Haranahalli Ramaswamy Institute of Higher Education

Assignment on strategic management
HARANAHALLI RAMASWAMY INSTITUTE OF HIGHER

EDUCATION
ASSIGNMENT ON STRATRGIC MANAGEMENT
SUBMITTED TO
Mr. Vijay Kumar
Department of MBA
HRIHE
Hassan SUBMITTED BY
BHAVANI B.R
2nd MBA
HRIHE
Hassan
SUBMITTED ON: 10/06/2020
Department of MBAPage 1
QUESTION NUMBER: 01
WHAT IS ETICAL DILAMA AND ETHICAL PROBLEM?
ANS: ETHICAL DILAMA:
An ethical dilemma is a situation of making a choice between two or more alternatives. An

agent is in unpleasant and difficult situation because he/she often needs to make a choice
between ethical and unethical alternatives, and when it comes to the ethical alternatives,
he/she should choose the best one. Selection reflects to a large number of principals, so this
situation causes conflicts between different levels of ethical dilemmas, but also the conflicts
within the same level. These conflicts can be solved by applying the hierarchy and priority
rules which are incorporated in the procedure and, in particular,in the strategy for solving the
ethical dilemmas. Through many case studies this paper points out the importance of an
ethical dilemma in making business decisions, the so-called business ethical dilemma. It is
the result of the incompatibilities between altruism, egoism and the common good.
Neglecting the need for establishing the compatibility not only creates an ethical dilemma,
but it becomes deeper, which is firstly manifested through the loss of reputation of the
company, then through decreasing the financial results, and, in the worst case, in closing the
company. Therefore, an ethical dilemma must be continuously managed.
Example
● A runaway trolley is heading down the tracks toward 5 workmen who will be killed if the
trolley proceeds on its present course. You are on a footbridge over the tracks that is in
between the approaching trolley and the five workmen. Next to you on this footbridge is a
stranger who happens to be very fat. If you do nothing the trolley will proceed, causing the
deaths of the five workmen. The only way to save the lives of these workmen is to push this
stranger off the bridge and onto the tracks below, where his fat body will stop the trolley,
causing his death. Should you push the stranger onto the tracks in order to save the five
workmen?
ETHICAL PROBLEM:
Definition: Ethical issues in business are a situation where a moral conflict arises and must
be addressed. In other words, it is an occasion where a moral standard is questioned.
What Does Ethical Issues Mean?

