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SIkkim Manipal Asignment

SIkkim Manipal Asignment

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  • 1. Master of Business Administration - MBA Semester 4 MB0052 - Strategic Management & Business Policy Assignment Set- 1 Q.1 What do you understand by the term Strategy in the context of Business Management and Policy? And what are the stages in the formulation of a Strategy? Ans Strategy It is a common direction set for the company and its various components to accomplish a desired position in a future. A meticulous planning process results in strategy. It is the comprehension of the goals which has logical step by step process. It defines a general mission and vision of an organisation. It is important to consider that the decisions taken by an organisation are likely to affect the employees, customers and competitors. Business strategy is used to achieve competitive advantage. The efficient development and implementation of strategy depends on the capability of the organisation. This includes the ability to prepare the strategic goals and implement the plans through strategic management. Strategy exists at different business levels. The different levels are: 1. Corporate strategy:- This is regarding the general function and scope of business to meet the stake holders expectations. As it is significantly influenced by the investors in the business, it is also called the critical level strategy. 2. Business strategy:- This is regarding how a business competes effectively in a particular market. It includes strategic decisions about the selection of a product and meeting customer requirements. 3. Operational strategy:- This is regarding how each part of the business is organised and delivered to the corporate and business level. Operational strategy focuses on issues of resources and practices of an organisation Strategy formulation is the development of long term plans. It is used for the effective management of environmental opportunities and for the threats which weaken corporate management. Its objective is to express strategical information to achieve a definite goal. The following are the features of strategy formulation:- 1. Defining the corporate mission and goals. 2. Specifying achievable objectives 3. Developing strategies 4. Setting company policy guidelines The main process involved in strategy formulation is as follows: 1. Stimulate the identification:- Identifying useful information like planning for strategic management, objectives to achieve the goal of the employees and the stakeholders.
  • 2. 2. Utilisation and transfer of useful information as per the business strategies:- A number of question arising during utilisation and transfer of information have to be solved. The questions that arise during utilisation and transfer of information are the following Who has the requested information? What is the relationship between the partners who holds the requested information? What is the nature of the requested information? How can we transfer the information?
  • 3. Q.2 What, in brief, are the types of Strategic Alliances and the purpose of each? Supplement your answer with one real life example of each. Ans Strategic alliance is the process of mutual agreement between the organisations to achieve the objectives of common interest. They are obtained by the co-operation between the companies. Strategic alliance involves the individual organisation to modify its basic business activities and join in agreement with similar organisations to reduce duplication of manufacturing products and improve performance. It is stronger when the organisations involved have balancing strengths. They contribute in successful implementation of strategic plan because it is strategic in nature. It provides relationship between organisations to plan various strategies in achieving a common goal. The different types are listed below:- 1. Joint Venture :- It is the most powerful business concept that has the ability to pool two or more organisation in one project to achieve a common goal. In a joint venture both the organisation invest on the resources like money, time and skills to achieve the objectives. An individual partner in joint venture may offer time and services whereas the other focuses on investment. This pools the resources among the organisations and helps each other in achieving the objectives. A long term relationship is built among the participating organisation. It increases integrity by teaming with other reputable and branded organisation. It helps in gaining new customers and in investing little or no money. It provided the capability to compete in the market with other organisations. It reduces production time as the organisations are into joint venture. More new products and services can be offered to the customers. Example The China Wireless Technologies, a mobile handset maker is getting into an agreement with the Reliance Communications Limited (RCom) to launch its new mobile. The joint venture between the two companies is to gain profits and provide affordable mobile phones to the market that consists of advanced features and aims to earn 8 billion dollars in the next 5 years. The new mobile consists of dual SIM smart phones with 3G technology at a cheaper rate. 2. Mergers and Acquisitions :- It is the process of combining two or more organisations to form a single organisation and achieve greater efficiencies of scale and productivity. The main reason to involve into merger is to join with other company and reap the rewards obtained by the combined strengths of two organisations. A smart organisation‟s merger helps to enter into new markets, acquire more customers, and excel among the competitors in the market. The different types or mergers are: HORIZONTAL MERGER – It takes place when two organisations competing in the same market join together. VERTICAL MERGER – This involves the union of a customer with the vendor. MARKET EXTENSION MERGER – It is the process of merging two organisations that sells same products in different geographical areas. PRODUCT EXTENSION MERGER- Most of the organisations execute product extension merger to sell different products of a category CONGLOMERATE MERGER- This merger involves organisations alliance with unrelated type of business activities Acquisition is the process of purchasing an organisation by another organisation either through the purchase of its shares or assets. Massive growth can only be achieved in less time by buying other organisations. They have become the major
  • 4. entity for growth in market these days. Most of organisations choose to grow by acquiring other organisations to increase market share, gain access to new technologies, achieve synergies in the operations, to develop distribution channels, and to obtain control of undervalued assets. Example – Transocean and GlobalSantaFe, the top oil drilling companies, merged to consolidate their position in a fast growing market. Google acquire Postini to introduce services of message security, Archiving, encryption and policy enforcement. 3. Collaborations and Co-Branding:- It is the process of co-operative agreement of two or more organisations which may or may not have previous relationship of working together to achieve a common goal. It is the beginning to pool resources like knowledge, experience and sharing skills of team members to effectively contribute to the development of a product rather working on narrow tasks as an individual team member in support to the development. Example:- The sportswear giant Nike formed co-branding agreements with Philips Consumer electronic products. The Philips electronic product will contain Nike‟s logos and it is mainly marketed in United States since the market share of Philips is not much impressive. The newly introduced digital audio player and portable CD players of Philips will be unveiled with the Nike logo to enhance profits in the market share in United States. 