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MS-11   June, 2008

MS-11 : STRATEGIC MANAGEMENT

1. (a) Discuss the different levels of strategy. Illustrate your answer with suitable examples

(b) Assume that you are the chief strategist

for an organization. As a strategist discuss the importance of strategy framework for your organization

2. Briefly discuss the concept and relevance of Porter's five forces framework

3. (a) 'Differentiation is normally costly.' Critically comment on this statement giving examples.

(b) Explain in brief the advantages and disadvantages of differentiation strategy.

Give suitable examples.

4(a) What is the rationale behind diversification ? Explain giving examples.

(b) what are the different ways to implement diversification strategies ? Give examples.

5. Briefly explain BCG's growth-share matrix in the context of Business portfolio Analysis.

6. Assume that you are the CEO of a commercial airline. The airline has a long-standing history in the airline industry but now it has to compete with the low-cost strategy of competing airlines.. Describe an appropriate organizational culture for your company so that it is able to maintain its position in the market.

7.Select a public library, which has now decided to serve its constituents and stakeholders even better. From your experience, delermine how the library should formulate and implement an effective strategy to improve its performance.

MS-11   June, 2009

MS-11 : STRATEGIC MANAGEMENT

1. a) What do you understand by a mission statement' ? Give two examples of

organizations having a well-formulated 'mission statement'.

(b) Suppose an organization does not have a well stated mission statement. Explain how will the firm be affected ? What is your opinion on the characteristics of Good Mission Statement ?

2. Take the example of Telecom industry and critically evaluate the impact of Porter's Five Forces that drive competition in that industry.

3. How does an organization expand by applying an 'integration strategy' ? Discuss keeping in mind the vertical and horizontal integration. Give Suitable examples.

4 a)   Discuss how 'corporate culture influences the behaviour of the employees in the organisation. Illustrate with the help of examples.

(b) How manager as a header taking Corporate Culture into account handles people

effectively ? Explain.

5. Write short notes on any two of the following :

a) Balanced Score Card

b) Leadership in Indian context

c) Differentiation Strategy

d) Ansoff's product-market expansion grid

6. Read and analyze the case nnd finswer the questions given at the end.

Dell Computers aims to stretch its way of business In an interview with the Financial Times in November 2003, Kevin Rollins, the CEO of Dell Computers, explained how he was putting his job on the line by leading a major strategic change in the company.

The US company famous for selling PCs is planning a big push into consumer electronics. If things go according to plan, Michael Dell could eventually become the Henry Ford of the information age

For a maker of desktop personal computers who founded his company, famously, in a University of Taxas dormitory 20 years ago, this may sound unlikely. But the ambitions of Dell Inc are boundless and thanks to a simple business idea that has proved highly adaptable, and a fearsome relentlessness... Consumer electronics

are about to proaide what could well be the biggest test of the Dell way of doing business. Until now, the company has sold mainly to corporate customers : only a fifth of its sales in the US are to consumers, and much less than that elsewhere.

...Dell's simple but effective idea has been to sell standardised electronic products direct to customers, usually over the internet. That removes most of the research and development that is normally required, while also cutting out retailers and other middlemen. Armed with the information it gets from taking orders directly from customers. Dell has gained two other powerful advantages. One is the ability to build products to match orders as they come in, slashing its inventory costs. The second is a highly efficient marketing machine that can adapt its message based on real-time results as orders arrive.' With its lower costs, Dell sets out to undermine profits in the markets it enters and destroy the margins that sustain its more entrenched competitors.

'Our goal is to shrink the profit pool and take the biggest slice,' says Mr Rollins. Consumer electronics companies, often with gross profit margins of more than 30 per cent, make an obvious target for this ruthless approach. 'Our gross marigins are in the L8-19 per cent range : we don't need 40 per cent' he says. A former partner from Bain (management consultants), the Dell president applies the cool analystics and familiar jargon of the strategy consultant to this relentless expansion : search out the markets with the biggest 'profit pools' to be plundered; pick ones with close

'adjacencies' to those DeIl already serves to reduce the risk of wandering into unknown territory; and apply its .'core competences' to conquering new ground. As

a textbook case of applying a proven and repeatable formula, Dell takes some beating. It used the formula to move from selling PCs to businesses to selling them to consumers. Next it followed its businesses customers into servers, then into storage hardware. Now it wants to follow consumers into other areas of electronics as well. Lt has started with products closely linked to the PC. Such as MP3 digital music players and l-7-inch flat-panel television sets that resemble computer monitors. According to Dell’s rivals, success in the PC business in the US has disguised the fact that the company has found it harder to break into other products and new geogaphic regions.