Ethical issues occur when a given decision, scenario or activity creates a conflict with a
society’s moral principles. Both individuals and businesses can be involved in these conflicts,
since any of their activities might be put to question from an ethical standpoint. Individuals
are subject to these issues in their relationships with other individuals or in their relationships
with organizations and same goes for organizations.
These conflicts are sometimes legally dangerous, since some of the alternatives to solve the
issue might breach a particular law. In other occasions, the issue might not have legal
consequences but it might generate a negative reaction from third parties. Ethical issues are
challenging because they are difficult to deal with if no guidelines or precedents are known.
For this reason, many professional and industry associations have ethical codes that are
discussed and approved by key participants to provide a useful framework for companies and
individuals to make adequate decisions whenever they face one of these conflicts.
Business Example
Mr. Pollard is a Regional Sales Manager at a company called Synthetic Fabrics Co. He
currently overseas ten different states within the U.S., supervising more than 50 sales
representatives. He travels very frequently to visit each of these states to meet with clients
and help representatives to close deals. As part of these assignments he receives a sum of
money for all his travel expenses. He has to report his actual expenses after the trip has ended
and he has to send back the remaining money to the company.
QUESTION NUMBER: 02
HOW BUSINESS ETHICS AND LAW ARE CO-RELATED?
ANS: What is ethics? How does it compare to economics, the social science wherein
commerce is studied? What scope does ethics have and what are its various subdivisions?
What are some prominent systems and theories of ethics? What should ethics be understood
to involve for ordinary citizens not specializing in moral philosophy; i.e., what is the common
sense of ethics? What problems may face us in the relationship between ethics and law, and
between ethics and public policy? According to DuPlessis, et al. business ethics are moral
principles and values that seek to determine right and wrong in the business world (2011). A
final point should be noted about ethics in general. However much one carefully reads
articles or listens to lectures about ethics, morality, standards of right conduct, ultimately the
matter is in the individual’s own hand, unless he or she is a prisoner or slave or is severely
incapacitated. The crucial feature of ethics is, after all, personal responsibility to do well at
living a human life. That is not something that can be implanted or programmed into people,
but must be a matter of the individual’s own choice and will. Whether a person is indeed
making the choice to act rightly and what this means is just what ethics and its various
branches, including business ethics, ultimately attempt to clarify.
Ethics deals with the question of how persons should conduct themselves. Managerial ethics,
then, is concerned with the question of how a manager (or an entrepreneur as manager)
should conduct him or herself so that the organizational goals and objectives are achieved in
a manner consistent with the principles of conduct that ethics dictates. There are two areas to
which ethical principles can be applied to managerial conduct: first, to the objectives or goals
chosen for the organization, and second, to the strategies, tactics, and policies employed for
the attainment of these objectives or goals. Therefore, managerial ethics can be divided into
two parts; management goals, and management strategies, tactics, and policies.
Business Goals
Within a free market society, it is generally thought that the primary goal of a business
organization is the attainment of profit. Though businesses often consider other objectives
(service to customers, employee needs and wellbeing, assistance to the needy) it cannot be
denied that the attainment of profit is the overall and guiding objective of the business
organization (DuPlessis, et al. 2011). Thus, the first question that managerial ethics should
consider is whether or not it is ethically proper to make the attainment of profit the objective
of a business firm. This is a most important question today, for it is sometimes said that the
pursuit of profit ought not be the primary and dominant goal of a business firm but rather
must be balanced by concern for customers, employees, or society. In order to see what the
standards for proper managerial conduct might be, we need to understand what is meant by
“free market society”.
Management Goals
Within a free market society, it is generally thought that the primary goal of a business
organization is the attainment of profit. Though businesses often consider other objectives
(service to customers, employee needs and wellbeing, assistance to the needy) it cannot be
denied that the attainment of profit is the overall and guiding objective of the business
organization. Thus, the first question that managerial ethics should consider is whether or not
it is ethically proper to make the attainment of profit the objective of a business firm. This is
a most important question today, for it is sometimes said that the pursuit of profit ought not
be the primary and dominant goal of a business firm but rather must be balanced by concern
for customers, employees, or society. In order to see what the standards for proper managerial
conduct might be, we need to understand what is meant by “free market society” and “profit,”
and what ethics has to say about such a society and goal (DuPlessis, et al. 2011).
The Free Market Society and Profit
The terms “free market society” are not solely descriptive. They signify a set of economic
and social arrangements that presupposes a certain ethical perspective. For example, “Murder
Incorporated” would not be regarded as a business firm in such a society but would instead be
viewed as criminal that ought not and must not be allowed to operate. Similarly, the term
“profit” does not mean merely a return on an economic exchange that is over costs; it also
involves a certain type of exchange; namely, a free or voluntary exchange. In order to
understand the ethical perspective from which the terms “free market society” and “profit”
derive their particular meaning, we should consider the notion of “individual rights.”
“Business ethics-while sometimes but not always coextensive with legal requirements are
also increasingly important to running a successful business” (DuPlessis, et al. 2011).
A free market society is a society based on the recognition of individual rights. “Individual
rights are the means of subordinating society to moral law.” They determine what matters of
morality; what ought to be, are to be matters of law; what must be. The view of rights that a
free market society is based on is one that holds that every person has the right to life and its
corollaries: liberty and property. These rights are rights to actions -that is, the right to take all
the actions necessary for the support and furtherance of one’s life, and the right to the action
of producing or earning something and keeping, using, and disposing of it according to one’s
goals. To have a right in this sense morally obligates others to abstain from physical
compulsion, coercion, or interference. Such actions may only be taken in self-defence and
only against those who initiate physical compulsion, coercion, or interference. The right to
life also morally sanctions the” and “profit,” and what ethics has to say about such a society
and goal. Freedom to act by means of one’s voluntary, uncovered choice for one’s own goals.
Thus, the activities of producing and exchanging goods and services in a free market society
are both protected and governed by this conception of individual rights.
QUESTION NUMBER: 03
DOES PHILOSOPHY AND ETHICS WORKS IN BUSINESS?
ANS: Business Philosophy Definition
Every business leader knows to make certain that the company mission and vision statement
are clear and well-defined. It is the business philosophy that defines why you are doing things
the way you are doing them. Your philosophy of business could be an unwritten attitude or a
specifically-written philosophy that defines how your people will act and interact with each
other and the general public.
For example, a business leader could impart a "Whatever it takes" philosophy by putting in
additional hours, constantly asking employees to do more in terms of performance, and
expressing absolutist ideas such as, "We're closing this sale, no matter what." Even though
this isn't defined in any mission statement or core value in the employee handbook, it clearly
becomes part of the set expectations that leaders have regarding employees' performance.
A written policy becomes what is referred to as a "codified policy." This could be part of the
mission statement, part of the code of ethics found in the employee handbook or found in a
memo, which states the direction of the company and how leaders lay out the plan for
success. Philosophies can be a positive thing or a negative thing, and they can directly affect
employee morale, performance and productivity. By thinking through and writing out the
company's philosophies, business leaders can reduce the chances that negative habits will
become part of the company culture.
Philosophy, Mission or Code of Ethics?