4. Technological Partnering:- It is the process of associating the technologies of two different companies to achieve a common goal. The two organisations work as co- owners in business and share the profits and losses. The technologies of individual organisations are shared to achieve desired outcome. The required resources like knowledge, machinery, and expertise are collaborated between the organisations. Example:- The software giant, Infosys Technologies Ltd. Has entered into partnership with US based NVIDIA, GPU inventor and the world‟s visual technologies giant. The purpose of this partnering is to develop NVIDIA CUDA (Compute Unified Device Architecture). This technology is viewed as the next big revolution in the field of technology in lending high performance in computing. The software helps the developers of various applications to tap into the previously uncultivated power of the GPU. This will enable certain applications to achieve high performance. The capacity of CUDA is expected to multiply fifty times the performance of existing computing and reduce the run time to advance user enterprise. 5. Contractual Agreements:- It is the process of agreement with specific terms between two or more organisations which guarantee in performing a specific task in return for a valuable benefit. The contractual agreement is the heart of business dealings. It is the most significant areas of legal concern and involves variations in certain situations and complexities. 6. Outsourcing:- It is the process of entering into a contract with an organisation or a person to perform a particular function. Most of the organisations outsource the work in numerous ways. The function being outsourced is considered as noncore to the organisation. Usually organisations adopt this concept to carry out narrow functions such as payrolls, billing, and data entry. Since most organisations lack in many resources, it outsources these processes to other organisations which consists of specialised tools, facilities and trained personnel. Example:- Tatvasoft is an Indian outsourcing company that offers software development services to its clients in United States, Canada and Australia. They provide software outsourcing services and solutions with the focus on secure, scalable, and reliable business systems. The key benefits of outsourcing are cost efficiency, availability of trained staff, flexible manpower utilisation, and risk minimisation. 7. Other Methods:- The various other methods are:
  • 5. Affiliate marketing – It is the process of revenue sharing between the website owner and the online merchant. This process includes the website owner to advertise the merchant‟s products or send the potential customers to the merchant‟s website. Technology licensing – It is the contractual agreements where trademarks, intellectual property and trade secrets are licensed to an external organisation. The main disadvantage is the loss of control over the technology. When it belongs to other organisation, there are chances of exploitation. Product licensing – This is similar to technology licensing. The only difference is that it deals with manufacturing and selling of certain products. The organisations owning the product license is provided with an opportunity to sell products within certain geographical area. The license allows selling the products within the prescribed boundary. Franchising – It is a quick process of achieving a successful objective nationwide. The organisation pays certain amount of fee in setting up franchise and agrees to constant payments so that the process is financially risk free for the organisation. Sharing R&D – The organisations set up strategic alliances to venture into research field. The main purpose of the organisation is to embark in the field of research and development to form a new entity. Distributors – Most of the organisations market their products by outsourcing it to various companies. These companies act as distributors where each one is located in different geographical areas. This ensures the effective distribution of products and provides employment opportunities in various geographical areas.
  • 6. Q. 3 What is a Business Plan? What purpose does it serve? Ans A business plan is a detailed description of how an organization intends to produce, market and sell a product or service. Whether the business is housing, commercial or some other enterprise, a good business plan describes to others and to your own board of directors, management and staff the details of how you intend to operate and expand your business. A solid business plan describes who you are, what you do, how you will do it, your capacity to do it, what financial resources are necessary to carry it out, and how you intend to secure those resources. A well-written plan will serve as a guide through the start-up phase of the business. It can also establish benchmarks to measure the performance of your business venture in comparison with expectations and industry standards. And most important, a good business plan will help to attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. A well-written plan will serve as a guide through the start-up phase of the business. It can also establish benchmarks to measure the performance of your business venture in comparison with expectations and industry standards. And most important, a good business plan will help to attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. A good business plan will help attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. A good business plan serves the following purposes: 1. Revenue Generation – Your organization may hope to create a business that will generate sufficient net income or profit to finance other programs, activities or services provided by your organization. 2. Employment Creation – A new business venture may create job opportunities for community residents or the constituency served by your organization. 3. Neighbourhood Development Strategy – A new business venture might serve as an anchor to a deteriorating neighbourhood commercial area, attract additional businesses to the area and fill a gap in existing retail services. You may need to find a use for a vacant commercial property that blights a strategic area of your neighbourhood. Or your business might focus on the rehabilitation of dilapidated single family homes in the community. 4. Establish Goals - Once you have identified goals for a new business venture, the next step in the business planning process is to identify and select the right business. Many organizations may find themselves starting at this point in the process. Business opportunities may have been dropped at your doorstep. Depending on the goals you have set, you might take several approaches to identify potential business opportunities. 5.Local Market Study - Whether your goal is to revitalize or fill space in a neighbourhood commercial district or to rehabilitate vacant housing stock, you should conduct a local market study. A good market study will measure the level of existing goods and services provided in the area, and assess the capacity of the area to support existing and additional commercial or home-ownership activity. A bad or insufficient market study could encourage your organization to pursue a business destined to fail, with potentially disastrous results for the organization as a whole. Through a market study you will be able to identify gaps in existing products and services and unsatisfied demand for additional or expanded products and services.