'Dell's success is backward-looking' , claims Jeff Clarke, head of global operations at Hewlett-Packard. According to Steve Milunovich, technology strategist at Merrill Lynch, not all markets are as susceptible to all aspects of the Dell approach as the PC business. Yet he adds that the company has shown great discipline in attacking only those areas where its strengths still give it a clear economic and operational advantage.

   Even most of the company's competitors concede that the shift in consumer electronics from analogue to digital technology plays to Dell's strengths. It is already the biggest purchaser of Iiquid crystal display screens and computer hard-drives, for instance, putting it in a strong position as these components come to play a bigger role in television sets and other household items.

When you combine monitors and LCD televisions, we will blow away the consumer electronics grys,'says Mike George, chief marketing officer. More importantly, Dell also benefits from the standardisation that brings down the cost of components and removes the advantage once enjoyed by companies that invest in their own technology. As more of a product's functions come to reside in standardized components such as microprocessors and hard drives, the differentiation that comes from making new versions declines The contrast with others is stark. Sony chief Nobuyuki ldei, for instance, told the FT that the Japanese company was putting a growing emphasis on proprietary components to differentiate its products. In the past four years, 70 per cent of Sony's investment has been in

silicon chips. While the digitisation of consumer electronics may have played to Dell's core strengths, though, there are at least three things about the market that are likely to test its business model. One is the fact that it will rely, at least for now/ on manufacturing by other companies,

reducing its ability to drive down costs. Also, the consumer electronics business is based on comrnon products that are not configured individually for different customers : according to Mr Clarke, that removes one main advantages of Dell's build-to-order model, the ability to customise products for each buyer. Using outside manufacturers is also likely to mean the company 'will not be able to operate on inventory that is as thin as it is in PCs,' says Charlie Kim, a consultant at Bain. Company executives suggest that once manufacturing volumes reach a high enough level, Dell is likely to start production itself. Also, while the cost advantages may be less in 'back-end' activities such as production and sourcing, the real opportunity for Dell in consumer electronics lies in the 'front-end' marketing and sales area, says Mr. Milunovich. 'There's a big chunk of money to be taken out of distribution' he says.

Whether Dell can take advantage of this opportunity with its direct sales system will be the second big challenge. Retail stores suit consumer products best because they bring an instant mass market and let users test the look and feel of products, says Mr Clarke. That is particularly important for products such as television sets, which buyers want to see, or handheld devices, which they want to pick up, say rivals.

   Dell executives retort that similar doubts were once expressed about its efforts to sell PCs online, and that its early sales of personal digital assistants suggest that consumers familiar with the quality and style of the company's PCs are willing to buy other items online too. The third test will be whether the Dell brand and marketing approach can be adapted to suit the new market. High name-recognition helps, but will get Dell only part of the way. 'Everyone knows who Dell is-but it's still a PC-focused brantd,' says Mr Kim at Bain. For a company that still relies heavily on selling to corporate customers this will pose a big challenge. 'I,we're very humbled by the fact that there are virtually no other companies that are both consumer and enterprise brands,' says Mr. George. He adds, though, that the basic attributes of the Dell brand-with its connotations of a certain level of value, quality and service-should extend across both types of market. Overcoming obstacles such as these will stretch the Dell model in ways that it has never been stretched before.

Questions

(a) why were the issues facing Dell Computers described as strategic ?

(b) Identify examples of issues that fit each of the different levels of strategy ?

MS-11   June, 2010

MS-11 : STRATEGIC MANAGEMENT

1. Explain the process of strategy formulation. Illustrate your answer with the help of examples.

2. Explain different types of resources involved in Internal Analysis and discuss their strategic importance. Also explain the relationship between resources, competencies and competitive advantage with suitable examples.

3. Discuss various techniques used in strategic control systems. Analyse the importance of each giving examples.

4(a) What do you understand by 'survival strategy' ? Discuss its various types and explain them with the help of suitable examples.

(b) Explain the Retrenchment Strategy as a Strategic Alternative with suitable examples.

5. Write short notes on :

a) Hofer's Product/Market Evolution. Matrix

b) Shell's Directional Policy Matrix

Case study

6. What are Mergers and Acquisitions as a part of Strategic Alliance ? Discuss

the concept in the light of the case given above ?

