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Corporate Policies and Practices - ADL-15-

Assignment - A
Question 1. Diversification to new markets can be a risky proposition. The risk can be
minimised if the coompanies can identify their strengths and evaluate market
opportunities accordingly. Discuss the various types of diversification strategies
in light of the statement.

Answer: Diversification is a much used and much talked about set of strategies. These
strategies involve all the dimensions of strategic alternatives.
Diversification may involve internal or external, related or unrelated, horizontal or vertical
and active or passive dimensions either singly or collectively.

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Question 2. Has globalisation made it easier for MNCs entering India now? How
liberalisation in Economic reforms has smoothened the path for them?

Question 3. Trusting your organisation to grow and develop in a haphazard fashion is

taking a large chance on the future. This is the fundamental reason for doing
strategic planning. Discuss the role of SWOT analysis in strategic planning.

Question 4. How has the Internet helped in the evaluation of Worls as a Global Village?

Question 5. Discuss the startegic initiative by Mr Ratan Tata of launching “Nano”

which suggests the cost leadership approach adopted by TATA. Do you think
this step may snatch leadership position of Maruti Suzuki in the small car

Assignment - B
Question 1. Mergers and acquisitions can be desirable expansion strategy for banks in
India? Comment with suitable examples.

Question 2. Indian Companies at the for front of technological innovation face several
challanges. The chief challange is increasing complexity. Discuss.

Question 3. The PESTLE analysis is a perfect tool for managers and policy makers;
helping them in analyzing the forces that are driving their industry and how
these factors will influence their buisnesses and the whole industry in general.
Conduct PESTLE analysis for retail sector of India.

Case Study
Corporate social responsibility (CSR) has been defined as the “commitment of business to
contribute to sustainable economic development working with employees, their families, the
local community, and society at large to improve their quality of life, in ways that are both
good for business and good for development."

To meet with the CSR it Is expected that a business in its entire procurement-production-
processing-marketing chain should focus on human development involving the producer, the
worker, the supplier, the consumer, the civil society, and the environment. Indeed, a very
tough task, Most businesses would certainly flounder in not being able to achieve at least one
or many of those expectations. But AMUL has shown the way.

CSR-seneltlve Organizational Structure

AMUL Is a three tier co-operative organization. The first tier Is the co-operative society at
the village, of which; milk producers are voluntary members, managing the co-operative
through a democratically elected 9-member managing committee, and doing business by
purchasing milk from members and selling it to the district level co-operative. There are more
than 11,000 co-operatives In villages of Gujarat.

The second tier Is the district co-operative that processes milk into milk products, markets
locally and sells surplus to the state co-operative for national and International marketing.
There are 12 district co-operatives each being managed by a 15-member board elected by the
college comprising the nominated representatives or chairmen of the village co-operatives.
Third tier Is the state level cooperative - the Gujarat Co-operative Milk Marketing Federation
(GCMMF) responsible for national and international marketing of milk and mllK products
produced and sold to It. The GCMMF Is managed by the board democratically elected by and
from amongst the chairmen of the district co-operatives.

The entire three-tier structure with the GCMMF at its apex, is a unique institution because It
encompasses the entire chain from production of raw material to reaching the consumer with
the end product. Every function Involves human intervention: 23.60 lakh primary milk
producers; 35,000 rural workmen in more than 11,400 village societies; 12,000 workers In 15
dairy plants; 750 marketing professionals; 10,500 salesmen In distribution network and
600,000 salesmen in retail network. Accumulation of human capital Is sine qua non for the
development and growth of any enterprise or economy. The GCMMF is sensitive towards
CSR. It believes that technology and capital ere replicable Inputs but not the human capital,
Since men are the basis for achieving the CSR, the GCMMF lays emphasis on their
development Into: competent, courteous, credible, reliable, responsive communicators and

CSR-seneltlve Business Philosophy

The first step towards discharging the CSR Is the business philosophy of the GCMMF. It is
two-fold: one, to serve the interests of milk producers and second, to provide quality products
to consumers as value for money. Evolution of an organizational system has ensured that the
corporate social responsibility towards the primary milk producers, village and the ecological
balance is fulfilled. The milk producers are paid for their milk in “ccordance with market
forces and realization of value for their produce, invariably the price paid to tlie member-
producers In Gujarat Is higher by 15 per cent than the national average.

