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Assignments of One Year MBA

Semester - II
1. Students are requested to go through the instructions carefully.
2. The Assignment is a part of the internal assessment.
3. Marks will be awarded for each Assignment, which will be added to the total marks.
Assignments carry equal marks.
4. Assignments should submit in your 'portal' on/before the 'completion date'
mentioned.
5. Case study project is based on the elective subject selected.
Please submit your case study also in the portal on the 'completion date' of
second semester assignments.

Assignments Total Marks :100

1. International Law
Explain the origin of International law.

Ans –

he international system has changed dramatically in

the years since the end of the Cold War has become a
commonplace. But which changes are most profound, and
what is their significance for international legal order? The
last decade of the twentieth century generated dozens of
hooks and articles hailing a transformed world order and
interpreting its political, economic, and social
consequences. We have more distance now. The first
years of this century have underscored the significance of
changes in the structure of international affairs — but they
also demonstrate how difficult it is to interpret them with
confidence.
The tradition of international law, across the globe, has
been associated by more than a century with a set of
political and ethical commitments — to multilateralism,
institutionalism, humanitarianism, liberalism in the
broadest sense. The international legal order was a focal
point for some the last century’s most fateful political
dramas — decolonization, human rights, arms control,
responses to genocide and environmental degradation —
as well as the site for any number of more routine
pragmatic endeavors — law of the sea, of the air, of
space. But not all problems of significance found their way
onto the international legal agenda. The world of trade
and investment, the world of the market, of development,
of technological change these were largely constructed
outside public legal order. Public law has seemed innocent
of the choices by which the world’s wealth is distributed
and of the instruments which bind the world’s cultures.
WTO is an international organization that brings
together two concepts of international law. Leaving aside
one or two specificities, it is a permanent negotiating
forum between sovereign states and is therefore a
cooperation organization akin to the international
conferences under traditional international law. But it also
comprises a sophisticated dispute settlement mechanism
which makes it an integration organization, rooted in
contemporary international law. In simple terms, the
WTO’s sophisticated dispute settlement mechanism
makes it a distinctive organization.
Above all, the WTO comprises a true legal order. If we
go by professor Jean Salmon’s definition, “a body of rules
of law constituting a system and governing a particular
society or grouping”, we see that there exists, within the
international legal order, a specific WTO legal order. The
WTO system has two essential attributes: valid rules, and
enforcement mechanisms. But the fact that it is specific
does not mean that it is insularized or isolated. These are
firstly how this legal system fits into the international legal
order, and secondly, how it links in with the other legal
systems.

Origin & Sources of International law

The idea of international law as understood and
practiced today owes its origins and foundational
principles to two sets of intertwined transnational
movements that radically reshaped European society
during the late medieval period of European history,
between the 15th and 17th centuries.
The first was the overhaul of the place of religion in
European political life. Although varying from one society
to another in its speed and particulars, this movement saw
justifications for power transform from appealing to the
divine and sacred to the mundane and secular; that is,
from belief in righteously anointed rulers to leadership
based on functional abilities. These transformations were
fostered and facilitated by splits and breaches within the
institutions and power structures of religious institutions
including the emergence of Protestantism and of reform
movements within the Roman Catholic Church. This
divorce of the legality of temporal power from religious
sanctification was enshrined in the Treaty of Westphalia in
1648, generally taken as one of the preeminent
constitutive documents of modern international law.
The second late-medieval movement that gave rise to
modern international law was the fierce competition
among European societies for maritime voyages of
discovery and the commerce that accompanied such
discoveries. During the so-called ‘age of discovery’,
European kingdoms and principalities vied to equip
entrepreneurial merchants, geographers, scientists,
seafarers, and adventurers who sailed the high seas to
discover, conquer and trade with ‘new lands’ in the
Americas, Africa and Asia. How to regulate this
competition became an integral element of international
law-making.
Thus, while internal European religious fragmentation
gave rise to and shaped international law doctrines as
secularism, sovereignty and self-determination, the forces
of externally driven competition contributed to other
international law doctrines such as those relating to the
freedom of navigation on the high seas, freedom of
commerce, and the use of force. In turn, these generated
exceptions, and counter-exceptions, which resulted in the
body of evolving doctrines and principles that currently
constitute international law.

THE SOURCES OF ORIGIN:

The starting place and linchpin for comprehending
international law is the centrality of the role of the nation
state in identifying, making and applying rules of conduct
and behaviour in the international system. Indeed, prior to
the 19th century, international law was commonly referred
to as ‘the law of nations’.

i) From nation to individual

International law was viewed simply as the product of
relations among nation states, something made by and for
the benefit of nation states. Its obligations, duties and
liabilities were assumed by nation states, and
correspondingly, its benefits, privileges and immunities
redounded exclusively to the nation state.
However, as law increasingly tries to accommodate
and reflect contemporary socio-political realities, vibrant
debates have emerged that seek to transcend this rigid
divide. Three lines of questioning underlie this transition:
- Does international law regulate only the behaviour of
states, or does it reach beyond the state to embrace
interests within the state such as individuals, corporations,
non-governmental organisations, or indeed
intergovernmental organisations as well?
- Similarly, who are the beneficiaries of international
law? Do such beneficiaries have a right to assert their
beneficial interests directly and independently of the
state?
- Finally, who gets to make international law? Is such
law-making solely the function of the institutions of the
state, or do other interested persons such as individuals,
civil and corporate non-governmental organisations have a
role to play in the process?
There is no single categorical answer, and current
answers are by no means permanent. Central to an
informed understanding of the available range of answers
is an appreciation of the sources of international law.

