MGT657 – SM FULL ANSWER PAST YEAR

Chapter 1 – overview sm

Year No Q Question Answer

Strategic planning or strategic mgt is the art & science of
formulating, implementing, and evaluate cross-functional
decisions that enable an organization to achieve its
objectives. The purpose of strategic mgt is to exploit and
create new and different opportunities for tomorrow; long-
range planning, in contrast tries to optimize for tomorrow the
trends of today.

There are 3 stages of strategic planning. Firstly, is

strategic formulation includes develop a vision & mission,
identifying an organization’s external opportunities and
threats, determine internal strength & weaknesses, establish
long term objectives, generate alternative strategies, and
JUSTIFY HOW
choose particular strategies to pursue. This will benefit firm
STRATEGIC
by commit them to specific products, markets, resources and
PLANNING CAN BE
Jun Part b technologies over an extended period of time.
2014 2a BENEFICIAL TO A
FIRM. (10M) Second, strategy implementation. Require firm to
establish annual objectives, devise policies, motivate
employees, and allocate resources so that formulated
strategies can be executed. It will develop strategy supportive
culture, create effective orgnznal structure, help prepare
budget and develop & use information system.

Lastly, strategy evaluation. Help manager to know

when particular strategies are not working well bcoz all
strategies subject to future modification due to external
internal factors tht constantly changing. 3 fundamental
strategy evaluation activity are review external internal
factors tht are the bases for current strategies, measuring
performances and take corrective action.

Strategic
management is  No formal training in strategic
not a guarantee management
for success and  No understanding of or appreciation for
some firms do the benefits of planning
Dec Part b
not engage in  No monetary rewards for doing planning
2015 1a
strategic  Not punishment for not planning
planning at all.  Prior bad experience with strategic
State five (5) planning done sometime.
reasons why
some firm
 refuse to pursue
strategic
planning. (10
marks)
 The key purpose of sm is to exploit and create
new and different opportunities for tomorrow
 4 effective guidelines:
i) It should be people process more than paper
process
 A perfect strategic plan will have no meaning if it
is not implemented.
 Change comes through implementation and
evaluation not through the plan
 A technically imperfect plan that is implemented
well will achieve more than the perfect plan that
never gets off the paper on which it is typed.
ii) It should be learning process for all managers and
employees
- State the key  Strategic mgt must not be self-perpetuating
purpose of  It must be self-reflective learning process that
sm and 4 familiarize managers and employees in the
effective organization with key strategic issues and feasible
guidelines in alternatives for resolving those issues
Jun Part b conducting iii) It should be words supported by numbers rather
2016 1a good than numbers supported by words
planning  Should represent the medium for explaining
process.(15 strategic issues and organizational responses
M)  Key role to strategists is to facilitate continuous
organizational learning and change
iv) It should be simple and nonroutine.
 Eliminate jargon and arcane (complicated and
hard to understand) planning language
 Strategic mgt is a process for fostering learning
and action, not merely a formal system for control
 To avoid routinized behavior, vary assignments,
team membership, meeting formats and the
planning calendar.
 Process should not be totally predictable , and
settings must be changed to stimulate creativity
 Emphasize word-oriented plans with numbers as
back-up material
 Strategic mgt. must not become ritualistic, stilted,
orchestrated or too formal, predictable and rigid.
Chapter 2 – vision mission

Year No Q Question Answer

1. To make sure all employees/managers
understand the firm’s purpose or reason for
being.
2. To provide a basis for prioritization of key internal
Explain why and external factors utilized to formulate feasible
Telekom needs to
Dec strategies.
4a have a mission
2013 3. To provide a basis allocation of resources.
statement.
(5marks) 4. To provide a basis for organizing work,
department, activities, and segment around a
common purpose.
5. To better financial result.

