SPRING 2018 MASTER OF BUSINESS ADMINISTRATION SEMESTER-IV SUBJECT CODE & NAME-MBA401 & STRATEGIC MANAGEMENT AND BUSINESS POLICY SET 1

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1 SPRING 2018 MASTER OF BUSINESS ADMINISTRATION SEMESTER-IV SUBJECT CODE & NAME-MBA401 & STRATEGIC MANAGEMENT AND BUSINESS POLICY SET 1 Q.1 What according to David are the various reasons for poor or no strategic planning and management by companies? Answer: Some companies do not undertake strategic planning and management. Some other companies do strategic planning, but receive no support from managers and employees. In some other cases, managers and employees do not get enough support from the top management. A number of such and other reasons explain why certain companies do not take to strategic planning and management. David has mentioned various reasons for poor or no strategic planning and management by companies. These are discussed below: 1. Poor reward structure: When an organization achieves success, it often fails to reward its managers or planners. But when failure occurs, the company may punish the managers concerned. In such a situation, it is better for individual managers to do nothing than to risk trying to achieve something, fail and be punished. 2. Content with success: If an organization is generally successful, the top management or individual managers may feel that there is no need to plan and strategize because everything is fine. However, they forget that success today does not guarantee success tomorrow. 3. Overconfidence: As managers gain experience, they may rely less on formalized planning and more on individual initiative and decisions. But, this is not appropriate. Overconfidence or overestimating experience leads to complacency and ultimately can bring downfall. Forethought and planning are the right virtues and are signs of professionalism. 1 P a g e

2 4. Fire-fighting: An organization may be so deeply engrossed in crisis management and fire fighting that it may not have time to plan and strategize. This happens with many companies and is a clear sign of non-professionalization. 5. Waste of time: Some organizations view planning as a waste of time because no tangible marketable products are produced through planning. But they forget that time spent on planning is an investment, and there would be returns, both tangible and intangible, in due course. 6. Too expensive: Some organizations are culturally opposed to spending resources on matters like planning which do not produce instant or immediate results. They feel that spending on planning is a wasteful expenditure. 7. Previous bad experience: Managers may have had previous bad experience with planning, that is, cases in which plans have been cumbersome, impractical or inflexible. There could be experience of failures also. They would like to avoid recurrence of this. 8. Honest difference of opinion: Some managers may sincerely think that a plan is not correct. They may see the situation from a different viewpoint, or, they may have aspirations for themselves or the organization, which are different from those envisaged in the plan. Different people in different jobs in the same organization may have different perceptions of the same situation, and this may lead to difference of opinions among them and eventually to lack of planning due to lack of consensus. 9. Self-interest: When management has achieved status, privilege or self-esteem through effectively using an old system, it often sees a new plan or a new system as unnecessary or a threat. 10. Fear of the unknown: Managers may not be sure of their abilities to learn new skills or take on new roles or adapt to new system. This is basically inertia against change or fear for change. 11. Fear of failure: Whenever something new or different is attempted, there is a chance of success, but, there is also some risk of failure. Many companies and managers may like to avoid strategic planning and management for fear of failure. 2 P a g e

3 12. Suspicion: Employees may not trust management, or, the management may not have enough confidence in the managers. This gives rise to mutual suspicion. Q.2 Write short notes on Business Continuity Planning and Business Impact Analysis. Answer: Businesses need to be planned not only for today, but also for tomorrow, that is, for the future. This implies business continuity and the need for sustainability. Sustainability requires understanding and analyzing the environment. Besides business fluctuations or business cycles, business interruptions occur because of natural disasters like floods, earthquakes, cyclones, etc. To safeguard against such threats or disasters, planning for business continuity is essential. Business continuity planning means proactively working out a means or method of preventing or mitigating the consequences of a disaster natural or manmade (sabotage or terrorism) and managing it to limit to the level or degree that a business unit can afford. Business impact analysis is the process of identifying major functions in an organization which have impacts of different degrees on the business of the organization. The analysis is usually done for each major function to determine its criticality for the business. This is done through impact questions. Relevant impact questions are: How important is the function in terms of business policy of the company? What is the role or criticality of the function in the business strategy of the company? How much the rest of the functions would be affected by absence of the function the operational impact? How much may be the revenue loss for the company in the absence of the function the financial impact? How long can the function be in operative without causing any major impact or losses? 3 P a g e

4 Whether the absence or in operation of the function affects market or industry ranking of the company loss of competitiveness? Is the function critical for relationships with customers loss of customer confidence or satisfaction? Can the absence of the function lead to loss of future sales or revenue future growth problem? The answers to these questions determine the magnitude of impact of a particular function. In terms of importance or criticality, business functions can be classified into four categories. These are: (i) Critical functions: Functions, if interrupted or unavailable for some time, can put the business in complete disorder, and, may result in heavy losses. (ii) Essential functions: Functions, whose absence or interruptions, would badly affect the regular functioning of the organization. (iii) Necessary functions: Functions without which an organization can continue functioning, but its operational efficiency would be affected. (iv) Desirable functions: The absence of these functions does not affect the operational effectiveness, but the presence of these functions would be beneficial to the organization. Q.3 what is Competence Analysis? What are the four major types or levels of competence? Answer: Competence is the ability to perform a task or achieve some objectives. Competence levels vary across organizations, and, also, within an organization from time to time. Difference in performance among companies in the same market and product category is, due to the difference in their competence levels. This happens because only some companies are able to demonstrate the competences demanded by particular competitive situations. This applies to a 4 P a g e

5 Particular company also. Just for survival, a company needs to possess a particular level of competence; but, for clear competitive advantage or sustained growth, a company would require a different level or type of competence. Four major types or levels of competence may be distinguished: 1. Core competence 2. Distinctive competence 3. Strategic competence 4. Threshold competence Core Competence Core competence of a company is one of its special or unique internal competences. Core competence is not just a single strength or skill or capability of a company; it is interwoven resources, technology and skill or synergy culminating into a special or core competence. Core competence gives a company a clear competitive advantage over its competitors. Distinctive Competence Core competence may not be enough, because it focuses predominantly on the product or process and technology - The combination of individual technologies and production skills. There are two problems with this. First, strong and aggressive competitors may develop, either through parallel innovations or imitations, similar products or processes which are highly competitive. Strategic Competence Strategic competence coexists with, or supports, core competence and distinctive competence. Strategic competence is the competence level required to formulate, implement and produce results with a particular strategy, for example, to outwit competitors. Hindustan Unilever did this. In the mid- and the late 80s, they used their strategic competence to out manoeuvre Nirma (which was launched very aggressively) and re-establish their leadership in the detergent market. Strategic competence may also involve combination or convergence of different capabilities as in the case of Hindustan Unilever. 5 P a g e

6 Threshold Competence Threshold competence is the competence level required just for survival in the market or business. The competence level of a company may be weaker than many of its competitors. Threshold competence may be adopted Last or Second Last player in the market or those struggling to survive. SET -2 Q.1 Write short note on BCG Portfolio Model and Porter s Generic Strategy. Q.2 Write short notes on Ansoff product-market expansion matrix and Strategic Alliance Q.3 What do you mean by Structure of an Organisation? Explain some of the common structural forms. Remaining Answers are available in Paid Assignments.. Contact us for complete assignments.. NAVEEN KUMAR: / smuassignment2014@gmail.com Website: Now you can Pay Online on our Website. To pay online go to Payment Details Page of our Website ALL OF OUR ASSIGNMENTS ARE IN WORD FORMAT, WITHOUT ANY WATERMARK, READY TO UPLOAD AND AS PER NEW GUIDELINES OF SMU 6 P a g e