SYLLABUS

UNIT I STRATEGY AND PROCESS 09hours

Conceptual framework for strategic management, the Concept of Strategy and the Strategy Formation
Process – Stakeholders in business – Vision, Mission and Purpose – Business definition, Objectives
and Goals - Corporate Governance and Social responsibility-case study.

UNIT II COMPETITIVE ADVANTAGE 09hours

External Environment - Porter’s Five Forces Model-Strategic Groups Competitive Changes during
Industry Evolution-Globalization and Industry Structure - National Context and Competitive
advantage Resources- Capabilities and competencies–core competencies-Low cost and differentiation
Generic Building Blocks of Competitive Advantage- Distinctive Competencies Resources and
Capabilities durability of competitive Advantage- Avoiding failures and sustaining competitive
advantage-Case study.

UNIT III STRATEGIES 09hours

The generic strategic alternatives – Stability, Expansion, Retrenchment and Combination strategies -
Business level strategy- Strategy in the Global Environment-Corporate Strategy Vertical Integration-
Diversification and Strategic Alliances- Building and Restructuring the corporation- Strategic analysis
and choice - Environmental Threat and Opportunity Profile (ETOP) -Organizational Capability Profile
- Strategic Advantage Profile - Corporate Portfolio Analysis -SWOT Analysis - GAP Analysis - Mc
Kinsey's 7s Framework - GE 9 Cell Model – Distinctive competitiveness - Selection of matrix - Balance
Score Card-case study.

UNIT IV STRATEGY IMPLEMENTATION & EVALUATION 09Hours

The implementation process, Resource allocation, Designing organizational structure-Designing
Strategic Control Systems- Matching structure and control to strategy-Implementing Strategic
change-Politics-Power and Conflict-Techniques of strategic evaluation & control-case study.

UNIT V STRATEGIC ISSUES 09hours

Managing Technology and Innovation-Strategic issues for Non-Profit organizations, New Business
Models and strategies for Internet Economy-case study
TEXTBOOKS
1. Charles W Hill & Jones, An Integrated Approach to Strategic Management, 12 thIndian edition,
Cengage Learning, Delhi, 2017.
2. Gregory Dess, Strategic Management Text and Cases, 3rd edition, Tata McGraw Hill, New
Delhi, 2015.
3. John A.Parnell. Strategic Management, Theory and practice Biztantra (2012).
4. 4.Azhar Kazmi, Strategic Management and Business Policy, 3rdEdition,Tata McGraw Hill, 08
REFERENCES
1. Adriau HAberberg and Alison Rieple, Strategic Management Theory & Application, Oxford
University Press, 2008.
2. Lawerence G. Hrebiniak, Making strategy work, Pearson, 2005.
3. Gupta, Gollakota and Srinivasan, Business Policy and Strategic Management – Concepts and
Application, Prentice Hall of India, 2005.
4. Dr.Dharma Bir Singh, Strategic Management & Business Policy, KoGent Learning Solutions Inc.,
Wiley, 2012.
5. John Pearce, Richard Robinson and Amitha Mittal, Strategic Management, McGraw Hill, 12 th
Edition, 2012
UNIT I STRATEGY AND PROCESS 09hours
Conceptual framework for strategic management, the Concept of Strategy and the Strategy Formation
Process – Stakeholders in business – Vision, Mission and Purpose – Business definition, Objectives
and Goals - Corporate Governance and Social responsibility-case study.

GREEN-Easy YELLOW-Medium RED-Tough

PART-A
Topic: Concept of Strategy
1. State the concept of strategic management. Medium-U
Strategic management consists of four basic elements
1. Environmental scanning
2. Strategy Formulation
3. Strategy Implementation and
4. Evaluation and control
Environmental Strategy Strategy
Scanning Formulation Implementation

EVALUATIO
N AND
CONTRIOL

2. What is strategy? EASY-R

“Strategy is the determination of the basic long goals and objectives of an enterprise and the adoption
of the course of action and the allocation of the resources necessary for carrying out these goals”. It’s
a comprehensive master plan stating how the corporation will achieve its mission and objectives of
maximizes the competitive advantage and minimizes the competitive disadvantage.
3. Outline the levels of Strategy. Tough-AZ

4. Strategic piggybacking? Tough-AZ

It is the new fund generating activity undertaken by the non-profit organization which is aimed
at reducing the gap between expanses and revenue. The primary purpose is Subsidize the service
program. It is gaining popularity in recent time. Example of piggy backing is Educational institutes
running commercial complexes hospitals running a meditation class and fitness program.
Topic: Environmental Scanning
5. What is environment scanning? Medium-U
Environment scanning is the monitoring evaluating and disseminating of information from the
external and internal environments to key people within the corporation. The external environment
consists of variables that one outside the organization these are the opportunities and threats. The
infernal environment consists of variables that are within the organization itself. These are the
strengths and weaknesses of organization.
6. State the term ‘SBA’. Medium-U
SBA is a distinctive segment of the environment in which the firm does want to do business. A
company instead of trying to compete in all the area, it selects the area of its competitive advantage
and invest its money and strategies in that area. This helps the company to concentrate its strategies
in a particular area and to reduce the unnecessary expenses in non-profitable area.
7. State the term Vision and Mission with Example Medium-U
A vision statement is picture of your company in the future but it’s so much more than that. Your
vision statement is your inspiration, the framework for all your strategic planning.
“To become the most successful and respected lift Truck Company in the U.S.” -Toyota
“Worldwide leader in retail”-Wal-Mart
“A personal computer in every home running Microsoft software” -Microsoft
A mission statement is a brief description of a company's fundamental purpose. A mission
statement answers the question, "Why do we exist?"
"To make people happy”- Walt Disney
“To increase the value of our shareholders’ investment”- Pepsi cola
“The ultimate driving machine”-BMW
“We refresh the world” -Coca Cola
“Connecting people” -Nokia
Topic: Stakeholder
8. State the term ‘Stakeholder’ Tough-AZ
Those who are directly or indirectly connected with the business are called as Stakeholder.

Topic: Corporate Governance

9. Define core- competency? Medium-U
Core competency is a unique skill or technology that creates distinct customer value. Core-
competencies are the things that a corporation can do exceedingly well. It is the combination of an
organization’s resources and capabilities if the core competency of an organization is superior to that
of its competitors it is called distinctive competency.

10. What is Corporate Social Responsibility? Medium-R

Corporate social responsibility (CSR) can be defined as the "economic, legal, ethical, and discretionary
expectations that society has of organizations at a given point in time"

PART-B
Topic: Concept of Strategy
1. Illustrate the detail components of strategic planning process Medium-AZ (16 M)

Topic: Environmental Scanning

2. Explain the concept of Environmental scanning. Medium-U (08 M)
Environmental scanning is the process of gathering information about events and their
relationships within an organization's internal and external environments. The basic purpose of
environmental scanning is to help management determine the future direction of the organization.
MACRO ENVIRONMENT:
➢ Political Factor ➢ Technological Factor
➢ Economical Factor ➢ Eco-Environmental Factor
➢ Social Factor ➢ Legal Factor
MICRO ENVIRONMENT
➢ Labor Supply:
➢ Material Supply:
➢ Infrastructure:
➢ Industry Specific Laws

Topic: Corporate Governance

3. Describe the various governance mechanisms followed to remove incompetent or ineffective
managers. Tough-AZ (16 M)
“Corporate Governance is about promoting corporate fairness, transparency and accountability.”
MECHANISMS AND CONTROLS
Internal corporate governance controls
➢ Monitoring by the board of directors:
➢ Internal control procedures and internal auditors:
➢ Balance of power:
➢ Remuneration:
External corporate governance controls
➢ Disclosure and transparency:
Benefits of Corporate Governance
➔Good corporate governance ensures corporate success and economic growth.
➔Strong corporate governance maintains investors’ confidence, as a result of which, company can
raise capital efficiently and effectively.
➔It lowers the capital cost.
➔There is a positive impact on the share price.
➔It provides proper inducement to the owners as well as managers to achieve objectives that are in
interests of the shareholders and the organization.
➔Good corporate governance also minimizes wastages, corruption, risks and mismanagement.
➔It helps in brand formation and development.
➔It ensures organization in managed in a manner that fits the best interests of all.