Unless you were a philosophy major in college, most people don't spend a lot of time
thinking about the ultimate value of philosophy as a general practice. Aristotle's sayings are
tossed around in quotes as motivational reminders. However, business philosophy can be left
for chance development of an entire company culture. This is a dangerous variable when left
unplanned. Business leaders focused on building a positive corporate culture build their
philosophy from the mission statement and on the company's code of ethics.
Philosophy refers to a basic or core belief that starts with an individual and then expands to a
group that is working together. Without being clearly defined, the group could take on the
philosophies of dominant personalities in the group, which might not align with the
company's desired dynamic. Imagine a department leader and mentor to younger employees,
who is cutting corners not only for his benefit but also to show others how to do so. The
effect could be a drop in the quality provided to consumers.
The opposite end of the spectrum is when a business leader explicitly defines that
craftsmanship is a core value. It starts with the mission of providing the best products that
last. The code of ethics could state not just about treating employees with respect and
inclusiveness but to also approach customer relations with integrity. By building on the
mission and the code of ethics, the employer could define the business philosophy as
"Creating products your grandfather would be proud to use with quality craftsmanship
unmatched anywhere else and standing behind every product with an iron-clad guarantee."
This philosophy of a business clearly doesn't leave room for cutting corners and providing
poorly made products to consumers.
Philosophy of Business Importance

When you stop and think about it, you see just how important a well-defined business
philosophy is. Think about the companies you choose to deal with personally. Most likely,
you prefer to deal with a company that has representatives who greet you at the door and that
give you the best of the best, with a smile on their faces. Your customers are no different.
Many customers are willing to pay more for a product or service with companies that provide
a better customer experience.
It is important that your business philosophy be genuine. Your employees will know if you
write a business philosophy merely because it makes a good sound bite and a talking point
with customers. Your customers will see through a company touting strong values but that
has no respect for consumers' needs. For example, if the code of ethics has a clearly stated
policy of inclusiveness, but the manager of a department divides his team into groups because
of favouritism, it becomes clear that inclusiveness is not a value he embraces. If those above
him on the corporate structure allow it to occur, then the inclusive philosophy is seen as
disingenuous and can hurt team morale.
Being honest, standing behind your product and being an active, positive member in the
community are all positive philosophies a business might adopt. Cutting corners, putting
profits first and embracing exclusivity can negatively affect a company's ability to produce
the desired results. As a leader, it is imperative that you understand how to position a
philosophy. Being innovative could be seen as cutting corners where, in fact, it represents
seeking out better ways to do things.
The latter is a positive business philosophy, where the former tends to lead to negative
results. Look for areas in which your company can embody personal values and philosophies.
Think about how you feel about customer service, quality, honesty and cooperation. These
are usually the foundation for any business philosophy and core value statement.
Keep Business Philosophy Simple

Because a business often has a diverse workforce and serves a diverse demographic, it is best
to keep business philosophies simple. You don't want to state your business philosophy in a
way that leads to confusion or misinterpretation. When people are confused, either they
ignore the directive or they get it wrong. Either scenario doesn't fulfill the purpose of the
business philosophy.
Whether you have your business philosophies written out or they are part of your everyday
practices, make sure they are consistent. Of course, everyone can have a bad day, so the
morning positivity huddle might not be as effective; but own up to when you don't meet the
standards of your philosophies. That goes a long way to winning over your team and
customers. Outside of the bad day, make sure you and all the leaders in your company follow
the philosophy of the company. If someone disagrees with a practice, discuss things in private
to avoid dissension with two separate company cultural groups doing things differently.
Hire the Right Fit

When you have a clear business philosophy, it becomes easier to recruit talent that already
holds the same philosophies personally. It is much easier to integrate someone who already
believes in what you are doing than to try to convince someone who doesn't. Think about a
major company like Apple. People are attracted to work for Apple because they seek to be
innovators in the technology industry in a way that helps people's lives become simpler.
Similarly, Google has created a corporate culture where people enjoy coming to work
because Google embraces the philosophy of happy employees means higher levels of
productivity and creativity. You might think it is easy for these large companies to attract top
talent but every company has the same capability to build a philosophy that attracts the right
talent. As a local pet store competing with major box store brands, you could build a
company philosophy of service. Becoming involved with local shelters as a company is one
way to stand behind your philosophy and this becomes part of your reputation. It's great
customer relations, branding and helps attract employees passionate about helping animals in
need.
When hiring, design interview questions designed to gain insight into a person's natural
tendencies. These are called behavioral interview techniques and are usually open-ended
questions asking a candidate about how they would act in specific situations. These questions
may revolve around honesty and integrity such as returning money to a client who overpaid.
Questions could stem around competitiveness and drive as well as being able to work
independently to solve problems. For example, "What would you do if a new product is being
launched and you were scheduled to work the day the team was training on it?"
Set a rubric on how you will score answers. Someone willing to come in without pay to learn
a new product to improve his sales might rate higher in competitiveness and drive compared
to someone who asks his supervisor to put him on the schedule for the meeting. Both
candidates express answers demonstrating a desire for success but the first candidate has a
stronger drive to succeed.
Changing Company Business Philosophy

