ASSIGNMENT

Course Code : MS-91

Course Title : Advanced Strategic Management
Assignment Code : MS-91/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. (a) Define corporate planning. Describe the process of corporate planning in detail.
(b) What are the implementation issues involved in corporate planning?
2. Write a note on the importance of Government initiatives taken to boost good Corporate
Governance.
3. Discuss various market structures and their impact on competition.
4. Briefly discuss e-business and the steps involved in formulating an e-business plan.
5. Present couple of cases / applications of Knowledge Management (KM) and discuss the
KM architecture adopted in those applications. Do you believe that KM can improve
competitiveness of a firm? Give reasons.
6. (a) Describe the nature of corporate philanthropy citing examples.
(b) Write a note on ethics of consumer production and marketing.

Answer
1. (a) Define corporate planning. Describe the process of corporate planning in detail.
Ans.: Corporate planning is a strategic tool used by companies to set long-term plans to meet
certain objectives, such as business growth and sales volumes. Corporate plans are similar to
strategic plans, but place greater emphasis on using internal resources and streamlining
operations to achieve certain end goals
Corporate plans are essentially business plans that seek to make improvements and generate
profits by making internal operations more effective and productive. Many corporate plans
have specific action steps that must be taken to achieve certain objectives. These steps are
clearly defined in the corporate plan and can be used as markers to check on a periodic basis
to determine whether or not sufficient progress is being made.
Ideally, corporate plans help companies grow during a period of time, typically a year, by
expanding their consumer base, improving marketing campaigns and attracting new business
partners. Corporate plans are generally structured by first introducing a grand overall vision
of growth and development, then laying out a plan of action on a microscopic level to meet
the end goal.
Corporate plans can be created and used by businesses of all sizes, but are most commonly
used by large organizations. Corporate plans typically consist of a vision statement, mission

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statement, identifying available resources and then listing business objectives and strategies
to be used to meet those objectives.
Effective planning requires gathering data about the projected growth of the industry and
information about competitors -- their strengths, weaknesses and the strategies they are
deploying. The small business owner also must identify the best opportunities for his
company to pursue. He starts by analyzing customer needs and determines how to create
products and services to meet these needs. He then sets goals for the company, which may
include revenue targets and productivity goals such as the gross margin percentage he intends
to achieve. The next step is designing strategies and action plans -- the specific steps the
owner and his team will take to reach company goals.
The plan will be more valuable -- and accurate -- if the business owner asks his team
members for their input as he prepares the plan. Employees who deal with customers on a
daily basis, for example, can provide insight regarding customers’ most pressing needs -- and
in what aspects of its operations the company needs to improve in order to attract more
customers. Companies that gather information about competitors on a systematic basis --
called competitive intelligence -- are better able to identify threats to the business from
changes in competitors’ strategies. A business owner should consider revising the financial
forecast in his plan during the course of the year if business conditions materially change.
(b) What are the implementation issues involved in corporate planning?
Ans.: Strategic planning is a process, an outcome, and, in its best form, a roadmap used by
stakeholders throughout an institution to move the institution toward higher levels of
achievement. Strategic planning is also a much maligned endeavor, subject to the usual (and
frequent) criticisms: too much time, too much money, and too little action. Having watched
more strategic plans than I can count gather proverbial dust, I’d like to reflect for a moment
on our experiences at the Academy for Academic Leadership. There are many reasons
strategic plans fail, but the following five challenges are among the most common:
If the leaders of the institution, school, program, or department do not support the plan, it will
fail. This point seems obvious, but far too often leaders talk about the importance of the
strategic plan as the planning process gets underway, only to show little interest down the
line. I’m thinking of a senior administrator who appeared exactly three times, for about 15
minutes each time, over a period of one year to express to his strategic planning task force
how important their work was to the institution. At virtually every other gathering associated
with the process, he sent an emissary to convey the importance of the strategic plan. Do you
suppose those task force members viewed the process as extremely important?
How do leaders contribute to the success of the plan? They are present and engaged at the
right times with the right people. Most important is their ongoing leadership responsibility:
they think strategically. Strategic thinking is guided by vision, mission, and values. Strategic
thinking and consequent action aligned with a clear vision of the future are an antidote to the
inevitable environmental changes that undermine the details of strategic plans. Strategic
thinking is ultimately about staying the course over time, in spite of detours caused by
unforeseen circumstances.

