INTRO TO SM - CHAP 1- SM

Question 1

Meaning and nature of SM - 2 def. of management

Answer 1

***Key group in an organization incharge of its affairs

*** set of interrelated functions and proceeses carried out by the management of the organization **

Question 2

**A game plan that the management of the business use to take market position ,conduct its operations attract and satisfy customers ,compete successfully and achieve organizational objective **

Answer 2

STRATEGY

Question 3

4 Q ‘s OF STRATEGY

Answer 3

**WHAT IT WANTS TO BE
WHAT IT WANTS TO DO

**HOW IT WANTS TO DO THINGS **

WHERE IT WANTS TO GO

Question 4

**Is strategy substitute to a sound alert and responsible managemnt **

Answer 4

It must be recognised that strategy can never be perfect, flawless and optimal. It is in the very nature of strategy that it is flexible and pragmatic to take care of sudden emergencies, pressures, and avoid failures and frustrations. In a sound strategy, allowances are made for possible miscalculations and unanticipated events.

Question 5

**STRATEGIES ARE FORMULATED AND IMPLEMENTED AT WHICH LEVELS **

Answer 5

**1. CORPORATE LEVEL
2. DIVISIONAL / BUSINESS LEVEL
3. FUNCTIONAL LEVEL **

Question 6

STRATEGY IS PARTLY PROACTIVE PARTLY REACTIVE

Answer 6

**1. Proactive actions on part of the managers to improve the market position and financial performance
2. Reactions to unanticipated development and fresh market conditions in the dynamic buz environment

Question 7

**OBJECTIVE OF SM ? **

Answer 7

**1. To create competitive advantage ( something that is unique and valued by the customers)so that the company can outperformt the customers in all the aspects of organizational performance

2. to guide the company successfully through all changes in the environment . That is to react in the right manner **

Question 8

The organizational operations are highly influenced by the ?_and ?_created on the organization

Answer 8

**increasing rate of change in the environment , ripple effect **

Question 9

**SM REFERS TO ? **

Answer 9

**Managerial process of
1. developing a strategic vision
2. setting objectives
3. crafting a strategy
4. implementingand evaluating the startegy
5 finally initiating corrective actions were deemed appropriate
6 the process doesnt end it keeps going on a cyclic manner **

Question 10

**Major benifits of SM **

Answer 10

**1. It gives direction to move ahead
2. helps to be praoctive rather than reactive in shaping its future
3. provides framework for all major decisions - guidance on a crucial point what it is trying to achieve
4. seeks to prepare the org to face the future and act as pathfinder to various oppurtunities
5. serves as corporate defence mechanism against mistakes and pitfalls .helps mngmnt to avoid cost mistakes in product market choices and invstment
6. helps to enhance longevity of the buxz. Actions over expectation is what SM ensures
7. helps org to create core competencies and competitive advantage to provide assistance in its fight for its survival and growth **

Question 11

**limitations of SM **

Answer 11

**1.Environment is highly complex and turbulent - the env affects as the org has to deal with suppliers vendors govt and other external factors
2.time consuming process - a lot of time is spent in planning and communicating strategies that may impede daily operation and may affect the routine buz
3.SM IS A COSTLY PROCESS- it requires experts which is a costly resource
4.difficult to clearly estimate the competitive responses to the firms strategies **

Question 12

**Q of Strategic intent **

Answer 12

PURPOSE OF THE ORGANIZATION
1. WHY THEY WANT TO DO ?
2. WHAT THEY WANT TO DO ?

Question 13

**Q OF STRATEGIC INTENT **

Answer 13

1. WHY THEY WANT TO DO
2. WHAT THEY WANT TO DO
3. PURPOSE OF SI - WHAT THE ORGANIZATION STANDS FOR

Question 14

Philosophical base of SM

Answer 14

Strategic intent

Question 15

**gives an idea of what the organisation desires to attain in future **
**option A - vision
option b- strategic intent
option c - mission
option d - strategy **

Answer 15

**option b - strategic intent **

Question 16

STRATEGIC INTENT AT
CORPORATE LEVEL -
BUSINESS LEVEL -
WHEN STATED IN PRECISE TERMS -
?

