.
o It results in improved communication; the network provides a common ground for
various parties such as designers, contractors, project managers etc. and they must all
understand each other’s role and contributions.

Disadvantages of PERT:

o Uncertainly about the estimate of time and resources. These must be assumed and the
results can only be as good as the assumptions.

o The costs may be higher than the conventional methods of planning and control.
Because of the nature of networking and network analysis, it needs a high degree of
planning skill and greater amount of details which would increase the cost in time and
manpower resources,

o It is not suitable for relatively simple and repetitive processes such as assembly line
work which are fixed-sequence jobs.

o Hence PERT is not very effective in manufacturing operations, since it deals in the time
domain only and does not deal with the quality information which is necessary in
manufacturing processes.

 CPM(Critical Path Method):-

o Activities are shown as a network of precedence relationships using activity on network
construction.
o Single estimate or activity time
o Deterministic activity times
o Used in: production management – for the jobs of repetitive in nature where the activity
time estimates can be predicted with considerable certainty due to the existence of past
experience.
  Difference between PERT and CPM:-

7. Write a note on the importance of BCG growth share matrix and

Mckinsey’s 7s model in strategic management
Answer:-

Introduction:-
o Boston consulting Group Model (BCG) or port-folio model is the model which
aims at clearly identifying the underlying tenets of specific business segments.
o It is careful analysis of each product and market segment as a separate nosiness so
that each business may be assigned to a specific strategy or sub-strategy.
o It involves the allocation of according to corporate perspective of each of the
business segments within the total port-folio.
o This model uses the growth- market share matrix concept to evaluate firm’s
products, business or profit centers as distinct entities and helps the strategic
managers to identify the cash-flow requirements of the different business which are
part of their port-folio.

Steps involved in BCG model :-

Dividing a company into SBUs:-

A SBUs is an organizational unit within the company that performs all or most of the
basic functions on meeting the needs of a particular market with a product line or a
mix related lines.

SBU is a unit of the firm that can be considered as a separate entity for planning
purposes may it be a single product, a division or the entire company. To start with,
the SBU for each economically distinct and different business areas are created
because SBUs are relevant for planning and strategy formulation. They are created in
terms of the product markets for which the company competes. Once the SBU are
defined, the strategic manager assess each according to two criteria namely, the SBu’s
relative market share and the growth rate of SBU’s relative market share and the
growth rate of SBU’s industry.

Relative market share :-

Relative share of market is the ratio between SBu’s market share to the market share
held by the largest rival of the company in the industry.

Industry growth rate:-

Growth rate of SBU’s industry is calculated, and is compared with the growth rate of
the economy as the whole. Those industries with growth rate higher than the the
average growth rate of the economy are featured as “high growth” rate industries, and
industries with the lower than the average growth rate are featured as “low growth”
rate industries

The purpose of assessing industrial growth rate is to determine whether industrial

conditions provide opportunities for growth or threats to SBU. High growth industries
provide a more favorable environment and opportunities as against long growth rate
industries provide a more favourable environment and opportunities as against long
growth rate industries that expose a more unfavourable environment and threats.

2) compairing SBU with industry

In this secod step the SBUs are compared with industry;s growth rate by means of two
dimensu=ional matrix or two by two matrix one demonstrating relative market share
and other showing industry growth.
 McKinsey 7s model is a tool that analyzes firm’s organizational design by looking at 7
key internal elements: strategy, structure, systems, shared values, style, staff and skills, in
order to identify if they are effectively aligned and allow organization to achieve its
objectives.
 McKinsey 7s model was developed in 1980s by McKinsey consultants Tom Peters,
Robert Waterman and Julien Philips with a help from Richard Pascale and Anthony G.
Athos.
 Since the introduction, the model has been widely used by academics and practitioners
and remains one of the most popular strategic planning tools.
 It sought to present an emphasis on human resources (Soft S), rather than the traditional
mass production tangibles of capital, infrastructure and equipment, as a key to higher
organizational performance.
 The goal of the model was to show how 7 elements of the company: Structure, Strategy,
Skills, Staff, Style, Systems, and Shared values, can be aligned together to achieve
effectiveness in a company.
 The key point of the model is that all the seven areas are interconnected and a change in
one area requires change in the rest of a firm for it to function effectively.
 Strategy is a plan developed by a firm to achieve sustained competitive advantage and
successfully compete in the market. What does a well-aligned strategy mean in 7s
 McKinsey model? In general, a sound strategy is the one that’s clearly articulated, is
long-term, helps to achieve competitive advantage and is reinforced by strong vision,
mission and values. But it’s hard to tell if such strategy is well-aligned with other
elements when analyzed alone. So the key in 7s model is not to look at your company to
find the great strategy, structure, systems and etc. but to look if its aligned with other
elements. For example, short-term strategy is usually a poor choice for a company but if
its aligned with other 6 elements, then it may provide strong results.
 Structure represents the way business divisions and units are organized and includes the
information of who is accountable to whom. In other words, structure is the
organizational chart of the firm. It is also one of the most visible and easy to change
elements of the framework.
 Systems are the processes and procedures of the company, which reveal business’ daily
activities and how decisions are made. Systems are the area of the firm that determines
how business is done and it should be the main focus for managers during organizational
change.
 Skills are the abilities that firm’s employees perform very well. They also include
capabilities and competences. During organizational change, the question often arises of
what skills the company will really need to reinforce its new strategy or new structure.
 Staff element is concerned with what type and how many employees an organization will
need and how they will be recruited, trained, motivated and rewarded.
 Style represents the way the company is managed by top-level managers, how they
interact, what actions do they take and their symbolic value. In other words, it is the
management style of company’s leaders.
 Shared Values are at the core of McKinsey 7s model. They are the norms and standards
that guide employee behavior and company actions and thus, are the foundation of every
organization.
 STEPS:-