ii) Article 38 of the ICJ

Article 38 of the Statute of the International Court of
Justice (ICJ) provides a widely agreed upon set of
standards for evaluating whether a statement purporting
to be a rule of international law is to be validly considered
as such[5]. Although Article 38 is addressed exclusively to
the ICJ, which is in itself entirely a creature of international
law, it has become accepted that Article 38 provides the
conceptual framework for ascertaining when a
pronouncement should be considered a legally-binding
obligation rather than a statement of a preferred value or
norm.
According to Article 38, there are four sources of
international law. These are 1) conventions or treaties to
which a state is a party; 2) international custom or
practice that international society has come to accept as
law; 3) the general principles of law that are recognised by
civilised states; and 4) the views of highly-qualified jurists
writing on a point of law. International lawyers seek to
pigeonhole particular pronouncements into one or more of
these sources of legal legitimacy. Although at the margins
these elements or sources of international law are not
without difficulty of application, they nonetheless have
reasonably well-settled meanings.

a) Conventions and treaties

The most uniformly accepted source of international
law is the convention or treaty[6]. A treaty is an
agreement between two or more countries. Treaties come
in numerous forms, from bilateral understandings between
two friendly states, to those that end world wars or create
international arrangements like the United Nations
Organisation. They cover the entire scope of human
activities from politics, economics and the arts to the
sciences, agriculture, youth exchanges and family
relations. They vary in the level of formality and solemnity
with which they are concluded.
All that matters is that the parties entering into the
treaty see themselves as making commitments that other
parties have a legal right on which to rely. Not surprisingly
then, although the existence of a treaty will rarely be
beyond dispute, occasionally disputes arise over whether
an agreement or understanding has been reached
between two states, and if so, whether the parties
intended to make binding legal commitments to each
other.
These and the several other issues that are presented
by the pervasive part played by treaties in international
relations have been addressed in a treaty: the 1969
Vienna Convention on the Law of Treaties, otherwise
known as ‘the treaty on treaties’. Like any treaty, the
terms of the Vienna Convention bind only those who are
parties to it, and some important members of the
international society, such as the United States, are not.
Yet, it is generally accepted that many of the provisions of
the treaty constitute customary international law
(discussed below), which binds non-parties.
Among the core provisions of the Vienna Convention
are the following: treaties are made only by and among
states as defined under international law; by signing a
treaty, a state undertakes to comply with its provisions in
good faith and not to undercut its purpose; once ratified (a
process that occurs under the domestic laws of the
ratifying country) and notified to the other parties, a treaty
imposes legal obligations according to its terms on the
ratifying party, and creates internationally-recognised
interests for all parties to the treaty; a treaty should be
interpreted by reference to its text which must be
construed in light of the treaty’s purpose or object; the
terms of a treaty should not be in conflict with certain
peremptory norms of international behaviour, so-called jus
cogens norms; just as parties should not be forced by
duress or fraud to enter into treaties, they are also free to
withdraw or renounce treaties, subject to the conditions
for withdrawal or renunciation contained in the treaty.
Central to the idea of treaty law creating legal
obligations and rights is the view of the state as a
sovereign entity that is free to consent or withhold
consent as it deems fit. Ostensibly, treaties are voluntary
undertakings which, once accepted, signify a commitment
to be bound, and create a reliance interest for other
parties.

b) Custom as a source of law

A second uniformly-accepted source of international
law is customary international law. There are three
conditions under which the general behaviour of states
becomes a rule of customary international law: a) if the
behaviour is widespread, b) practices are followed over a
not insignificant period of time, and c) it s viewed by it is
practitioners as mandated by law.
Questions, however, remain: at what point does a
practice become sufficiently widespread among states and
of sufficient duration in time so that it should be deemed a
general practice? And how does one know whether the
states are engaging a practice because they view it as
law, or for some other reason, such as convenience?
Nonetheless, some of the most venerated rules of
international law either originated as customary practices
among states that were subsequently codified as treaties,
or continue to be derived from such custom. Increasingly,
however, the trend is less to transform customary laws
into treaty law than the reverse. Given the proliferation of
treaties and the diversification of international society
from its West European cultural roots, those who want a
uniform standard of behaviour among states increasingly
look to treaties to extrapolate customary law, often
insisting it should be binding on all states regardless of
participation in a specific treaty regime. The result is some
sort of a symbiosis between treaty law and customary
international law.
For evident reasons, ascertaining and applying
customary international law in specific situations is often
problematic. However, procedural problems with its
 crystallisation process are not its gravest. The doctrine
seemingly contradicts the two established principles that
undergird the treaty regime: sovereignty and consent.
The application of customary international law
therefore often requires attempts to reconcile the
universality of its obligations and rights with national
rights such as sovereignty and consent. The result is a
mishmash of doctrines. For example, on the one hand, a
state that persistently objects to a particular rule of
customary international law is thereby freed from
compliance (the persistent objector rule); and on the other
hand there are certain so-called jus cogens,peremptory
rules of international law that no state can derogate from
them. These problems of interpretation are compounded
by the third possible source of international law.