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Strategic planning is about consensus building. Done correctly, the process promotes
communication, participation, and collaboration. It provides a structured forum for airing
conflicts, dealing with the inevitable political struggles, and negotiating the purpose and
meaning of an organization and one’s place in it. While a true consensus about all issues
among all stakeholders is unrealistic, engaging everyone through interviews, focus groups,
surveys, open forums, and the like is essential if leaders expect them to implement the plan.
Such engagement of others requires time. There are no formulas for the right amount of time.
Too much and people lose interest or become mired in details; too little, and they feel
unheard. Yet the results of this consensus-building process reflect the antithesis of the plan
developed by committee or the lone administrator behind closed doors.
2. Write a note on the importance of Government initiatives taken to boost good Corporate
Governance.
Ans.: Corporate governance is based on trustee-ship principles of Gandhi. In this trustee
means capitalist are guardian of interest of stakeholders public interest. In order to be
efficient , it shall have accountability, transparency, fairness in decision making process. It is
based on belief that that those who are managing the company affairs will not affect the
interest of shareholder,customers, clients ,employees etc . They will also not influence
political decision making at the cost of stakeholders for their vested interest ,thus they will
not in any case subordinate the public interest.
 Government is committed to safeguard the interest of people as well as ensure
effective corporate governance
 Establishment of SEBI , a security market watch dog with quasi judicial,exec and
legislative powers vested in it . recent FMC merger comes extension to it . Such will
protect the investors interest
 Amendments in RPA and recent CS 2013 act ,Sec 182 ,which says 7.5% of profit as
the cap for donations in the Political parties. it must have 3 consecutive balance
sheets.
 Serious fraud investigation Unit and MRAU for investigating the frauds in corporate
sector.
 It also have investor education fund to raise awareness about the fraudulent schemes
 recent amendment in SEBi to give more teeth
 Negative externalities caused by Industrial unit shall be compensated with CSR 2% in
new Companies act for 500 cr profit or 1000 cr turnover companies
Various other steps apart from this have also been observed by narayan murthy committee on
corporate governance . government has taken adequate step from time to time in ensuring it
In India initiatives have been taken from time immemorial to improve the standards of
Corporate Governance. At the outset, SEBI appointed a committee on Corporate Governance
on May 7 1999 under the Chairmanship of Shri. Kumara Mangalam Birla known as the
Kumara Mangalam Birla Committee with a view to promote and raise the standards of
Corporate Governance. This Committee focused on instituting safeguards within the
companies to deal with insider information and insider trading and also to draft a code of best

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corporate governance practices. Secondly the committee took the initiative to identify three
key constituents of Corporate Governance namely the Share Holders, Board of Directors and
the Management. The committee identified their roles and responsibilities as well as their
rights in the context of good Corporate Governance.
SEBI as part of its endeavor to improve the standards of Corporate Governance in line with
the needs of a dynamic market, constituted another committee known as the Narayana
Murthy Committee, under the Chairmanship of N.R.Narayana Murthy to review the progress
of the Corporate Sector in meeting the norms of Corporate Governance. However based on
the recommendations of the Committee and public comments SEBI took further initiatives to
revise Clause 49 of the Listing Agreement by a circular so as to raise and promote the
standards of Corporate Governance.
A good Corporate Governance is influenced by a variety of factors like the integrity of
management, quality of corporate reporting and disclosures, participation of stake holders in
the business of enterprises etc. If any of these factors is not properly complied with it results
in weak functioning of the enterprises. These factors play a vital role in ensuring smooth and
efficient functioning of the Corporate Houses.
The main aim of Corporate Governance is to ensure transparency in the Board process and
independency in the functioning of Boards, with a view to enhance the shareholders
confidence and reputation of the company.
Corporate Social Responsibility (CSR) is a concept through which organizations consider the
interests of society by taking responsibility for the impact their activities have on customers,
suppliers, employees, communities and the environment. This responsibility goes beyond
compliance with regulations and is about organizations voluntarily taking further steps to
improve the quality of life for employees as well as for the local community and society at
large.47 percent of the respondents believe that CSR is not high on the agenda of Indian
companies. Thirty percent of the respondents were undecided on this aspect.
3. Discuss various market structures and their impact on competition.
Ans.: There are several market structures in which firms can operate. The type of structure
influences the firm’s behaviour, whether it is efficient, and the level of profits it can generate.
Neo-classical theory of the firm distinguishes a number of market structures, each with its
own characteristics and assumptions. The structure of a market refers to the number of firms
in the market, their market shares, and other features which affect the level of competition in
the market. Market structures are distinguished mainly by the level of competition that exists
between the firms operating in the market.
As well as considering market structures, modern theory also looks at the behaviour, or
conduct of firms, their performance, and the level of contestability in the market. A market
might have an uncompetitive structure, with only a small number of firms competing, but the
behaviour of firms might be highly competitive, as is the case in the UK with the supermarket
sector.