7. How Mergers and Acquisition helped the organisation in becoming global leaders ? Discuss.

MS-11   June, 2011

MS-11 : STRATEGIC MANAGEMENT

1. What are the different steps involved in the implementation of strategy ? Discuss each of them in brief giving examples.

2. Explain the concept of Critical Success Factors (CSFs). Take a firm of your choice, which is into consumer durables. Select any two products the firm manufactures and list out the critical success factors that are important for tleP.- firm's success.

3. (a) Explain in brief different types of differentiation, giving examples.

(b) Explain the difference between a niche - low cost - differentiation strategy and a

low-cost differentiation strategy. Support your answer with the help of examples.

4. Differentiate between Vertical integration and Horizontal integration under which   conditions each would be advisable ? Discuss.

5. Write short notes on any two.

(a) GE's strategic business planning grid

(b) Mission and vision

(c) Global Product structure

(d) Balanced Score Card (BSC)

6. Read the following illustrations and answer the questions given at the end.

Culture and strategy

Newspapers are about news

the top management team of a newspaper business had spent the morning in small groups analysing the changes in the business environment they faced. They concluded that they faced many major challenges, including changing demographics, electronic media and the growth in free newspapers. Also over 70 percent of their revenue was from the sale of advertising space rather than the newspaper itself. Indeed there seemed

to be so many threats that one group decided that ' the end of the world is night'

In the afternoon they turned their attention to the future strategy of the organisation. This quickly became a series of proposals about how they could improve the coverage of news and sport and the physical presentation of the newspaper itself.

One of the younger members of the team suggested that they might consider a more fundamental question '.... whether we are really in the news business or if we are an advertising medium ?' He was met with astonished silence from his colleagues.

So, in the morning, these managers were quite able to undertake a 'rational' analysis which raised questions about the traditional role of a newspaper. But, in the same afternoon, when it came to what they should do, the paradigm 'newspapers are about news' drove their thinking.

IKEA

In the mid - 2000s the Swedish company IKEA was the leader in the European 'flat-pack' householder furniture business. It had a presence in some 30 countries and was famous for its good -quality products marketed at low prices. This had been achieved

by the vision of the founder, Ingvar Kamprad, and an almost obsessive attention to every item that would add to cost -so much so that cost reduction became ingrained in the company culture. Kampard himself drove an old Volvo and bought fruit and vegetables in the afternoons at markets when they were cheap. IKEA staff always travelled economy class and took buses not taxis. There were wall stickers urging staff to turn off lights, taps and computers. There were prizes for the store or office that saved most electricity.

Cross-border mergers

French and British companies approach business in different ways -strongly shaped by

the different national cultures. This can be an important impediment to successful mergers unless managers are aware of these differences and able to manage their impact

within the merged companies. The impact of national culture is seen in the day -to -day ways that companies function. The French are much more committed to rational, analytical approaches to decision making whereas the British tend to get straight to the point and rely more on 'gut feel'. Meetings in France are held mainly to rubber stamp what has already been decided by 'the boss'. The British expect to go to meetings to influence decisions. The membership of meetings tends to reflect these different purposes. The French have more people involved - since it is part of the education and communication process. In Britain the membership is usually confined to those who have a 'right' to influence the decision.

Questions

(a) For each of the three illustrations make lists of advantages and disadvantages of the (four) corporate cultures described.

(b) Imagine that you work for a French company that is considering a merger with a British company. Write a short executive report to your CEO listing the cultural clashes that might arise and how they could be handled.

MS-11   Dec, 2007

MS-11 : STRATEGIC MANAGEMENT

1. Identify an organization of your choice. Explain how technological and economic forces can present opportunity as well as a threat to the organization..

2. Diflerentiate between a business level strategy and corporate level strategy. Illustrate your answer with the help of an example and its relevance in the present context.

3. Explain the various steps involved in the Merger and Acquisition deals. Give suitable examples.

4. Explain the methods and techniques used in strategic control systems. Support your answer with examples.

5. a) What are the major factors, which are necessary to match the structure of the organization with the needs of the strategy ?

b) Why is it necessary for the top management in a business organization to match the structure to the strategy ?

6. Assume that you and your friend are investors and wish to start a restaurant in the same city. You wish to cater to family food needs, whereas your friend wishes to cater to the needs of people who pref.er specialized foods like continental, with nice surroundings. It is clear that both the businesses will need different functional strategies. How would you suggest the planning and implementation of functional strategy for each restaurant ?