Answer 16

**CORPORATE LEVEL - MISSION AND VISSION
BUSINESS LEVEL - BUSINESS DEFINITION AND BUSINESS MODEL
EXPRESSIONS OF AIMS TO BE ACHEIVED OPERATIONALLY - GOALS AND OBJECTIVES **

Question 17

**Q OF VISSION **

Answer 17

**WHERE THE ORG . WANTS TO LAND ?
WHAT IT WOULD LIKE TO BECOME IN FUTURE **

VISSION IS BLUE PRINT OF THE COMPANYS FUTURE POSITION

Question 18

Q OF MISSION

Answer 18

**WHAT BUZ THE FIRM UNDERTAKES ?

**
MISSION DEFINES PRESENT CAPABILITIES , ACTIVITIES , CUSTOMER FOCUS AND ROLE IN THE SOCIETY **

Question 19

**MISSION **

Answer 19

It defines the buz. its goals and ways to reach those goals .
it explains the existence of the firm in the society .
It help the potential shareholder and investor to understand the purpose of the firm.
it help to identify what buz the firm undertakes. it defines the present capabilities, activities, customer focus and role int he society

Question 19

VISION
* (Provides specific about - technology and customer focus ,
* geographies and product market to be pursued
* the capabilities it plans to develop
* kind of company the managemnet is trying to create )

Answer 19

**Vision is the blue print of the companys future position. It describes where the org. wants to land in future . It depicts the aspiration of the org. and provides a glimpse as to what it would like to become in future .Every sub system of the org. is required to follow its vision **

Question 20

BASE OF MEASUREMENT

Answer 20

**GOALS AND OBJECTIVES **

Question 21

**goals and objectives **

Answer 21

**base of measurement.
the goals are the end results that the org would attempt to acheive . on the other hand the objective are time badsed measurable targets , which help in the accomplishment of goals
**
these are the end results which are to be attained with the help of overall plan, over a particular peiod **

Question 22

**business definition **

Answer 22

what buz the org. is into?
it seeks to explain the buz undertaken by the firm with respect to customer need , target markets and alternative technologies .
one can ascertain strategic buz choices .
ORGANIZATIONAL RESTRUCTURING ALSO DEPENDS ON BUZ. DEFINITION

Question 23

**BUSINESS MODEL **

Answer 23

Strategy for effective operation of business , ascertaining sources of income, desired customer base and financial details.
**
Rival firms operating in the same industry rely on different business models due to their strategic choice **

Question 24

1. Mission , vision . buz definition,buz. model -
2. goals and objectives -

Answer 24

1. explain philosophy of the organization
2. represent the results to be acheived in multiple areas of business

Question 25

VALUE / VALUE SYSTEM

Answer 25

Deep rooted principle which guides an org. decision and action .

Question 26

WHAT DID COLLINS AND PORRAS DEFINED REGARDING VALUE AND VALUE SYSYTEM ?

Answer 26

THEY DEFINED CORE VALUES AS BEING INHERENT AND SACROSANCT (MOST SACRED AND HOLY );
they can never be compromised either for convinience and short term economic gain

Question 27

4 ESSENTIALS OF STRATEGIC VISION

Answer 27

1. The entrepreneruial challenge in developing a strategic vision is to think creatively about how to prepare a company for future.
2. forming a strategic vision is an exercise in intelligent entrepreneuship
3. A well articulated strategic vision creates enthusiasm amongthe members of the organization
4. A best worded vision statement clearly illuminates the direction in which the organization is headed .

Question 28

why should an organization have a mission ?

Answer 28

**1. to ensure unanimity of purpose within an organization
2. to develop a basis or standard for allocating organizational resources
3. to provide a basis for motivating the use of organizations resource
4. to establish a general tone or organisational climate - to suggest a buziness like operation.
5. to serve as a focal point for those who can identify with the organizations purpose and direction
6. to facilitate the translation of objectives and goals into work structure involving the assignment of task to responsible elements within the organization
7. to specify organizational purpose and translation of these puposes into goals in such a way that cost time and performance parameters can be assessed and controlled **

Question 29

What are the 3 useful points while writing a mission of the company ?

Answer 29

**1. One of the roles of mission statement is to give the organizations its own special identity ,business emphasis, path for development that typically sets its apart from simialr postioned companies

**2. A MISSION STATEMENT is defined by the what needs it is trying to satisfy, the customer group it targets , technologies and compentenccies it uses, and the activities it performs **

**3. good mission statements are one that are unique to the organization for which they are developed **

Question 30

Q raised by peter drucker and theodre levitt

Answer 30

1. what is our mission?
2. what is our ultimate purpose?
3. what do we want to become ?
4. what kind of growth do we seek ?
5. what buz are we in ?
6. do we understand our buz correctly and define it accurately in its broadest connotation ?
7. whom do we intend to serve ?
8. what human need do we intend to serve through this offer ?
9. what brings us to this particular buz?
10. what should be the nature of the business in the future ?
11. in what buz would be like to be in future ?