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Structures are classified in term of the presence or absence of competition. When
competition is absent, the market is said to be concentrated. There is a spectrum, from perfect
competition to pure monopoly.
A purely competitive market is one in which there are a large number of independent buyers
and sellers dealing in standardized products. In pure competition, the products are
standardized because they are either identical to each other or homogenous. Moreover, the
price of products is same in the entire market.
Therefore, buyers can purchase products from any seller as there is no difference in the price
and quality of products of different sellers. Under pure competition, sellers cannot influence
the market price of products. This is because if a seller increases the prices of its products,
customers may switch to other sellers for getting products at lower price with the same
quality.
On the other hand, if a seller decreases the prices of its products, then customers may become
doubtful about the quality of products. Therefore, in pure competition, sellers act as price
takers. In addition, in a purely competitive market, there are no legal, technological, financial,
or other barriers for the entry and exit for organizations.
In pure competition, the average revenue curve or demand curve is represented by a
horizontal straight line. This implies the homogeneity of products with fixed market price.
Perfect competition or competitive markets -also referred to as pure, or free competition-,
expresses the idea of the combination of a wide range of firms, which freely enter or leave the
market and which considers prices as information, since each bidder only provides a relative
small share of the good to the market and thus do not exert a noticeable influence on it.
Therefore, perfect competitors cannot influence the levels of market clearing prices. Also,
buyers are numerous and disperse, which also means that they cannot influence prices.
Perfect competition markets are almost impossible to find in the real word as all markets have
some type of imperfection. This is the reason they are mostly considered only theoretically.
However, its study helps understand real world markets and their phenomena.
It must be noted that the theory of contestable markets, developed by William J. Baumol in
his “Contestable Markets: An Uprising in the Theory of Industry Structure”, 1982, that
perfect competition prices and output can be reached with just a few of these assumptions.
Furthermore, Bertrand’s duopoly model determines that oligopolistic markets can reach the
same prices as in perfect competition as long as oligopolists compete by changing their
prices, instead of the quantity offered.
4. Briefly discuss e-business and the steps involved in formulating an e-business plan.
Ans.: An organizational strategy is a broad-based formula for how a business is going to
compete, what its goals should be, and what plans and policies will be needed to accomplish
those goals. There is a strategy for a pure-play e-tailer and strategy for an existing physical
business that is now considering selling on the Internet (or, at least having some presence on
the Internet. Any contemporary business strategy setting process must include the Internet.
The winners will be those that view the Internet as a complement to not a cannibal of