  • 7. 6. Analysis of Local and Regional Industry Trends - Another method of investigating potential business opportunities is to research local and regional business and industry trends. You may be able to identify which business or industrial sectors are growing or declining in your city, metropolitan area or region. The regional or metropolitan area planning agency for your area is a good source of data on industry trends. 7. Internal Capacity - The board, staff or membership of your organization may possess knowledge and skills in a particular business sector or industry. Your organization may wish to draw upon this internal expertise in selecting potential business opportunities. 8. Internal purchasing needs / Collaborative Procurement - Perhaps, the organization frequently purchases a particular service or product. If nearby affiliate organizations also use this service or product, this may present a business opportunity. Examples of such products or services include printing or copying services, travel services, transportation services, property management services, office supplies, catering services, and other products.
  • 8. Q.4 What is the chief purpose of a Business Continuity Plan and what are its components for effective implementation. Explain in a sentence or two as to how it is different from a Business Plan. Ans. The Business Continuity Plan is a tool to allow organizations to consider the factors and steps necessary to prepare for a crisis (disaster or emergency) so that it can manage and survive the crisis and take all appropriate actions to help ensure the organization‟s continued viability. The advisory portion of the plan is divided into two parts: Planning process - It provides step-by-step Business Continuity Plan preparation and activation guidance, including readiness, prevention, response, and recovery/resumption. Implementation and maintenance: It gives the details of tasks required for the Business Continuity Plan to be maintained as a living document, changing and growing with the organization and remaining relevant and executable. The purpose of the business continuity plan is to prepare to face the unthinkable situations that may threaten an organization‟s future. This new challenge goes beyond the mere emergency response plan or disaster management activities that we previously employed. Organizations now must engage in a comprehensive process best described generically as Business Continuity. It is no longer enough to draft a response plan that anticipates naturally, accidentally, or intentionally caused disaster or emergency scenarios. Today‟s threats require the creation of an on-going, interactive process that serves to assure the continuation of an organization‟s core activities before, during, and most importantly, after a major crisis event. In the simplest of terms, it is good business for a company to secure its assets. CEOs and shareholders must be prepared to budget for and secure the necessary resources to make this happen. It is necessary that an appropriate administrative structure be put in place to effectively deal with crisis management. Following steps are required to be fulfilled for effective implementation of the business continuity plan: 1. Educate and Train: The BCP is only as valuable as the knowledge that others have of it. Education and training are necessary components of the BCP process. They require a time commitment from the Crisis Management Team, the Response Teams, and the general employee population. 2. Educate and Train Teams: The Crisis Management and Response Teams should be educated about their responsibilities and duties. Check lists of critical actions and information to be gathered are valuable tools in the education and response processes. 3. Educate and Train All Personnel: All personnel should be trained to perform their individual responsibilities in case of a crisis. Such training could include procedures for evacuation, shelter-in-place, check-in processes to account for employees, arrangements at alternate worksites, and the handling of media inquiries by the company. 4. Review of BCP:
  • 9. The BCP should be regularly reviewed and evaluated. Reviews should occur according to a pre-determined schedule, and documentation of their view should be maintained as necessary. The following factors can trigger are view and should otherwise be examined once a review is scheduled: Risk Assessment Sector/Industry Trends Regulatory Requirements Event Experience Test/Exercise Results 5. Maintenance of BCP Regular maintenance of the BCP cannot be overemphasized. Clear responsibility for BCP maintenance should be assigned. Maintenance can be either planned or unplanned and should reflect changes in the operation of the organization that will affect the BCP. Difference between a Business plan & Business continuity Plan a. A Business plan is a detailed description of how an organisation intends to produce, market and sale a product or service. A Business continuity plan is an ongoing process supported by senior management and funded to ensure that the necessary steps are taken to identify the impact of potential losses, maintain viable recovery strategies and plans, and ensure the continuity of operations through personnel training, plan, testing and maintenance. b. A Business continuity plan is a tool which allows organisations to consider the factors and steps necessary to prepare for a crisis.(disaster or emergency).Whereas a business plan is not prepared for such type of disaster or emergency. c. In a business continuity plan, a necessary Administrative structure is put in place to effectively deal with crisis management, whereas, in a business plan, no such administrative structure is available.