c) & d) General principles of law and the views of highly

qualified publicists
The third broadly accepted source of international law
is the so-called general principles of law which is, in the
phrasing of the Statute of the International Court of
Justice, “recognised by civilised nations”. The primary
difficulty lies in deciphering what this vague formulation
actually means in specific cases.
If it is intended to incorporate no more than broad
principles of law present in all reasonably developed
modern legal systems – e.g. wrongs should have
remedies, claimants and defendants should be given fair
opportunities to present and defend their positions,
decisions should be based on reasoned analysis of
evidence, and the decision-maker should be impartial – it
might be asked whether the rule serves any useful
purpose.
If the rule is intended to go beyond broad procedural
niceties to impose additional substantive obligations on
states (other than those that may already exist either
under treaties or customary international law), then it is
fair to ask what those additional obligations might be.
Perhaps here, one ought to read the ‘general principles of
law’ source along with the fourth source cited in the ICJ
statute: “the teachings of the most highly qualified
publicists of international law”.
The function of ascertaining, sanctifying and
legitimising so-called general principles of law may
depend on the existence of consensus among highly-
qualified international law scholars and jurists as to
whether a particular behaviour or rule should be
considered as mandated by international law,
independently of what states may have accepted or done.
What is clear is that the concept of ‘general principles of
law’ under international law is at best underdeveloped.
Whatever the intellectual underpinnings of international
law may be, it is difficult to imagine that this
unrepresentative process for fashioning ‘general principles
of law’ by appeal to the teachings of publicists does not
undercut its legitimacy as a tool of governance.

iii) Institutional sources of international law

The sources considered above are the explicitly stated
formal sources of international law. However, as a cultural
institution, international law, like any legal order, is
dynamic and adaptable. It is fashioned by human beings
to serve their needs which vary with time, place and
environment. A final source of international law, then,
must account for the human beings, institutions and the
contingencies of politics and economics that shape,
interpret and deploy law to serve particular ends[7]. Such
laws are less the product of specific rules, doctrines or
procedures than they are of the policy preferences of
interested subgroups within international society.
Sometimes applicable laws are ascertained less by a
formalistic resort to written texts and shared practices
than they are by the needs of a particular group – power
rather than reasoned analysis is here the coinage of rule-
making.
Although Article 38 of the ICJ Statute may be silent
about the place of power as a source of law, no-one
doubts that an agreed-upon policy of the United Nations
Security Council – and indeed of each the five permanent
members of the Council – may well constitute international
law, even though such policy does not receive the
benediction of any one of the formal criteria.
The beliefs and views of diplomats, international civil
servants, economists, non-governmental organisations
and of course statesmen in certain circumstances now
prove to be just as influential in determining international
law as those of legal specialists.
International law (and indeed any legal order) cannot
be seen simply in terms of static rules that can be
ascertained from rule books. Law may not be politics, but
no legal order is intelligible without reference to the
political environment in which it operates.
A UNIQUE LEGAL SYSTEM WITHIN THE
INTERNATIONAL LEGAL ORDER:
The WTO is an international organization. This may
seem obvious, and yet it took over 50 years to achieve
that result. This protracted effort to acquire a legal
existence has left its marks.

The General Agreement on Tariffs and Trade (GATT), which

was replaced by the WTO in 1994, was a provisional
agreement that entered into force in January 1948 and
was to disappear with the treaty creating the International
Trade Organization. Since that treaty never entered into
force, the GATT remained, for a half a century, an
agreement in simplified form which, in principle, did not
provide for any institutional continuity. Thus, the GATT did
not have “Members” but “contracting parties”, a term
which highlighted the purely contractual nature of the
arrangement Without any international organization in the
strict sense of the term, and therefore without a separate
international legal personality, the GATT could only
operate through its CONTRACTING PARTIES and, for its
every day work, with the support of the Interim
Commission for the International Trade Organization
(ICTTO), a provisional commission responsible for setting
up the ITO.

Thus, it was almost 50 years later, with the Marrakesh

Agreement, that a true international organization was
finally created, i.e., according to the definition supplied by
the International Law Commission in its draft articles on
the responsibility of international organizations, “an
organization established by a treaty or other instrument
governed by international law and possessing its own
international legal personality”. In order to avoid any
ambiguity, the Agreement Establishing the WTOstates in
Article VIII that the Organization shall have legal
personality.
The implications of this status are numerous. The
Marrakesh Agreement states that Members shall accord
the WTO such privileges and immunities as are necessary
for the exercise of its functions. Thus, its legal personality
consists of an international facet, which enables it to act
at the international level, and an internal personality,
which enables it to conclude contracts for the purposes of
its day-to day operations and among other things to
employ its six hundred permanent staff members. As with
all international organizations, the competencies of the
WTO are limited by the principle of specialty. But alongside
its subject-matter competence, which is explicitly provided
for in its constituent instrument, the WTO also has implicit
competencies. Thus, the main consequence of this status
of international organization is that it enables the WTO to
have its own will which is expressed in a legislative output
within the limits fixed by its constituent instrument, and to
interact with other international players.
As a true international organization, the WTO now
comprises an integrated and distinctive legal order:
(l) It produces a body of legal rules
(2) Making up a system and
(3) Governing a community.