Question 31

garnd design of the firms future
expression of growth ambition of firm

Answer 31

mission

Question 32

according to peter drucker every org should ask an importnat question and get correct and meaningful answer

Answer 32

what buz. are we in ?
the answer should have a marketing and external perspective and shud not be restated to the production or generic activities of business.

Question 33

characteristics of the “objectives”

Answer 33

**objectives should be
1. Defines organization relationship with enviromment
2. facilitative towards acheivement of mission and purpose
3. provide the basis for strategic decision making
4. provides standard for performance appraisal
5. concrete and specific
6. related to a time frame
7. challenging
8. different objectives should correlate with each other
9. measurable and controllable’
10. Objectives should be set within the constraints of organisational resources and external environment **

Question 34

**7 areas whre long term objectives are set by strategic planners **

Answer 34

**1. profitability
2. productivity
3. competitive position
4. employee development
5. employee relationship
6. technological leadership
7. public responsibility **

Question 35

INTENT OR VALUE WHICH IS A BROADER CONCEPT ?

Answer 35

VALUE IS WIDER THAN INTENT .
INTENT IS DRIVEN BY VALUES

Question 36

SBU

Answer 36

**An organization is divided into number of segments that work together to bring a particular product or service to the market .If a company provides several kind of product and service it often duplicates its function and creates a series of self contained divisons to manage each different product or service .

**the general manager of these divsion then become responsible for their product line.the overriding concern of these divisional managers is the healthy growth of their divisions

they are responsible for deciding how to create a competituve advantage and acheive higher profitability with the resources and capital at thier disposals .

**such divisons are called sbus **

Question 37

JUST FOR INFO - SBU

Answer 37

Not necessarily. While some larger SBUs may have their own designated CEO or top executive, it’s not a universal practice. The organizational structure of an SBU can vary depending on factors such as the size of the SBU, its strategic importance within the company, and the company’s overall management philosophy.

In many cases, an SBU will have its own management team led by a general manager or president who oversees the unit’s operations, strategic direction, and performance. This individual may report directly to the CEO or a higher-level executive within the parent company.

However, there are instances where the CEO or top executive of the parent company directly oversees multiple SBUs without each SBU having its own CEO. In such cases, the SBUs may operate under the leadership of executive vice presidents or senior vice presidents within the parent company’s organizational hierarchy.

Ultimately, the decision to appoint a separate CEO for each SBU depends on the specific needs and circumstances of the organization, as well as its approach to decentralization and delegation of authority.

User
real life examples
ChatGPT
Certainly! Here are some real-life examples of companies where each Strategic Business Unit (SBU) has its own CEO:

Johnson & Johnson:

Johnson & Johnson is a multinational corporation with a broad range of healthcare products. The company is organized into multiple SBUs, each led by its own CEO. For example:
Janssen Pharmaceuticals, one of Johnson & Johnson’s SBUs, has its own CEO responsible for overseeing the pharmaceutical business.
Johnson & Johnson Consumer Health, another SBU, may have its own CEO focused on consumer healthcare products like Band-Aid and Tylenol.
General Electric (GE):

GE has historically organized its operations into various SBUs, and some of these SBUs have had their own CEOs. For instance:
GE Aviation, a major SBU within GE, has had its own CEO overseeing the aircraft engines and related services business.
GE Healthcare, another significant SBU, may have its own CEO responsible for the medical equipment and healthcare solutions division.
Procter & Gamble (P&G):

P&G, as mentioned earlier, operates through SBUs focused on different product categories. While not every SBU has its own CEO, some of the larger ones do. For example:
The Beauty & Personal Care SBU at P&G may have its own CEO leading brands like Pantene and Gillette.
The Fabric Care SBU might also have a CEO overseeing brands like Tide and Downy.

Question 38

CORPORATE LEVEL MANAGEMENT

Answer 38

CEO, OTHER SENIOR EXECUTIVES,BOD AND CORPORATE STAFF

Question 39

ROLE OF CORPORATE LEVEL MANAGERS

Answer 39

OVERSEE THE DEVELOPMENT OF STRATEGIES FOR THE WHOLE ORGANIZATION -
1. defining mission and goals of the organization
2. determining waht buz it should be in
3. allocating resources among different businesses
4. formulating and implementing strategies that span individual business and providing leadership for organization as a whole.