7. Assume. that you wish to open a bookstore close to your campus. You have already conducted the market research to assess the need for a bookstore. Assume that you belleve that any of the two generic strategies could be' successful for the bookstore : niche low-cost strategy and niche-differentiation strategy. Answer the following for both the strategies separately.

(a) What type of physical store should you create ?

(b) What kind of books would you have as the inventory of the bookstore ?

(c) What kind of in-store services would you provide to customers ?

MS-11   Dec, 2008

MS-11 : STRATEGIC MANAGEMENT

1.a) Strategy making requires personwith vision, while strategy implementation requires a person with administrative ability. Critically comment on the statement with respect to implementation of strategy.

(b) Explain the importance of evaluation and control in strategy making process.

2. Explain Critical Success Factors (CSF) and value chain framework as a guide to analyse a firm's strengths and weaknesses.

3.Focus is different from other business strategies'. Explain, how Focus Strategy is different from other business strategies giving examples.

4. Discuss the important issues involved in turnaround strategy. Support your answer with example.

5. a)   What do you understand by Strategic Control Process ?

(b) Briefly explain different methods of control.

6. Think of an organization, which is using a corporate growth strategy :

(i) Analyze as to how the organization's strategy has influenced its structure.

(ii) Looking at the present trends, is its current structure the optimal structure for this enterprise ? Discuss.

7. Select a company, which is well-known in the automobile sector. From your

understanding of the PESTLE framework, identify different opportunities and threats

for the following:

- political

- legal

- economical

-technological and

- social forces

MS-11   Dec, 2009

MS-11 : STRATEGIC MANAGEMENT

1. Briefly discuss two important changes in the Indian Business Environment in each of the following areas giving examples.

—Economic

-   Social

—Political

---Technological

2. Explain the different levels of strategy. Discuss the importance of strategy for an organisation.

3. What are Mergers and Acquisitions as a part of diversification strategy ? Discuss the different forms of Mergers with suitable examples. Give five reasons of Merger and Acquisition Strategy

4. Critically discuss the perspectives on strategy and structure with respect to :

a) Porter's Perspective

b) Peter and Waterman's Perspective

5. Write short notes on any two of the following :

a) Leadership styles

b) Diversification

c) Experience curve

d) Mckinsey's 7s framework

6. Read the analyse the case and answer the questions given at the end.

The mobile phone industry

Competitive rivalry

By 2004 the competitive rivalry between network operators was becoming intense in most countries. In the UK numerous different packages were on offer. Initially if a customer threatened to withdraw, operators would offer a new free phone and several free months of line rental as an enticement to stay. However, as markets matured, emphasis was placed on price, coverage, general customer service and the offering of new products and services (with the advent of 3G technology).

Buying power

Buying power of consumers was high as they had so much choice. The danger for providers was confusing potential customers with over-complex offers. Independent retailers (e.g. in the UK Carphone Warehouse) competed with those owned by network operators (e.g. Vodafone). Others offered cheaper deals through newspaper adverts and the internet.

Power of suppliers

Equipment manufacturers competed for market share. Prior to 3G launch the big manufacturers-

Nokia, Motorola and Ericsson - had concerns about market saturation. Supplier power was increasing as their sector consolidated through alliances (such as 'Casio and Hitachi in 2003). Network operators could be held back by supply difficulties as with the Hutchison (3-UK) launch of 3G services in 2003/4.

Threat of substitutes

In the 1990s the main threat of substitution was 'technological regression' where customers returned to fixed-line telephony because of high mobile call charges. By 2000 price decreases and the 'need' for everyone to have a mobile phone reduced this threat. By 2004 the greatest threat was the convergence of mobile telephony with PDAs (Personal Digital Assistants) and with the internet (e.g. MSN Messenger). This could switch both voice and text messaging onto the internet -avoiding mobile phone operator networks.

Location technology in mobile phones (making the caller easy to find) might encourage this 'drift'.

Threat of entry

The threat of entrants was low because of the enormous cost in both licences (-E22bn (€33bn) in the UK alone) and in the general investment needed to be a player in new 3G (broadband) technology.. Power was a function of who was ahead of the game in 3G and had the licences to operate a service. There was only a threat of entrants if public policy towards this heavy regulation of the sector changed in future.

Questions :

Viewing this industry through the eyes of a network operator (such as Vodaphone).