  • 10. Q.5Take any three examples of the components of a Decision Support System and explain how they help decision making Ans. Following are the three components of a Decision Support System 1. Annual Budget: It is really a business plan. The budget allocates amounts of money to every activity and/or department of the firm. As time passes, the actual expenditures are compared to the budget in a feedback loop. During the year, or at the end of the fiscal year, the firm generates its financial statements: the income statement, the balance sheet, the cash flow statement. When putting together, these four documents are the formal edifice of the firm‟s finances. However, they cannot serve as day-to-day guides to the General Manager. 2. Daily Financial Statements: The Manager should have access to continuously updated statements of income, cash flow, and a balance sheet. The most important statement is that of the cash flow. The manager should be able to know, at each and every stage, what his real cash situation is – as opposed to the theoretical cash situation which includes accounts payable and account receivable in the form of expenses and income. 3. The Daily Ratios Report: This is the most important part of the decision support system. It enables the Manager to instantly analyse dozens of important aspects of the functioning of his company. It allows him to compare the behaviour of these parameters to historical data and to simulate the future functioning of his company under different scenarios. It also allows him to compare the performance of his company to the performance of his competitors, other firms in his branch and to the overall performance of the industry that he is operating in. The Manager can review these financial and production ratios. Where there is a strong deviation from historical patterns, or where the ratios warn about problems in the future – management intervention may be required. Examples of the Ratios to be Included in the Decision System SUE measure – deviation of actual profits from expected profits ROE – the return on the adjusted equity capital Debt to equity ratios ROA – the return on the assets The financial average ROS – the profit margin on the sales ATO – asset turnover, how efficiently assets are used Tax burden and interest burden ratios Compounded leverage Sales to fixed assets ratios Inventory turnover ratios Days receivable and days payable Current ratio, quick ratio, interest coverage ratio and other liquidity and coverage ratios Valuation price ratios And many others
  • 11. A decision system has great impact on the profits of the company. It forces the management to rationalize the depreciation, inventory and inflation policies. It warns the management against impending crises and problems in the company. It specially helps in following areas: a. The management knows exactly how much credit it could take, for how long (for which maturities) and in which interest rate. It has been proven that without proper feedback, managers tend to take too much credit and burden the cash flow of their companies. b. A decision system allows for careful financial planning and tax planning. Profits go up, non cash outlays are controlled, tax liabilities are minimized and cash flows are maintained positive throughout. The decision system is an integral part of financial management in the West. It is completely compatible with western accounting methods and derives all the data that it needs from information extant in the company. So, the establishment of a decision system does not hinder the functioning of the company in any way and does not interfere with the authority and functioning of the financial department, but in fact helps the manager to take quick decisions and make profit to the company
  • 12. Q.6 Name and explain any three ways in which a Company’s CSR can be expressed Ans. CSR is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” as they are increasingly aware that responsible behaviour leads to sustainable business success.CSR is also about managing change at company level in a socially responsible manner. If companies succeed in managing change in a socially responsible manner, this will have a positive impact at the macro-economic level. Following are the different ways in which company's CSR can be expressed. 1. Employment and Social Affairs Policy Within a business CSR relates to quality employment, life-long learning, information, consultation and participation of workers, equal opportunities, integration of people with disabilities anticipation of industrial change and restructuring. Social dialogue is seen as a powerful instrument to address employment-related issues. Employment and social policy integrates the principles of CSR, in particular, through the European Employment Strategy, an initiative on socially responsible restructuring, the European Social Inclusion Strategy, initiatives to promote equality and diversity in the workplace, the EU Disability Strategy and the Health and Safety Strategy. In its document "Anticipating and managing change: a dynamic approach to the social aspects of corporate restructuring", the Commission has stressed that properly taking into account and addressing the social impact of restructuring contributes to its acceptance and to enhance its positive potential. The Commission has called upon the social partners to give their opinion in relation to the usefulness of establishing at Community level a number of principles for action, which would support business good practice in restructuring situations. Deeply rooted societal changes such as increasing participation of women in the labour market should be reflected in CSR, adapting structural changes and changing the work environment in order to create more balanced conditions for both genders acknowledging the valuable contribution of women as strategies which will benefit the society as well as the enterprise itself. 2. Enterprise policy Only competitive and profitable enterprises are able to make a long-term contribution to sustainable development by generating wealth and jobs without compromising the social and environmental needs of society. The role of enterprise policy is to help create a business environment, which supports the Lisbon objective of becoming the world‟s most dynamic knowledge-driven economy, supports entrepreneurship and a sustainable economic growth. Its objective is to ensure a balanced approach to sustainable development, which maximises synergies between its economic, social and environmental dimensions. 3. Consumer Policy CSR has partly evolved in response to consumer demands and expectations. Consumers, in their purchasing behaviour, increasingly require information and reassurance that their wider interests, such as environmental and social concerns, are being taken into account. Consumers and their representative organisations have an important role to play in the evolution of CSR. If CSR is therefore to continue to serve its purpose, strong lines of communication between enterprises and consumers need to be created.