1. Customers – identify who their customers. To

earn customer loyalty, we must listen to them
and anticipate their needs. Ex: if the customers
have problems to heat the food in short time, we
must create the product which can solve their
problem. Therefore, microwaves are created.
2. Product or services – what a major product or
services. In order for the customers to buy our
products or use our services, both of them must
beneficial to the customers. Ex: safi rania gold
skincareis using natural ingredient which is safe
Explain any five (5) for those who have sensitive skin.
components of
3. Markets – related to the geographically. To
4b mission
statement. determine where can sell our product or services
(15marks) to the potential customers. Ex: selling winter coat
in korea during winter seasons.
4. Technology – what technology company used.
Using an advanced technology in order to
increase our productions. Ex: using solar power to
charge the cell phones.
5. Philosophy – priority of the firm. Set our basic
beliefs, values, aspirations and ethical properties
in order to strengthening our business. Ex: the
philosophy of Tabung Haji is to be honest with the
customers without giving them feels ambiguity.

5 components of  Customers
Dec mission o Who are the firm’s customers? How do you
2
2014 statement. Give benefit them? An effective mission statement
examples for sets out, in broad terms, the target market. A
each. (20m) manufacturer that makes nuts and bolts
might set its target market as retail hardware
stores, machine manufacturers, or both.
o Eg: Our customers are outdoor enthusiasts
seeking fishing excitement and adventure.
 Products or services
o What are the firm’s major products or
services?
o Eg: Intel; Delight our customers (1),
employees (3), and shareholders by
relentlessly delivering the platform and
technology (2) advancements that become
essential to the way we work and live
 Employees
o What is the firm's attitude/orientation
towards employees? Every company has a
policy regarding its relationship with
employees. A mission statement provides an
opportunity to describe that policy in brief so
employees know the essentials of where they
stand. A company’s employees need to feel
that their work is significant and that it
contributes to people’s lives.
o Eg: Our on the water and off the water
employees are on a mission to help
customers have a great time.
 Markets
o Geographically, where does the firm
compete? The business must determine what
region it serves best and relay that
information by way of the mission statement.
A garage, for example, might limit its target
region to the community while a magazine
company might target an entire country.
o Eg: Toyota will lead the way to the future of
mobility, enriching lives around the world.
o
 Public image
o Is the firm responsive to social, community
and environmental concerns? Companies
develop public images. Careful companies
craft the public image they want to establish
and lay out the major features of it in the
mission statement. This helps managers’
direct employees that stray from the
 sanctioned public image.
o Eg: Toyota: “respect for the planet” was
mentioned in the line of their mission.

 Customers : identify who their

customers (eg: Johnson & Johnson-we
believe our first responsibility is to the
doctors, nurses, patients, mothers, and
all others who use our product and
services.)
 Markets : geographical, the place the
firms to compete (eg: Corning Glass
Work – We are dedicated to the total
success of Corning Glass Works as a
worldwide competitors)
 Philosophy : identify the basic beliefs,
values, aspirations and ethical priorities
of the firm. (eg: Johnson company- our
Describe with
world-class leadership is dedicated to
example five (5)
management philosophy that holds
Dec components in
1b people above profits)
2015 a good mission
statement. (10  Self-concept : identify the firm’s
marks) distinctive competence or major
competitive advantage (eg: Crown
Zellerbach - Crown Zellerbach is
committed to leapfrogging ongoing
competition within 1,000 days by
unleashing the constructive and creative
abilities and energies of each of its
employees.)
 Concern for public image : the firm
responsive to social, community and
environmental concerns. (eg: Dow
Chemical – to share the world’s
obligation for the protection of the
environment.
Chapter 3 – external

Year No Q Question Answer

• Gather intelligence and information
• About company, social, cultural, demographic, environmental, political, governmental, legal and
technological trends
Gather

a) Illustrate how • Gathered information should be assimilated and evaluated

• A series of meeting of managers is needed to collectively identify the most important opportunities
to conduct an and threats facing the firm
June Evaluate
2 external
2016 strategic mgt
audit.(10M) • The final list of the most important key external factors should be communicated and distributed
widely in the organization.
• The key factors should be: (i) important to achieving long-term objectives; (ii) measurable; (iii)
Final list applicable to all competing firms; and (iv) hierarchical in the sense that some will pertain to the overall
company and others will be more narrowly focused on divisional/functional areas.