There are times when the philosophy of a business needs to be changed. This could be the
result of new leadership entering the company, such as the changes seen in Uber when Dara
Khosrowshahi became the new CEO. Uber had become subject to national scandals, and an
entirely new marketing campaign was launched to discuss the new business philosophy that
Khosrowshahi was developing, based on philosophies that had been passed on to him as a kid
by his father. The company became much more customer-focused, and it made listening to its
customers, drivers and other stakeholders a priority, so as to make the experience of Uber
better for all.
Sometimes, leadership doesn't change, but a business leader might realize that minor bad
habits have crept into daily operations and are having a major impact on performance.
Regardless of why a company is changing its business philosophy, leaders must realize that
change requires patience and doesn't happen overnight. Employees develop habits and must
not only buy into the new philosophy but must make an effort to integrate changes.
To accomplish a change in a fundamental component of business philosophy, a business

leader should analyze exactly what is happening that caused the problem in the first place.
Then he needs to establish a strategy to roll out the new philosophy and business practices.
Training must be consistent and may take several training sessions over extended periods of
time to fully change the dynamic. Think about a hypothetical assembly line, in which
everyone became comfortable overlooking one or two cosmetic problems with a product. The
employees have developed a habit to not see problems. It will take time to undo this habit
that's based on a philosophy of "Our customers deserve the best we can deliver. We can do
better."
Don't simply roll out changes. Explain to employees the importance of new policies, and how
the policies affect not only customer experience but also the other employees. Employees
who buy into the company philosophy tend to work harder to meet standards that are set in
core values and mission statements. Ultimately, better work is done, customers have a better
experience, the company generates more revenues, and, ultimately, the company grows. This
is the ultimate goal of business, and having a corporate business philosophy helps companies
achieve this goal.
QUESTION NUMBER: 04
PRACTICES OF CORPORATE GOVERNANCE IN INDIA
ANS: The organizational framework for corporate governance initiatives in India consists of
the Ministry of Corporate Affairs (MCA) and the Securities and Exchange Board of India
(SEBI). SEBI monitors and regulates corporate governance of listed companies in India
through Clause 49. This clause is incorporated in the listing agreement of stock exchanges
with companies and it is compulsory for listed companies to comply with its provisions.
MCA through its various appointed committees and forums such as National Foundation for
Corporate Governance (NFCG), a not-for-profit trust, facilitates exchange of experiences and
ideas amongst corporate leaders, policy makers, regulators, law enforcing agencies and non-
government organizations.
Regulation
The Companies Act, 2013 got assent of the President of India on 29 th August, 2013 and it was
enacted on 12th September, 2013 repealing the old Companies Act, 1956. The Companies
Act, 2013 provides a formal structure for corporate governance by enhancing disclosures,
reporting and transparency through enhanced as well as new compliance norms. Apart from
this, the Monopolies and Restrictive Trade Practices Act, 1969 (which is replaced by the
Competition Act 2002), the Foreign Exchange Regulation Act,1973 (which has now been
replaced by Foreign Exchange Management Act,1999), the Industries (Development and
Regulation) Act, 1951 and other legislations also have a bearing on the corporate governance
principles. In addition to various acts and guidelines by various regulators, non-regulatory
bodies have also published codes and guidelines on Corporate Governance from time to time.
For example, Desirable Corporate Governance Code by the Confederation of Indian
Industries (CII) in 2009. The issue of corporate governance for listed companies came into
prominence with the report of the Kumar Mangalam Birla Committee (2000) set up by SEBI
in the to suggest inclusion of a new clause, Clause 49 in the Listing Agreement to promote
good corporate governance. On 21 August 2002, the Ministry of Finance appointed the
Naresh Chandra Committee to examine various corporate governance issues primarily around
auditor – company relationship, rotation of auditors and defining Independent directors. This
was followed by constitution of the Narayana Murthy Committee (2003) by SEBI, which
provided recommendations on issues such as audit committee’s responsibilities, audit reports,
independent directors, related parties, risk management, independent directors, director
compensation, codes of conduct and financial disclosures. Many of these recommendations
were then incorporated in the Revised Clause 49 that is seen as an important statutory
requirement. Further, after enactment of the Companies Act, 2013, SEBI has amended Clause
49 in 2013 to bring it in line with the new Act.
Board of Directors
The Desirable Corporate Governance Code by CII (1998) for the first time introduced the
concept of independent directors for listed companies and compensation paid to them. The
Kumar Mangalam Birla Committee (2000) then suggested that for a company with an
executive Chairman, at least half of the board should be independent directors, else at least
one-third. The updated Clause 49 based on the report by the Narayana Murthy Committee
further elaborates the definition of Independent Directors; and also requires listed companies
to have an optimum combination of executive and non-executive directors, with non-
executive directors comprising of at least 50% of the Board. The 2013 Act introduces the
requirement of appointing a resident director and a woman director. The term ‘Key
Managerial Personnel’ has been defined in the 2013 Act, comprising of Chief Executive
Officer, Managing director, Manager, Company Secretary, Whole-time director, Chief
Financial Officer; and any such other officer as may be prescribed. The 2013 Act has also
introduced new concepts such as performance evaluation of the board, committee and
individual directors. The revised Clause 49 (in 2013) now also states that all compensation
paid to non –executive directors, including independent directors shall be fixed by the Board
and shall require prior approval of shareholders in the General meeting and that limit shall be
placed on stock options granted to non executive directors. Such remuneration and stock
option is required to be disclosed in the annual report of the company. The independent
directors are also required to adhere to a ‘Code of Conduct’ and affirm compliance to the
same annually.
Audit Committee
The audit committee’s role flows directly from the board’s oversight function and delegation
to various committees. It acts as an oversight body for transparent, effective anti-fraud and
risk management mechanisms, and efficient Internal Audit and External Audit functions
financial reporting. As per section 177 of the Companies Act, 2013 read with Rule 6 of
Companies (Meetings of Board and its powers) Rules, 2014, every listed company and all
other public companies with paid up capital of Rs. 10 crore or more; or having turnover of
100 crore or more; or having in aggregate, outstanding loans or borrowings or debentures or
deposits exceeding Rs.50 Crores or more, to have an Audit Committee which shall consist of
not less than three directors and such number of other directors as the Board may determine
of which two thirds of the total number of members shall be directors, other than managing or
whole-time directors.
The Kumar Mangalam Birla Committee, Naresh Chandra Committee and the Narayana
Murthy Committee recommended constitution, composition for audit committee to include
independent directors and also formulated the responsibilities, powers and functions of the
Audit Committee. The Audit Committee and its Chairman are also entrusted with the ethics
and compliance mechanisms of an organization, including review of functioning of the
whistleblower mechanism. The revised Clause 49 expands the role of the Audit Committee
with enhancing its responsibilities in providing transparency and accuracy of financial
reporting and disclosures, robustness of the systems of internal audit and internal controls,
oversight of the company’s risk management policies and programs, effectiveness of anti-
fraud and vigil mechanisms and review and administration of related party transactions of the
organization.
Subsidiary Companies
The rationale behind having separate provisions with respect to subsidiary companies in the
Revised Clause 49 was the need for the board of the holding company to have some
independent link with the board of the subsidiary and provide necessary oversight. Hence, the
recommendation of Narayana Murthy Committee to make provisions relating to the
composition of the Board of Directors of the holding company to be made applicable to the
composition of the Board of Directors of subsidiary companies and to have at least one
independent director on the Board of Directors of the holding company on the Board of
Directors of the subsidiary company, were incorporated in the Revised Clause 49 of the
Listing Agreement. Besides the Audit Committee of the holding Company is to review the
financial statements, in particular investments made by the subsidiary and disclosures about
materially significant transactions ensures that potential conflicts of interests with those of the
company may be taken care of. The definition of ‘subsidiary’ is also widened by the
Companies Act, 2013 to include joint venture companies and associate companies.
Role of Institutional Investors
Fast growing countries like India have attracted large shareholding by international investors
and large Indian financial institutions with global ambitions. This has resulted in a significant
progress in the standards of corporate governance in the investee companies. Many research
reports published in recent years show that companies with good governance system have
generated high risk-adjusted returns for their shareholders. So, if a company wants
institutional investor participation, it will have to convincingly raise the quality of corporate
governance practices. Indian companies thus need to adopt the best practices such as the
OECD Corporate Governance Principles (revised in 2004) that serve as a global benchmark.
In countries like India where corporate ownership still continues to be highly concentrated, it
is important that all shareholders including domestic and foreign institutional investors are
treated equitably.
Institutional investors are expected to actively participate in the AGM voting on the shares
held by them in their portfolio companies along with public disclosure of their voting records
and reasons for non-disclosures. Their reason for assenting or dissenting to any Board
Resolution of their portfolio companies shall be disclosed on their website.
Stakeholders Relationship Committee
As one of its mandatory recommendations, the Kumar Mangalam Birla Committee