  • 13. Master of Business Administration - MBA Semester 4 MB0052 - Strategic Management & Business Policy Assignment Set- 2 Q.1Having formulated a Business Strategy, what are the steps in its implementation? Explain each in a sentence or two. Ans. A strategy is an operational tool to achieve the goals, and thus, the corporate mission. Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives. A company may view downsizing as a strategy in a competitive market to render cost-effective services. Thus, strategy provides a framework to guide thinking and action. Strategies are very much useful in organizations for guiding, planning and control. Strategy is a way of life both at the macro as well as micro levels for everyone, whether it is a nation or a company. To win over in a given complex situation, the organizations, even trans- nationals adopt strategies. They make changes, if necessary, even to their global strategies. An individual company may formulate its own strategy to bring out the desired results. The eventual success of the organization depends upon strategy formulation and implementation. Strategy refers to the course of action desired to achieve the objectives of the enterprise. Formulation, together with its implementation, constitutes an integral part of the management activity. Managers use strategies for different purposes such as to overcome competition, to increase sales, to increase production, to motivate the employees to provide their best, and so on. Implementation of a strategy is a crucial task as the formulation of it. There may be a lot of resistance during the implementation process. It is necessary for the manager to be very tactful to involve the members of his group in the formulation of strategy to facilitate the implementation process. Following are the steps for implementing the business strategy 1. Identification of mission and objectives 2. Environment scanning 3. Generic strategy alternatives 4. Strategy variations 5. Strategic choice 6. Allocation of resources and formulation of organizational structure 7. Formulation of plans, policies, programmes and administration 8. Evaluation and control. After formulating a business strategy, the process of strategy implementation calls for an integrated set of choices and activities. These include 1. Allocating Resources:
  • 14. A good strategy with effective implementation has a higher probability of success. There source allocation decisions, such as, which department is sanctioned how much of money and resources, in the name of the budget, and soon – set the operative strategy of the firm. Budgets are formulated after a series of negotiations across different levels in the organization. Budgets may be of different types: corporate budgets, capital budgets, departmental budgets, sales budgets, expense budgets, and others. 2. Organising: An effective co-ordination and efficient division of labour requires an appropriate organizational structure. The best structure is one, which fits into the organizational environment. Also its internal characteristics should give rise to an effective strategy. Appropriate changes in the organization structure may be initiated to ensure strategic implementation of the proposed strategy. Effective strategic management practices suggest that organization structure should also change if the strategy changes or if the organization experiences any bottlenecks in this regard 3. Formulation Of Policies, Plans, Programmes And Administration: The resources allocated are said to be well-utilized only when they are well-monitored. For this purpose, it is essential: To develop policies and plans. To assign and reassign leaders the tasks and decisions to support the chosen strategy. To provide a conducive environment in the organization through proper administration to achieve the given objectives directly and indirectly. The implementation of plans and policies is designed in accordance with the strategy chosen. The firm creates plans and policies to guide managerial performance, and these make the chosen strategies work. The corporate success lies ultimately in the ability to convert corporate strategy into plans and policies that are compatible and workable. 4. Evaluation And Control Of Strategy: Evaluation is the last phase of the strategic management process. It is at this stage that the success of the programmes can be assessed. There should be a built-in mechanism to examine the deviations and initiate corrections as and when required. This assures that the chosen strategies will be implemented properly. The control process requires identifying a set of parameters for evaluating and measuring the performance at the individual level and also at the department level. The performance has to be evaluated to identify deviations and take corrective action. The control and evaluation take place not only at the SBU level but also at the corporate level. This process may involve the participation of all the executives at all levels. Corrective actions are required wherever the evaluation reveals deviations between the actual performance and the projected one, over a given period of time
  • 15. Q.2How do we cope with crises and how do we use the Business Continuity Plan to manage and recover from crisis? Ans. The Business Continuity Guideline is a tool to allow organizations to consider the factors and steps necessary to prepare for a crisis (disaster or emergency) so that it can manage and survive the crisis and take all appropriate actions to help ensure the organization‟s continued viability. The advisory portion of the guideline which helps us to cope with the crisis and to manage and recover from the crisis is divided into two parts: 1. The Planning Process - provides step-by-step Business Continuity Plan preparation and activation guidance, including readiness, prevention, response, and recovery/ resumption. The following steps are important: i. Assign Accountability ii. Perform Risk Assessment iii. Conduct Business Impact Analysis (BIA) iv. Agree on Strategic Plans v. Crisis Management and Response Team Development vi. Mitigation Strategies vii. Avoidance, Deterrence and Detection viii. Potential Crisis Recognition ix. Communications x. Resource Management xi. Financial Support xii. Financial Issues and Insurance xiii. Service Providers xiv. Mutual Aid Agreements xv. Damage and Impact Assessment xvi. Resumption of Critical and Remaining Processes xvii. Return to Normal Operations 2. Successful Implementation And Maintenance - details those tasks required for the Business Continuity Plan to be maintained as a living document, changing and growing with the organization and remaining relevant and executable. The various steps involved are: i . Educate and Train ii. Test the BCP iii. Develop BCP Review Schedule iv. Develop BCP Maintenance Schedule
  • 16. In order to use the Business Continuity Plan to manage and recover from the crisis, the following checklists on the basis of the above advisory portion of the guideline needs to be checked and necessary requirements as per the same, needs to be kept in ready mode for immediate applications. Accountability: 1. Does your organization‟s policy include a definition of crisis? 2. Has the person responsible for critical systems and business processes been identified? 3. Has a BCP Team been appointed, and does it include senior business function leaders? 4. Has the BCP been communicated throughout the organization? 5. Has a person been assigned with the responsibility to update the BCP? Risk Assessment: 1. Has your organization conducted a Risk Assessment? 2. Have the types of risks that may impact your organization been identified and analyzed? 3. Has the likelihood for each type of risk been rated? Business Impact Analysis: 1. Have the critical business processes been identified? 2. Have the business processes been ranked (low, medium, high)? 3. If a crisis were to happen, has the impact, in terms of human and financial costs, been assessed? 4. Have the maximum allowable outage and recovery time objectives been determined? 5. Has the length of time your organization‟s business processes could be non-functional been determined? 6. Have the recovery time objectives been identified? 7. Have the resources required for resumption and recovery been identified? Strategic Plans: 1. Have methods to mitigate the risks identified in the Business Impact Analysis and Risk Assessment been identified? 2. Have plans and procedures to respond to any incident been developed? 3. Have strategies that address short and long term business interruptions been selected? 4. Are the strategies attainable, tested, and cost effective? Compliance with Corporate Policy & Mitigation Strategies: 1. Have compliance audits been conducted to enforce BCP policy and procedures? 2. Have the systems and resources that will contribute to the mitigation process been identified, including personnel, facilities, technology, and equipment?
