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IGNOU MBA MS-91 Free Solved Assignment 2012

Course Code Course Title Assignment Code Coverage

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MS - 91 Advanced Strategic Management MS-91/SEM -I /2012 All Blocks

1. Distinguish between Prescriptive and Descriptive Schools of Thought on Corporate Strategy Formulation. Solution: =============================================================== 2. What is the purpose of Kumar Mangalam Birla Committee Report on Corporate Governance? Also discuss its major recommendations. Solution: The Purpose of Kumar Mangalam Birla Committee Report on Corporate Governance: The primary objective of the committee was to view corporate governance from the perspective of the investors and shareholders and to prepare a Code' to suit th e Indian corporate environment. The committee had identified the Shareholders, the Board of Directors and the Management as the three key constituents of corporate governance and attempted to identify in respect of each of these constituents, their roles and responsibilities as also their rights in the context of good corporate governance. The Committee therefore agreed that the fundamental objective of corporate governance is the "enhancement of shareholder value, keeping in view the interests of other stakeholder". This definition harmonises the need for a company to strike a balance at all times between the need to enhance shareholders wealth whilst not in any way being detrimental to the interests of the other stakeholders in the company. In the opinion of the Committee, the imperative for corporate governance lies not merely in drafting a code of corporate governance, but in practising it. Even now, some companies are following exemplary practices, without the existence of formal guidelines on this subject. Structures and rules are important because they provide a framework, which will encourage and enforce good governance; but alone, these cannot raise the standards of corporate governance. What counts is the way in which these are put to use. The Committee is thus of the firm view, that the best results would be achieved when the companies begin to treat the code not as a mere structure, but as a way of life. It follows that the real onus of achieving the desired level of corporate governance, lies in the proactive initiatives taken by the companies themselves and not in the external measures like breadth and depth of a code or stringency of enforcement of norms. The extent of discipline, transparency and fairness, and the willingness shown by the companies themselves in implementing the Code, will be the crucial factor in achieving the desired confidence of shareholders and other stakeholders and fulfilling the goals of the company

The Recommendations of the Committee

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Mandatory and non-mandatory recommendations The committee divided the recommendations into two categories, namely, mandatory and non- mandatory. The recommendations which are absolutely essential for corporate governance can be defined with precision and which can be enforced through the amendment of the listing agreement could be classified as mandatory. Others, which are either desirable or which may require change of laws, may, for the time being, be classified as nonmandatory. Mandatory Recommendations: Applies To Listed Companies With Paid Up Capital Of Rs. 3 Crore And Above Composition Of Board Of Directors Optimum Combination Of Executive & NonExecutive Directors Audit Committee With 3 Independent Directors With One Having Financial And Accounting Knowledge. Remuneration Committee Board Procedures Atleast 4 Meetings Of The Board In A Year With Maximum Gap Of 4 Months Between 2 Meetings. To Review Operational Plans, Capital Budgets, Quarterly Results, Minutes Of Committee's Meeting.Director Shall Not Be A Member Of More Than 10 Committee And Shall Not Act As Chairman Of More Than 5 Committees Across All Companies Management Discussion And Analysis Report Covering Industry Structure, Opportunities, Threats, Risks, Outlook, Internal Control System Information Sharing With Shareholders Non-Mandatory Recommendations: Role Of Chairman Remuneration Committee Of Board Shareholders' Right For Receiving Half Yearly Financial PerformancePostal Ballot Covering Critical Matters Like Alteration In Memorandum Etc Sale Of Whole Or Substantial Part Of The Undertaking Corporate Restructuring Further Issue Of Capital Venturing Into New Businesses As per the committee, the recommendations should be made applicable to the listed companies, their directors, management, employees and professionals associated with such companies, in accordance with the time table proposed in the schedule given later in this section. Compliance with the code should be both in letter and spirit and should always be in a manner that gives precedence to substance over form. The ultimate responsibility for putting the recommendations into practice lies directly with the board of directors and the management of the company. The recommendations will apply to all the listed private and public sector companies, in accordance with the schedule of implementation. As for listed entities, which are not companies, but body corporates (e.g. private and public sector banks, financial institutions, insurance companies etc.) incorporated under other statutes, the recommendations will apply to the extent that they do not violate their respective statutes, and guidelines or directives issued by the relevant regulatory authorities . The Committee recognizes that compliance with the recommendations would involve restructuring the existing boards of companies. It also recognizes that some companies, especially the smaller ones, may have difficulty in

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immediately complying with these conditions. The recommendations were implemented through Clause 49 of the Listing Agreements, in a phased manner by SEBI.