propounded the need to form a board committee under the chairmanship of a non-executive
director to specifically look into the redressing of shareholder complaints like transfer of
shares, non-receipt of balance sheet, non-receipt of declared dividends etc. The Committee
believed that the formation of shareholders’ grievance committee would help focus the
attention of the company on shareholders’ grievances and sensitise the management to
redress their grievances. The 2013 Act as well as the revised Clause 49 now mandate the
formation of such a committee with broader remit to cover issues and concerns of all
stakeholders and not just shareholders.
The 2013 Act now mandates companies with more than one thousand shareholders,
debenture-holders, deposit-holders and any other security holders at any time during a
financial year are required to constitute a Stakeholders Relationship Committee consisting of
a chairperson who shall be a non-executive director and such other members as may be
decided by the Board to resolve the grievances of security holders of the company.
Risk Management
The Kumar Mangalam Birla Committee report included mandatory Management Discussion
& Analysis segment of annual report that includes discussion of industry structure and
development, opportunities, threats, outlook, risks etc. as well as financial and operational
performance and managerial developments in Human Resource /Industrial Relations front.
Clause 49 included this recommendation as a part of management disclosures. Risk
Management was however propounded for the first time by the Narayana Murthy Committee
(2003) in its report by which it required that the company shall lay down procedures to
inform Board members about the risk assessment and minimization procedures. These
procedures shall be periodically reviewed to ensure that executive management controls risk
through means of a properly defined framework and overlooked by a Risk Management
Committee. This is incorporated in Clause 49 as a part of internal disclosures to the Board.
The 2013 Act and Revised Clause 49 specify requirements related to risk management. Audit
Committee and the independent directors of the company are entrusted with the responsibility
of evaluating the robustness of the risk management systems and policy laid down by the
Board.
Ethics
A code of conduct creates a set of rules that become a standard for all those who participate
in the group and exists for the express purpose of demonstrating professional behaviour by
the members of the organization.TheNaresh Chandra Committee for the first time
recommended that companies should have an internal code of conduct. The Report by
Narayana Murthy Committee further recommended that a company should have a mechanism
(whistle blower) to report on any unethical or improper practice or violation of code of
conduct observed and that Audit Committee would be entrusted with the role of reviewing
functioning of the mechanism
Clause 49 incorporated these recommendations further mandating directors of every listed