4. “It is very difficult to implement Corporate Governance in Indian Business Environment”.

Discuss. . Tough-AZ (16 M)
“Corporate Governance is about promoting corporate fairness, transparency and accountability.”
MECHANISMS AND CONTROLS
Internal corporate governance controls
➢ Monitoring by the board of directors:
➢ Internal control procedures and internal auditors:
➢ Balance of power:
➢ Remuneration:
External corporate governance controls
➢ Disclosure and transparency:
Suggestions
➢ New method for the appointment of Independent Director is required.
➢ •Independent directors- selection criteria must be transparent, also process of appointment of
➢ BOD must be reconsidered.
➢ It is important to focus on not just Quantity or profits but on the sustainability of business models.
➢ Need for having regulations of SEBI for the credit rating agencies need to develop criteria that
focus on substance rather than the form of governance
➢ Compensation of executive directors should flow from an objective performance evaluation process
conducted by the board
❖ Need for having supervising the functions of management and make them accountable and
transparent to shareholders.
❖ To revise clause 49 of SEBI listing Agreement
❖ Codes of conduct and whistle blower policies must be framed in such a way as to be possible
to put in to practise.
➢ Need for having supervising the functions of management and make them accountable and
transparent to shareholders
➢ Effective impliementation of code of corporate governance
➢ Regulators should enhance penalities as well as to fix liability in imposing substantial penalties
for non-compliance

5. Explain Elaborately the concept of different levels of strategy and stakeholders of Business.
Medium-U (16 M)

UNIT II COMPETITIVE ADVANTAGE 09hours

External Environment - Porter’s Five Forces Model-Strategic Groups Competitive Changes during
Industry Evolution-Globalization and Industry Structure - National Context and Competitive
advantage Resources- Capabilities and competencies–core competencies-Low cost and differentiation
Generic Building Blocks of Competitive Advantage- Distinctive Competencies Resources and
Capabilities durability of competitive Advantage- Avoiding failures and sustaining competitive
advantage-Case study.
PART-A
Topic: COMPETITIVE ADVANTAGES
1. Define the term ‘Competitive advantage’. EASY-U
Competitive advantage is defined as the strategic advantage one business entity has over its
rival entities within its competitive industry.
2. How competitive advantage is created? Tough-AZ
➢ New technologies ➢ Changes in government regulations
➢ New or shifting buyer needs ➢ Innovation
➢ The emergence of a new industry ➢ Continuous Process Improvement
segment ➢ Meeting the Market Demand
➢ Shifting input costs or availability ➢ Enhanced customer Service
3. List the components of sustaining competitive advantage. Medium-U
Failing companies are not just below average; they earn very low or negative profits. Three related
reasons for failure are explored here: inertia, prior strategic commitments, and the Icarus
paradox.
4. Sketch the Genseric Building blocks of competitive advantages. Medium-AZ

5. List the main attributes of national context in competitive advantages. Medium-AZ

1. Factor Condition 3. Demand conditions
2. Firm Strategy, Structure and rivalry 4. Related and supporting industries
Topic: DISTINCTIVE COMPETENCE
6. What is Distinctive competency? EASY-R
Distinctive competencies are firm’s specific strengths that allow a company to differentiate its
products and achieve substantially lower costs than its rivals and thus gain competitive advantage
competencies arise from two complementary sources resources and capabilities
7. Define SWOT Analysis? EASY-U
Management scans both the external environment for opportunities and threats and the
internal environmental for strengths and weakness. The following factors that are most important to
the corporation’s future are called strategic factors: (SWOT) strengths, weakness, opportunities and
threats.
8. Show the interrelationship between resources, capabilities and competitive advantage.
Tough-AZ
9. Write the process of Building Distinctive Competence. Tough-AZ
STEP-I➔ Identify and analyze the strengths and weaknesses of the firm.
STEP-II➔Determine and identify the strategic importance of these strengths and weaknesses of the
firm in the given marketplace.
STEP-III➔Analyze specific market needs and look for comparative advantages that they have over
the competition.
10. State the factor leads durability of competitive advantage. Medium-AZ
Durability refers to the length of time that a competitive advantage lasts, once it has been
created. Successful companies earn above-average returns, which send a signal to competitors.
Three factors lead to durability:
➢ High barriers to imitation,
➢ Poor capability of competitors, and
➢ Low dynamism in the industry
Topic: Porters Five Forces
11. Outline the Porter’s five forces for Industry Analysis. Medium-AZ

PART-B
Topic: Porters Five Forces
1. Illustrate the Porters Five Forces for an auto mobile industry. Tough-AZ (16M)
 Topic: COMPETITIVE ADVANTAGES
2. Illustrate the Generic Building blocks of competitive advantage. Tough-AZ (16M)

Topic: DISTINCTIVE COMPETENCE

3. Discuss distinctive competencies. How will you develop a sustainable competitive
advantage for the company? Tough-AZ (16M)
4. What are the possible strengths of an organization identified as part of the SWOT analysis?
Medium-AZ (16M)

5. Describe the main aspects of Value chain analysis Medium-AZ (08M)

UNIT III STRATEGIES 09hours
The generic strategic alternatives – Stability, Expansion, Retrenchment and Combination strategies -
Business level strategy- Strategy in the Global Environment-Corporate Strategy Vertical Integration-
Diversification and Strategic Alliances- Building and Restructuring the corporation- Strategic analysis
and choice - Environmental Threat and Opportunity Profile (ETOP) -Organizational Capability Profile
- Strategic Advantage Profile - Corporate Portfolio Analysis -SWOT Analysis - GAP Analysis - Mc
Kinsey's 7s Framework - GE 9 Cell Model – Distinctive competitiveness - Selection of matrix - Balance
Score Card-case study.

PART-A
TOPIC: THE GENERIC STRATEGIC ALTERNATIVES
1. Outline the levels of Strategy. [AZ]

2. List the different types of stability strategy?[AZ]

Stability strategy implies continuing the current activities of the firm without any significant
change in direction. If the environment is unstable and the firm is doing well, then it may believe
that it is better to make no changes.