CSR-orientation To Distributors & Retailers

The GCMMF has identified the distributors and retailers are its important link In Its vendor
supply chain. Through surveys the GCMMF found that 90% of the distributors do not get any
opportunity of exposure to latest management practices. The GCMMF realized that it was a
corporate social responsibility to strengthen the core business processes of its distributors so
as to keep them in mainstream business and compete with those with formal training in
management. The GCMMF has developed and trained all its distributors through Value-Miss
ion-Strategy Workshops, competence building, Amul Yatra, Amul Quality Circle meetings,
computerization, and electronic commerce activities.

Competency Building Module of the GCMMF is meant to infuse professional selling skills
by making the distributors and their salesmen aware of latest sales management tools and
techniques; enhance their knowledge of products; positioning and segmentation strategies for
various products. Under Amul Yatra the distributors and their salesmen are taken on a visit to
Anand. During this visit they are shown dairy plants, their upkeep, international standards of
hygiene and quality; the practices adopted for clean milk production, and above all the
cooperative philosophy. Through one to one talk with the farmers, the distributors and
salesmen realize AMUL is a large business of small farmers. The visit leaves an everlasting
impression on their minds that by selling AMUL products, they are discharging a social
responsibility towards a large number of poor farmers whose livelihood depends upon their
skill and integrity. They feel proud that they are participants in development of rural society
and thus in nation building.

Earnings of GCMMF Nurturing its primary members - the milk producers - is the first
mission of the GCMMF. Discharge of this responsibility is reflected in the manner in which
the GCMMF conducts its business and shares its earnings. The milk from the village co-
operatives is purchased at an interim price. So as to maximize the earnings of the milk
producers the GCMMF changes the product profile during the fiscal and directs its sales and
marketing activities towards those products that would bring in maxirnum returns. True!
Every business organization follows the same principle. But the GCMMF follows it with the
central interest of the producers. During the fiscal, as the GCMMF finds that from its
earnings it is possible to pay more to the producers for milk, the final price is declared higher
than the interim price being paid. Before the GCMMF closes its financial accounts the co-
operatives are paid ‘price difference', the amount between the interim price and the final
price. Thus profit of the GCMMF is very low. The net profit (PADT) of the GCMMF during
2003-04 was Rs 7.31 crore against a turnover of Rs 2.947 crore, a meager 0.25%. Further out
of the net profit of Rs 7.31 crore. Rs 4 crore was given as share dividend to the co-operatives.
To fulfill its corporate social responsibility towards its milk producers and co-operatives the
GCMMF works on razor thin profits and retention of funds.

CSR-oriented To Staff
The GCMMF hires and trains people to take advantage over its competitors. It has developed
in-house modules for training and competence buil-ding to improve and up grade of their
knowledge; communication skills to understand the customer, be responsive to customer
requirements, and communicate clearly for trouble shooting of problems. They are expected
to be courteous, frie-ndly, respectful, and considerate to the customer. To improve the
credibility and trustworthiness of the managers it is important they perform consistently and
accurately every time and at all times. The structure of salary and perquisites is altogether
different. The first and foremost the staff must get satisfaction from the job they. They are
recognized for their contribution (Climate Survey) CSR-AMUL WAY
Question 1. How do you associate the values and ethics of the organization with the
execution of Corporate Social Responsibility?

Question 2. Do you suggest that CSR should be included as one of the important
elements in the Mission statement of the Company?