(1) A body of legal rules, first of all. The WTO is a treaty

comprising some 500 pages of text accompanied by more
than 2,000 pages of schedules of commitments. Moreover,
50 years worth of GAH practice and decisions — what we
call the “GATT acquis” — have been incorporated in what
constitutes the new WTO treaty. WTO rules are regularly
renegotiated. While it is true that the WTO Secretariat and
the WTO bodies do not have any general power to adopt
formally binding rules, the WTO bodies are able to adopt
effective decisions that provide pragmatic responses to
specific needs, and in that sense, they do produce a kind
of secondary legislation. The system is no longer based
solely on the principles of a certain diplomacy which often
led, under the GATT, to the adoption of negotiated
solutions that reflected the relative power of the States
involved. The WTO does not produce equity, in the
meaning given to the term by public international law —
rather, it produces legality.

2) Secondly, these legal rules form an integrated system.

Indeed, the WTO agreements are kite- grated in a “single
undertaking” which forms an entity that is meant to be
coherent. A number of provisions recall this fact, and in
particular Article 11:2, which states that the multilateral
trade agreements “are integral parts” of the Agreement
Establishing the WTO and are “binding on all Members”.
This is why they appear in annex to the Agreement
Establishing the WTO. In the Indonesia —Autos dispute,
the panel which ruled in the first instance recalled that
there was a presumption against conflict between the
different provisions of the WTO treaty since they formed
part of agreements having different scopes of application
or whose application took place in different circumstances.
On several occasions, the Dispute Settlement Body (DSB)
reaffirmed that Members must comply with all of the WTO
provisions, which must be interpreted harmoniously and
applied cumulatively and simultaneously. Thus, the WTO
treaty is in fact a “single agreement” which has
established an “organized legal order”.
(3) Thirdly, WTO law governs a community, namely its
Members. In United States — Section 301, the Panel
confirmed the existence of a GATI7WTO legal order and
even seemed to suggest that this order was characterized
by its “indirect impact on individuals”. For, by contrast,
“when an actual violation takes place ... in a treaty the
benefits of which depend in part on the activity of
individual operators the legislation itself may be construed
as a breach, since the mere existence of legislation could
have an appreciable ‘chilling effect’ on the economic
activities of individuals.” The qualification of nations no
longer only as objects of WTO law, but also as subjects, is
still disputed. Leaving that debate aside, I would say that
the WTO rules above all effectively govern the community
of its Members, since failure to comply is punishable in the
framework of the DSB. In other words, they do form a new
legal order as defined above.
However, this integrated legal system is not “clinically
isolated”: there is a presumption of validity in international
law and the rules of its treaties must therefore be read in
harmony with the principles of international law. Thus, the
WTO legal order respects, inter alia, the sovereign equality
of States, good faith, international cooperation, and the
obligation to settle disputes peacefully, not to mention the
rules of interpretation of conventions which the Appellate
Body, for example, applies without hesitation. The WTO
respects general international law, while at the same time
adapting it to the realities of international trade. In joining
the international legal order, the WTO has ended up
producing its own unique system of law.
Leaving aside the doctrinal debate on the autonomy of
international economic law, it is clear that WTO law is
largely a circumstantial application of international law in
general.

Summary:
Within a domestic legal order, hierarchy is established
over time through the exercise of political power. This
hierarchy might emanate from foundational constitutional
arrangements, or it may be the result of extra-
constitutional power grabs; but in either event, the
structure of authority within a domestic legal order is both
clear and hierarchical. This is important because of the
certainty that is derived from infallibility. That finality
ultimately is backed up by the coercive power of the state
exerted through enforcement mechanisms.
There is no equivalent route to finality in the
international system. International rules are interpreted by
a myriad of institutional actors acting more or less
independently of each other. There is no one institution
whose pronouncements override all others, and there is no
enforcement system that guarantees compliance. But this
does not result in international rules being indeterminate
or rarely obeyed.
 It does say, however, that the level of compliance that
is brought about by the existence of predictable and final
rules is, at best, underwhelming. The emerging role of
national, regional and specialised international courts or
tribunals as interpreters and enforcers of international law
may reduce some of the gaps between the aspirations of
international law and its practical applications, but the
chasm remains.
Put another way, the effectiveness of a legal order
depends on the coherent exercise of political power within
a political community. Against constant appeals to an
‘international community’, reality shows a society of
national political communities. It is neither a substitute for
those communities, nor does it operate independently of
them. International law offers humanity at best a hope for
coordinating these varied legal orders.

2. Strategic Management
Why strategies fail often? Explain.
Ans –

Precautions to avoid failures in strategies for General Managers of a production unit :

Strategic Management is a set of Managerial decisions and actions aimed at the generation
of sustainable competitive advantage. It operates on several time scales as short term and
long term. The short term involve planning and managing for the present while long term
strategies involve preparing and pre empting the future.

Strategic Management is difficult in part because it requires contradictory qualities and skills
in dealing with the paradoxical demands of situations. The way to understand strategic
management is first seeing the different types of managers and then realizing how the
qualities and skills of the different types may be present in single individuals, who have to
being them together in complementary ways to deal with the strategic tensions they confront.

Now a days the study of strategic management in business schools and other places has
increased for one good reason that is Strategic management works. In fact, there are
hundreds of definitions of strategic management and probably the main variants of them can
be justified on numerous grounds.