Industrial Organization View Resource-Based View

Advocates that external Contend that organizational
factors are more important performance will primarily
than internal factors in a firm be determined by internal
for achieving competitive resources that can be
advantage. I/O theorists grouped into three all-
Discuss the contend that external factors encompasing categories
concepts of and the industry in which a that are physical resources,
Industrial firm competes has a human resources and
Organization stronger influence on the organizational resources.
View and the firm’s performance than do RBV involves developing
Dec
3 Resource- the internal functional issues and exploiting a firm’s
2015
Based View in in marketing, finance and unique resources and
assessing the the like. The I/O view has capabilities, and continually
environment of enhance the understanding maintaining and
a firm. (20 of strategic management. strengthening those
marks) Effective integration and resources. For a resource to
understanding of both be valuable, it must either
external and internal factors rare, hard to imitate and not
is the key to securing and easily substitutable.
keeping a competitive
advantage.
Chapter 4 – internal

Year No Q Question Answer

Value chain analysis (vca) refers to the
process whereby a firm determines the costs
associated with organizational activities from
purchasing raw materials to manufacturing products
to marketing those products. Vca aims to identify
where low-cost advantages or disadvantages exists a
nywhere along the value chain from raw material to
customer service activities. Vca can enable a firm to
Discuss how value better identify its own strength and weaknesses,
chain analysis and especially as compared to competitors’ value chain
benchmarking analyses and their own data examined over time.
Dec help firms to Benchmarking is an analytical tool used to
2a
2013 determine the determine whether a firm’s vca are competitive
competitiveness of compared to the rivals and thus conducive to winning
prices and costs. in the marketplace. Benchmarking entails measuring
(10marks
costs of value chain activities across an industry to
determine best practices among competing firms for
the purpose of duplicating or improving on those best
practices. Benchmarking enables a firm to take action
improve its competitive mess by identifying and
improving on value chain activities where rival firms
have comparative advantages in cost, service,
reputation and operation.

c) Refers to the firm’s strength that cannot be easily

matched or imitate by competitors
d) Building competitive advantages involves taking
b) Describe advantage of distinctive competencies
meaning of e) Strategies are designed in part to improve on a firm’s
June weaknesses, turning them into strength or distinctive
2 distinctive
2016 competencies
competence.(
5M) f) For example, the firm Research In Motion (RIM)
exploits its distinctive competence in research and
development by producing a wide range of innovative
products

Resources Based View can be define as approach to

competitive advantages by Internal resources are
July more important than external factor. There have
1a RBV three types which is Physical resources, Human
2017
resources and Organizational resources. RBV exploit
opportunities and neutralize threats.

i- Customer analysis: The examination and evaluation of

1b customer needs, desires, and wants involves
administering customer surveys, analysing consumer
 information, evaluating market positioning strategies,
developing customer profiles, and determining optimal
market segmentation strategies. For example
ii- Product and service planning: One of the most effective
product and service planning techniques is test
marketing. Test markets allow an organization to test
alternative marketing plans and to forecast future sales
of new products. For example, after extensive test
marketing the chocolate marker Hershey recently
launched its first candy in China, a condensed milk
candy.
iii- Distribution: Distribution becomes especially important
when a firm is striving to implement a market
development or forward integration strategy. Some of
the most complex and challenging decisions facing a
firm concern product distribution. For example,
Chapter 5 – strategic in action (type of strategies)

Year No Q Question Answer

There are two types of diversification strategies which is related
and unrelated diversifications. It is related when their value chain
possess competitively valuable cross-business strategies fits. And, it is
unrelated when their value chains are so dissimilar that no competitively
valuable cross-relationship exists.

Related diversification referred to firms that are generally

When a company
moving away from diversification to focus. A strategy of diversifying the
has the
business on something related on the existing business activities. Next,
opportunity to
diversify into adding new but related products or services. For an example, nestle
other products or come out the variety of food and beverage product such as milk, instant
businesses, would noodle and cereal.
the management
Dec
1 opt to pursue Unrelated diversification strategy favors capitalizing on a
2013
related portfolio of businesses that are capable of delivering excellent financial
diversification, performance in their perspectives industries. A strategy where a
unrelated business expand its business beyond existing nature of business. And
diversification or
firms adding new, unrelated products or services. For an example, FedEx
combination of
both? Explain. recently entered the computer repair business offer in major
(20marks) corporations with overnight computer repair.

Most companies favour related diversification strategies to

capitalize on synergies as follows: transferring competitively valuable
expertise, technological know-how, or other capabilities from one
business to another and exploiting common use of a well known brand
name.