Step 1. Identify the areas that are not effectively aligned

During the first step, your aim is to look at the 7S elements and identify if they are
effectively aligned with each other. Normally, you should already be aware of how 7
elements are aligned in your company, but if you don’t you can use the checklist from
WhittBlog to do that. After you’ve answered the questions outlined there you should look
for the gaps, inconsistencies and weaknesses between the relationships of the elements. For
example, you designed the strategy that relies on quick product introduction but the matrix
structure with conflicting relationships hinders that so there’s a conflict that requires the
change in strategy or structure.
Step 2. Determine the optimal organization design

With the help from top management, your second step is to find out what effective
organizational design you want to achieve. By knowing the desired alignment you can set
your goals and make the action plans much easier. This step is not as straightforward as
identifying how seven areas are currently aligned in your organization for a few reasons.
First, you need to find the best optimal alignment, which is not known to you at the moment,
so it requires more than answering the questions or collecting data. Second, there are no
templates or predetermined organizational designs that you could use and you’ll have to do a
lot of research or benchmarking to find out how other similar organizations coped with
organizational change or what organizational designs they are using.

Step 3. Decide where and what changes should be made

This is basically your action plan, which will detail the areas you want to realign and how
would you like to do that. If you find that your firm’s structure and management style are not
aligned with company’s values, you should decide how to reorganize the reporting
relationships and which top managers should the company let go or how to influence them to
change their management style so the company could work more effectively.

Step 4. Make the necessary changes

The implementation is the most important stage in any process, change or analysis and only
the well-implemented changes have positive effects. Therefore, you should find the people
in your company or hire consultants that are the best suited to implement the changes.

Step 5. Continuously review the 7s

The seven elements: strategy, structure, systems, skills, staff, style and values are dynamic
and change constantly. A change in one element always has effects on the other elements
and requires implementing new organizational design. Thus, continuous review of each area
is very important.

8. Define environment. Explain the components of environment. Discuss the

importance of SWOT analysis in strategic planning with an example.
Ans.
Introduction:
  Business establishes, grows or operates and dies in environment. It exchanges
resources I environment.
 It collects inputs i.e. Man money, materials, machines etc. And provides output i.e.
Goods and services in the environment.
 Environment means surrounding. Business environment defines as a force that
effect on organizational performance.
 It includes internal an eternal factors.
 The combination of internal and external factors that influence a company
operating situation.
 The business environment can include factors such as: clients and suppliers; its
competition and owners; improvements in technology; laws and government
activities; and market, social and economic trends.

Characteristics of environment:

 It is complex: it consists of many interrelated factors.

 It is dynamic
 It is multifaceted: The environment developed is perceived differently by
different people
 It has a far reaching compact: the growth and profitability of the organization
critically depends upon its environment.

Components of a Business Environment:

 Internal environment:
- It is defined as all the forces or conditions that are available within an environment
that affects on organization and business.
- It is also known as controllable factors because business can control them.
- It includes;
 Employees:
 Business hires employees. It is the major internal factor. It works inside the
business.
 It can be controlled by the business. Employees differ in skill, knowledge,
morality, and attitude and so on.
 When managers and employees have difference in goals and beliefs then conflict
may arise.
 The task of management is to divide the work and assign the work to the suitable
employee and handle the conflict.
 Shareholders:
 Management deals with many shareholders.
  Shareholders have the right of ownership, power of management and voting right.
 The actual management of organization is carried out by elected representative of
shareholders jointly known as board of directors.
 Boards of directors have the responsibility of overseeing the management of
organization.
 It plays the major role in formation of objectives, policies, strategies of the
organization as well as their implementation.
 Organization structure:
 It is located inside the organization. The arrangement of various facilities, pattern
of relationships among the various department, responsibility, authority and
communication is the organization structure.
 It also included specialization and span of control.
 Organization culture:
 The sets of values that help the members to understand what organization stand for
how it does work, what it considers, cultural values of business forces of business
and so on.
 It helps in direction of activities.
 External environment (PEST):
- All the forces and condition that cannot be controlled by the business is called
external environment.
- It is also known as uncontrollable factors because business can’t control them.
- It is located outside the business. It affects on organizational performance.
- It includes:
 Economic environment:
 It indicates the condition of economy in which business organization operates.
 It has continuous and great impact on business.
 It includes national income, production, inflation, savings, investment, price,
government activities.
 Business person must have constant watch on this factor.
 Political or legal environment:
 It is defined as rules and regulations determined by the government.
 Business must fulfill demand of government.
 There should be non-violation of rules and regulation of government.
 Business should avoid unfair trade and should provide essential information to
the government.
 Social environment:
 Business must have good environment where a business can be established neatly.
 Business also helps in employment opportunities generation.
  There should be socio cultural understanding and application of anti-pollution
measures.

 Technological environment:
- It defines about the methods available for converting resources into product or
services.
- It transforms inputs into output. Inputs means material, capital, man, machine.
- It affects on business.
- It helps to change the level of job, skill, and product and so on.
- There can be innovation, development of scientific techniques which encouraged
mass production and distribution.
Introduction:
 A SWOT analysis is a comprehensive look at a company strengths and
weaknesses, or internal factors, as well as external factors it faces in the market.
 A company usually starts a SWOT analysis by studying its strengths, such as a
strong brand name or good reputation, and weaknesses, like inexperienced
management or poor distribution.
 Subsequently, an external environment SWOT analysis enables a company to
ultimately determine how it can exploit its strengths and minimize weaknesses to
compete.
 SWOT analysis is a business analysis process that ensures that objectives for a
project are clearly defined and that all factors related to the project are properly
identified.
 The SWOT analysis process involves four areas: Strengths, Weaknesses,
Opportunities and Threats.
 Both internal and external components are considered when doing SWOT
Analysis, as they both have the potential to impact the success of a project or
venture.

SWOT Analysis

 Strengths
 Strengths in SWOT analysis are the attributes within an organization that are
considered to be necessary for the ultimate success of a project.
 Strengths are resources and capabilities that can be used for competitive advantage.
Examples of strengths that are often cited include:
o Strong brand names.
o Good reputation
o Cost advantages of proprietary know-how
 Weaknesses
 The factors within the SWOT analysis formula that could prevent successful results within
a project are Weaknesses.
 Weaknesses include factors such as an abundance of rivalry between departments, a weak
internal communication system, lack of funding and an inadequate amount of materials.
 Weaknesses can derail a project before it even begins. Other Weaknesses include:
 Weak brand name
 Poor reputation
 Ineffective and high cost structure
 Opportunities
 Opportunities are classified as external elements that might be helpful in achieving the
goals set for the project.
 These factors could involve vendors who wish to work with the company to help achieve
success, the positive perception of the company by the general public, and market
conditions that could make the project desirable to the segment of the market.
 Additional Opportunities include:
o Arrival of new technology
o Unfulfilled customer needs
o Taking business courses (training)
 Threats
 These external factors could gravely affect the success of the project or business venture.
 The possible threats that are critical to any SWOT analysis include a negative public
image, no ready-made market for the final product and the lack of vendors who are able
to supply raw materials for the project.
 Some other threats include:
o Trend changes
o New regulations
o New substitute products

Short answers
1. Business intelligence
Answer:-
 Business Intelligence is the processes, technologies, and tools that help us change data
into information, information into knowledge and knowledge into plans that guide
organization
 Technologies for gathering, storing, analyzing and providing access to data to help
enterprise users make better business Decisions.
 Components of business intelligence:
 o OLAP:-
 (Online transaction processing)- OLAP performs fast analysis of
multidimensional business data and provides the capability for complex
calculations, trend analysis, and sophisticated data modeling.
 Types of OLAP:- Multidimensional, Rational and Hybrid.
 Advantages- Reduces paper trails, simple & effective, Highly accurate
 Disadvantages :- Needs technical resources, Needs maintenance, Costly
o Data mining:-
 Data mining is the process of finding correlations or patterns among
dozens of fields in large relational databases.
 Data mining is the process of analyzing data from different
perspectives and summarizing it into useful information.
 Data mining is becoming an increasingly important tool to transform
this data into information.
 It is commonly used in a wide range of profiling practices, such as
marketing, surveillance, fraud detection and scientific discovery.
 Data mining can be used to uncover patterns in data but is often
carried out only on samples of data.
o Analytics:-