Assignment - C
1. A firm can acknowledge the critical importance of its_______, by having explicit goals
that state its intention to improve work conditions by adding more lighting and providing the
workers with more and better safety equipment.
a) employee welfare
b) market share
c) sales revenue
d) satisfaction

2. A firm shares its offices with another firm in a foreign location to reduce costs. This is an
example of:
a) Economies of scope
b) Economies of Scale
c) Integration
d) consolidation

3. A key change in the decision-making process for new-ventures as contrasted with the
decision-making process for established companies is the addition of
a) the implementation step.
b) the development of the basic business idea,
c) the scanning of the internal environment.
d) the analysis of strategic factors.

4. A survey of 93 Fortune 500 firms found ten major problems that over half of the group
experienced when they attempted to implement a strategic change. Which of the following is
not one of the implementation problems?
a) poor definition of key implementation tasks and activities
b) uncontrollable external environmental factors
c) time allocated for implementation was adequate, but was used inappropriately
d) crises that distracted attention away from implementation

5. According to Collins and Poras, what separates visionary organizations from merely good
organizations is that:
a) They are not prepared to change their core values
b) They are prepared to change their core values
c) They are not prepared to change their culture
d) They are prepared to change their culture

6. Aggregating prospective buyers into groups is called:

a) market segmentation
b) BCG matrix analysis
c) grouping
d) market categorization

7. Alfred Chandler produced classic work on the study of organizational structures. He was of
the view that:
a) Structure determines strategy
b) A centralized structure is superior
c) Strategy determines structure
d) A divisionalised structure is superior

8. An effective short-hand summary of the situation analysis Is a:

a) SWOT analysis
b) SBU analysis
c) BCG analysis
d) Competition analysis

9. An organization's reputation Is an example of:

a) An Intangible resource
b) A tangible resource
c) A knowledge-based resource
d) A threshold resource

10. An organization's structure is

a) the physical building of the organization.
b) often represented by an organizational chart.
c) the raw material assets of an organization.
d) the patterns of beliefs of the employees.

11. Ansoff had four market-product strategies to expand sales. They Included (1) market
penetration, (2) product development, (3) market development and:
a) diversification
b) current customer retention
c) distribution enhancement
d) product simplification

12. Bartlett and Ghoshal (1990) distinguish between an organization's anatomy, physiology
and psychology. The anatomy is the organization's:
a) Structure
b) Culture
c) Motives
d) Values

13. Conglomerate diversification is another name for:

a) Related diversification
b) Unrelated diversification
c) Acquisition diversification
d) Portfolio diversification

14. Core Competencies can be defined as:

a) A cluster of attributes that confer competitive advantage
b) Capabilities
c) Attributes that a firm requires to be able to compete
d) Ways of doing things

15. For a resource to provide the potential for sustainable competitive advantage It must be:
a) Valuable, rare, difficult to Imitate, no strategic substitutes
b) Valuable, rare, patented, no strategic substitutes
c) Valuable, tacit, easy to imitate, no strategic substitutes
d) Valuable, embedded, rare, no strategic substitutes

16. The_____________ for PepsiCo is “We believe our commercial success depends upon
offering quality and value to our consumers and customers; providing products that are safe,
wholesome, economically. efficient and environmentally sound; and providing a fair return to
our Investors while adhering to the highest standards of quality.”
a) mission
b) organizational code of conduct
c) functional code
d) benefits statement

17. Horizontal integration is where:

a) A firm takes over a distributor
b) A firm takes over a competitor
c) A firm takes over a manufacturer
d) A firm takes over a supplier

18. In the strategic marketing process, once you get results you go into the;
a) control phase
b) marketing plan
c) planning phase
d) marketing program

19. Knowing where the organization is at the present time enables managers to set a direction
for the firm and start to allocate resources to move toward that direction. Two techniques to
aid in these decisions are:
a) Market-product analyses and portfolio analysis.
b) Contribution margin analysis and market-product analyses.
c) Industry forecasting and situational analyses.
d) Break-even analysis and sales forecasting.