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traditional ways of competing. Many businesses are taking a focused look on the impact of
the Internet and ec on their future. For such businesses, an e-strategy is the formulation and
execution of a vision of how an new or existing company intends to do business
electronically.
In the late 1990s, some entrepreneurs claimed that there was an unusual opportunity for new
companies to gain a foothold in the online marketplace, since existing "bricks and mortar"
companies were generally slow to move online and were dismissed in the press and by
industry analysts as "out of touch" and "out of date". However, many traditional companies
weren't concerned about the upstart Dot-Coms and didn't try to move at "Internet time". Their
online initiatives started slowly to "test the waters". After all, at the time e-business was only
a small fraction of the business conducted offline. Their cautious approach seems justified
since many traditional companies have continued their steady growth and now dominate the
top ranks of online business. As for the Dot-Coms, there a few spectacular successes and a
large number of failures. But surprisingly, most of them slowly succeeded in one form or
another.
Part of the unintended legacy of the Dot-Coms is confusion about the value of business
planning. Planning, even management, was ignored by some Dot-Coms, which is possible
when operating funds don't have to earned, but are supplied by investors. When a company's
key business strategy is an exit strategy, and when the interest of managers, suppliers and
even customers focused on stock options rather than performance, planning became
cumbersome. But the real risk for investors became apparent as many of these businesses
failed or were taken over by other companies.
In contrast to the freewheeling days of the Dot-Coms, today's survivors emphasize the
relative value of each expenditure. They emphasize return on investment (ROI) decision
making, where funds are put into programs and projects with the highest estimated payoff.
This approach is safe, but doesn't encourage innovation.
The restructuring of a business to include e-business activities, or the startup of a new e-
business are unique processes that require planning. In an existing business, the plan for a
new division or program is sometimes called animplementation plan. The initial plan for a
start-up is known as a business plan.
There is a distinction between starting an online business activity in an existing organization
and starting a brand new e-business. Existing organizations with skilled workers, market
intelligence, a range of resources and available funding appear to have an advantage, but
that's not always the case. In fact, an e-business starting within an existing corporate structure
is doomed to fail unless it is carefully supported.
Turning a traditional business into an e-business, or just adding an e-business component, is a
surprisingly difficult task. Some established companies rushed into e-business it was touted
to significantly reduces costs, or simply because their competitors were doing it. Nearly every
company has begun to make some changes to accommodate online activities and has found
that the move is difficult and may take a significant amount of time and resources to
accomplish. The process is facilitated with an implementation plan, which delineates the

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steps to be taken and the resources required to start a new "business" within an existing
business. It also addresses the challenges to be faced such as system integration, security, and
corporate culture.
Any company in business for more than 20 years is likely to have several different computer
systems, each using customized software. These so-called legacy systems perform particular
tasks well and many are still used today! One of the major challenges of installing
information or communications systems across an enterprise is to integrate these systems into
an over-reaching network that allows access to their files throughout the company.
The process of planning and integrating corporate-wide systems is known as Enterprise
Resource Planning (ERP). Just a few years ago ERP was the mantra of corporate America.
However, the speed with which the Internet evolved as a business tool caused many ERP
efforts to be suspended and sent companies back to the drawing board to determine how their
systems should operate in an e-business environment. After establishing an Internet presence,
some companies are implementing Business Process Management (BPM).
Organizing an e-business where corporate computer systems are linked to a publicly
accessible network such the Internet, presents a major security risk. But the failure to take
that risk presents business risk of being out-performed by competitors. The response of
management to the dilemma has been inconsistent, which indicates that many companies
don't appreciate either the potential benefits of online business or the importance of security.
The use of the Internet is essential for business because it can increase efficiency and greatly
lower costs by providing a free global network for data transfer. Corporations first realized
that commercial transactions over the Internet can replace EDI applications that run on
expensive virtual private networks. However, financial institutions still maintain private
networks to provide extra security.
Organizations use software and hardware technology, known as a firewall, to increase
security on the Internet. It controls access from the public network to an adaptation of the
Internet within the company, known as an Intranet. Over the Internet, buyers and sellers link
their Intranets to form exclusive networks that extend beyond corporate boundaries and
include other enterprises. While corporate partners have access through a firewall to some
information on another company's web site, they are excluded from other important files by
yet another firewall.
An emerging approach to providing access and security is by identity management and the
use of directories. Whereas anyone with the correct passwords can enter through a firewall,
the directory regulates firewall passage and access to various files based on the identity of the
individual, obtained, for example, by biometric means. After the identity of the user is
authenticated, the directory provides him or her with the access permissions needed to
perform a defined task.
5. Present couple of cases / applications of Knowledge Management (KM) and discuss the
KM architecture adopted in those applications. Do you believe that KM can improve
competitiveness of a firm? Give reasons.