1. Which would you regard as the three most important threats to your business ?

2. How could you respond to each of these to lessen their impact ?

3. Answer questions 1 and 2 for an equipment manufacturer - such as Nokia.

4. What are the main benefits and limitations of five forces analysis ?

MS-11   Dec, 2010

MS-11 : STRATEGIC MANAGEMENT

1. Briefly discuss the process of strategy

(a) for a Single Business Unit (SBU)

(b) for a Multiple Business Units. Illustrate your answer with the help of examples.

2. 'Technological factors represent major opportunities and threats which must be taken into account while formulating strategies. Critically comment on the statement keeping in mind the technological advances in the field of agriculture. Also explain how these advances have affected in tapping the opportunities available overseas.

3. Explain the relationship between corporate level strategy, business unit strategy and functional strategy. How are these strategies different from each other ? Explain with the help of examples.

4. Briefly explain 'Ansoff's Product Market Expansion Grid', as a useful tool in discovering growth opportunities.

5. Write short notes on any two of the following:

(a) Shell's Directional Policy Matrix

(b) Mother - Daughter Type structure

(c) Business Portfolio Analyks

(d) Strategic Alliances.

6. Read the following illustration and answer the questions given at the end :     Agility through outsourcing with British Telecom

British Telecom (BT) promotes its outsourcing business with the strap-line 'Agility

through Outsourcing'. Many organisations both in the public and private sector have reviewed their internal processes and found that they lack the necessary resources to meet the increasing challenges put on them by changing demands of their customers... They have turned to companies whose core competences fill the gaps in their internal structure. They hand over the running of whole business functions, such as payroll or training, gaining the expertise they need to meet that step change requirement forced on them by the expectations of their customers, but at a predictable cost.

BT offers its clients the opportunity to outsource its information, communication and technology (ICT) functions to provide them with 'freedom from technology' : Making an investment in technology requires a great deal of expert knowledge to ensure that it becomes an enabler for business rather than a barrier to it. Often organisations find they don't have that expertise in - house. The solution is either buying that expertise in, further raising the level of investment, or handing over the responsibility of managing their ICT systems to a third party like BT that has the relevant skills at its core.

BT has such skills, it argues, because in its own transformation from a public sector organisation to a private company, it placed ICT processes and management at its core, reducing its own cost base and focusing on competitive advantage and customer care by aligning its people, processes and technology. The result is that it believes it can offer a:

Totally integrated approach to IT infrastructure, software systems and applications which enables us to manage more effectively on behalf of our customers... BT can take some or all of the operational responsibility on behalf of the clients' ICT departments.

We are able to provide a customised communication service that involves taking over the customer's existing network, including services from other carriers. All solutions are tailored to meet the specialised needs of each customer... our services will go to the extent of transferring assets including staffing resources. We buy the assets from our customers that we need to serve their top technology needs. As a result they get a capital injection by removing those assets from the balance sheet... these organisations can then plough the money they saved into products that benefit their core competences, focused on giving a high quality service to their customers.

   BT suggests further benefits to potential clients. Its services : Greatly benefit organisations that have a specific process or service, which depends greatly on leading edge technology, but for which there is little in-house expertise. The benefits include :

• Achieving costs savings and predictable costs, improving piece of mind through reduced risk.

• Gain access to funds which otherwise would not be available for potential large scale projects.

• Reduce the risk of business change by involving economies of scale from BT.

• Increased agility to reach new markets or new geographies.

• Increased agility to change your business in line with changes in the environment.

• Take advantage of access to resources in expertise not available internally.

• Improve access to technology, innovation and scarce technical skills.

• Reduce management overheads and supplier interfaces.

• Achieve productivity gains leading to lower costs.

Questions :

(1) Other than ICT, what other areas of business operations might benefit from outsourcing ? Specify some of the benefits that might be gained.

(2) Given the benefits stated in this illustration why might businesses choose to keep their ICT or other business operations in-house ? Explain.

MS-11   Dec, 2011

MS-11 : STRATEGIC MANAGEMENT

1. Distinguish between

(a) Strategy v/s Policies

(b) Strategy v/s Tactics and explain giving examples.

2.   How does the value chain framework work as a guide to any firm's strengths and weaknesses? Give examples in support of your answer.

3. (a) Discuss the cost of differentiation under following leads :

(i) Training.

(ii) Promotion of a product.

(iii) Hiring skilled workforce.

(iv) I mproving quality of the product.

(b) Discuss the Advantages and Disadvantages of Differentiation.