20. Multidivisional corporations tend to* use what type of responsibility center?
a) revenue center
b) profit center
c) investment center
d) standard cost center

21. Once an organization has determined how each of its business units should be labeled in
terms of the BCG portfolio analysis, it is time to decide what strategy should be used with
each. Which of the following is NOT one of the strategies available for use with each SBU?
a) Build
b) Harvest
c) Divest
d) Milk

22. One key to effective implementation is setting:

a) schedule of events
b) milestones
c) good managers in motion
d) goals

23. One of the strengths inherent in the use of the BCG portfolio analysis is that it
a) forces firms to assess their SBUs in terms of relative marker share and industry growth
b) acts as a strong motivational tool for employees in SBUs that have been labeled dogs or
problem children
c) considers all factors that might impact an SBU's value to an organization
d) is remarkably easy to locate an SBU on the BCG matrix

24. Railroads may have let other forms of transportation take business away from them
because their vision included only the railroad business, rather than the broader vision of
a) transportation
b) wholesaling
c) entertainment
d) aerospace

25. Strategic planning is often distinguished from operational planning by the

a) number of executives involved in the formulation
b) complexity of the planning forms
c) use of outside consultants
d) length of time in the planning period

26. Substantial changes to the range of offerings or the markets served or both are known as:
a) Differentiation
b) Diversification
c) Relocation
d) Repositioning

27. ‘Synergy’ can best be explained by which of the sums below?

a) 2-2=1
b) 2+2=5
c) 1+1=2
d) 2+1=3

28. The calculation of ratios from financial data is referred to as

a) Receivables analysis.
b) Ratio analysis.
c) Diversification analysis.
d) S.W.O.T analysis.

29. The first functional areas to be heavily outsourced were

a) R&D and customer service.
b) Customer services and information systems,
c) Finance and manufacturing.
d) Manufacturing and marketing.

30. The leadership style of the person leading an organization would come under which
support activity?
a) Human resource management
b) Technology development
c) Operations Management
d) Customer Relations

31. The ‘operation’ ace to value chain in a passenger airline service would be:
a) Getting passengers and baggage from A to B by means of flying in an aircraft
b) The design of the price structure and yield plan
c) Selling the tickets to passengers
d) The manufacture of the aircraft

32. The primary activities in Porter's Value Chain are:

a) Inbound logistics, operations, outbound logistics, marketing and sales, service
b) procurement, operations, distribution, marketing and sales, service
c) Inbound logistics, operations, distribution, marketing and sales, service
d) Procurement, operations, outbound logistics, marketing and sales, service

33. The resources of an organization can be defined as:

a) Inputs to enable the organization to carry out its activities
b) The activities of the organization
c) Tangible assets
d) Capabilities of the organization

34. The sale of government owned business to private investors in known as

a) Capitalization
b) divestiture
c) Merger
d) Acquisition

35. The strategic marketing process is how an organization allocates its marketing mix
resources to reach its:
a) target markets
b) area of expertise
c) competition
d) stated business ideas

36. The theory that structure follows strategy was developed by

a) Peter Chandler.
b) Alfred Chandler,
c) Michael Chandler.
d) Alfred Porter.

37. The value chain is subdivided into two main headings. These are primary activities and:
a) Support activities
b) Peripheral activities
c) Outsourced activities
d) Chain Activities

38. Toyota has excellent materials handling and inventory control. In terms of the value
chain, this is the activity of:
a) Procurement
b) Firm infrastructure
c) Technology development
d) marketing program

39. Value for shareholders of a firm is measured by:

a) stock performance and profitability
b) sales revenue
c) satisfactory employee targets
d) profitable year-end balance sheet

40. When actual performance results are better than what the plan called for, managers
a) Increase prices.
b) Find creative ways to exploit the situation,
c) Ignore it.
d) Issue more stock options to employees.