3. List the different types of Retrenchment strategy.[AZ]

TOPIC: EXPANSION STRATEGY

4. List the different types of Expansion strategy.[AZ]
5. What is Diversification? [U]
It is the process of adding new businesses to the company that are district from its established
operations. A diversified or multi business company is one that is involved in two or more district
industries. It could be internal or external, related or unrelated, horizontal or vertical,
technological etc. It changes business definition
6. What is conglomerate diversification?[U]
When firms create new businesses that are unrelated to its original business, it is called
conglomerates diversification. The benefits of conglomerate diversification are reductions of risks,
economics of large scale operations, financial stability, and increase in profits and attain managerial
competence.
➔ITC – Tobacco & Hotel, ➔Essar – Shipping & Steel, ➔Shriram – Nylon Fibre & Ball bearings,
etc.
7. What is vertical integration?[R]
The degree to which a firm owns its upstream suppliers and its downstream buyers is referred
to as vertical integration. It has two activities, expansion of downstream is referred to as forward
integration, and expansion upstream is referred to as backward integration
8. What is Horizontal integration?[R]
The acquisition of additional business activities at the same level of the value chain is referred to as
horizontal integration.
9. Define the term “Joint Venture”[U]
A joint venture is a legal partnership between two (or more) companies where in they both make a
new (third) entity for competitive advantage.
10. Define the term “Strategic Alliance”[U]
SA is a kind of partnership between two entities in which they take advantage of each other’s
core strengths like proprietary processes, intellectual capital, research, market penetration,
manufacturing and/or distribution capabilities etc. They share their core strengths with each other.
They will have an open door relationship with another entity and will mostly retain control.
TOPIC: STRATEGY ANALYSIS AND CHOICE
11. List the different techniques of Strategy analysis and choice.[AZ]
The following devices or techniques are used in the procedure of strategic analysis:
➢ Five Forces Analysis
➢ PEST Analysis (Political, Economic, Social and Technological Analysis)
➢ Market segmentation
➢ Scenario planning
➢ Competitor analysis
➢ Directional policy matrix
➢ SWOT Analysis (Strength, Weaknesses, Opportunities, and Threats Analysis)
➢ Critical Success Factor Analysis
12. Draw the structure of Mc Kinsey's 7 S Frame work.[C]
 PART-B
TOPIC: THE GENERIC STRATEGIC ALTERNATIVES
1. Illustrate the Generic Building blocks of competitive advantage. [AZ][16M]

2. Illustrate the various strategies to manage rivalry in mature industries [AZ] [16]
3. Illustrate the concentration and diversification strategy in detail [AZ][16]

4. Explain the integration strategy in detail [U][08]

1. Horizontal Integration
The acquisition of additional business activities at the same level of the value chain is referred to as
horizontal integration.
2. Vertical Integration
The degree to which a firm owns its upstream suppliers and its downstream buyers is referred to as
vertical integration.

TOPIC: STRATEGY ANALYSIS AND CHOICE

05. Illustrate the any two techniques of Strategic Analysis [AZ][16]
**SWOT analysis ** PESTEL analysis ** Porter’s five forces analysis
**Four corner’s analysis **Value chain analysis **Early warning scans **War gaming.
06. Explain the different stages of Gap Analysis.[U][08]

07. Describe the different stages of Strategic Choice. [AZ][08]

 TOPIC: CORPORATE PORTFOLIO MANAGEMENT
08. Illustrate the role of portfolio analysis in Corporate Strategy formulation and explain the
BCG matrix in detail [AZ][16]
The business portfolio is the collection of businesses and products that make up the
company. The best business portfolio is one that fits the company's strengths and helps exploit the
most attractive opportunities.
The company must:
-- Analyze its current business portfolio and decide which businesses should receive more or
less investment, and
-- Develop growth strategies for adding new products and businesses to the portfolio, whilst at
the same time deciding when products and businesses should no longer be retained.
The two best-known portfolio planning methods are the Boston Consulting Group Portfolio
Matrix and the McKinsey / General Electric Matrix. In both methods, the first step is to identify
the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company
that has a separate mission and objectives and that can be planned independently from the other
businesses. An SBU can be a company division, a product line or even individual brands - it all
depends on how the company is organized.
BCG MATRIX
BCG STARS (high growth, high market share)
BCG CASH COWS (low growth, high market share)
BCG DOGS (low growth, low market share)
BCG QUESTION MARKS (high growth, low market share)
09. Describe the GE 9 CELL Matrix for Strategic Formation in detail [AZ][16]

Factors that Affect Market Attractiveness

Whilst any assessment of market attractiveness is necessarily subjective, there are several
factors which can help determine attractiveness. These are listed below:
➔Market Size
➔Market growth
➔ Market profitability
➔ Pricing trends
➔Competitive intensity / rivalry
➔Overall risk of returns in the industry
➔Opportunity to differentiate products and services
➔Segmentation
➔ Distribution structure (e.g. retail, direct, wholesale
Factors that Affect Competitive Strength
Factors to consider include:
➔Strength of assets and competencies
➔ Relative brand strength
➔ Market share
➔Customer loyalty
➔ Relative cost position (cost structure compared with competitors)
➔Distribution strength
➔ Record of technological or other innovation
➔Access to financial and other investment resources
10. Explain the Mc Kinsey 7 ‘s’ Framework in detail[U][8]

Hard Elements Soft Elements

 Strategy Shared Values
Structure Skills
Systems Style
Staff

STRATEGY:
➔What is our strategy?
➔How do we intend to achieve our objectives?
➔How do we deal with competitive pressure?
➔How are changes in customer demands dealt with?
➔How is strategy adjusted for environmental issues?
STRUCTURE:
➔How is the company/team divided?
➔What is the hierarchy?
➔How do the various departments coordinate activities?
➔How do the team members organize and align themselves?
➔Is decision making and controlling centralized or decentralized? Is this as it should be, given
what we're doing?
➔Where are the lines of communication? Explicit and implicit?
SYSTEMS:
➔What are the main systems that run the organization? Consider financial and HR systems
as well as communications and document storage.
➔Where are the controls and how are they monitored and evaluated?
➔What internal rules and processes does the team use to keep on track?
SHARED VALUES:
➔What are the core values?
➔What is the corporate/team culture?
➔How strong are the values?
➔What are the fundamental values that the company/team was built on?
STYLE:
➔How participative is the management/leadership style?
➔How effective is that leadership?
➔Do employees/team members tend to be competitive or cooperative?
➔Are there real teams functioning within the organization or are they just nominal groups?
STAFF:
➔What positions or specializations are represented within the team?
➔What positions need to be filled?
➔Are there gaps in required competencies?
SKILLS:
➔What are the strongest skills represented within the company/team?
➔Are there any skills gaps?
➔What is the company/team known for doing well?
➔Do the current employees/team members have the ability to do the job?
➔How are skills monitored and assessed?
UNIT IV STRATEGY IMPLEMENTATION & EVALUATION 09Hours
The implementation process, Resource allocation, Designing organizational structure-Designing
Strategic Control Systems- Matching structure and control to strategy-Implementing Strategic
change-Politics-Power and Conflict-Techniques of strategic evaluation & control-case study.
PART-A
TOPIC: STRATEGY IMPLEMENTATION
1. Define Reengineering.[U]
Reengineering is the fundamental re-thinking and radical redesign of business processes to
achieve dramatic improvements in critical, contemporary measures of performance such as quality,
cost service and sped. The aim of reengineering is to improve the corporate performance.
2. Define Intrapreneurship[U]
He is acting like an entrepreneur within a larger organization. The term is derived from a
combination of "intra" or internal, and "entrepreneurship." Intraprenuers are usually highly self-
motivated, proactive and action-oriented people who are comfortable with taking the initiative, even
within the boundaries of an organization, in pursuit of an innovative product or service
3. What is Job enrichment?[R]
Job enrichment is a conscious effort to build into jobs a higher sense of challenge and
achievement. In a job enrichment program, the worker decides how the job is performed, planned
and controlled and makes more decision concerning hi entire process job. Employee decides how the
job will be performed and receives less direct supervision on the job. Consequently the employee
receives a greater sense of accomplishment as well as more authority and responsibility and job
satisfaction. This in turn contributes for batten employee performance and higher productivity.
4. Explain strategy implementation.[R]
Strategy implementation is "the process of allocating resources to support the chosen
strategies". To effectively direct and control the use of the firm's resources, mechanisms such as
organizational structure, information systems, leadership styles, assignment of key managers,
budgeting, rewards, and control systems are essential strategy implementation ingredients" Strategy
implementation is "the process of allocating resources to support the chosen strategies".
TOPIC: STRATEGIC CHANGE-POLITICS-POWER AND CONFLICT
5. Define Corporate Culture.[U]
Corporate culture is the corporation of belief. Expectations and values learned and shared by
a corporate is members and transmitted from one generation of employees to another. The tern
corporate culture generally reflects the values of the founder and the mission of the format givens a
company a sense of identity. Corporate culture has two distinct attributes, intensity and integration
6. What is strategic change?[R]
A strategic change is a type of change where some general plans, policies and the initiatives of
the business are changed. These changes are quite common and also simple, something that is quite
ordinary. Strategic changes are market oriented and are the first and final steps for market conquests.
Strategic Change means changing the organizational Vision, Mission, Objectives and of course the
adopted strategy to achieve those objectives. Strategic change is defined as “changes in the content
of a firm's strategy as defined by its scope, resource deployments, competitive advantages, and
synergy"(Hofer and Schendel 1978)
7. What is power and conflict?[R]
Power is an ability to influence others and politics is carrying out activities though not
prescribed by any Policy to gain advantages and influence distribution. Corporate politics is not good
or bad but it creates divisiveness which is not good.
Organizational conflict is a state of discord caused by the actual or perceived opposition
of needs, values and interests between people working together. Conflict takes many forms in
organizations.
TOPIC: STRATEGIC EVALUATION & CONTROL
8. What is strategic control?[R]
Strategic control can be defined as process of monitoring as to whether to various strategies
adopted by the organization are helping its internal environment to be matched with the external
environment. Strategic control processes allow managers to evaluate a company's program from a
critical long-term perspective.
9. What are the primary measures of corporate performance?[U]
Most investors tend to focus on return on equity as their primary measure of company
performance. Many executives focus heavily on this metric as well, recognizing that it is the one that
seems to get the most attention from the investor community. If investors are not careful, it can divert
attention from business fundamentals and lead to nasty surprises. Companies can resort to financial
strategies to artificially maintain a healthy ROE (Return on Equity) for a while and hide deteriorating
performance in business fundamentals. Excessive debt leverage becomes a significant albatross for a
company when market demand for its products heads south, as many companies discovered during
the current economic downturn. It actually creates more risk for a company in hard times.
10. What is organizational life cycle?[AZ]
Organizational life cycle is the life cycle of an organization from birth level to the termination. There
are five level/stages in any organization. Birth, Growth, Maturity, Decline, Death
11. State the relationship between strategy formulation vs strategy implementation[AZ]
Following are the main differences between Strategy Formulation and Strategy
Implementation-
Strategy Formulation Strategy Implementation
Strategy Formulation includes planning and Strategy Implementation involves all those means
decision-making involved in developing related to executing the strategic plans.
organization’s strategic goals and plans.