  • 17. 3. Have the systems and resources been monitored to ensure they will be available when needed? Avoidance, Deterrence, and Detection: 1. Are employees motivated to be responsible for avoidance and deterrence and detection? 2. Have facility security programs to support avoidance and deterrence and detection been established? 3. Have operational policy and procedures to protect the facilities been developed? 4. Is it ensured that sufficient physical security systems and planning are in place to protect the facility? Response: Potential Crisis Recognition and Team Notification: 1. Will the response program recognize when a crisis occurs and provide some level of response? 2. Have the danger signals been identified that indicate a crisis is imminent? 3. Have personnel been trained to observe warning signs of an imminent crisis? 4. Has a notification system been put in place, including redundant systems? 5. Is the notification contact list complete and up to date? Assess the Situation: 1. Has an assessment process to address the severity and impact of the crisis been developed? 2. Has the responsibility for declaring a crisis, with first and second alternates, been assigned? Declare a Crisis: 1. Have the criteria been established for when a crisis should be declared? 2. Has the responsibility for declaring a crisis been clearly defined and assigned? 3. Has an alert network for BCP Team members and employees been established? 4. Is it ensured that there is an alternate means of warning if the alert network fails? 5. Have the activities that will be implemented in event of a crisis been identified, including notification, evacuation, relocation, alternate site activation, team deployment, operational changes, etc? Execute the Plan: 1. Has consideration been given to developing the BCP around a „„worst case scenario?‟‟ 2. Has the BCP been prioritized to save lives, protect assets, restore critical business processes and systems, reduce the length of the interruption, protect reputation, control media coverage, and maintain customer relations? 3. Have the severity of the crisis and the appropriate response been determined?
  • 18. Communications: 1. Has a crisis communications strategy been developed? 2. Are communications timely, honest, and objective? 3. Are communications with all employees occurring at approximately the same time? 4. Are regular updates provided, including notification of when the next update will be issued? 5. Has a primary spokesperson and back-up spokespersons been designated who will manage and disseminate crisis communications to the media and others? Resource Management – Logistics: 1. Has a designated Crisis Management Centre been identified, and does it have necessary life support functions, including uninterruptible power supply and communications equipment? 2. Have alternate worksites for business resumption and recovery been identified? 3. Have critical and vital records been stored at an offsite storage facility? 4. How long can each business function operate effectively without normal data input storage processes? 5. What must be done to restore data to the same previous point in time within the recovery time objective? 6. Can any alternate data storage processes be used, after the initial data recovery, to speed the forward recovery to the present time? Resource Management – Financial Issues and Insurance, Transportation, Suppliers/Service Providers, and Mutual Aid: 1. Has the appropriate insurance coverage been identified and obtained? 2. Are cash and credit available to the BCP Team? 3. Have transportation alternatives been arranged in advance? 4. Have critical vendor and service provider agreements been established? 5. Have mutual aid agreements been established? 6. If so, are they legally sound, properly documented, and understood by all parties? Recovery and resumption: 1. Damage and Impact Assessment, Process Resumption, and Return to Normal Operations 2. Has a damage assessment been performed as soon as possible? 3. Has the Damage Assessment Team been mobilized to the site? 4. Has business process recovery been prioritized to recover the most critical business processes first?
  • 19. 5. Is the schedule of the processes to be restored in accordance with the prioritization schedule? 6. is there documentation of when the processes were resumed? 7. Has the organization returned to normal operations? 8. Has the decision to return to normal operations been documented and communicated? The preparation and readiness of the resources as per the above checklists on the basis of the Business Continuity Plan helps us to manage and recover from the crisis in a successful manner.
  • 20. Q.3What are the main components of Business Plan, explaining the role of each in the Plan? Ans. A business plan is a detailed description of how an organization intends to produce, market and sell a product or service. A solid business plan describes who you are, what you do, how you will do it, your capacity to do it, what financial resources are necessary to carry it out, and how you intend to secure those resources. A well-written plan will serve as a guide through the start-up phase of the business. It can also establish benchmarks to measure the performance of your business venture in comparison with expectations and industry standards. And most important, a good business plan will help to attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. A good business plan will help attract necessary financing by demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. A business plan should contain the following components: 1. Executive Summary: The purpose of this component is to provide direction and help you establish your goals as clearly as possible. With this clearly spelled out, both management and employees can focus their efforts. Also it will help with investors and bankers in that they can clearly understand what your. It should include the following information. A history of the company (if you're already in business) or a history of the idea development. A description of the products or services you plan to develop and sell. 2.Company and Product Description: In this component one should provide type of business, reason of creating business unit, referencing the goal and attach references of business plan. Product or Service-Focus on the feature that distinguishes from rest of market and what will attract consumers to your product or service. Price-Provide realistic price estimate and discuss the rationale behind that price. Describe where this price positions you in the market place: at the high end, low end or in the middle of the existing range for a similar product or service. Place-Describe the location and its advantages where you will produce or distribute your product or provide your service. Customers-Providing detail description of the customer base depending upon their characteristics i.e. demographics, geography and socio economic status. Provide statistical data to describe the size of target customer base and its growth potential. Competition-Explain the reason for entering in the new venture and what differentiate your proposed venture from existing business. Sales Projections-Present an estimate based on size of your market, the characteristic of your customers and the share of market you will gain over your competition. 3.Market Description: A key composition of the operation of your business will be your sales and marketing strategy, so one must describe how you will inform your target market about your product or service and how you will convince customer to purchase.