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3. Explain any five strategies used by a firm in a stable industry environment. Elucidate it with examples from real world. Solution: The five forces model for industry analysis (Porter, 1980) is now a standard tool used by both academics and practitioners when conducting strategic management studies. In the past decade, this competitive positioning approach has been augmented by the resourcebased perspective, which has focused on the accumulation of valuable, knowledge-based assets by individual firms. An integrative synthesis of this work has recently been developed by Teece, Pisano and Shuen (1997) and Teece and Pisano (1998). They have proposed a dynamic capabilities approach as the key to strategy development for the modern business firm. Such an approach focuses on the specific ways in which capabilities are renewed as a response to shifts in the environment relevant to the firm. This new perspective raises two important questions. First, does the standard five forces model adequately include the various actors in the firm's environment to which it must respond, given the complexities of modern business, especially the tendency toward globalization? Second, given the relevant external forces to be included in a strategic positioning analysis, do changes in specific external forces require specific types of shifts in the development and use of dynamic capabilities? In the next sections, a simple conceptual framework is developed that suggests an answer to the above two questions. The relevance of the framework is verified through the analysis of five high profile case studies of corporate strategic responses to environmental regulation, namely the cases of Du Pont, Laidlaw, Allied Signal, Honeywell, McDonalds and Xerox. Environmental regulation demonstrates the necessity to extend the five forces model into at least a five forces model, in which government regulation is included. The five cases were selected as interesting and relevant examples of the need for a shift in firm-level strategy in response to changes arising from specific forces driving industry competition. They also all bring an international dimension to the issue of corporate strategy and environmental regulation. Previous researchers distinguish three main stages of industry growth: (1) growth, (2) maturity, and (3) decline. The business or competitive strategies that help firms to achieve profits are thought to differ under each of these stages.4 The findings of previous research on strategies adopted by large businesses under different growth conditions are summarized in table. For Examples: Anderson and Zeithaml, "Stage of the Product Life Cycle'; Hambrick, et al., "Strategic Attributes'; Hofer, "Toward a Contingency Theory'; and Porter, Competitive Strategy. In growth industries, the overall competitive pressure is limited, and a firm has a comparatively broad range of choices among strategies. Many researchers imply that this is the most hospitable environment in which to operate and earn profits. The "learning curve' is

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a major tool for the large firm to use to gain competitive advantage; hence high market share is often helpful. One interesting result is that while resource efficiencies, product quality, market share, and high levels of future-oriented investments have commonly been employed as strategies in growth industries, they have had little impact on profit performance. =============================================================== 4. Describe the influence of Strategy and Support Mechanisms in promoting or hindering creativity and innovation. Solution: coming soon =============================================================== 5. The term philanthropy is generally understood as giving in the interest of the recipient. Elaborate this statement with special reference to nature of Corporate Philanthropy. Solution: Corporate philanthropy or corporate giving is the act of corporations donating some of their profits, or their resources, to nonprofit organizations. Corporate giving is often handled by the corporation, directly, or it may be done through a company foundation. Corporations most commonly donate cash, but they also donate the use of their facilities, property, services, or advertising support. They may also set up employee volunteer groups that then donate their time. Corporations give to all kinds of nonprofit groups, from education and the arts to human services and the environment. Our companies are known for creating products that enrich people's lives. Through Sony Corporation of America and its operating companies - Sony Electronics Inc., Sony Pictures Entertainment Inc. and Sony Music Entertainment - we are also dedicated to improving people's lives. Our commitment extends to helping local communities, fostering better educational systems, funding research to cure devastating diseases, supporting the arts and culture, helping disadvantaged youth, protecting and improving the environment and actively encouraging employee volunteerism. Our philanthropic efforts reflect the diverse interests of our key businesses and focus on several distinct areas: arts education; arts and culture; health and human services; civic and community outreach; education; the environment; and volunteerism. Each operating company has its own philanthropic priorities and unique resources, from product donations to recordings and screenings that benefit a multitude of causes. Sony Corporation of America is a strong supporter of arts and culture. Education and volunteerism are key components of Sony Electronics Inc.'s philanthropic efforts. Sony Pictures Entertainment is a major supporter of arts education and community involvement, with emphasis in Culver City, California, its world headquarters. Collectively, we have also been quick to provide assistance when large-scale disasters have struck. We've helped victims of major hurricanes, earthquakes, wildfires and the attack on the World Trade Center. The spirit of philanthropy is deeply imbedded in the culture of Sony in America. We're proud of the dozens of programs and partnerships that have touched thousands of lives in all corners of the country and fill the pages of this brochure. Our 20,000 employees have responded positively to this spirit and