STRATEGIC PLANNING

Strategic management has become widely established in all sectors of modern economies,
although mainly in larger organizations. The rise of strategic planning in the 1960s and its use
in the private sector in the 1970s was noted, advocated, and analyzed in many influential
studies. This prescriptive view of strategic planning emphasized the importance of the
organizational environment as a source of threats and opportunities and the need for effective
responses was expressed in a plan. Typically this plan formulated major decisions about entry
to new industries or the development of new products or services and was guided by sets of
objectives and goals. In the 1980s, under the influence of Porter’s writings, the emphasis was
less on the plan then on the selection of an appropriate generic strategy to position the
business unit in is competitive environment. Porter appeared less concerned with trends and
events that might pose threats and opportunities than with an environment. Porter suggested
that the competitive environment could be analyzed using what is now often referred to as a
Five Forces Analysis. Mapping the environment primarily as a pattern competitive pressure
from rivals, suppliers, buyers, entrants, and substitutes. Then he broadly distinguished two
strategic options. The business could either position itself as offering a low cost product at a
standard price, or it could offer a product that was different from that offered by rivals. These
are referred to as generic strategies. However, Porter still placed emphasis on the analytical
strategic thinking needed to formulate an appropriate response to an organization’s
environment. This analytical thinking extended to the planning of implementation of cost
reductions to additions to value through differentiation. This planning of the implementation of
a generic strategy could be done using Porter’s concept of the value chain. This involved
essentially characterizing different types of activity within an organization and analyzing them
in sufficient detail to identify opportunities for cutting unproductive costs or adding values as
perceived by customers.

IMPLEMENTATION

The emergent but rational quality of strategy formulation was emphasized in Quinn, whose
study had a more descriptive intent than some earlier studies of strategic management. This
meant that strategic thinking was logical but issues of organizational politics and managerial
ignorance affected the way in which strategy might be implemented. Others studies alerted
managers to the issues of strategic implementation. Ansoff took on board the importance of
resistance strategic planning is coupled with strategy implementation. Ohmae’s draws
attention to three key groups – the corporation, the customer, and the competitors. Strategic
Management might be defined, therefore, as the pursuit of superior performance by using a
strategy that ensures a better or stronger matching of corporate strengths to customer needs
than is provided by competitors. Ohmae also emphasizes the importance of moving from
abstract ideas of strategy to concrete planning of implementation. This means that this
favours properly worked–up action plans for line managers. Pettigrew and Whip also make
the point about the importance of property linking strategic and operational changes. This is
based on their in-depth case studies of specific organizations. Strategic intensions should be
broken down to what they call actionable pieces, made the responsibility of change
managers. They identify target setting, communication mechanisms, and reward systems as
important in carrying strategic intensions though operational activities. This suggests, as does
Ohmae, that strategic management is based on an interdependent relationship between
strategic ideas or intensions and operational level changes.

On number of circumstances the strategy get fails due to various reasons. Therefore it is to
be taken note of the circumstances why the strategies fail. In an effort to deepen our
understanding of why so many strategies have failed in implementation, designed and led in
the mid 1980s, a research project. Its focus was on where things most often go wrong in the
process of strategy formulation and implementation.

In this research, the researcher invited a response to an extensive questionnaire from a broad
sample of business unit heads, corporate planning directors, and chief executive officers with
substantial experience in strategic planning in American multi-business corporations. He also
conducted executive seminars to search for remedied. There were 300 respondents to the
questionnaire and 216 participants in the day-and-a-half seminars. Of these, 61 per cent were
general management line executives either at corporate or business unit level. The remaining
39 per cent were corporate planning directors and staff. Forty-one per cent of the seminar
participants were from service businesses, 52 per cent from manufacturing businesses and 7
percent from government agencies.

In the responses both to the questionnaire and the seminar, almost every participant (87 per
cent) reported feelings of disappointment and frustration with his/her experience with strategic
planning. Fifty-nine percent attributed their discontent mainly to difficulties encountered in the
implementation of plans. Two out of three trace their implementation problems to the design
of their strategic planning systems and the way they manage them. Yet, despite all the
frustration expressed, most companies in the sample stated their resolve to continue with
strategic planning.

It is striking that most companies remain committed to strategic planning despite the
disappointing returns on their investments to date. The reasons for this are rooted in the
needs that led firms to adopt strategic planning in the first place. Their managements have
come to realize that financial controls alone are insufficient to steer the business. Balance
sheet feedback is too aggregated, too stripped of connotative information and often too late. It
managers are to make more timely and appropriate mid-course corrections in response to
external change, financial plans must be augmented and supplemented by strategic plans.
Without these, the penalty for inability to adapt along the way is simply too great.

Another reason that persists in planning despite disappointment stems from a tendency by
managers to separate in their thinking, strategy formulation from strategy execution. If one
believes that the strategy was soundly developed in the first place, then subsequent failures
in implementation can be blamed on the poor work of those lower down in the organization
responsible for executing the strategy. However, when one examines in depth the relationship
between strategy formulation and strategy execution, this tendency to view the two aspects of
strategy as distinctly separate issues can be seen to be wrongheaded.