  • 21. Production Description:-Describe the steps from raw material to finished goods, packaged and ready for distribution and sale. Avoid using industry jargon to describe the production process. Staffing:-Describe the type of staff, their qualification, skill, salaries, other benefitand how they will be recruited. 4.Equipment and Material: In this component one must describe the special type of machines and materials required to purchase, their cost and source. Facility:-Facilities and other infrastructure required for the company, specialized features if any are to be described. Market Description:-Strategy for locating your target market, informing or educating customers about your product or service and convincing them to buy it. Discuss the product„s feature you plan to emphasize to gain the attention of your target market. 5. Operations: In this component company must highlight the senior manager responsible for overseeing the start-up and operation of your business, their background and their responsibility in the business. Ownership- Potential investors and lenders will be interested in ownership stake of the board of directors and also in what portion of the company„s equity is available. An investor or banker must know this because each form has certain legal and tax implications. The typical forms are: • Sole proprietor. • Partnership. • Limited Liability Company • Corporation. • Sub-Chapter S Corporation 6. Management and ownership: Providing a brief description of the different financial statements of the business to be attached such as: Start-up budget-Describe the initial expenses which may incur to get your business up and running. Cash flow projection-Provide month to month schedule of estimated cash inflow and outflows from the business for the first year. This include how much money and when. Income statement-Prepare a multiyear statement of projected revenue, expenses, capital expenditure and cost of goods sold. This should be supported by documents of growth pattern of similar companies or studies that forecast an industry wise forecast. Balance sheet-Provide a copy of balance sheet of sponsoring organization. 7.Financial information and timeline: Capital Requirement- Describe the Requirement of type of capital for financing and repayment period, amount of expected return and explain any commitment or investment that you may have already secured. Types of requirement of funds are.
  • 22. Seed Capital Fixed asset financing Working Capital Initial Start-up timeline-Provide a timeline of task and events necessary to get your business operational. Be sure to record stage as on today also. Set realistic dead line to capacity to complete these tasks. There may be several reasons to delay the project which are in not ones hand but explain in details. describe any asset that will be allocated to the start-up of the business. 8.Risks and their mitigation: Although it is impossible to know exactly what will go wrong in staring and running your business plan, thinking upon different challenges will strengthen plan.
  • 23. Q.4 Explain the concept, need for and importance of a Decision Support System. Ans. Concept: Decision support systems constitute a class of computer-based information systems including knowledge-based systems that support decision-making activities. It is also explained as a class of information systems (including but not limited to computerized systems) that support business and organizational decision-making activities. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions. Typical information that a decision support application might gather and present are: • An inventory of all of your current information assets (including legacy and relational data sources, cubes, data warehouses, and data marts), • Comparative sales figures between one week and the next, • Projected revenue figures based on new product sales assumptions. Need: Many companies in developing countries have a very detailed reporting system going down to the level of a single product, a single supplier, a single day. However, these reports – which are normally provided to the General Manager – should not be used by them at all. They are too detailed and, thus, tend to obscure the true picture. A General Manager must have a bird‟s eye view of his company. He must be alerted to unusual happenings, disturbing financial data and other irregularities. As things stand now, the following phenomena could happen: systems including knowledge-based systems that support decision-making activities. It is also explained as a class of information systems (including but not limited to computerized systems) that support business and organizational decision- making activities. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions. Typical information that a decision support application might gather and present are: • an inventory of all of your current information assets (including legacy and relational data sources, cubes, data warehouses, and data marts), • comparative sales figures between one week and the next, • projected revenue figures based on new product sales assumptions. Need: Many companies in developing countries have a very detailed reporting system going down to the level of a single product, a single supplier, a single day. However, these reports – which are normally provided to the General Manager – should not be used by them at all. They are too detailed and, thus, tend to obscure the true picture. A General Manager must have a bird‟s eye view of his company. He must be alerted to unusual happenings, disturbing financial data and other irregularities. As things stand now, the following phenomena could happen: • That the management will highly leverage the company by assuming excessivedebts burdening the cash flow of the company.
  • 24. • That a false Profit and Loss (PNL) picture will emerge – both on the single product level – and generally. This could lead to wrong decision-making, based on wrong data. • That the company will pay excessive taxes on its earnings. • That the inventory will not be fully controlled and appraised centrally. • That the wrong cash flow picture will distort the decisions of the management and lead to wrong (even to dangerous) decisions. Importance: A decision system has great impact on the profits of the company. It forces the management to rationalize the depreciation, inventory and inflation policies. It warns the management against impending crises and problems in the company. It specially helps in following areas: The management knows exactly how much credit it could take, for how long (for which maturities) and in which interest rate. It has been proven that without proper feedback, managers tend to take too much credit and burden the cash flow of their companies. A decision system allows for careful financial planning and tax planning. Profits go up, non cash outlays are controlled, tax liabilities are minimized and cash flows are maintained positive throughout. The decision system is an integral part of financial management in the West. It is completely compatible with western accounting methods and derives all the data that it needs from information extant in the company. So, the establishment of a decision system does not hinder the functioning of the company in any way and does not interfere with the authority and functioning of the financial department.
