Summer 2013 Master of Business Administration - MBA Semester 4 MB0052 Strategic Management and Business Policy - 4 Credits Q1.

. A well-formulated strategy is vital for growth and development of any organization. Explain corporate strategy in different types of organizations. A well-formulated strategy is vital for growth and development of any organization - whether it is a small business, a big private enterprise, a public sector company, a multinational corporation or a non-profit organization. But, the nature and focus of corporate strategy in these different types of organizations will be different, primarily because of the nature of their operations and organizational objectives and priorities. Small businesses, for example, generally operate in a single market or a limited number of markets with a single product or a limited range of products. The nature and scope of operations are likely to be less of a strategic issue than in larger organizations. Not much of strategic planning may also be required or involved; and, the company may be content with making and selling existing product(s) and generating some profit. In large businesses or companies whether in the private sector, public sector or multinationals the situation is entirely different. Both the internal and the external environment and the organizational objectives and priorities are different. For all large private sector enterprises, there is a clear growth perspective, because the stakeholders want the companies to grow, increase market share and generate more revenue and profit. For all such companies, both strategic planning and strategic management play dominant roles. Multinationals have a greater focus on growth and development, and also diversification in terms of both products and markets. This is necessary to remain internationally competitive and sustain their global presence. For example, multinational companies like General Motors, Honda and Toyota may have to decide about the most strategic locations or configurations of plants for manufacturing the cars. In public sector companies, objectives and priorities can be quite different from those in the private sector. Generation of employment and maximizing output may be more important objectives than maximizing profit. Stability rather than growth may be the priority many times. Accountability system is also very different in public sector from that in private sector. There is also greater focus on corporate social responsibility. The corporate planning system and management have to take into account all these factors and evolve more balancing strategies. In non-profit organizations, the focus on social responsibilities is even greater than in the public sector. In these organizations, ideology and underlying values are of central strategic

significance. Many of these organizations have multiple service objectives, and the beneficiaries of service are not necessarily the contributors to revenue or resource. Q2. Businesses need to be planned not only for today, but also for tomorrow, that is, for the future which implies business continuity. Write the importance of business continuity planning. Explain any two strategies for business continuity planning. An extension of strategic planning is business continuity planning. This is a recent development in policy and strategic management. It essentially deals with the damages due to a disaster to a businessnatural or manmade. Appropriate planning and strategies are required to handle such damages or disasters. Implementation issues are also involved. Importance of Business Continuity Planning (BCP) As indicated in the definition, businesses today can be exposed to different types of threats natural or man-made. Major threats are: Natural disasters such as floods or earthquakes or accidents Man-made threats like sabotage or terrorism Financial crisis or disaster can be partly man-made and partly due to environmental factors.

BCP prepares companies to prevent or respond to such situations so that the damages or losses are minimized and the business or company survives. Thus, BCP plays a critical role in a businessits survival and sustainability. The two strategies for business continuity planning are: 1. Prevention Conventionally, prevention is the best strategy; this means taking steps or actions to prevent or minimize the chances of occurring of a disaster. Companies can adopt many preventive control measures as safeguards. Common preventive control measures are: (a) Security controls: These involve controls by setting up barriers to protect the site and prevent unauthorized entry into the premises. This means, in other words, manned surveillance at the location. (b) Infrastructure controls: These include appropriate infrastructural facilities like UPS/back-up power, smoke/fire detectors, fire extinguishers, weather forecasting systems , etc. (c) Personnel controls: Skilled/trained personnel are posted to man sensitive zones where key or critical resources may be located. (d) Software controls: These involve modern methods of controls through computerized systems or software. These include authentication, encryption, firewall, intrusion detection systems, etc.

2. Response Prevention is a pre-emptive measure; response is a reactive step. If prevention is not possible, fast response is the next best alternative strategy. After an interruption or damage has taken place, the BCP team should immediately inform the management and the Damage Assessment Team. Two other teams would also be involved: the Technical Team and the Operations Team. The Damage Assessment Team would assess the nature and magnitude of the damage. More specifically, the team should investigate into: The cause of disruption or damage The scope for preventing additional damage What can be salvaged What repairs, restorations and replacements are required Based on the report of the Damage Assessment Team, the Technical

Q3. Governed corporation is a model of successful corporate governance. Define and explain governed corporation. Distinguish between managed corporation and governed corporation in terms of boards role, major characteristics and policies of a company.

Q4. Price or market competitiveness of a product or business depends on its cost competitiveness. Cost competitiveness implies two things-cost efficiency and cost effectiveness. Explain the concept of cost efficiency of an organization. Analyze the major determinants of cost efficiency.

Q5. Stability strategy is most commonly used by an organization. An organization will continue in similar business as it currently pursues similar objectives and resource base. Discuss six situations when it is good/best to pursue stability strategy. Give some Indian examples.

Q6. Corporate culture governs, to a large extent, business ethics and values in an organization. Describe the state of business ethics in Indian companies. Analyze in terms of KPMG business ethics survey.

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