Differentiate 3
approaches in
determining a
Jun business’s worth
2
2015 when selling or
acquiring other
company

First, integration difficulties

Explain 5 reasons Second, inability to achieve synergy

why many merger
Jun Third, too large diversification
5b and acquisition
2015
always failed.
Fourth, managers overly focused on acquisitions
(10m
Five, difficult to integrate different organizational cultures
 (chapter 5-
types of
strategy-
textbook)
Explain three
(3) types of
defensive
Dec Part a
strategies that
2015 3
can be
implemented by
FGV to sustain
its financial
position. (9
marks)

 Type 1 – cost leadership strategy (low cost strategy) :

offers products or services to a wide range of customers
at the lowest price available on the market. Example,
Wal-Mart Stores Inc. has been successful using its
strategy of everyday low prices to attract customers
 Type 2 – cost leadership (best value strategy) : offers
products or services to a wide range of customers at the
best price value. It aims t offer customers a range of
products or services at lowest price available compared
Elaborate
to a rival’s product with similar attributes. Iphone sells a
Porter's Five
higher price but it offers a good features ios.
Generic
 Type 3 – differentiation strategy : aimed at producing
Strategies. Give
Dec products and services considered unique industry wide
2 appropriate
2015 and directed at customers who are relatively price-
examples for
insensitive. Example, Mountain Dew and root beer have
each strategy
a unique taste.
identified. (20
marks)  Type 4 – focus (low cost strategy) : offers products or
services to a small range (niche group) of customers at
the lowest price available on the market. Example, Jiffy
Lube International and Pizza Hut
 Type 5 – focus (best value strategy) : offers a niche
group of customers products or services at the best price
value that the products or services meet their tastes and
requirements better than rivals’. Example, Singer sewing
machine.
2
Chapter 6 – strategy analysis

Year No Q Question Answer

A) DEFINE
Company assets, attributes, or abilities that are difficult to
SUSTAINABLE
Jun duplicate or exceed; and provide a superior or favourable long term
3a COMPETITIVE
2014 position over competitors.
ADVANTAGE. (4M)

The swot matrix is important matching tool that helps managers

develop 4 types of strategies: SO (strength-opportunities) strategies,
WO (weaknesses- opportunities), ST (Strength-threat) and WT
(weaknesses-threats) strategies.

SO strategies use a firm’s internal strengths to take advantage

of external opportunities. Organizations generally will pursue WO, ST,
or WT strategies to get into a situation in which they can apply so
strategies. When a firm has major weaknesses, it will strive to
overcome them and make them strengths. When organizations faces
major threats, it will seek to avoid them to concentrate on
opportunities.

WO strategies improve internal weaknesses by taking

advantage of external opportunities. Sometimes key external
opportunities exist, but a firm has internal weaknesses that prevent it
from exploiting those opportunities. For eg, there may be high dd for
electronic devices to control the amount n timing of fuel injection in
ELABORATE automobile engines (opportunity), but certain auto parts
3b SWOT ANALYSIS. manufacturer may lack the technology required for producing these
(16M) devices (weaknesses). One possible strategy would be to acquire this
technology by forming a joint venture with a firm having competency
in this area. Other alternative wo strategy would be to hire and train
people with the required technical capabilities.

ST strategies use a firm’s strengths to avoid or reduce the

impact of external threats. This does not mean that strong company
should always meet threats in external environment head-on. For
example, ST strategy occurred when Texas instruments used an
excellent legal department ( a strength) to collect nearly 700 million in
damages and royalties from nine Japanese & Korea firms tht infringed
on patents for semiconductor memory chips (threat). Rival firms tht
copy ideas, innovations, and patented product are mjor threat in
many industries especially for US firms selling product in china.

WT strategies defensive tactics aimed at reducing internal

weakness and avoiding external threats. An organization faced with
numerous external threats and internal weaknesses may indeed be in
a precarious position. In fact, such a firm may hv to fight for its
 survival, merge, retrench, declare bankruptcy or choose liquidation.

There is limitation on this swot analysis which are Does not

show how to achieve a competitive advantage so it must not be an
end in itself, Provides a static assessment in time, May lead the firm to
overemphasize a single internal or external factor in formulating
strategies.