In short, Strategy Formulation is placing the In short, Strategy Implementation is managing

Forces before the action. forces during the action.
Strategy Formulation is an Entrepreneurial Strategic Implementation is mainly
Activity based on strategic decision-making. an Administrative Taskbased on strategic and
operational decisions.
Strategy Formulation emphasizes Strategy Implementation emphasizes
on effectiveness. on efficiency.
Strategy Formulation is a rational process. Strategy Implementation is basically
an operational process.
Strategy Formulation requires co-ordination Strategy Implementation requires co-ordination
among few individuals. among many individuals.
Strategy Formulation requires a great deal Strategy Implementation requires
of initiative and logical skills. specific motivational and leadership traits.
Strategic Formulation precedes Strategy STrategy Implementation follows Strategy
Implementation. Formulation.
12. State the Process of Effective Control System[AZ]
 PART-B
TOPIC: STRATEGY IMPLEMENTATION
1. Illustrate the main phases of Strategic Implementation [AZ] [16]
Strategy implementation consists of 3 phases
➔ Activating a strategy
➔ Managing a strategy
➔ Achieving a strategy
Activating a strategy is a process of putting strategy into action. Strategy implementation
involves several issues in activating the strategy. Activation of strategy OR
Managing a strategy is a process of managing and coordinating the internal and external
factors of an organization.
Achieving a strategy is a process of improving functional and operational elements in an
organization.

2. Illustrate the different form of Procedural Implementation of strategy. [EV][16]

Procedural Implementation deals with the different aspects of the regulatory framework that
Indian companies have to consider.
 Any organization which is planning to implement strategies must be aware of the regulatory
framework within which the plans, programmes , and projects have to be approved by the government
(central and state)
In order to implement the strategies, the management must have good knowledge of the
procedural framework within which the plans, projects and programmes have to be approved by the
government authorities. The government authorities besides the policy guidelines issued by the from
time to time. Some of the important procedural requirements can be elaborated as follows:
➔➔Formation of a company
The formation of a company is governed by the provision of Indian companies act, 1956 as
amended from time to time. All activities for formation should be carried out such as Registration,
obtaining certificates; documentation, winding up and liquidation procedure must be
forwarded to registrar of companies, etc
➔➔Licensing Procedures
Certain industries require licensing procedures. As per the industrial policy, 1991, six
industries require licensing manufacturing products such as alcohol, cigarettes, chemical
fertilizers, industrial explosives, defense and Drugs& Pharmaceuticals. Therefore company
requiring the license must apply for the same.
➔➔FEMA Requirements
Organization must fulfill the necessary requirements of the Foreign Exchange Management
Act, 2000. Those organizations willing to deal in foreign exchange transactions must ensure that
they collect required information in context to provisions of FEMA.
➔➔Import and Export Requirements
Similarly, organization willing to deal in Import & Export need to follow certain procedural
requirements, such as they have to register with Directorate General of Foreign Trade (DGFT) and
obtain Importers Exporters Code (IEC)
➔➔Competition Act, 2002
The government has introduced this act that aims at promoting competition by restricting anti
competitive practices. Large businesses must have a good understanding of the competitive act
➔➔Foreign Collaboration Procedures
For proposals to set up projects with foreign collaborations require prior government approval.
The government authorities such as Reserve Bank of India (RBI), Foreign Investment Promotion
Board (FIPB) and Project Approval Board are major regulatory bodies for foreign collaborations
including joint ventures abroad.
➔The govt. policy, in general, allows foreign investment & collaboration on a selective basis in
priority areas, export oriented or high technology industries, and permitting existing foreign
investment in non-priority areas up to 40% of the equity holding. This limit has been raised to 51%
in 34 high-priority industries.
➔All proposals to set up projects with foreign collaboration require prior government approval.
➔The regulatory framework deals with the need for foreign technology, royalty payments, terms
& conditions for collaborative agreement & foreign investment.
➔Preliminary evaluation by the promoter, obtaining industrial licence (if necessary), or
registration with the Directorate General of Technical Development
➔Obtaining clearance under the MRTP Act
➔Applying for foreign collaboration to Foreign Investment Board
➔Applying for import of capital goods (if required)
➔Finalization of agreement and clearance from the Reserve Bank of India (RBI)
➔➔ SEBI Requirement
Securities and Exchange Board of INDIA (SEBI) became active since 1992 with the passing of
SEBI Act, 1992. The act empowered SEBI with necessary powers to regulate the activities connected
with marketing of securities & investments of stock exchanges, merchant banking, portfolio
management, stock brokers and others connected with securities
➔➔Consumer Protection Act, 1986
Business firms must have good knowledge of consumer protection act, 1986. This act was
passed to provide better protection of the interests of consumers.
The act seeks to promote & protect rights of consumers such as: -
➔The right to be protected against the marketing of goods that are hazardous to life & property
➔The right to be informed about the quality, quantity, potency, purity standards and price of
goods to protect the consumer against unfair trade practices.
➔The right to be heard & be assured that consumers interests will receive due consideration
➔The right to seek redressal against unfair trade practices or exploitation of consumers, etc
➔➔Pollution Control Requirements
The govt. of India has passed several laws relating to the protection of environment. The
business organizations should have a good knowledge of such laws.
To name few of them are as follows:
➔The Water (Prevention & Control of Pollution), Act, 1974.
➔The Air (Prevention & Control of Pollution), Act, 1981.
➔The Environment Protection Act, 1986,
➔➔Labour Legislation Requirements
The govt. of India has passed several laws to protect the interest of the workers. Business Organizations
should have a good knowledge of such laws, which include:
➔The factories Act, 1948
➔The Workmen Compensation Act, 1923
➔The Bonus Act, 1965
➔The Minimum Wages Act, 1948
➔The Industrial Disputes Act, 1947, etc…
➔➔MRTP Requirements
➔The Monopolies & Restrictive Trade Practices (MRTP) Act,1969 seeks to prevent monopolistic &
restrictive trade practices, & the concentration of economic power.
➔The MRTP Act requires that any substantial expansion which increases the assets or productive
capacity or supply for distribution not less than 25% requires the approval of the central govt.
➔The MRTP Act applies to four types of undertakings:
➔An undertaking having gross assets of Rs. 100 crore & above
➔Interconnected Undertakings which together have assets of Rs. 100 crore or above
➔A dominant undertaking (one which produce, supplies, or controls one-third of any goods in the
country) having assets of Rs. 1 crore & above
➔Interconnected dominant undertakings
TOPIC: RESOURCE ALLOCATION
3. Describe the factors influencing resource allocation in industry [AZ][08]
➔Objectives of the Organisation – Realisation of Strategic Intent
➔Dominant Strategists – Powerful Lobbying, influential departmental heads, CEO preferences etc.
➔Internal Politics – Resource allocation is construed a Power Statement and SBU In-charges,
departmental heads strive for grabbing more resources for their departments.
➔External Influences – Government policies, statutory requirements, demands from financial
institutes, Share holders, Community, necessity of Pollution control and safety equipments
➔Scarcity of Resources – Financial, physical and human resources, cost of capital and that of cash
credits, Government Policies with regards to raw materials and Technology.
➔Credit-worthiness of organisation– ability to raise funds
➔Overstatement of needs – Bottom up or democratic ways of resource allocation gets developed in
to everyone grabbing his share of pie by overstating and dramatising their needs.
➔It is a role for CEO for managing resources. He need to have a Strategic Plan and communicate the
same to all executives and ensure that resource allocation decisions are taken amicably
TOPIC: DESIGNING ORGANIZATIONAL STRUCTURE
4. Illustrate the different form of organizational structure design in detail [AZ][16]
The manner in which an organization divides it’s labour into specific tasks and achieves
coordination among these tasks.
An organizational structure consists of activities such as task allocation, coordination and
supervision, which are directed towards the achievement of organizational aims. It can also be
considered as the viewing glass or perspective through which individuals see their organization and
its environment. Many organizations have hierarchical structures, but not all.