Question 40

**TOP DOWN APPROACH OF DECISION MAKING **

Answer 40

LEADERSHIP AT THE TOP - CEO
(decision solely made by leadership)

Question 41

**bottom up approach **

Answer 41

**Gives all team across the levels a voice in decision making **

Question 42

functional/divisional relationship

Answer 42

It is an independent relationship”: This means that each part of the organization operates on its own without depending too much on other parts.

“where each function or a division is run independently headed by the function/division head”: This means that within the organization, each department or group (like finance or marketing) is led by its own boss or manager.

“who is a business level manager”: This refers to the manager’s position in the organizational hierarchy, meaning they oversee a specific area of the business.

“reporting directly to the business head, who is a corporate level manager”: This means that these department heads report directly to the top boss of the company, who oversees the whole business. This top boss is often called the CEO or president.

So, in simpler terms, it’s like each part of the company does its own thing with its own boss, and those bosses report directly to the big boss at the top.

Question 43

HORIZONTAL RELATIONSHIP

Answer 43

top management to staff level employee all are ijn same heirarchical position
flat structure
evryone considered at same level

more suitable for startups

Question 44

MATRIX STRUCTURE

Answer 44

grid like structure
mange huge conglomerates
more than one business level managers for each functional level teams.
extremely useful for large organization

Question 45

**XYZ Ltd. is a multi-product company, suffering from continuous losses since last few years
and has accumulated heavy losses which have eroded its net worth.
What strategic option is available to the management of this sick company? Advise with
reasons. **

Answer 45

XYZ Ltd. is a sick company with accumulated losses that have eroded its net worth. The
multi-product company may analyse its various products to take decisions on the viability
of each. The company may consider retrenchment strategy. Retrenchment becomes
necessary for coping with hostile and adverse situations in the environment and when any
other strategy is likely to be suicidal.
Retrenchment strategy is adopted because of continuous losses and unviability and
stability can be ensured by reallocation of resources from unprofitable to profitable
businesses.
Retrenchment strategy is followed when an organization substantially reduces the scope
of its activity. This is done through an attempt to find out the problem areas and diagnose
the causes of the problems. Next, steps are taken to solve the problems. These steps
result in different kinds of retrenchment strategies as follows:
Turnaround strategy: If the organization chooses to transform itself into a leaner structure
and focuses on ways and means to reverse the process of decline, it adopts a turnaround
strategy. It may try to reduce costs, eliminate unprofitable outputs, generate revenue,
improve coordination, better control, and so on.
Divestment Strategy: Divestment strategy involves the sale or liquidation of a portion of
business, or a major division, profit centre or SBU. Divestment is usually a part of
rehabilitation or restructuring plan and is adopted when a turnaround has been attempted
but has proved to be unsuccessful.
Liquidation Strategy: In the retrenchment strategy, the most extreme and unattractive is
liquidation strategy. It involves closing down a firm and selling its assets. It is considered
as the last resort because it leads to serious consequences such as loss of employment
for workers and other employees, termination of opportunities where a firm could pursue
any future activities, and the stigma of failure. The management of multiproduct sick company manufacturing various items need to
understand pros and cons of each strategic option. The decision will depend upon the
specific circumstances of each product and management goals of the company.

Question 46

**Ram and Shyam are two brothers engaged in the business of spices. Both have different
approaches to management. Ram prefers the conventional and formal approach in which
authority is used for explicit rewards and punishment. While, on the other hand, Shyam
believes in democratic participative management approach, involving employees to give
their best.
Analyse the leadership style followed by Ram and Shyam

Answer 46

Ram is a follower of transactional leadership style that focuses on designing systems
and controlling the organization’s activities. Such a leader believes in using authority of its
office to exchange rewards, such as pay and status. They prefer a more formalized
approach to motivation, setting clear goals with explicit rewards or penalties for
achievement or non-achievement. Transactional leaders try to build on the existing culture
and enhance current practices. The style is better suited in persuading people to work
efficiently and run operations smoothly.
On the other hand, Shyam is a follower of transformational leadership style. The style
uses charisma and enthusiasm to inspire people to exert them for the good of the
organization. Transformational leaders offer excitement, vision, intellectual stimulation and
personal satisfaction. They inspire involvement in a mission, giving followers a ‘dream’ or
‘vision’ of a higher calling so as to elicit more dramatic changes in organizational
performance. Such a leadership motivates followers to do more than originally affected to
do by stretching their abilities and increasing their self-confidence, and also promote
innovation throughout the organization.