Fist important of SWOT analysis is note that both the internal

and external factors and SO, ST, WO, and WT strategies are
stated in quantitative terms to the extent. This is important.
For an example, regarding the second SO number 2 and ST
number 1 strategy, if the analysis just said “add new repair
and services persons”, reader might think that 20 new repair
and service persons are needed. Actually only two are
Elaborate the two
needed. Always be specific to the extent of possible in stating
most important
Dec factors and strategies.
2b parts of SWOT
2013
analysis.
(10marks It is also important to include the S1, O2 type of notation after
each strategy in a SWOT matrix. This notation reveals the
rationale for each alternative strategy. Strategies do not rise
out of the blue. For an example, note that this retail computer
store business may need to “purchase to build new store”
because a new highway 34 will make its location less
desirable.

Is a group of individuals who are elected by the ownership of a

Define Board of
Jun corporation to have oversight and guidance over management
4a Director (BOD)
2015 and who look out for shareholders’ interest.
 4 major duties
and
4b responsibilities of
BOD

Dec
2015
Chapter 7 – strategy implementation

Year No Q Question Answer

Common forms of resistance to change are regularly
occurs in organizations in the form of sabotaging
production machines, absenteeism, filing unfounded
grievances, and an unwillingness to cooperate. People
often resist strategy implementation because they do not
understand what is happening or why changes are taking
place.

3 common change strategies are first, force change

strategy. Involves giving orders and enforcing those
Discuss the orders; this strategy has the advantage of being fast, but
common forms of it is plagued by low commitment and high resistance.
Jun resistance to
5 Second, the educative change strategy is one of that
2015 change and 3
presents information to conceive people of the need of
common change
strategies. change; the disadvantages of this strategy is that
implementation becomes slow and difficult. However,
this strategy evokes greater commitment and less
resistant than does the force change strategy. Third, a
rational change strategy or self-interest change strategy is
one of that attempts to convince individuals that the
change is to their personal advantage. When this appeal
is successful, strategy implementation can be relatively
easy. However, implementation changes are seldom to
everyone’s advantage.

I- Strategies such as market development, market

penetration, and diversification require increased
sales through new markets and products.
II- Market segmentation allows firm to operate with
July limited resources, mass distribution, and mass
3
2017 advertising are not required.
III- Market segmentation decisions directly affecting
marketing mix variables which are product, place,
promotion and price
Chapter 8 – strategy marketing R&D

Year No Q Question Answer

4 Rumelt’s criteria for evaluating strategies are
consistency, consonance, feasibility and advantage.

First is consistency. A strategy should not present

inconsistent goals and policies. Organizational conflict &
interdepartmental bickering are often symptoms of
managerial disorder, but these problems may also be
sign of strategic inconsistency. 3 guidelines help
determine if organizational problems result of
inconsistency in strategy are if managerial problems
continue despite changes in personnel & if they tend to
be issue-based rather than people-based, then strategies
may be inconsistent, if success for one organizational
means, or is interpreted to mean, failure for another
department, then strategies may be inconsistent and if
policy problems & issues continue to be brought to the
top for resolution.
Discuss 4
Rumelt’s criteria Second, consonance. Need for strategist to
Jun for evaluating examine sets of trends as well as individual trends. A
5
2014 strategies. strategy must represent an adaptive response to the
(20m) external environment & to the critical changes occurring
within it. One difficulty in matching a firm’s key internal
external factors in the formulation of strategy is that
most trends are the result of interactions among other
trends. For example, daycare explosion came about as a
combined result of many trends that included a rise in
the average level of education, increased inflation, and
an increase in women in the workforce. although, single
economic or demographic trends might appear steady
for many years, there are waves of change going on at
the interaction level.

Third, feasibility. Neither overtax resources nor

create unsolvable subproblems. The final broad test of
strategy is its feasibility; tht is can the strategy be
attempted within the physical, human & financial
resources of the enterprise? Devices such as captive
subsidiaries hv been use to help win key position in
 suddenly expanding industries. A less quantifiable, but
actually more rigid, limitation on strategic choice is tht
imposed by ind. & orgnztnl capabilities.