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Ans.: “Knowledge management (KM) system” is a phrase that is used to describe the creation
of knowledge repositories, improvement of knowledge access and sharing as well as
communication through collaboration, enhancing the knowledge environment and managing
knowledge as an asset for an organization. In this paper, we analyze the KM concept, system
and architecture; then we propose a framework of KM system implementation in
collaborative environment for Higher Learning Institutions (HLI). We also discuss various
issues involved in this field that will help organizations to increase productivity and quality as
well as to achieve return on investment (ROI). Issues that are highlighted in this paper
include how best to acquire and disseminate knowledge; how to determine the best way for
approaching and acquiring knowledge effectively including motivating people to share and
access knowledge through the system; how to determine metrics for evaluating KM
efficiency; how to identify how people create, communicate and use knowledge; and how to
create more inclusive and integrated KMS software packages.
Knowledge is something that comes from information processed by using data. It includes
experience, values, insights, and contextual information and helps in evaluation and
incorporation of new experiences and creation of new knowledge. Knowledge originates
from, and is applied by knowledge workers who are involved in a particular job or task.
People use their knowledge in making decisions as well as many other actions. In the last few
years, many organizations realize they own a vast amount of knowledge and that this
knowledge needs to be managed in order to be useful. Davenport and Prusak (1998) defined
knowledge as a “fluid mixture of experience, values, contextual information, and expert
insight that provides a framework for evaluating and incorporating new experiences and
information”. They argue that knowledge originates and is applied in the minds of people. In
organizations, it becomes embedded in documents and repositories, in organizational
routines, in processes, practices, and norms. There is a slightly different definition given by
Alavi and Leidner (1999). They see knowledge as a “justified personal belief that increases
an individual’s capacity to take action”.
There are two type of knowledge, namely explicit and tacit knowledge (Nonaka and
Takeuchi, 1995). Tacit knowledge is obtained by internal individual processes and stored in
human beings. Suchknowledge is sometimes described as Experience, Reflection,
Internalization or Individual Talent.
Explicit knowledge is stored in a mechanical or technological device, such as documents or
databases. This knowledge would be more useful if it could be shared and used among the
community that works together using collaborative technology at anytime, anyplace and
anywhere.
The knowledge management (KM) is very important in the 2000’s because it helps
organizations to gain competitive advantage and effective working through sharing and re-
using knowledge. In the market place of e-business, KM initiatives are used to systematically
leverage information and expertise to improve organizational responsiveness, innovation,
competency and efficiency (RICE) (Lotus, 2001). There are many reasons why knowledge
should be managed properly especially using the collaborative technology. Among these are
information overload, technology advancement, increased professional specialization,

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competition, workforce mobility and turnover, and capitalization of organizational
knowledge.
The knowledge management (KM) framework is very important for the organizations that
intend to implement the KM system in their organization. It will become as the guidelines in
order to ovoid the errors and gain other benefits in terms of time and effort as well as cost
involvement. Numerous researchers have proposed several KM frameworks. Many of these
frameworks are prescriptive, providing direction on the type of KM procedure without
providing specific details on how those procedures should be accomplished. For example,
Wiig’s (1997) KM framework proposes three KM pillars which represent the major functions
needed to manage knowledge. The pillars are based on a broad understanding of knowledge
creation, manifestation, use, and transfer. The Leonard-Barton (1995) model highlighted a
KM framework that comprises of four core capabilities and four knowledge-building
activities that are crucial to a knowledge-based organization (KBO). Arthur Andersen and
APQC (1996) have advanced a model comprising seven KM processes that can operate on an
organization’s knowledge: create, identify, collect, adapt, organize, apply, and share. The
framework advanced by Van der Spek and Spijkervet (1997) identifies a cycle of four
knowledge management stages: conceptualize, reflect, act, and retrospect. Chih-Ping et al.
(2002) proposed another framework by integrating the previous frameworks. It consists of
three aspects, knowledge resources, knowledge management activities, and knowledge
influences. Although Chih-Ping et al. (2002) has conducted a review on these frameworks,
the cases used in the study were only based on highly knowledge-intensive companies.
Therefore, knowledge management performed in other industries such as global support
environment where there is rapid technological advancement and changes are not studied.
KM tools have played its major roles to support the KMS that consists of knowledge use,
knowledge finding, knowledge creation and knowledge packaging (Meso and Smith, 2000).
Normally, the tools are also called the KM technologies such as mailing and search and
retrieval system that are used to accomplish certain missions and objectives in the
organizations. In this case, KM technology could involve more than one feature, but the more
features it has, the better its functionality. There is an English saying: “Two heads are better
than one”. This proverb stresses the importance of having a second person involved in
whatever task one is performing. By having two persons working together on one task, the
job will be performed faster. If one person is an expert in a field that the other is not, then,
the combining of expertise will make the job easier and smoother to run, thus ensuring the
best results for the job. This situation is more relevant in the context of HLI where it is vital
to promote knowledge sharing among others like students, lecturers, administrators and the
wider community.
6. (a) Describe the nature of corporate philanthropy citing examples.
Ans.: Scholars and practitioners alike indicate a movement in corporate philanthropy toward
“strategic” giving, for example, giving that improves the firm's strategic position (ultimately
the “bottom line”) while it benefits the recipient of the philanthropic act. Although the
existence of this trend is widely accepted, it is represented in the literature most often by
anecdotal evidence. This article presents the findings of a survey of corporate giving