company to lay down a Code of Conduct and post the code on their company’s website. The
Board members and all senior management personnel are required to affirm compliance with
the code annually and include a declaration to this effect by the CEO in the Annual Report.
The recommendation of Narayana Murthy Committee to make Audit Committee responsible
for reviewing the functioning of the whistle blower mechanism, where it exists, is
incorporated in the Clause 49. The 2013 Act and revised Clause 49 mandate establishing
Whistleblower mechanism to let employees and directors blow whistles on financial and non-
financial wrong doings and also that such mechanism should provide protection to the whistle
blower from victimization and provide direct access to the Chairman of the Audit Committee
in exceptional cases.
Executive Remuneration
The overriding principle in respect of directors’ remuneration is that of openness and

shareholders are entitled to a full and clear statement of benefits available to the directors.
The 2013 Act and Revised Clause 49 mandate the formation of a Nomination &
Remuneration Committee comprising of at least three directors, all of whom shall be non-
executive directors and at least half shall be independent. The Nomination and Remuneration
Committee is to ensure that the level and composition of remuneration is reasonable and
sufficient; the relationship of remuneration to performance is clear and meets appropriate
performance benchmarks; and the remuneration to directors, key managerial personnel and
senior management involves a balance between fixed and incentive pay reflecting short and
long-term performance objectives appropriate to the working of the company and its goals.
There are also compulsory disclosures to be made in the section on corporate governance of
the annual report - All elements of remuneration package of all the directors i.e. salary,
benefits, bonuses, stock options, pension etc.; Details of fixed component and performance
linked incentives, along with the performance criteria; Service contracts, notice period,
severance fees; Stock option details, if any – and whether issued at a discount as well as the
period over which accrued and over which exercisable.
Directors’ Responsibility Statement
To promote better disclosures and transparency, the 2013 Act, requires the company’s
Annual Report to include a Director’s Responsibility Statement stating the following:
(a) Applicable accounting standards had been followed in the preparation of the annual
accounts
(b) The directors have selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the company
(c) Proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities
(d) The annual accounts of the company are prepared on a going concern basis
(e) The directors have laid down internal financial controls to be followed by the company
and that such internal financial controls are adequate and were operating effectively
(f) The directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
CEO/CFO Certification
Internal control is a process, effected by an entity’s board of directors, management and other
personnel, designed to provide reasonable assurance regarding the achievement of objectives
in the following categories:
− Effectiveness and efficiency of operations,
− Reliability of financial reporting, and
− Compliance with applicable laws and regulations.
The Naresh Chandra Committee for the first time required the signing officers, to declare that
they are responsible for establishing and maintaining internal controls which have been
designed to ensure that all material information is periodically made known to them; and
have evaluated the effectiveness of internal control systems of the company. Also, that they
have disclosed to the auditors as well as the Audit Committee deficiencies in the design or
operation of internal controls, if any, and what they have done or propose to do to rectify
these deficiencies. Clause 49 requires the CEO and CFO to certify to the board the annual
financial statements in the prescribed format and establishing internal control systems and
processes in the company. CEOs and CFOs are, thus, accountable for putting in place robust
risk management and internal control systems for their organization’s business processes. The
2013 Act and revised Clause 49 have also brought much rigour into internal controls
certification by making it as one of the parts of Directors’ Responsibility Statement.
QUESTION NUBER : 05
MICHEL PORTER’S COMPETATIVE STRATEGY EXPLAIN WITH

ANY TWO EXAMPLES
Ans. Definition of Competitive Strategy
As mentioned above, competitive strategy is a long-term action plan of firms so as to gain a
competitive advantage over its rivals in the industry. This strategy is focused to achieve
above average position and generate a superior Return on Investment (ROI). This strategy is
very important when firms having a competitive marketplace and several similar products
available for consumers.
Four Types of Competitive Strategy