Lastly, advantage. Creation or maintenance of

competitive advantage. Competitive advantages
normally are the result of superiority in one of three
areas which is resources, skills or position. The ideas tht
positioning of one’s resources can enhance their
combined effectiveness is familiar to military theorists,
chess players & diplomats. For example, the principal
characteristic of good position is tht it permits the firm
to obtain advantage from policies tht wouldn’t similarly
bnefit rivals without same position.

Market segmentation is subdividing of a market into

distinct subsets of customers according to needs and
Define market buying behavior.
segmentation and
Jun
1a positioning. (4m) Product positioning is identifying target customers on
2015
which to focus marketing efforts sets to the stage for
deciding how to meet the needs and wants of particular
consumer groups.

The reasons for product positioning are firstly, identifying

target customers on which to focus marketing efforts sets
to the stage for deciding how to meet the needs and
wants of particular consumer groups. Secondly,
developing schematic representations that reflect how
Discuss 2 reasons products or services compare to competitors’ on
for implementing dimensions most important to success in the industry.
market
segmentation and The reasons for market segmentation are firstly, market
1b
product segmentation allows a firm to operate with limited
positioning. (16m) resources because mass production, mass distribution,
and mass advertising are not required. By allowing a small
firm to compete successfully with a large firm by
maximizing per-unit profits and per-segment sales.
Secondly, markets segmentation decisions directly affect
marketing mix variables: product, place, promotion, and
price.

Elaborate any  Market Segmentation : Subdividing of a market

Dec four (4) into distinct subsets of customers according to
4
2015 marketing needs and buying habits.
issues in the •Market segment basis are geographic,
 effort of psychographic, demographic and
implementing behavioral.
strategies. (20 •Market-development, product-
marks) development, market-penetration, and
diversification strategies require market
segmentation.
•Market segmentation allows operating
with limited resources; enables small
firms to compete successfully.
•Market segmentation decisions affect
marketing mix variables

 Product Positioning : Schematic

representations that reflect how
products/services compare to competitors’ on
dimensions most important to success in the
industry

i) New Competitive Pressures

 Due to the increasing number of
competitors in the market
 The pressures exists when other
competitors are becoming more
competitive when developing new and
more creative products
 Rise when there is urge to compete in
the market
ii) Rising Research Costs
 Due to the economic condition
4 reasons why nowadays, the cost of doing research
collaboration in has highly increase
Jun R&D is on the  For example, the expenditure for
3
2016 rise.(15M) research and development for new
drugs has been increasing constantly
 Thus, collaboration in R&D will means
that the costs will also be divided into
2 or more for the companies involved.
iii) Increasing Regulatory Issues
iv) Accelerated Product Development Schedules
 The product needed to be ready
before the time scheduled
 By collaborating, the time required to
get a product done and develop is
shorter
Chapter 9 – strategy evaluation

Year No Q Question Answer

th
Diagram pg 365 (16 edition) – figure 11-2

There are 3 bases of strategy.

1. Review underlying bases of strategy

o Prepare revised internal factor evaluation (IFE) matrix –
focus on changes in the organization’s management,
marketing, finance and accounting, productions and
operations, research and development, and management
information system (MIS) strength and weakness.
o Prepare revised External Factor Evaluation (EFE) Matrix –
indicate how effective a firm’s strategies have been
response to key opportunities and threats.
2. Measure organizational performance
o Core planned to actual progress toward meeting stated
objectives.
o Comparing expected results to actual results, investing
deviations from plans, evaluating individual performance,
and examining progress being made toward meeting
Aid of diagram.
stated objectives. Commonly use both long term and
Discuss strategy
annual objectives. Criteria for evaluating should be
Dec evaluation
5 measurable and easily verifiable.
2014 framework (20m)
o Compare the firm’s performance over different time
period, to competitors and to industry averages.
o Evaluate individual performance and examine progress
toward stated objectives
3. Take corrective action
o Making changes to competitively reposition a firm for a
future.
o The probabilities and possibilities for incorrect or
inappropriate might increase according to the action.
Person in control must check on the actions of the
participants as well as the results they have achieved. If
either the actions or result do not comply with planned
achievements then corrective action are needed.
o Raises employees’ and managers anxieties by taking
correlative action. Individual must engage in the strategy
evaluation activities to overcome individual resistance to
change. They accept best when they understand the
changes, sense of control over the situation and
awareness that necessary actions are going to be taken to
implement the changes.
 o Examples of changes are altering an organization’s
structure, replacing one or more key individuals, selling
division or revising a business mission and others.