  • 25. Q.5 Explain the importance of any five aspects of a Licensing Agreement that you will look for when negotiating the right to use an Intellectual Property Ans. A licence is a grant of permission made by the patent owner to another to exercise any specified rights as agreed .Licensing is a good way for an owner to benefit from their work as they retain ownership of the patented invention while granting permission to others to use it and gaining benefits, such as financial royalties, from that use. However, it normally requires the owner of the invention to invest time and resources in monitoring the licensed use, and in maintaining and enforcing the underlying IP right. A licence is merely the grant of permission to undertake some of the actions covered by intellectual property rights, and the patent holder retains ownership and control of the basic patent .Licences is often limited to specific rights, territories and time periods. If an inventor owns patents on the same invention in five different countries, they could assign (or sell)these patents to five different owners in each of those countries. Portions of a patent right can also be assigned – so that in order to finance your invention, you might choose to sell a half- share to a commercial partner. A lot of aspects are to be taken care of very carefully while negotiating or making a licensing agreement to give right to use an intellectual property. Some of the important aspects of a Licensing Agreement that we will look for when negotiating the right to use an Intellectual Property are explained below: 1.The Parties To The Licence: The „parties‟ to the licence are the entities (individual people, companies or institutions) that are bound by the licence as a legal contract. They normally sign (or „execute‟) the licence to confirm in a legally clear-cut way that they agree to comply with its terms. The parties can be individual persons, but they are normally legal entities such as a research institution, a university or a company. It is important to ensure that the licence is signed in a way that is legally binding, and by a person authorized to sign for their institution. In some cases, the licence is not directly signed (think of the „I Agree‟ block which you are often asked to click when installing a software package on a computer), and in the national law of many countries, contractual obligations can arise even without a formal signed document. 2. Licensor And Licensee: The person granting the licence – the „licensor‟ – typically holds rights to technology, biological material, IP rights, know-how, or other information. The person receiving the licence – the „licensee‟ – is the party which is seeking to use or exploit that material. The basic idea of the licence is that the person granting the licence (the „licensor‟) is giving another person (the „licensee‟) the right to do something that they could otherwise prevent them from doing, in exchange for some kind of benefit (this maybe financial, but may be other forms of benefit). So the licensor might permit the licensee to use a technology that is covered by a patent – and if there was no license, the licensor could take legal action under the patent to prevent this use of the technology. 3.Sole, Exclusive Or Non-Exclusive Licences: The choice taken among these options is very important.
  • 26. An exclusive licence means that the licensor agrees not to grant another licence to any other party, and agrees not to use the licensed rights (in other words, the licensor cannot become a competing user of the licensed technology).  A sole licence means that the licensor grants a licence to only one licensee, the sole licensee, but the licensor retains the right to use the technology itself.  Under a non-exclusive licence, the licensor grants the licensee a right to use the technology, but the licensor can still give the same rights to other licensees. The kind of license granted will depend on several factors, and will do much to influence the pattern of use, and the scale of royalties or other payments, made by the licensee. 4. Sub-Licences: A „sub-licence‟ is a further licence, when the licensee of the original licence itself grants a licence to a third party. The sub-licence may extend to some or all of the rights granted under the original licence. The original licence may need to make clear whether sub-licences can be granted, and if so, to who, and on what terms or conditions. There may be issues such as protecting the confidentiality of licensed material, liability for use of the technology, or the interests of the licensor in granting direct licenses to the same third parties. A sub- licensing program may be of considerable benefit to the licensor, as it will increase the scope of use of the licensed technology, and may be an effective way of exporting the technology to new overseas markets. The original licensor might retain an entitlement to a share of any royalties or other payments paid by the sub-licensee. The original licensor might retain the right to investigate and approve the eligibility of a sub-licensee, especially if the sub-licensee has no direct relationship with the original licensee 5. Diligence And Milestones: The licensee may be relying on the license as the principal mechanism for recovering its investment in research and for deriving benefits from the patent or other IP. So it may be important to the licensor to ensure that the licensee does everything they can to develop and commercialize the licensed IP. If a licensee gains an exclusive licence, subject to a royalty payment on profits, and then decides to shelve the technology for several years because its immediate interests lie elsewhere, then the whole value of the IP is lost to the licensor. So licenses will frequently include obligations on the licensee to develop and apply the licensed technology diligently and to meet specific deadlines. Where ever possible, certain defined points or milestones should be identified – possibly based on the business plan originally proposed by the licensee. The license could require the licensee to bring the product to the market as soon as practicable, and to continue to make the product available to the public on reasonable terms. These obligations may also be built into sub-licenses granted under the licence. 6.Payments And Pricing: A licence will normally involve a valuable „consideration‟ –something of value which is given in exchange for the right to use this technology. It need not be financial consideration – it could be a right in exchange to use another technology (a „cross-licence‟), or valuable access to other facilities or resources. There are many potential models for payment. It is always difficult to establish a value for intellectual property, even more so if it relates to unproven technology that will require a licensee to take a considerable commercial risk. The options boil down to lump sum payments, and royalties based on the extent of use of the technology. It is not unusual to see a mixture of both.
  • 27. Q.6What is Corporate Social Responsibility? Why is it becoming increasingly relevant in today’s Business? Ans. Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business(SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honouring of a triple bottom line: People, Planet and Profit. The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Corporate Social Responsibility has been redefined throughout the years. However, it essentially is titled to aid to an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Relevancy In Today‟s Business: Business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles).Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia, descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have re-branded their core values in the light of business ethical considerations (e.g. BP's "beyond petroleum" environmental tilt).The term CSR came in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those impacted by an organization's activities, was used to describe corporate owners beyond shareholders as a result of an influential book by R Freeman in 1984. Whilst there is no recognized standard for CSR, public sector organizations (the United Nations for example) adhere to the Triple Bottom Line (TBL). It is widely accepted that CSR
  • 28. adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones. However, businesses may not be looking at short-run financial returns when developing their CSR strategy. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include charitable efforts and volunteering. CSR may be based within the human resources, business development or public relations departments of an organisation, or may be given a separate unit reporting to the CEO or in some cases directly to the board. Some companies may implement CSR-type values without a clearly defined team or programme.