Most of the chief executives, corporate planning directors and business unit heads who
responded to the questionnaire were later involved in one of a series of executive seminars.
In discussing common problems, they appeared to have second thoughts about what was
wrong with their firms’ planning systems and what was needed to put things right. Two-thirds
of what these managers had initially described as implementation difficulties was, on closer
scrutiny, attributed to ten factors. Factors 1 through 9 relate to the way strategic plans are
formulated – well in advance of actual implementation. Only factor 10 relates directly to
implementation itself. Yet, the mishandling of each of these factors can have profound,
adverse impacts on the extent to which intended strategic objectives are actually realized.

Many precautions will have to be taken to avoid the failures of the strategies. The important
reasons for the failure of strategies are follows:-

Poor Preparation of Line Managers

It was noted that since the early 1980s, an increasing number of companies have recognized
that the responsibility for formulating strategy belongs to line managers, not staff planners.
The staff planner’s role is supportive and facilitative. Number of instances, line executives
have been inadequately prepared to assume this responsibility and therefore the same turns
as one of the important reason for failure of the strategies.

Line managers will have to be briefed and they need to understand the key concepts and
language of strategic planning. It is unlikely that without some help, they will uniformly
understand the operational meaning of such notions as ‘bases of competition’, ‘strategic
issues’, ‘key success factors’, ‘portfolio role’, and ‘strategic management’. Some line
managers think the strategic planning as an additional burden imposed from above, diverting
them from ‘running the business’. All too often, many line managers adopt a grudging,
mechanistic approach to their planning duties. Small wonder that staff planners creep back in
to lend a hand of help. Another aspect of preparing line managers to become more effective
strategy formulators has to do with broadening their perspective. Normally the line managers
will be concentrating the particular field, which has been entrusted them, but in fact they need
to think about the business as a whole rather than only their own function. They need to know
how to rise above their specialized frames of reference into a general management view of
trade-offs between functions. They also need to know what questions will be asked and what
challenges to expect when they submit their proposed business plans for approval.

Improving line managers’ understanding and skills in strategic planning through participation
in ‘quick-fix’ management development courses often yields disappointing results. Too much
management development training still consists of discussions of generic or hypothetical case
materials and packages of received wisdom presented to groups of peers. Such training may
provide some value, but it usually falls far short of replicating the real conditions facing the
line management strategist.

When line managers can focus on real problems in their own companies, they can enhance
their understanding of the strategic context and implications. An opportunity to learn how to
think more broadly and how to behave in ways that are more flexible and adaptive should be
offered with the explicit understanding that particular changes in personal behaviour are
required. This offer should be made to groups representing the various functions and levels
whose co-operation is needed to solve problems that are both tough and urgent.

2. Faulty Definition of the Business

Another circumstances which led to failure of strategy is the faulty definition of the business.
The firms’ management’s definition of each of the businesses they are conducting can have a
profound bearing on the business’s strategic behaviour, its competitive clout and on the
strategic options management may choose to implement.

The two issues relevant to the connection between business definition and successful
strategy implementation is ‘getting the definition right’ and executive perceives and
understands the business definition In this context, ‘right’ means in tune with the marketplace
requirements and competitive dynamics. It means the definition which best positions the firm
to compete successfully. The successful strategy implementation depends heavily on an
agreed business definition among the entire management group. Differences in perception
will undermine the effectiveness of strategy implementation.

3. Faulty Definition of the Strategic Business Unit (SBU)

Another important aspect to be considered as a precaution to safeguard the business from

failure is to give proper definition to strategic business unit. When a multi-business fails to
define its SBUs correctly within its organizational structure, an excellent planning process can
do the damage. When strategic planning is newly installed, it is often assumed that the
organizational units already in place should handle the planning. Because these units are
typically a result of historical evolution, they may owe their boundaries to many factors that
make them inappropriate to use as a basis for planning: geography, administrative
convenience, the terms of old acquisition deals, product lines, traditional profit centers, a
belief in healthy internal competition, or old ideas about centralization and decentralization.

Such rationales for unit boundaries often lead to faultily defined SBUs. Executives who take
organizational structure as a given before planning begins are not realizing that their SBU
definitions are defective. Organization theory and strategic management hold that the main
purpose of organization is to support the development and execution of strategy. Thus
organization should come after strategic planning. The faultiness of the reorganization logic
and its consequences for strategic planning can be attributed to either ignorance or
discounting of customer and competitor behaviour in the major home appliance market.
Specifically, the product line organization with its associated localized strategic perspective
impeded consideration of several important factors that characterize this market. The quality
and style of the materials, Price of the product, and the competition are the main and
important factors that decides the market :

• Quality and style: customers expect that the refrigerator, dishwasher, cooking range etc.,
which they purchase be coordinated in terms of quality (materials used, performance,
warranties, etc.) and appearance (colour, tones, physical design, features, etc.).

• Price: customers expect a pricing policy that unified the major kitchen appliances within the
context of the manufacturer’s ‘quality and style’ philosophy.

• Competition: the division responsible for cooking ranges quickly discovered that its
competitors and distribution channels were identical to those faced by its sister divisions,
which manufactured refrigerators, dishwashers, etc. Despite this extensive overlap each
division was waging its own battle with the same set of competitors.

The important principles which guide the definition of SBUs are as follows:-

•Let external rather than internal forces shape unit boundaries. If competitive forces require a
larger unit than normal spans of control would dictate, go with the larger unit.

•When separate units are strategically appropriate for external reasons but must, for
economies of scale, share central facilities and services, let them share, but keep them as
separate units.