VERTICAL DIVISION OF LABOUR is concerned with apportioning authority and for planning and
decision making
HORIZONTAL DIVISION OF LABOUR groups the basic tasks to be performed into jobs and then into
departments so organizational goals can be achieved.
An organization can be structured in many different ways, depending on their objectives. The
structure of an organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for different
functions and processes to different entities such as the branch, department, workgroup and
individual.
FUNCTIONAL STRUCTURE
Employees within the functional divisions of an organization tend to perform a specialized set
of tasks, for instance the engineering department would be staffed only with software engineers. This
leads to operational efficiencies within that group.
As a whole, a functional organization is best suited as a producer of standardized goods and
services at large volume and low cost. Coordination and specialization of tasks are centralized in a
functional structure, which makes producing a limited amount of products or services efficient and
predictable.
FEATURES:
➔It typically works well for smaller and less complex organizations dealing with only one or a few
products or services.
➔Also work best in relatively stable environments that allow organizations to pursue consistent
strategies.
ADVANTAGES:
The major potential advantages include:
➔Economies of scale with efficient use of resources
➔Task assignments consistent with technical training
➔High quality technical problem solving
➔In-depth training and skill development within functions
➔Clear cut career paths within functions
DISADVANTAGES
➔Poor communication and coordination across functions, having too many decisions referred upward
in the hierarchy,
➔One of the most serious disadvantages occurs when members of functional departments become
overspecialized, develop self-centered, narrow viewpoints, and lose the total system perspective.
➔However it could also lead to a lack of communication between the functional groups within an
organization, making the organization slow and inflexible.
DIVISIONAL STRUCTURE
Also called a "product structure", the divisional structure groups each organizational function
into a division. Each division within a divisional structure contains all the necessary resources and
functions within it. Divisions can be categorized from different points of view. One might make
distinctions on a geographical basis or on product/service basis (different products for different
customers: households or companies).
Each division may have its own sales, engineering and marketing departments.
FEATURES:
Divisional structures are popular among organizations with diverse operations cutting across
many products, areas, and customers.
ADVANTAGES:
➔Greater flexibility in responding to environmental changes
➔Improved coordination across functional departments
➔ Clear points of responsibility for product or service delivery
➔ Expertise focused on specific customers, products and regions
➔Easier growth or reduction in size by adding or deleting divisions
DISADVANTAGES
➔ May reduce economies of scale, disperse technical competence and expertise,
➔ Even create unhealthy rivalry among operating units.
➔ May also increase costs by duplicating resources and efforts across divisions and causing an
overemphasis on divisional versus organizational goals.
MATRIX STRUCTURE
The matrix structure groups employees by both function and product. This structure can
combine the best of both separate structures. A matrix organization frequently uses teams of
employees to accomplish work, in order to take advantage of the strengths, as well as make up for
the weaknesses, of functional and decentralized forms.
➔Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the
cross- functional aspects of the project. The functional managers maintain control over their
resources and project areas.
➔Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared
equally between the project manager and the functional managers. It brings the best aspects of
functional and projectized organizations. However, this is the most difficult system to maintain as the
sharing power is delicate proposition.
➔Strong/Project Matrix: A project manager is primarily responsible for the project. Functional
managers provide technical expertise and assign resources as needed.
FEATURES:
Matrix structures are often found in organizations pursuing growth in dynamic and complex
environments
ADVANTAGES:
➔More inter functional cooperation: The matrix provides a way of coordinating different
functional contributions to serve specific program needs
➔Flexibility: The matrix makes it easier to add, remove and change the focus of teams to reflect
new program directions or basic changes in business size.
➔ Customer service: The customer or client of a matrix structure always has a program manager
available to respond to questions, provide status reports and address problems.
➔ Improved decision making: The matrix forces decision making and problem solving down to the
team level, where the best information exists.
➔Improved strategic management: The matrix helps keep top managers free of routine decisions
and enables them to apply their time to more strategic management concerns.
DISADVANTAGES
➔ Power struggles, which may result from the two boss system
➔ Team members may become too focused on themselves and develop “groupies’” losing sight of
important goals.
➔Often creates increased costs as overhead rises in the form of extra salaries for program managers
Product based Structures:
In large volume scenario it makes a sense to have a separate organisation dedicated to a
product. This enables optimum use of specialised skills. Product separation helps organisation in
addition /deletion decisions.
Customer based Structures:
Assuming that sales volume justifies the need of separate setup; it enables organisation to
concentrate on specific customer group and provide exclusive attention required for that particular
product / services. It helps in creating specialised skills and timely response to changing needs of the
customers.
GEOGRAPHIC STRUCTURES:
Set ups at different sites sometimes evolve due to expansions and mergers. It also offers
advantage of nearness to raw materials or to markets / customers. It helps in fair degree of de-
centralisation. It needs a very good top level co-ordination and communication amongst all locations
and corporate office.
 Geographic regions may become the basis for grouping organizational activities when
companies expand nationally through internal expansion, horizontal integration, or mergers.
Expanding nationally – geographic structure
➔More responsive to needs of regional customers
➔Can achieve a lower cost structure and economies of scale
➔Provides more coordination and control than a functional structure through the
regional hierarchies
TOPIC: STRATEGIC CHANGE-POLITICS-POWER AND CONFLICT
5. Write a short note on corporate politics and power [U][08]
Power is an ability to influence others and politics is carrying out activities though not prescribed
by any Policy to gain advantages and influence distribution. Corporate politics is not good or bad
but it creates divisiveness which is not good.
Sources of Power:
‘Reward Power’ ability of Manager to reward people of his choice. ‘
Coercive Power’ Ability to penalise negative results.
‘Legitimate Power’ Ability of Mangers to influence behaviour of sub ordinates
Referent Power is Managers to create liking among subordinates due to charisma or knowledge.
Expert Power is due to competence, knowledge and experience of Managers.
TOPIC: STRATEGIC EVALUATION & CONTROL
6. Explain the process of Strategic Evaluation and Control [U][08]
7. State the different strategic evaluation technique in detail [[AZ][08]
Gap Analysis
The gap analysis is one strategic evaluation technique used to measure the gap between the
organization's current position and its desired position. 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. 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.
SWOT Analysis
The SWOT analysis is another common strategic evaluation technique used as a part of the strategic
management process. The SWOT analysis evaluates the organization's strengths, weaknesses,