Michael Porter divided competitive strategy in four different types of strategies.
Cost Leadership Strategy

Cost leadership strategy is difficult to implement for small scale businesses as it involves
making long term commitment for offering products and services at lower prices in the
market. For this purpose firms need to produce products at low cost otherwise it will not
make profit.
Since the cost leadership means to become low cost producer or provider in the industry, Any
large-scale business which can provide and manufacture products at low cost by attaining
economies of scale. There are many cost leadership factors such efficient operation, large
distribution channels, technological advancement and bargaining power. Here Walmart is a
good example.
Differentiation Leadership Strategy

Identifying attribute of a product which are unique from competitors in the industry is the
driving factor in the differentiation leadership strategy. When a product is able to differentiate
itself from other similar products or services in the market through superior brand quality and
value added features it will be able to charge premium prices to cover the high cost.
There are few business examples who successfully differentiated their brands e.g. Apple, Clif
Bar and Company, Ben & Jerry’s and T Mobiles.
Cost Focus Strategy

This strategy is quite a resemblance to the cost leadership strategy; however, a major
difference is that the cost focus strategy businesses target a particular segment within the
market and that segment is offered the lowest price of the product or service. This type of
strategy is very useful to satisfy your consumer and increase brand awareness.
For example, beverage companies manufacturing mineral water can target market segment

like Dubai, where people need and use only mineral water for drinking, can be sold at a lower
than competitors.
Differentiation Focus Strategy
Similar to the cost focus strategy, differentiation focus strategy targets a particular segment
within the market; however, instead of offering lower prices to consumer; firms differentiate
itself from its competitors. Differentiation strategy offers unique features and attributes to
appeal its target segment. For example, Breezes Resorts is a company having several resorts
and caters only couple having no children and offer peaceful environment without any
children disruption.
Examples of competitive Strategies
Case Study of Aldi
The rise of Aldi in the food retail industry is very impressive and this position is mainly
associated with its competitive strategy which is its use of ‘Lean Production’ which makes
the organization more efficient. Through lean production, Aldi aims to reduce the number of
resources that are used in the provision of goods and services to consumers. Additionally, the
concept also involves eliminating waste and utilizing lesser material, space, labor and time.
The overall result is a reduced cost of production.
Another competitive strategy which stands for Aldi and against its competitors is that its
investment in staff members. Every member undergoes a comprehensive training program
which makes them multi-skilled and they are able to undertake different roles in the
workplace. In this way, Aldi has to hire lesser staff to run its stores.
Case Study of Apple

Apple Inc. is the manufacturer and marketer of computers and consumer electronic products
including tablets, smart phones, and music players. The company has attained a distinct
position in the industry through its competitive strategy which is innovation and premium
pricing policy. Apple has a consistent practice of developing new products and its ability to
make product complement with each other and strengthens customer loyalty and helps in
creating a barrier for competitors in the market.
The company also sets premium prices for its products. The aim of the company is to offer a
high-quality product with unique features and uses higher prices to reinforce the perception
of added value along with maintaining profitability.
QUESTION NUMBER: 06
EXPLAIN PLC WITH ANY TWO EXAMPLES

ANS: The product life cycle is the process a product goes through from when it is first
introduced into the market until it declines or is removed from the market. The life cycle has
four stages - introduction, growth, maturity and decline.
While some products may stay in a prolonged maturity state, all products eventually phase
out of the market due to several factors including saturation, increased competition, decreased
demand and dropping sales.
4 Stages of the Product Life Cycle

Generally, there are four stages to the product life cycle, from the product's development to
its decline in value and eventual retirement from the market.
1. Introduction
Once a product has been developed, the first stage is its introduction stage. In this stage, the
product is being released into the market. When a new product is released, it is often a high-
stakes time in the product's life cycle - although it does not necessarily make or break the
product's eventual success.
During the introduction stage, marketing and promotion are at a high - and the company often
invests the most in promoting the product and getting it into the hands of consumers. This is
perhaps best showcased in Apple's (AAPL) - Get Report famous launch presentations, which
highlight the new features of their newly (or soon to be released) products.
It is in this stage that the company is first able to get a sense of how consumers respond to the
product, if they like it and how successful it may be. However, it is also often a heavy-
spending period for the company with no guarantee that the product will pay for itself
through sales.
Costs are generally very high and there is typically little competition. The principle goals of
the introduction stage are to build demand for the product and get it into the hands of
consumers, hoping to later cash in on its growing popularity.
2. Growth
By the growth stage, consumers are already taking to the product and increasingly buying it.
The product concept is proven and is becoming more popular - and sales are increasing.
Other companies become aware of the product and its space in the market, which is
beginning to draw attention and increasingly pull in revenue. If competition for the product is
especially high, the company may still heavily invest in advertising and promotion of the
product to beat out competitors. As a result of the product growing, the market itself tends to
expand. The product in the growth stage is typically tweaked to improve functions and
features.
As the market expands, more competition often drives prices down to make the specific
products competitive. However, sales are usually increasing in volume and generating
revenue. Marketing in this stage is aimed at increasing the product's market share.
3. Maturity
When a product reaches maturity, its sales tend to slow or even stop - signaling a largely
saturated market. At this point, sales can even start to drop. Pricing at this stage can tend to
get competitive, signaling margin shrinking as prices begin falling due to the weight of
outside pressures like competition or lower demand. Marketing at this point is targeted
at fending off competition, and companies will often develop new or altered products to reach
different market segments
Given the highly saturated market, it is typically in the maturity stage of a product that less
successful competitors are pushed out of competition - often called the "shake-out point."
In this stage, saturation is reached and sales volume is maxed out. Companies often begin
innovating to maintain or increase their market share, changing or developing their product to
meet with new demographics or developing technologies.
The maturity stage may last a long time or a short time depending on the product. For some
brands, the maturity stage is very drawn out, like Coca-Cola(KO) - Get Report .
4. Decline
Although companies will generally attempt to keep the product alive in the maturity stage as
long as possible, decline for every product is inevitable.