a) Explain five (5) key trends of the importance of

strategy evaluation in today's business? (10
marks)-page 383
 Economical
 Meaningful
 Generates useful information
 Timely information
 Provides accurate picture of events
Dec
5
2015
b) Evaluate four (4) perspectives of the Balanced
Scorecard. (10 marks)-page 381
 Financial performance
 Customer knowledge
 Internal business processes
 Learning & growth

 A firm should always make their strategies

visible for their stakeholders.
 This is because the managers, employees
and other stakeholders can readily contribute
Decide whether to the process. They often have excellent
your firm’s ideas and keeping the strategies hidden will
strategies should only results in the loss of many excellent
be visible or ideas
hidden from  Investors, creditors and other stakeholders
Jun have greater basis for supporting a firm when
4 stakeholders.
2016 they know what the firm is doing and where
Select your
the firm is going
decisions and
 Visibility also promotes democracy. Domestic
justify your
firms and most foreign firms prefer
rationale.(15M) democracy over autocracy (strategies hidden)
as a management style
 Participation and openness enhance
understanding, commitment and
communication within the firm
Chapter 10 – business ethics

Year No Q Question Answer

Restructuring also called as downsizing, rightsizing or
delayering involves reduce the size in terms of number of
employees, no. of division or units, & no. of hierarchical levels
in the firm’s organizational structure. This reduction in size is
intended to improve both efficiency & effectiveness.
Restructuring is concerned primarily with shareholder well-
being. For example, the lingering recession in Europe has
forced many companies there to downsize, lay off managers
B) CONTRAST THE & employees. Primary benefit is cost reduction. For eg, some
PROCESS OF RE- highly bureaucratic firms, restructuring can actually rescue
ENGINEERING firm from global competition and demise.
Jun
2 AND RE-
2014 In contrast, reengineering is concerned more with
STRUCTURING. employee & customer well-being. Reengineering also called
(10M) process mgt, process innovation or process redesign involves
reconfiguring or redesigning work, jobs, and processes for the
purpose of improving cost, quality, service and speed.
Reengineering doesn’t usually affect organizational structure
or chart nor does it imply job loss or employee layoffs. The
focus of reengineering is changing the way work is actually
carried out. It is characterized by many tactical (short-term,
business-function-specific) decisions. For eg, use of six-sigma
technique which is a quality boosting process improvement.

 All businesses and managers need to be attentive

towards the issues of halting and reversing worldwide
ecological destruction and deterioration. World
environment means that surroundings in which an
organization operates, including air, water, land,
natural resources, flora, fauna, humans, and their
interrelation. Therefore firms need to be good
Businesses must
not exploit and stewards of the natural environment.
destroy the  To avoid public danger and loss of goodwill
4
natural o Other unethical actions also impact public
environment. goodwill in a business environment. For
Discuss (20m) example, companies that put locals in danger
by neglecting to follow safe operating
procedures like irresponsibly dispose the
chemical waste into river can risk a public
relations disaster, not to mention legal
ramifications. Similarly, companies that
exploit workers risk negative publicity, even if
 the customer base lives elsewhere.
 To prevent unsustainable behaviour
o Some businesses unethically pursue
temporary profits without considering the
long-term impact of their actions on the
physical environment. For example, if timber
companies fail to plant trees to replace the
ones they harvest, sooner or later the
industry will destroy itself, as well as the
world. Ethical businesses, on the other hand,
recognize that sustainable practices maximize
their future prospects and have the added
benefit of minimizing environmental damage.
 Increase business ability to comply with regulation.
o The discussion regarding climate change,
dwindling energy resources, and
environmental impact, that state and federal
government agencies are enacting
regulations to protect the environment.
Integrating sustainability into business will
position it to meet changing regulations in a
timely manner.
 Attract employees and investors.
o People like to be associated with the positive,
especially younger generations raised on a
steady diet of environmental protection
messages. They do not want to be linked to
companies implicated in ecological disasters
and social welfare scandals. Show the
company as respectful of the environment
and of its employees and it will attract the
calibre of people whom want to employ and
the funds the business needs to expand.