opportunities and threats. Strengths and weaknesses are internal factors, while opportunities and
threats are external factors. This identification is essential in determining how best to focus resources
to take advantage of strengths and opportunities and combat weaknesses and threats.
PESTEL Analysis
Another common strategic evaluation technique is the PEST analysis, which identifies the
political, economic, social ,technological, Eco Environmental, and Legal factors that may impact the
organization's ability to achieve its objectives. Political factors might include such aspects as
impending legislation regarding wages and benefits, financial regulations, or even the risk of a military
invasion in another country. Economic factors include all shifts in the economy, while social factors
may include demographics and changing attitudes. Technological pressures are also inevitable as
technology becomes more advanced each day. These are all external factors, which are outside of the
organization's control but which must be considered throughout the decision making process.
Benchmarking
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. Organizations may
benchmark themselves against other organizations within the same industry, or they may benchmark
themselves against their own prior situation. 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.
8. State the relationship between strategic Implementation and Formation in detail[ EV][08]
Following are the main differences between Strategy Formulation and Strategy
Implementation-
Strategy Formulation Strategy Implementation
Strategy Formulation includes planning and Strategy Implementation involves all those means
decision-making involved in developing related to executing the strategic plans.
organization’s strategic goals and plans.
In short, Strategy Formulation is placing the In short, Strategy Implementation is managing
Forces before the action. forces during the action.
Strategy Formulation is an Entrepreneurial Strategic Implementation is mainly
Activity based on strategic decision-making. an Administrative Taskbased on strategic and
operational decisions.
Strategy Formulation emphasizes Strategy Implementation emphasizes
on effectiveness. on efficiency.
Strategy Formulation is a rational process. Strategy Implementation is basically
an operational process.
Strategy Formulation requires co-ordination Strategy Implementation requires co-ordination
among few individuals. among many individuals.
Strategy Formulation requires a great deal Strategy Implementation requires
of initiative and logical skills. specific motivational and leadership traits.
Strategic Formulation precedes Strategy STrategy Implementation follows Strategy
Implementation. Formulation.
9. Evaluate the characteristics of effective control systems [EV][08]
Effective control systems have certain characteristics. For a control system to be effective, it must be:
Accurate Information on performance must be accurate. Evaluating the accuracy of the information
they receive is one of the most important control tasks that managers face.
Timely Information must be collected, routed, and evaluated quickly if action is to be taken in time
to produce improvements.
Objective and Comprehensible The information in a control system should be understandable and
be seen as objective by the individuals who use it. A difficult-to understand control system will cause
unnecessary mistakes and confusion or frustration among employees.
Focused on Strategic Control Points The control system should be focused on those areas where
deviations from the standards are most likely to take place or where deviations would lead to the
greatest harm.
Economically Realistic The cost of implementing a control system should be less than, or at most
equal to, the benefits derived from the control system.
Organizational Realistic The control system has to be compatible with organizational realities and
all standards for performance must be realistic.
Coordinated with the Organization's Work Flow Control information needs to be coordinated
with the flow of work through the organization for two reasons: (1) each step in the work process may
affect the success or failure of the entire operation, (2) the control information must get to all the
people who need to receive it.
Flexible Controls must have flexibility built into them so that the organizations can react quickly to
overcome adverse changes or to take advantage of new opportunities.
Prescriptive and Operational Control systems ought to indicate, upon the detection of the deviation
from standards, what corrective action should be taken.
Accepted by Organization Members For a control system to be accepted by organization members,
the controls must be related to meaningful and accepted goals.
These characteristics can be applied to controls at all levels of the organization.
10.Create the Effective Control System for Strategy Implementation in an organization[C][08]
Steps in Designing an Effective Control System
Strategic control is concerned with tracking a strategy as it is being implemented, detecting
problems or changes in its underlying premises, and making necessary adjustments
Strategic control involves tracking a strategy as its being implemented. It's also concerned with
detecting problems or changes in the strategy and making necessary adjustments. As a manager, you
tend to ask yourself questions, such as whether the company is moving in the right direction, or
whether your assumptions about major trends and changes in the company's environment are
correct. Such questions necessitate the establishment of strategic controls
Premise Control
Every strategy is based on certain planning premises or predictions. Premise control is
designed to check methodically and constantly whether the premises on which a strategy is grounded
on are still valid. If you discover that an important premise is no longer valid, the strategy may have
to be changed. The sooner you recognize and reject an invalid premise, the better. This is because the
strategy can be adjusted to reflect the reality.
Special Alert Control
A special alert control is the rigorous and rapid reassessment of an organization's strategy
because of the occurrence of an immediate, unforeseen event. An example of such event is the
acquisition of your competitor by an outsider. Such an event will trigger an immediate and intense
reassessment of the firm's strategy. Form crisis teams to handle your company's initial response to
the unforeseen events.
Implementation Control
Implementing a strategy takes place as a series of steps, activities, investments and acts that
occur over a lengthy period. As a manager, you'll mobilize resources, carry out special projects and
employ or reassign staff. Implementation control is the type of strategic control that must be carried
out as events unfold. There are two types of implementation controls: strategic thrusts or projects,
and milestone reviews. Strategic thrusts provide you with information that helps you determine
whether the overall strategy is shaping up as planned. With milestone reviews, you monitor the
progress of the strategy at various intervals or milestones.
Strategic Surveillance
Strategic surveillance is designed to observe a wide range of events within and outside your
organization that are likely to affect the track of your organization's strategy. It's based on the idea
that you can uncover important yet unanticipated information by monitoring multiple information
sources. Such sources include trade magazines, journals such as The Wall Street Journal, trade
conferences, conversations and observations.
Control Systems
The measurement and correction of the performance of activities of all the people in structure
in order to make sure that enterprise objectives and plan devised to achieve the same is accomplished
Information Systems
The Organisational Arrangements that provides information to managers to perform their
tasks and relate their works to others. This is also known as MIS
Appraisal Systems
To evaluate the managerial performance Appraisals are used for salary fixation, awards,
incentives, management development, etc.
Motivation Systems
To enforce the desirable behaviour Motivation can be monetary such as Salary, Bonus,
Rewards and non monetary such as recognition, designation, perks