4. ' An organization can "go international" by crossing domestic borders as it employs various growth stratagies'. Keeping the statement in mind explain various ways through which a firm can expand internationally. Give examples in support of your answer.

5. What are the different methods of control ? Discuss them in brief giving examples.

6. Read The following case and answer the questions given at the end.

Abhinav Kumar never failed to enjoy his company's establishment-day jamboree. That was one time in the year when his company, Total Industries, really splurged on its employees. Assistant managers and about 122 of them-would be flown into Mumbai from all the branch offices, and lodged in hotels for 2 days.

The get-together cost the company Rs. 50 lakhs, but Kumar knew it was a small price to pay for the credibility it generated. After all, Total was no longer the textile peddling, one-man outfit his grandfather had founded back in 1927. Rather, it was a Rs. 6,000 crores plus conglomerate with interest in consumer electronics, switchgears, batteries, soaps and oils.

Being a largely family managed company, Total is likely to be perceived as a benevolent

employer. Today, watching is employees come together. like a big family, Kumar felt proud about his grand-father and father. He turned his gaze to where his father was sitting, 2 tables away to his right, chatting animatedly with Srikant Suresh, President (Consumer Durables Division). In another 5 minutes, Kumar Senior would be up on the dais, making his annual address to the empolyees. Kumar knew what his father would be talking about. They had discussed it over dinner last night. Ratika Sahai, the young President (Batteries), took the microphone as soon as the evening's last item, a dance recital, came to an end. "Thank you Rachana for your wonderful performance. Ladies and Gentlemen, before we wrap up this evening. I would like to invite our Chairman to the dais for his customary address". Amidst loud applause, Deepak made his way to the dais.

"I hope all of you had a good time over the last 2 days. Although this is only our fourth get-together in as many years, I feel a tremendous sense of belonging. I hope you feel the same because, as a company, we will prosper only when all of us contribute our

best".

Total Vision 2010'

To become a market-leader in each of the four business segments by ensuring total

quality, customer satisfaction, and continuous innovation.

"As I see it, " Deepak continued," the challenges before us are many. We need to become a more efficient company. We need to become more cost-competitive. Our products need to be of better quality, and we need to become more customer-friendly. The business environment today is vastly different from what it was when I joined Total. Unless we regularly re-vitalise the organization, change our mindsets, and revisit our basics, we cannot be competitive. What kind of company should Total be in another decade?"

For about half a minute nobody replied. Then, Manoj Kohli, the President of the switchgears division, stood up to answer the question. "Probably the largest company in the country", he said.

"Certainly the largest company, Manoj, but also the market-leader in all the segments we choose to be in", Deepak elaborated. "Do all of you feel that way ?" he threw the question at the audience.

"Yes," pat came the chorus.

"Let's keep that in mind when we return to our jobs tomorrow morning, and work towards making it happen. Once again, thank you all for being here, and I hope it was worth your while," Deepak said concluding his address. Kumar met up with his father near the exit, "Sir can you give me a ride back home," he asked. Kumar always "Sir-ed" his father in front of other executives.

"What happened to your car ?"

" I have it but I want to talk to you".

Deepak gave him a quizzical look but did not say anything. After saying good bye to his departing colleagues, Abhinav joined his father who was already seated in the car.

"So, what do think dad? Did it go off well ?"

"Of course, it did. Do you have any doubts?"

"Not about the party but something did strike me as odd."

"What ?" Deepak asked, his curiosity piqued.

"Remember when you asked what kind of a company Total should be in another 10 years?"

"Yes, What about it ?"

Didn't it strike you as odd that there was a long silence before Manoj replied ?

"I think they were hesitant. It's not everyday that I ask them a question like that."

"They were hesitant, dad, but not because they were shy. Don't you realize they don't know what we want Total to be ?rThey do not know what our vision for Total is."

"Bah ...don't give me your management jargon. I don't care if they don't know of our

"vision". We have done perfectly well over the last 73 years without your 'vision' thing," Deepak scoffed.

"Those days, our executives just took orders from you and grandpa. But, today we are asking them to act like profit-centres: Don't you think having a common vision which

everybody knows about will help ?"

"Do you think Total got to where it is today without a vision ?"

"No. But the vision is locked up inside the heads of people like you, me, and our top executives. We have not discussed its contours and documented a formal statement".

"I don't know' Abhi, I would still trust my gut feel than go by some fancy vision

statement. It looks good hanging from your office wall".

"No, dad," Abhinav persisted. "It's just like you and I having our breakfast or dinner

talks. Only, this time it will be communicated to all the employees in the company".