•Include within the jurisdiction of the SBU all functions and processes the unit head needs for
executing the strategy. For example it may not be wise to require a manager charged with
opening up new markets for a cluster of products to buy manufacturing and distribution
services from sister profit centers.

•Leave the unit head free to take profits where strategy dictates. Hence nothing smaller than
an SBU should be a profit center.
While the application of these principles of SBU definition is crucial to good strategy
development and execution, they can conflict with one another. As a practical matter,
therefore, these principles cannot serve as absolutes. In the end, boundary setting is an
executive judgment call but not a purely subjective one.

4.Excessive Focus on the Numbers

When in strategic planning there is an excessive focus on financial and other numbers
relevant to business performance, the resultant plan is likely to have serious distortions and
be of limited value in guiding implementation. A numbers-driven plan is often the result of a
short-term, bottom-line mindset on the part of top management. There is also likely to be an
excessive focus on the numbers when the staff supports function for planning is under the
control of the corporate financial function. When performance numbers govern strategy
formulation, SBU managers responsible for carrying out the strategy tend to make arbitrary or
constrained strategic choices. Such choices are not reflecting the realities of the industry,
markets and competitive environment. It is important to note that when the numbers dominate
strategic planning, there is likely to an imbalance between the quantitative and qualitative
elements of the plan. Explanations of what lies behind the numbers and what the numbers
really mean are often cursory. There are mainly three adverse consequences of a numbers-
driven planning system they are :-

(a). The quality of the plans suffers because they are shaped more by top management’s
willful assumptions then by the realities of the market place.

(b) The managers responsible for implementations are de-motivated with no real commitment
to implementation because the plans lack credibility and no longer reflect their best thinking.

(c) Corporate executives insulate themselves from opportunities to learn about the firm’s
various businesses because of their imposition of uniform quantitative objectives and their
unwillingness to enter into a debate with SBL managers on the consequences of arbitrary cuts
in finding.

5.Imbalance between External and Internal Considerations

Earlier we have noted that strategic planning differs from earlier efforts to plan for the long
term by its primary emphasis on the firm’s external environment. In practice, this means
developing an understanding of the firm’s industry, markets, customers and competition, and
using this knowledge to determine what is strategically relevant when assessing the firm’s
capabilities, and competitive strengths and weaknesses. Understanding and focusing on
externals is crucial in making the strategic choices that will lead to the desired long-term
outcomes.

6.Unrealistic Self-assessment

There is another element in strategic planning that can significantly influence the quality of the
strategic choices and the extent to which a strategy can be implemented successfully. This is
the quality of management’s analysis of their organization’s capabilities to carry out various
strategies. Management’s assessment of the firm’s strengths and weaknesses in the light of
possible courses of action in an important consideration in the choice of strategic options.
Further, this assessment is an important input to the definition of the work required to
implement the selected options.

7.Insufficient Action Detailing

Implementation is bound to go away if strategy formulation goes no further than defining

general thrusts and end-point goals.

About seven out of ten companies do not carry the formulation of strategy much beyond some
general statement of thrust such as market penetration or internal efficiency and some
generalized goal such as excellence. Having, only generalizations to work which makes
implementation very difficult. Targets don’t mean much if no one maps out the pathways
leading to them. After this kind of half-baked strategy is handed over for execution,
subordinates who have not been in on the formulation of the strategy are left to deal with its
cross-impacts and trade-offs when they bump into them.
The cure for half-baked strategy is action detailing, but this task often baffles and irritates
many executives. Only one in three of the companies have a process or a forum for the
interfunctional debate and testing of unit strategies. Their procedures for action detailing and
other kinds of reality testing are often non-existent or merely rudimentary. Action detailing of a
sort is carried on in some places as a part of operational planning, but it usually follows
strategic planning and takes the strategy as given. Planning in detail should be used as a
further test of a strategy’s feasibility.

One way to combine operational and strategic planning is to begin an action planning
advocacy process as soon as preliminary agreement on strategic options has been reached.
An interfunctional task group is set up for each strategic option – with strong representation
from middle management. Each group first can identify and analyze the issues that must be
resolved for implementing a particular strategy. Then they can rough out the major action
steps or pieces of work necessary to resolve each issue and thus implement the strategy. The
group then presents its proposed action Programme to the unit strategic planning team. Each
task group’s job is to explain and defend what it considers the best way of bringing the
strategic option to life.

After the planning team has heard, debated, modified and validated each of the proposed
action programmes, they deal with time frame, risk analysis, allocation of responsibility,
resource requirements, organizational obstacles, performance measurement and monitoring
devices. In mapping out and testing strategic options, managers begin to think explicitly about
assumptions, alternatives, contingencies, and what competitive reactions to expect. Failure to
come to grips with these details can undermine the execution of the strategy.

8.Insufficient Effective Participation Across Functions

Strategic plans are of better quality and are more likely to be implemented successfully when
the plan is formulated by a team of executives and managers working together in ‘real time’.
This team should include the SBU general manager, the functional heads who report to this
executive and middle-level managers Elected for their ability to contribute usefully to the
debate. In addition, the planning team should include other functional executives and
managers outside the SBU who are responsible in providing strategically significant resources
and supporting services to the SBU.

