The document discusses strategic management and the strategic management process. It outlines 5 key stages in the strategic management process: goal setting, analysis, strategy formation, strategy implementation, and strategy monitoring. It also discusses findings from research that show many organizations fail at executing strategies successfully. Additionally, the document provides details on different types of mergers, including horizontal, vertical, conglomerate, concentric, forward, reverse, and subsidiary mergers, and provides examples of each type.
1. INTERNALASSIGNMENTNO-1
PAPERCODE: MBA-208
PAPERCODE: STRATEGIC MANAGEMENT
QUESTION -1 Answerall these question:
(i) Define the termbusinesspolicy.
ANS- Business Policy defines the scope or spheres within which decisions can be taken by the
subordinates in an organization. It permits the lower level management to deal with the problems and
issues without consulting top level management every time for decisions.
Business policies are the guidelines developed by an organization to govern its actions. They define the
limits within which decisions must be made. Business policy also deals with acquisition of resources with
which organizational goals can be achieved. Business policy is the study of the roles and responsibilities
of top level management, the significant issues affecting organizational success and the decisions
affecting organization in long-run.
(II) State the primaryactivitiesof avalue chain.
The value chain model is done by a company in certain industries in order to provide a product
or service. The way that they provide these products or services is done through activities. There
are primary activities, support activities and physical, virtual and combined value chain.
The primary activities include inbound logistics, operations, outbound logistics, marking and
sales and service. These seem like common activities found in a business. The inbound logistics
include the movement of the parts or supplies around to end with the final product.
(ii) What do youmeanby strategiccontrol?
ANS- Strategic control is the process used by organizations to control the formation and execution
of strategic plans; it is a specialized form of management control, and differs from other forms of
management control (in particular from operational control) in respects of its need to
handle uncertainty and ambiguity at various points in the control process.[1]
Strategic control is also focused on the achievement of future goals, rather than the evaluation of
past performance. Vis:
The purpose of control at the strategic level is not to answer the question:' 'Have we made the right
strategic choices at some time in the past?" but rather "How well are we doing now and how well will
we be doing in the immediate future for which reliable information is available?" The point is not to
bring to light past errors but to identify needed corrections to steer the corporation in the desired
direction. And this determination must be made with respect to currently desirable long-range goals
and not against the goals or plans that were established at some time in the past.[1]
2. (IV) Name anytwoexternal environmentappraisal tools
ANS- The external environmentalappraisal toolsare many,below are twoof them;
Explanation:
Sustainable appraisal
Here the core businessistoascertainwhether,the the appraisal procedure isuserfriendlyandcan
be put inplace to cause noharm , to the environmentratherthan,the intendedappraisal target.
Environmental assessment
At thispointthe processisassessedinorderto ensurerthat, the procedure ispotent andcan be put to
the nextlevel of implementation.
(V) Mentionanytwofactors affectingorganizational design.
ANS- Factors Affecting Organizational Design
Although many things can affect the choice of an appropriate structure for an organization,
the following five factors are the most common: size, life cycle, strategy, environment, and
technology.
Organizational size
The larger an organization becomes, the more complicated its structure. When an
organization is small — such as a single retail store, a two‐person consulting firm, or a
restaurant — its structure can be simple.
Organization life cycle
Organizations, like humans, tend to progress through stages known as a life cycle. Like
humans, most organizations go through the following four stages: birth, youth, midlife, and
maturity. Each stage has characteristics that have implications for the structure of the firm.