"I don't feel comfortable about your management mumbo-jumbo. But we will do it

anyway".

The car pulled into the drive-way of their sprawling mansion.

"Thanks, dad. Eventually, you'll see that it works."

"I hope so, Good night, son". Next morning, Abhinav asked his four presidents-Srikant

Suresh of Durables, Manoj Kohli of Switchgears, Guneen Roy of soaps and oils, and

Ratika Sahai of Batteries-to join him in the conference room. Without much ado, he

got to the point as soon as the meeting began.

"Tell me something frankly. Do you think Total has a vision where it wants to go?"

His audience of 4 was momentarily taken aback by the question. They looked at each

other, before Guneen replied : "Of course, aren't all of us committed to making Total

the best company in the industry?"

There are two things involved here, Guneen. One, only you and I seem to know where

Total is headed. And two, even we see the final goal differently. We have been so

caught up with our day-to-day operations that we haven't articulated the big picture".

"You are right, "Kohli said.

"But how do you develop a vision, for a company that is as diversified as ours ?"

Questioned Ratika. "Should we find a common thread that runs across all our businesses and build the vision around it, or develop separate vision statement for each of them?"

"I think the unit-specific vision would make sense provided we were to spin off our divisions into separate companies, "Guneen said... "Given our current position, we should identify the unique set of skills that straddles the 4 divisions".

"In fact, I do see some common characteristics," said Kumar "One, our businesses are volume-driven. Two, the sales are largely dealer-led. Three, our products cater to the mass market, and they are sold on the economy plank. So, what is the core proposition

that binds them all ? Obviously, it is value-for-money. So, should our vision be built

around this proposition ?"

It's my sense that we should," Kohli said "Look at our market shares. In refrigerators, we have 1/5 th of the market; it's 23 percent in switchgears, and 17 percent in CTVs.

Our market share in batteries is modest because it's a relatively new business for us. Of course, soaps and oils is a legacy business, which Guneen is trying hard to turn around".

I feel that connected to the issue of vision is also the question of strategy," Ratika noted.

"It must make a fit with the vision."

"I think this is what we should do", Kumar opined. "As a first step, do an in-house vision poll to find out what our people feel about it. We'll work on the strategy thereafter."

It took Total about 2 months to finish the in-house poll. The results were revealing.

There was a stark absence of vision awareness below the middle-management level. In fact, the clerical cadre was not even sure that Total had a vision.

"This is scary, dad," Kumar had told his father the evening the poll results came in.

"But do you think all our employees are capable of understanding the complexities of the business ?" his father had asked.

"May be not, but they'll appreciate transparency. And if we keep our vision simple-not simplistic, though I don't see why they won't buy it".

"I have my reservations, Abhi. Can we develop a meaningful, shareable vision for all our businesses ? How should the vision be put across, and how should we manage the mechanics of developing this vision without trivialising what we have toiled to build over the years, or scaring our employees away with too high a vision ?"

QUESTIONS :

(a) What should be the basis of the vision statement of Total Industries: Value for money or anything else ? Explain clearly.

(b) How can Total Industries develop a meaningful shareable vision for all its businesses ?

(c) Is it possible for Total Industries to develop the vision statement through active employee involvement and participation ? If yes, outline the steps in a sequential way.

(d) What are the dangers of building a vision statement through a bottom-up process ?

MS-10   june, 2007

MS-10 : ORGANISATIONAL DESIGN, DEVELOPMENT AND CHANGE

1.Distinguish between the Functional and Product organisation and Une & Staff organisation. List out their merits and demerits with examples.

2. Describe the skills required for becoming a successful change agent and briefly discuss the role of a change agent.

3. Briefly describe the erherging trends in work organization and discuss how they affect the quality of work life of employees, with suitable examples.

4. Describe the meaning and purpose of job design and various approaches to job design and their relevance.

5. Write short notes on any threeof the following :

(i) Inverted pyramid structure

(ii) Intervidru as a diagnostic tool

(iii) Organisation vs. institution

(iv) T-Group training

v)Mechanistic vs. Organic organization

6. Read the following case carefully and answer the questions given at the end :

If lean and mean could be personified, Percy Barnevik would walk through thr door a thin bearded swede Barnevik is Europe's leading hatchet man. He is also the creator of what is fast becoming the most successful cross-border merger since Royal Dutch Petroleum linked up with Britain's Shell in 1907.