2. Environment scanning:-
o Environmental scanning can be defined as the process by which organizations
monitor their relevant environment to identify opportunities and threats affecting
their business for the purpose of taking strategies decisions.
o Factors to be consider for environmental scanning-
 1. Events are important and specific occurrence taking place in different
environmental sectors.
2. Trends are the general tendencies or the courses of action along which events
take place.
3. Issues are the current concerns that arise in response to events and trends.
4. Expectations are the demands made by interested group in the light of their
concern for issues.
o Approaches to environmental scanning:
1. Systematic approach
2. Ad hoc approach
3. Processed form approach.
3. Restructure strategy :
 Corporate restructuring is the process of redesigning one or more aspects of a
company. The process of reorganizing a company may be implemented due to a
number of different factors, such as positioning the company to be more
competitive, survive a currently adverse economic climate, or poise the corporation
to move in an entirely new direction.
 Objectives of corporate restructuring:-
i. Evaluation of current endowments and performance
ii. Fine tuning of available skills, technology and plant
iii. Assessment of changes in business environment
iv. Identification of new business opportunities
v. Securing of a competitive edge for the corporation
o Types of restructuring: Merger, Acquisition, demerger and join venture.
4. Project manager as a staff manager:-
 Project manager:
o The project manager is a person responsible for managing the project’s scope,
schedule, and cost to support the owner’s expectations for the successful
completion of the project.
o He is the one who provides direction, coordination and integration to the project
team
o Is responsible for the performance and success of the project.
 Importance of a project manager:-
o The most important aspect of project management is the project manager—the
person who functions to unify project-related planning, communications, control
and direction to achieve project goals.
o The project manager is the integrator who ties together the efforts of functional
areas, suppliers, and contractors, and keeps top management and the customer
apprised of project progress.
 o The individual appointed with responsibility for managing the project.
o Acts as the customer’s single point of contact for services delivered within the
scope of a project.
o Controls planning and execution of the project’s scope of activities and resources
towards meeting established cost, timetable, and quality goals.
 Duties of a project manager:-
o Managing the development of the scope definition and project plans.
o Providing team leadership for problem resolution by working with the lowest
organizational levels possible and escalating, as necessary.
o Monitoring schedule and costs versus project progress to identify problems that
could potentially extend the schedule or overrun costs.
o Must induce the right people at the right time to address issues, make decisions
and carry out the project’s activities
o Addresses the right issues and makes the right decisions
o Taking, directing, or recommending corrective action when scope, schedule, or
cost variances threaten the project.
o Serving as the central point of contact for the project and communicating project
status to the project owner and other stakeholders.
o Providing input to the performance reviews of the project team members.
o Negotiating a resolution to team member resource conflicts with their functional
managers
5. What are the issues involved in strategic management:-
 Differentiated product:- A differentiated product which cannot be matched by
the competition and for which the customer is prepared to pay a superior price
Differentiation requires deep understanding of what creates value for customers
Profit potential derives from the premium price
 Low cost product:- A unique low-cost way of creating or making available a
non-differentiated product (commodity).Commodity: Open market has created a
standardized and clearly defined product for which there is a continuing market
Profit potential derives from cost leadership.
6. Key result area:-
 Key result areas or KRAs refer to the general metrics or parameters which the
organization has fixed for a specific role. The term outlines the scope of the job
profile, and captures almost 80%-8% of a work role.
 Key result areas (KRAs) broadly define the job profile for the employee and enable
them to have better clarity of their role. KRAs should be well-defined, quantifiable,
and easy to measure. It also helps employees to align their role with that of the
organisation.
 KRAs are broad categories or topics on which the employee has to concentrate
during the year. For example, an employee who is working at a managerial level in
a manufacturing company would have a different KRA than somebody who is in a
technology firm.
 A manager who is working in a manufacturing firm would have to focus on
maintaining the budget of the department, safety of the employees, coordination
with different departments, and training, reporting as well as introducing new
technologies to improve productivity.
 The next step is to define objectives and standards for each KRA which should be
easily quantifiable. The employee should have a clear understanding of his/her
KRAs to perform his/her tasks efficiently.
 Key result areas are those areas in which you have to take complete ownership.
The first step is to list out daily activities which could be part of the KRAs. In
some organization even a team meeting every day is part of a manager’s KRA.
 So, KRAs could be varying from organization to organization and from one work
profile to another. There are no set rules to define KRAs, but broadly they sum up
the job profile as well as the key impact areas on which the employee is expected
to deliverly.