UNIT V STRATEGIC ISSUES 09hours

Managing Technology and Innovation-Strategic issues for Non-Profit organizations, New Business
Models and strategies for Internet Economy-case study

TOPIC: MANAGING TECHNOLOGY AND INNOVATION

1.Give the characteristics of innovative entrepreneurial culture. U
Entrepreneurial culture is a part of innovative culture which presupposes flexibility and
dynamism into the structure. “Diffusion of Innovation” observes that an innovative organization has
the following characteristics.
➔Positive Attitude to change
➔Decentralized Decision Making
➔Informal structure
➔Inter connectedness
➔ Complexity
➔Slack resources
➔System openness

2. Define the term “Innovation” R

Innovation in its modern meaning is "a new idea, creative thoughts, new imaginations in form
of device or method".

3.What is ‘brick and click’ strategy? R

Brick and Click is a business model by which a company integrates both offline (bricks) and
online (clicks) presences. The Brick and Click model has typically been used by traditional retailers
who have extensive logistics and supply chains. Part of the reason for its success is that it is far easier
for a traditional retailer to establish an online presence than it is for a start-up company to employ a
successful pure “dot com” strategy, or for an online retailer to establish a traditional presence.
4. What is strategic fit? R
Strategic fit express the degree to which an organization is matching its resources and
capabilities with the opportunities in the external environment. The matching takes place
through strategy and it is therefore vital that the company have the actual resources and capabilities
to execute and support the strategy. Strategic fit can be used actively to evaluate the current strategic
situation of a company as well as opportunities as M&A and divestitures of organizational divisions

TOPIC: STRATEGIC ISSUES FOR NON-PROFIT ORGANIZATIONS

5. Discuss the issues in alliances with foreign companies? A
There are many reasons that contribute towards the failure of strategic alliances. International
markets need to avoid the following issues in the case of forming strategic alliances.
• Incompatibility of partners
• Issues in having access to each other’s information • Disagreements over distribution of earnings
• Issues due to potential loss of autonomy
• Changes in motivations due to changing circumstances over time

6. What is the meaning of ‘Strategic Piggybacking?

Strategic piggybacking refers to the development of a new activity for the not-for-profit organization
that would generate funds needed to make up the difference between revenues and expenses. Its
purpose is to help subsidize the primary service programs. It appears to be a form of concentric
diversification but it is engaged in only for its money generating value

7. Highlight any four strategic issues in nonprofit organization.

➔Sources of Revenue
➔Constraints in Not-for-profit organization:
➔Service is intangible in nature.
➔The clients have very little influence.
➔The sponsor mainly donate the fund for not for profit organization
➔The professional people is going to join
➔ Restraints on the use of rewards and punishments
➔Problems in the strategy formulation:
➔ The main aim is to collect the funds.
➔They don‟t know how to frame strategy.
➔ Internal conflict with the sponsor
➔Worthless will be rigid.
➔Problems in Strategy implementation:
➔The problem in decentralization
➔ Links in internal external
➔ Rewards and punishment

TOPIC: NEW BUSINESS MODELS AND STRATEGIES FOR INTERNET ECONOMY

8. Define Intrapreneurship
He is acting like an entrepreneur within a larger organization. The term is derived from a
combination of "intra" or internal, and "entrepreneurship." Intraprenuers are usually highly self-
motivated, proactive and action-oriented people who are comfortable with taking the initiative, even
within the boundaries of an organization, in pursuit of an innovative product or service

9. Define Corporate Entrepreneurship.

When internal new venturing place in an organizational the corporate managers must that the
internal new vesturing process as a form of Entrepreneurship and the people who are leading the new
ventures as entrepreneurs. That organizational structure control and culture must be designed to
encourage creativity and give new-venture managers autonomy and freedom to develop and champion
new products. This is called entrepreneurship.

10. What is the meaning of ‘Entrepreneurial Venture’?

Entrepreneurship is the act and art of being an entrepreneur or "'one' who
undertakes innovations, finance and business acumen in an effort to transform innovations into
economic goods". This may result in new organizations or may be part of revitalizing
mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship
is that of starting new businesses (referred as Startup Company); however, in recent years, the term
has been extended to include social and political forms of entrepreneurial activity. When
entrepreneurship is describing activities within a firm or large organization it is referred to as intra-
preneurship and may include corporate venturing, when large entities spin-off organizations

11.What is organizational life cycle?

Organizational life cycle is the life cycle of an organization from birth level to the termination.
There are five level/stages in any organization.
Birth, Growth, Maturity, Decline, Death
12. State the forces of New Economy.

1. Knowledge – intellectual capital as a strategic factor; a set of understandings used by

people to make decisions or take actions that are important to the company
2. Change – continuous, rapid and complex; generates uncertainty and reduces predictability
3. Globalization – in R&D, technology, production, trade, finance, communication and
information, which has resulted in opening of economies, global hypercompetition and
interdependency of business

PART-B
TOPIC: STRATEGIC ISSUES FOR NON-PROFIT ORGANIZATIONS
1. What is Not-for-Profit organization and explain its types?
NONPROFIT ORGANIZATION
Nonprofit organization (abbreviated as NPO) is neither a legal nor technical definition but
generally refers to an organization that uses surplus revenues to achieve its goals, rather than
distributing them as profit or dividends. States in the United States defer to the IRS designation
conferred under United States Internal Revenue Code Section 501(c), when the IRS deems an
organization eligible. They may or may not have shareholders.
While Not-for-profit organizations are permitted to generate surplus revenues they must be
retained by the organization for its self-preservation, expansion, or plans. NPOs have controlling
members or boards. Many have paid staff including management, while others employ unpaid
volunteers and even executives who works without compensation (or that work for a token fee, such
as $10 per year). Where there is a token fee, in general, it is used to meet legal requirements for
establishing a contract between the executive and the organization.
Designation as a non-profit and intent to make money are not related in the United States.
This means nothing can be conferred by the declaration. It is unclear whether or not this holds outside
of the U.S. In the United States, such inference is the purpose of the Internal Revenue Code, Section
501(c). The extent to which an NPO can generate surplus revenues may be constrained or use of
surplus revenues may be restricted.
Not-for-Profit (NFP):
An organization that provides some service or good with no intention of earning a profit. NFP
includes Private nonprofit corporations (such as hospitals, institutes, private colleges, and organized
charities) as well as Public governmental units/agencies (such as welfare departments, prisons and
state universities)
Types of Not-for-Profit Organizations
2. What is impact of Strategic Management on Not-for-Profit organization?
Impact of Constraints on strategic management: Several characteristics peculiar to the not for
profit organisation constrain its behavior and affects it strategic management. The constraints are as
follows:
➔Service is often intangible/hard to measure
➔Client influence may be weak
➔Strong employee commitments to professions
➔Resource contributors intrude on internal management
➔Restraints on use of rewards and punishments
Impact on Strategy Formulation:
➔Goal conflicts with rational planning: because NFPs typically lacks a single clear cut
performance criterion, divergent goals and objectives are likely, especially with multiple sponsors.
➔An integrated planning process tends to shift from results to resources: because NFPs
tend to provide services that are hard to measure planning becomes more concerned with resource
inputs, which can be easily measured than with service which cannot.
➔Ambiguous objectives create opportunities for internal politics and goal
displacement: the combination of vague objectives and heavy concerns with resources allows
managers a considerable scope in their activities. Such attitude created opportunities for politics.
➔Professionalization simplifies detailed planning but adds rigidity: In NFPs professional
values and traditions can prevent the organizations from changing its conventional behviour patterns
to fit new service mission tuned to changing social needs. Goals of the professionals and their
representative bodies may not align with organizational goals
Impact on Implementation
➔Decentralization is complicated: the difficulty of setting objectives for an intangible service
complicates the decision making authority.
➔Increased requirement for an environmental buffer role: because of the heavy
dependence on outside sponsors a special need arises for people in buffer roles to relate to both inside
and outside organizations. The job of a “dean for external affairs” for example consists primarily of
working with the school alumnae and raising funds.
➔Job enlargement and executive development can be restrained by professionalism: in
organisations that employ large number of professionals, managers must design jobs that appeal to
prevailing professional norms.
Impact on Evaluation & Control
 ➔Rewards & penalties have little or no relation to performance: when results are vague
and the judgement of success is subjective, predictable and impersonal feedback cannot be
established.
➔Inputs rather than outputs are heavily controlled: because its inputs can be measured
much more easily than outputs, the not for profit organisation tends to focus more on the resources
going into performance than on the performance itself.