9.Poor Management of the Corporate Face-off

In a multi-business corporation, even when all the steps in the strategy development process
are taken according to the principles of best practice, strategic plans can be ruined and the
whole system undermined at the final corporate review state. The issue here is how good the
design is and management of the planning cycle when the SBUs’ proposed plans hit the
corporate screen. This may be called the corporate face-off.

The face-of is a moment of inevitable, healthy conflict. Not only do all the units’ resource
requests often exceed what corporate is prepared to provide, but also their aggregate
performance promises are often less than the Corporate requires. Performance requirements
typically come from an analysis of capital markets. On the other hand, performance promises
arise from strategies for dealing with each SBU’s particular environment. Thus, conflict is to
be expected.

What should happen at the face-off is reconciliation. This often involves queuing, downsizing,
redirection and recycling. What actually does happen is often rather primitive: exhortation,
backdoor dealing across-the-board cost cuts, moving the goalposts, and mandated promises.

10.Conflicts with Institutionalized Controls and Systems

The foregoing nine factors describe flaws in the ‘upstream strategic planning process that can
undermine ‘downstream’ strategy implementation.

This tenth factor is the only once directly applicable to the implementation process. A strategic
planning system can’t achieve its full potential until it is integrated with other control systems
such as budgets, information, and rewards. The badly designed, poorly managed face-off is a
manifestation of a deeper problem – compartmentalized thinking which treats various existing
control systems as freestanding and strategically neutral. When this is the case, there is a
high probability that conflicts will arise between the requirements and organizational impact of
each SBU’s intended strategies, and the requirements of institutionalized control systems.
These are usually far more deeply rooted in the organization’s culture than strategic thinking
and planning. When conflicts occur, the existing control systems prevail and strategy
implementation suffers.

PLANS AND BUDGETS:-

The conflict between strategic plans and budgets is the most commonly perceived area of
dissonance. Managers tend to view the annual planning and budgeting sequences as
logically connected but not integrated in fact. A budget should be derived from the strategic
plan. Yet in many firms strategic planning is so divorced from budgeting that budget
preparation precedes strategy formulation. The best strategic planning is systemic, involving
the integration of all the relevant functions. It starts from an environmental analysis and then
works in the unit’s ability to respond. Budgeting, on the other hand focuses on each function,
and usually proceeds by making incremental adjustments to the previous year’s internal
departmental budgets. This practice allows the momentum of last year’s business strategy
and this year’s functional strategies to determine the funding of this year’s business unit plan.

The absence of strategic action planning often thwarts those who want to integrate plans and
budgets. Not until a company has formulated explicit action steps can it cast fixed capital
working capital, operating expense and revenue and head-count implications in the form of
strategy-based budgets. Most CEOs yearn for such budgets so that they can see how their
strategies, not just their departments, are doing. But the same CEOs often report that they are
told such budgets are not possible without disrupting the whole accounting system.

PLANS AND INFORMATION SYSTEMS

In recent years many strategic planners in the units and at the top of multi-business
corporations express concern about the adequacy of their planning information based and
decision support systems, and thereby the plan goes out of way and not reaching the desired
result. They worry about linking poor information bases with sophisticated computers. Even
accurate, timely, and accessible information will not help the planner if it leads to an
inappropriate strategy.
Like many businesses, this company based its strategy on data that had accumulated in
response to questions raised in the past by its financial managers and its technical and
professional specialists, whose expertise was too narrow. The information system drove
future strategy instead of the other way around. Strategy is what makes a fact relevant or
irrelevant and a relevant fact significant or insignificant.
Corporate CEOs and their SBL’ heads are the ones who must raise the issues ask the
questions, and formulate the business definitions, missions, objectives, and strategies that will
drive their decision-support systems. With today’s information technology, it is possible to
move in the right or the wrong strategic direction with great speed.

PLANS AND REWARD SYSTEMS

When companies design reward systems as separate, freestanding controls, they may
overlook the fact that such controls are not strategically neutral. Many companies have
witnessed the quiet destruction of a two or a three-year strategy while their executives
protected their first-year profit-sharing bonuses. It is folly to appeal to managers’ self-interest
with rewards for behaviour other than the kind the strategic business plan calls for and it is
naïve to expect them to override the powerful incentives that reward systems evoke.

11.From Strategic Planning to Strategic Management

There is no organizational arrangement, control system, or productivity Programme is

strategically neutral. Strategic planning becomes the device for consistently lining up such
factors.

It is important to note that among companies exploring the problem of integrated control
systems, the idea is taking shape that strategic planning can serve as the core control
instrument of a business enterprise, with other controls adjusted and adapted to facilitate the
execution of strategy. Why this emphasis on strategic planning? Because of all control
devices, it is one that is driven by the business environment.

Strategic planning comes before the final results are known, determines whether profit will be
taken now or later, and decides which facts are relevant. While financial controls are
obviously indispensable the feedback they arrive is often too aggregated, too homogenized,
and too late not to mention too conservative of past business practices.

Under the circumstances it can safely conclude that the above are the precautions one will
have to take to avoid failures in strategies in a production unit
3. Business English
How communication acts as a bridge of understanding among people.Explain.
4. Management Information System
An effective MIS helps to supply accurate, relevant and timely information to the
management of the organisation and that of a poor MIS may provide inaccurate,
irrelevant and obsolete information which becomes too expensive or fatal to an
organisation.Explain.