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have given generously of themselves. They've collected food for the hungry, built homes for the poor, cleaned polluted waterways, mentored the disadvantaged and helped in countless other ways that are detailed in the following pages. Together with our employees, Sony in America is working to improve our communities and the world around us. ===============================================================

6. Write short notes on the following: a) Transnational Strategy Solution: The firm seeks to combine the benefits of global-scale efficiencies with the benefits of local responsiveness. Interchange still occurs between the home base and foreign subsidiary and between foreign subsidiaries - a process known as global learning.
Advantages: Core competencies exchangeable. Experience and location economies. Locally responsive. Difficult to implement. The term transnational may be used differently from person to person. There is no universally agreed definition. Shell, Unilever, Caterpillar.

Disadvantages:

Examples:

No strategy of the four mentioned is likely to provide the perfect response to the many variables which confront an MNE. However, the firm must search for the best compromise. Turn now to your textbook and then take some time to work through the placement of each strategy in Figure 12.6 on page 428. An application of international strategy decisions for the global automotive industry is also included in the readings. =============================================================== b) Personalized Recognition Solution: In order to personalize recognition as a leader, you need to know your employees. The two biggest leadership barriers to this are limits to time and organizational skills. In a 24/7 business environment with large spans of control, it is increasingly challenging for leaders to develop personal face time with their direct reports. Organizational skills are therefore required to develop a system to keep track of significant information about each person. The biggest cultural barrier is when an organization does not hardwire managing up as a key recognition principle.

Why is it important to do anyway?

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Again, the goal of employee recognition is to show appreciation for an employees achievement and motivate employees to continue with good performance. When you personalize this recognition, it is a win-win for both the employee and you as their leader. For the employee, when the recognition is personalized it is more specific to the actual event or performance occurrence and therefore more apt to be repeated. For the leader, you earn credibility. Personalized recognition demonstrates that you have taken the time to know the employee and that you pay attention to their work.

How can you do it?

Round with your employees. You must have a system in place for you to get to know your employees. Most leaders participate in operational rounding every day and spend a great deal of time troubleshooting problems. This is not the same as rounding with your employees. Develop a system by which you check-in regularly with your employees. Learn whats going on with them personally and professionally. Ascertain any nuggets of information that will assist you in personalizing recognition. Encourage managed up information about performance. You cannot be in all places at once, so you need to rely on others to share with you when employees demonstrate excellent performance. Ask employees about excellence demonstrated by their coworkers; ask your assistant managers or supervisors to send you specific information about employees performing excellence. When you recognize your employee, reference the co-worker and/or manager you received the information from. Another win-win. Write personal thank you notes to the employees homes. Probably the most important todo of personalized recognition is to translate the above information into a handwritten, personalized thank you note. In todays world of tweets, texts, and email a handwritten thank you note is a treasure. Be as specific about the excellent behavior observed as possible, and thank them for making a difference in your organization. Send the note to their home. This manages up the employee to their family. You will be amazed at how powerful and memorable your kind words of recognition will be. ===============================================================

c) Corporate Citizenship Solution: Corporate citizenship is a term used to describe a company's role in, or responsibilities towards society. For this reason it is sometimes used interchangeably with corporate social responsibility, and in fact many companies including Microsoft, IBM and Novartis have used it in this way to describe their social initiatives. However, many also take it to mean that corporations should be regarded as citizens within a territory - i.e. that corporations have citizenship of some sort. This is usually based on the principle of corporate personhood, in that in certain legal jurisdictions, such as the United States, companies are

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afforded some of the same legal rights as individuals. Therefore, if corporations are 'artificial persons' under the law (e.g. they own their own assets, they can sue and be sued etc), then they can also claim some of the entitlements, privileges and protections of citizenship such as rights to free speech and political participation. Although this debate remains very active (see legal controversies below), a more recent approach to corporate citizenship has also stressed the political role of corporations in protecting or inhibiting the citizenship rights of individuals (such as by taking over previously governmental roles and functions)b or direct political activity such as lobbying and party financing ================================================================== ================================================================== ==================================================================