3. Analyze the strategic Issues for Non-Profit organizations [A] 16]

“A non-profit organizations also known as a not-for- profit organization is an
organization that does not distribute its surplus funds to owners or shareholders, but instead
uses them to help pursue its goals/
Types of non-profit-organizations:
➔Private non-profit organizations
➔ Public governmental units
Two Major Reasons:
Society needs certain goods services Private not for profit organization are exempted.
Sources of Revenue:
Profit making organization (Sales of goods or services)
Not for profit organization (Sponsor or donations)
Constraints in Not-for-profit organization:
➔Service is intangible in nature.
➔The clients have very little influence.
➔The sponsor mainly donate the fund for not for profit organization
➔The professional people is going to join
➔ Restraints on the use of rewards and punishments
Problems in the strategy formulation:
➔ The main aim is to collect the funds.
➔They don‟t know how to frame strategy.
➔ Internal conflict with the sponsor
➔Worthless will be rigid.
Problems in Strategy implementation:
➔The problem in decentralization
➔ Links in internal external
➔ Rewards and punishment
Functional issues:
➔Functional plans and policies
➔Financial,
➔Marketing,
➔Operations,
➔Personnel, and IT,
Functional Strategies are derived from Business & Corporate Strategies and are
implemented through Functional & operational Implementation. Functional Strategies deal
with limited plan designed to achieve Objectives in a specific Functional area, allocation of
resources for that functional area and coordination among different functional operations to
achieve Functional Objectives.
Functional Plans & Policies are developed for:
 ➔The Strategic decisions are implemented by all parts of an Organisation.
➔There is a basis available for controlling activities in different functional areas of Operation.
➔Plans are laid down for what is to be done and Policies provide guideline for discretions
and Functional Manager’s time in decision making is reduced.
➔Required Coordination amongst different functions takes place.

4. Illustrate the Technological life cycle for a Mobile phone. [A]16

5. Describe different categories of innovation [A] [16]

Innovation can range from incremental to radical. As shown in, a corporation’s
capabilities (existing or new) interact with its strategic scope (limited or unlimited) to form
four basic categories of innovation. A corporation may emphasize one of these categories or
operate in all of them.

Quadrant 1: Improving Core Businesses: This type of innovation focuses on incremental

innovations that can be developed rapidly and inexpensively. It includes line extensions and
more convenient packaging and is often a part of a horizontal growth strategy. Its potential
weakness is market myopia—its emphasis on current products and customers. As illustrated
earlier in this chapter, PepsiCo is the master of this type of innovation.
Quadrant 2: Exploiting Strategic Advantages: This type of innovation focuses on taking
existing brands and product lines to new customers and markets without requiring major
Change in current capabilities. It means moving beyond the company’s current strategic
scope by leveraging capabilities by spreading them across a broader range of markets and
customers via concentric diversification. Its potential weakness is the relative ease with which
competitors with similar capabilities can imitate the innovation. Coleman and Toro are
examples of companies that have leveraged their capabilities in camping (Coleman) and lawn
(Toro) equipment to move into new products and new markets, such as Coleman gas grills
and Toro snow blowers.
Quadrant 3: Developing New Capabilities: This type of innovation focuses on deepening
customer satisfaction and loyalty to the brand or product line by adding new organizational
capabilities without introducing major changes in strategic scope. The company may develop
or purchase new technologies, talents, or businesses to better serve the firm’s current scope
of customers and markets. It may involve a vertical growth strategy. Its potential weakness
is the investment cost and implementation time. Microsoft follows an embrace-and-extend
policy to either acquire or imitate a new product in order to offer it to its current customers
in the next version of Windows or Office software.
Quadrant 4: Creating Revolutionary Change: This type of innovation focuses on radical
innovations that transcend current product lines or brands to make fundamental changes in
both its strategic scope and its capabilities. This can mean a new business model and a
revolutionary new future for the company. Its potential weakness is a high risk of failure.
Sony Corporation is the master of radical innovation. Its pioneering products, such as the
Walkman, the Airboard, and the robo-pet Aibo, introduce whole new product categories.
 TOPIC: NEW BUSINESS MODELS AND STRATEGIES FOR INTERNET ECONOMY

6. Illustrate the impact of internet in E-Commerce. A [16]

The internet economy is an economy is based on electronic goods and services produced by
the electronic business and traded through electronic commerce.
The Internet Economy refers to conducting business through markets whose infrastructure is
based on the internet and world-wide web. An internet economy differs from a traditional economy in
a number of ways, including communication, market segmentation, distribution costs and price.
Impact of the Internet in E-Commerce
➔Impact on external industry environment
➔Changes character of the market and competitive environment
➔Creates new driving forces and key success factors
➔Breeds formation of new strategic groups
➔Impact on internal company environment
➔Having, or not having, an e-commerce capability tilts the scales
➔Toward valuable resource strengths or threatening weaknesses
➔Creatively reconfiguring the value chain will affect a firm’s competitiveness rivals.

Effects of the Internet and E-commerce:

Major groups of internet and e-commerce firms comprising the supply side include
➔Makers of specialized communications components and equipment
➔Providers of communications services
➔Suppliers of computer components and hardware
➔Developers of specialized software
➔E-Commerce enterprises

7. Describe the characteristics of Internet Market Structure [A] [8]

Internet is composed of
➔Integrated network of user’s connected computers
➔Banks of servers and high speed computers
➔Digital switches and routers
➔Telecommunications equipment and lines
Strategy-shaping characteristics of the E-Commerce Environment Internet make it feasible for
companies everywhere to compete in global markets.
➔Competition in an industry is greatly intensified by new e-commerce. Strategic initiatives of existing
rivals and by entry of new, enterprising e-commerce rivals
➔Entry barriers into e-commerce world are relatively low
➔On-line buyers gain bargaining power
➔Internet makes it feasible for firms to reach

8. R&D:
The following best practices can be considered as benchmark for a company’s R&D
activities.

8. Explain thirteen “best practices” for improving R&D.

1. Corporate and business unit strategies are well defined and clearly communicated.
2. Core technologies are defined and communicated to R&D.
3. Investments are made in developing multinational R&D capabilities to tap ideas throughout the
world.
4. Funding for basic research comes from corporate sources to ensure a long-term focus; funding for
development comes from business units to ensure accountability.
5. Basic and applied research is performed either at a central facility or at a small number of labs,
each focused on a particular discipline of science or technology. Development work is usually
performed at business unit sites.
6. Formal, cross-functional teams are created for basic, applied, and developmental projects.
7. Formal mechanisms exist for regular interaction among scientists, and between R&D and other
functions.
8. Analytical tools are used for selecting projects as well as for ongoing project evaluation.
9. The transfer of technology to business units is the most important measure of R&D performance.
10. Effective measures of career development are in place at all levels of R&D.
11. Recruiting of new people is from diverse universities and from other companies when specific
experience or skills are required that would take a long time to develop internally.
12. Some basic research is performed internally, but there are also many university and third party
relationships.
13. Formal mechanisms are used for monitoring external technological developments.