3. ANS-2 Discuss various steps involved in the process of strategic management.
Stages of The Strategic
Management Process
Strategic management is the process of managing, planning, and analyzing in order
to reach all organizational goals. Strategic management helps an organization see
where it currently stands, where it will be in the future staying on the current
course, and where it would like to be in the future. Strategic management takes
advantage of organizational resources to create a strategy that helps get closer to or
reach their goals.[i]
If you look into the research on strategic management and planning, the results are
shocking. According to studies:[ii]
95% of a typical workforce doesn’t understand its organization’s strategy
90% of organizations fail to execute their strategies successfully
86% of executive teams spend less than one hour per month discussing strategy
60% of organizations don’t link strategy to budget
Based on these statistics, we can conclude that organizations’ workforces are
not aware of their organization’s overall strategy, if the strategies being utilized
are unsuccessful, and if strategies are not being budgeted for. As an
organization, planning and strategizing for the future is one of the most
beneficial initiatives you can take.[iii]
The process of strategic management includes goal setting, analysis, strategy
formation, strategy implementation, and strategy monitoring. Let’s take a look
at how each of these steps ties into the overall strategic management process.
4. Goal Setting
The first part of strategic management is to plan and set your goals. Set the short-
and long-term goals of the organization and make sure that these are shared with
all members of the organization. Explain and share how each member of the team
will have an impact on the organization reaching this goal. This will help give each
member of the team a sense of purpose and will give their job meaning.
Analysis
During this stage of the process, it is important to gather as much information and
data as possible. This information will be integral to creating your strategy to reach
your goals. This step of strategic management entails becoming aware of any
issues within the organization and understand all of the needs of the organization.
Strategy Formation
In this strategic management step, you will use all the intelligence and data you have
gathered to formulate the strategy that you will use to reach whatever goal you set.
Identify useful resources you have, and also seek out other resources you will need to
set up your strategy.
Strategy Implementation
This is arguably the most important part of the entire strategic management process.
At this point, each member of the team should have a clear understanding of the plan
and should know how they play a part within it. This is the stage where your strategy
is put into action.
5. Strategy Monitoring
During this stage, your strategy will already be in play. At this point, you should be
managing, evaluating, and monitoring each part of your strategy, and ensuring that it
aligns with the end goal. If it does not, this is the time where you would make tweaks
and adjustments to strengthen the overall plan. This is the stage where you will track
progress and have the opportunity to deal with any unexpected shifts in the strategy.
Planning for the future of your business is an integral piece of operating a successful
organization. Strategic management is a great first step, so be sure to visit our page to
see how we can help your company.
ANS-3Explainvarioustype of mergersalongwithexamples.
TYPES OF MERGERS
Horizontal mergers:
It refers to two firms operating in same industry or producing
ideal products combining together. For e.g., in the banking
industry in India, acquisition of Times Bank by HDFC Bank,
Bank of Madura by ICICI Bank, Nedungadi Bank by Punjab
National Bank etc. in consumer electronics, acquisition of
Electrolux’s Indian operations by Videocon International
Ltd., in BPO sector, acquisition of Daksh by IBM,
Spectramind by Wipro etc. The main objectives of horizontal
mergers are to benefit from economies of scale, reduce
competition, achieve monopoly status and control the
market.
6. Vertical merger:
A vertical merger can happen in two ways. One is when a firm
acquires another firm which produces raw materials used by
it. For e.g., a tyre manufacturer acquires a rubber
manufacturer, a car manufacturer acquires a steel company,
a textile company acquires a cotton yarn manufacturer etc.
Conglomerate merger:
It refers to the combination of two firms operating in
industries unrelated to each other. In this case, the business
of the target company is entirely different from those of the
acquiring company. For e.g., a watch manufacturer acquiring
a cement manufacturer, a steel manufacturer acquiring a
software company etc. The main objective of a conglomerate
merger is to achieve i big size.
Concentric merger:
It refers to combination of two or more firms which are
related to each other in terms of customer groups, functions
or technology. For eg., combination of a computer system
manufacturer with a UPS manufacturer.
Forward merger:
In a forward merger, the target merges into the buyer. For
e.g., when ICICI Bank acquired Bank of Madura, Bank of
Madura which was the target, merged with the acquirer,
ICICI Bank.
7. Reverse merger:
In this case, the buyer merges into the target and the
shareholders of the buyer get stock in the target. This is
treated as a stock acquisition by the buyer.
Subsidiary merger:
A subsidiary merger is said to occur when the buyer sets up
an acquisition subsidiary which merges into the target.