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managers of U.S. firms that have had an established giving program of at least 5 years, with
annual giving totaling at least $200,000 each year. The data show that corporate giving
managers believe their firms are becoming increasingly strategic in their philanthropic
activities. The findings also indicate that institutional-, firm-, and individual-level influences
combine to precipitate strategic philanthropy. These findings lend support to the belief that
the nature of corporate philanthropy is evolving to fit a more competitive marketplace.
Companies engage in corporate philanthropy for a mix of reasons. Charitable contributions
have the potential to increase shareholder value. Nevertheless, executives also make
corporate giving decisions based on self-interest. This report provides practical
recommendations to companies and boards for ensuring the legitimacy of their corporate
giving programs.
Corporations gave approximately $14.1 billion to a wide array of nonprofit organizations in
2009. Despite the fact that almost all companies contribute some money to charity, corporate
philanthropy remains controversial. Proponents believe that companies have a moral
obligation to assist the communities in which they do business. Critics contend that corporate
giving programs consume company resources and, more often than not, further the goals of
management rather than the goals of shareholders. Most recently, corporate philanthropy has
been labeled “tantamount to theft” and “a tax on shareholders.” The opposing camps find
common ground when corporate giving improves shareholder value as well as social welfare.
A preponderance of academic research reports a positive association between socially
responsible initiatives and economic success, particularly in recent years. Companies with
strong social performance also tend to have strong financial performance. However, a
positive association does not establish causation. That is, a positive association between
charitable contributions and profits does not necessarily mean that corporate philanthropy
serves a legitimate business purpose.
(b) Write a note on ethics of consumer production and marketing.
Ans.: In the market approach to consumer protection, consumer safety is seen as a good that
is most efficiently provided through the mechanism of the free market whereby sellers must
respond to consumer demands. If consumers want products to be safer, they will indicate this
preference in market by willingly paying more for the safer products and showing a
preference for manufacturers of safer products while turning down the goods of
manufacturers of unsafe products Market approach to Consumer Protection.
The costs to manufacturers and to society will only increase as technologies grow more
complex and their applications more varied. Testing products for safety under every possible
condition of use will not only impose great testing costs on manufacturers but will result in
enormous delays in the introduction of new products that could benefit society.
Manufacturers also maintain that it is morally unjust to hold someone liable for injuries that
he or she could not have prevented. Through extensive research and repeated testing,
companies do all that they possibly can, to ensure product safety. And, to prevent harm,
warnings and instructions are plastered over each piece of merchandise. Finally, some
manufacturers point out that in a free market system, businesses have the right to make and

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sell whatever products they choose and consumers have the right to choose what they buy.
But rights carry with them responsibilities. When consumers choose to buy risky products
rather than safe ones (both of which businesses may offer in a free market) or when they
choose not to inform themselves about products, they must accept the consequences,
including the responsibility for any injuries resulting from those choices.
Consumer activists also challenge the corporate claim that consumers "freely" choose to buy
unsafe products. Consumers, they argue, are woefully uninformed about the products they
buy because they don't have access to information about the products. Others lack a
comprehensive understanding of the seriousness of the printed warning. Still others may be
functionally illiterate or too young to make informed choices. It is manufacturers, not
consumers, who make the "free" choices to compromise product safety and it is
manufacturers who must therefore accept the consequences.

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