In four years, Barnevik, 51, has welded ASEA, a Swedish engineering group, to Brown Boveri, a Swiss competitor, bolted on 7 more companies in Europe and the [J.S., and created ABB, a global electrical equipment giant that is bigger than Westinghouse and can go head to head with GE. It is a world leader in high-i peed trains, robotics, and environmental control.

To make this monster dance, Barnevik cut more than one in five jobs, closed dozens of factories, and decimated headquarters staffs around Europe and the [J.S. Whole businesses were shifted from one country to another. He created a corps of just

25 global managers to lead 21,000 employees. IBM has talked with Bamevik and his team. about how to pare down its own overstaffed bureaucracy. Du Pont recently put Barnevik on its board. Says a senior executive at Mitsubishi Heavy Industries :

"They're as aggressive as we are, I mean this as a compliment. They are sort of super-Japanese." ABB isn't Japanese, nor is it Swiss or Swedish. It is multinational without a national identity, though its mailing address is in Zurich. The company's 13 top managers hold frequent meetings in different countries. Since they share no common first language, they speak only English, a foreign tongue to all but one. Like their boss, senior ABB managers are short on sentiment and long on commitment. An oil portrait of a l9th-century founder of Brown Boveri hangs in ABB's headquarters, but few are sure what his name is. (lt's Charles Brown.) Ask for a fax number, though, and you're likely to get two, office and home.

To Barnevik, today's competitive market economy is a "cruel world". Not making it any kinder, he has launched a personal war on what he sees as excess capacity

- 2% to 3% in the electrical equipment industry in Europe alone. Educated in Sweden and the U.S. (he studied Business Administration and Computer Science at

Stanford in the mid-1960s), Barnevik thinks European industry must be restructured massively to become competitive in world markets. He foresees billions of dollars of mergers and acquisitions in the next three to five years. Europe's best strategy against the Americans and Japanese, he national markets. believes; is to break free of, protected

Before the merger, Brown Boveri had 4 people in Baden, Switzerland. ASEA had as nrqny as 2, in Vasteros, Sweden. The combined company now employs just 15 in a modest six-storey building across from a train station in west Zurich. Where did everybody go ? Many were fired. The rest were sent to subsidiaries or off ered jobs in new companies set up to assume rnany headquarters functions. (ABB Marketing Services, for exarnple, creates. and mns and campaigns for ABB, but

. also takes on a few other clients. And Bamevik expects it to make money.) It's not just cost cutting Barnevik is after, though that is obviously irnportant. Says he : "ldeally you should have a minimum of staff to disturb the operating people and prevent them from doing their more importdnt jobs. "

Bamevik's master matrix gives all employees a country manager and a business sector manager. The country managers run traditional, national companies with local boards of directors, including eminent outsiders. ABB has about 2 such managers, most of them citizens of the country in which they work. Of more exalted rank are 65 global managers who are organized into eight segments : transportation, process automation and' engineering, environmental devices, financial services electrical equipment (mainly motors and robots), and three electric power businesses : generation, transmission, and distribution. Barnevik is well aware that the once popular management by matrix is in disfavour in the U.S. business schools and has been abandoned by most multinational companies. But he says he uses a loose

Decentralized version of it the two bosses are not always equal that is particularly suited to an organization composed of many nationalities

The matrix system makes it easier for managers like Gerhard Schulmeyer, a German who heads ABB's U.S. businesses as well as the automation segment, to make use of technology from other countries. Because of the matrix, Schulmeyer has a better idea of what is available where. He says that the techniques developed by ABB in

Switzerland that he uses to serviee U.S. steam turbines are more reliable and efficient than those of General Electric and Westinghouse, his main American competitors. Schulmeyer also relied on European technology to convert a Midland, Michigon, nuclear reactor into a natural gas-fired plant, ... ABB executives say the value of the company's matrix system extends beyond the swapping of technology and products. For example, the power transformer business segment consists of 31 factories in 16 countries. Barnevik wants each of these businesses to be run locally with intense global coordination. So every month the business segment headquarters in Mannheim, Germany, tells all the factories how all the others are

doing according to dozens of measurements. If one factory is lagging, solutions to common problems can be discussed and worked out across borders.

Questions

(a) How is ABB achieving integration and coordination of its global operations ?

(b) Which of the four basic departmentalization formats Explain.

(c) Has Barnevik created an effective balance between centralization and decentralization ?

(d) How does ABB apparently avoid unity-of-command problems with its matrix structure