In the decline stage, product sales drop significantly and consumer behavior changes as there
is less demand for the product. The company's product loses more and more market share,
and competition tends to cause sales to deteriorate.
Marketing in the decline stage is often minimal or targeted at already loyal customers, and
prices are reduced.
Eventually, the product will be retired out of the market unless it is able to redesign itself to
remain relevant or in-demand. For example, products like typewriters, telegrams and muskets
are deep in their decline stages (and in fact are almost or completely retired from the
market).
Examples of the Product Life Cycle
The life cycle of any product always carries it from its introduction to an inevitable decline,
but what does this cycle practically look like, and what are some examples?
Typewriter
A classic example of the scope of the product life cycle is the typewriter.
When first introduced in the late 19th century, typewriters grew in popularity as a technology
that improved the ease and efficiency of writing. However, new electronic technology like
computers, laptops and even smartphones have quickly replaced typewriters - causing their
revenues and demand to drop off.
Overtaken by the likes of companies like Microsoft (MSFT) - Get Report , typewriters could
be considered at the very tail end of their decline phase - with minimal (if existent) sales and
drastically decreased demand. Now, the modern world almost exclusively uses desktop
computers, laptops or smart phones to type - which in turn are experiencing a growth or
maturity phase of the product life cycle.
VCR
Many of us probably grew up watching or using VCRs (videocassette recorders for any Gen
Z readers), but you would likely be hard pressed to find one in anyone's home these days.
With the rise of streaming services like Netflix (NFLX) - Get Report and Amazon(AMZN)
- Get Report (not to mention the interlude phase of DVDs), VCRs have been effectively
phased out and are deep in their decline stage.
Once groundbreaking technology, VCRs are now in very low demand (if any) and are
assuredly not bringing in the sales they once did.
Electric Vehicles
The rise of electric vehicles shows more of a growth stage of the product life cycle.
Companies like Tesla (TSLA) - Get Report have been capitalizing on the growing product for
years, although recent challenges may signal changes for the particular company.
Still, while the electric car isn't necessarily new, the innovations that companies like Tesla
have made in recent years are consistently adapting to new changes in the electric car market,
signaling its growth phase.

Haranahalli Ramaswamy Institute of Higher Education

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Assignment on strategic management

HARANAHALLI RAMASWAMY INSTITUTE OF HIGHER

ASSIGNMENT ON STRATRGIC MANAGEMENT

Mr. Vijay Kumar

SUBMITTED ON: 10/06/2020

WHAT IS ETICAL DILAMA AND ETHICAL PROBLEM?

ANS: ETHICAL DILAMA:

An ethical dilemma is a situation of making a choice between two or more alternatives. An

What Does Ethical Issues Mean?

HOW BUSINESS ETHICS AND LAW ARE CO-RELATED?

The Free Market Society and Profit

Philosophy, Mission or Code of Ethics?

Philosophy of Business Importance

Keep Business Philosophy Simple

Hire the Right Fit

Changing Company Business Philosophy

To accomplish a change in a fundamental component of business philosophy, a business

Role of Institutional Investors

Stakeholders Relationship Committee

As one of its mandatory recommendations, the Kumar Mangalam Birla Committee

Clause 49 incorporated these recommendations further mandating directors of every listed

The overriding principle in respect of directors’ remuneration is that of openness and

Directors’ Responsibility Statement

MICHEL PORTER’S COMPETATIVE STRATEGY EXPLAIN WITH

Four Types of Competitive Strategy

Cost Leadership Strategy

Differentiation Leadership Strategy

Cost Focus Strategy

For example, beverage companies manufacturing mineral water can target market segment

Case Study of Apple

EXPLAIN PLC WITH ANY TWO EXAMPLES

4 Stages of the Product Life Cycle

long as possible, decline for every product is inevitable.

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