Business Policy and Strategy notes -MBA-OU

This teaching note is updated according to the syllabus of the MBA offered at Osmania University. It is useful for students of MBA, BBA, Integrated MBA, MAM, etc.
It is presented unit-wise, from Unit-I to Unit-5, It covers around 150 plus topics from the subjects of Global; Business, and Electronic business
domains
It uses very simple and understandable language which any student can easily comprehend in just one reading
This note is prepared by a professor of management sciences having more than 20 years of teaching experience across three countries India, Malaysia, and Saudi Arabia

1. MBA-IV-Semester –Osmania University
Sub: Business Policy and Strategy
Unit-I - Introduction to strategic management
Strategic management
Strategic management is the process of setting goals, procedures, and objectives in order to make
a company or organization more competitive. Typically, strategic management looks at
effectively deploying staff and resources to achieve these goals. The strategic management
involves the formulation and implementation of the major goals and initiatives taken by an
organization's managers on behalf of stakeholders
Advantages and Disadvantages of S.M
Better decision
Increased competitiveness
Better resource allocation
Enhanced organizational performances:
Greater adaptability:
Disadvantages of strategic management
Time and money constrain
Complexity in execution
Resistance to change from employees mainly
Inaccurate predictions due to volatile market
Objectives of Business
1. Economic Objectives
i. Market Standing: ii. Innovation: iii. Productivity:
iv. Physical and Financial Resources v. Earning Profit:
2. Social Objectives:
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2. i. Supply of desired quality of goods and services ii. Generating employment opportunities iii.
Community service activities iv. Employee welfare v. Protection of environment –
3. Organic Objectives:
i. Adopting the policy for strengthening the business and self-
ii. Implementing the schemes of growth and expansion
iii. Carrying the activities of research and development for innovation in business. Innovative
ideas must be implemented.
v. Enhancing the goodwill, reputation and image of the business organization.
4. National Level Objectives:
i. Performing the business activities within the frame work of national priorities.
ii. Strengthening the national economy by giving their adequate contribution.
iii. Entering into new areas of production and distribution according to national priorities.
iv. Improving import substitution.
v. Promoting export in variety of products.
viii. Ensuring the community at large for productive investment.
Types of Businesses
1.Sole proprietorship- a business that can be owned and controlled by an individual
2.General partnership business made up of two or more partners, each obligated for the
business's debts, liabilities, and assets
3.Limited partnership exists when two or more partners go into business together, but
the limited partners are only liable up to the amount of their investment. 
4.C Corporation C Corporation? A C corporation (or C-corp) is a legal structure for a
corporation in which the owners, or shareholders, are taxed separately from the entity.
5.S corporation An S corp or S corporation is a business structure that is permitted under
the tax code to pass its taxable income, credits, deductions, and losses directly to its
shareholders.
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3. 6.Benefit corporation Benefit Corporation is a corporate firm designed for for-profit
entities that want to consider society and the environment in addition to profit in their
decision making process
7.Limited liability company (LLC)LLC. noun [ C ] abbreviation for limited liability
company (= a type of company in which the owners have specific tax advantages and
no personal financial risk if the company should fail)
8.Nonprofit non-profit organisation is an entity that works for social welfare, charity or
social development.
9.Joint venture joint venture is a combination of two or more parties that seek the
development of a single enterprise or project for profit, sharing the risks associated
with its development
Strategic planning Process
Step 1: Environmental Scan
Step 2: Internal Analysis (SWOT) assessment.
Step 3: Strategic Direction
Step 4: Develop Goals and Objectives
Step 5: Define Metrics, Set Timelines, and Track Progress.
Step 6: Write and Publish a Strategic Plan
Step 7: Plan for Implementation and the Future
Decision making
Decision making is the process of making choices by identifying a decision, gathering
information, and assessing alternative resolutions. Using a step-by-step decision-making process
can help you make more deliberate, thoughtful decisions by organizing relevant information and
defining alternatives.
Types of Decision Making
Routine, Strategic, Policy based
Operating, Organizational, Personal
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4. Programmed, Non-Programmed
Individual , Group Decisions
Designing Vision and Mission Statements
A vision statement is a written document that describes where an organization is going and what
it will look like when it gets there. The important thing is to write it clearly and thoughtful. The
Vision statement details where the organization aspires to go. Why does your company exist?
What do you hope to accomplish in the next several years
Features of Good vision statement
Must be future Oriented, Inspiring and Challenging.
Motivating and Memorable, Purpose-driven & Unique
Designing Mission statement
A mission statement is used by a company to explain, in simple and concise terms, its purpose(s)
for being. It is usually one sentence or a short paragraph, explaining a company's culture, values,
and ethics. It is the road map for attaining the vision of organisation.
3 parts of a mission statement - Purpose Vision Values
Strategic positioning
Strategic positioning is a business strategy where an organization differentiates itself from
competitors by creating better value for its customers. This can help them create a competitive
advantage over other similar companies and, ultimately, increase company profit. It attempts to
achieve sustainable competitive advantage by preserving what is distinctive about a company.
There are five types of strategic positioning
1.Customer service positioning strategy.
2.Convenience-based positioning strategy.
3.Price-based positioning strategy.
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5. 4.Quality-based positioning strategy.
5.Differentiation strategy.
Elements of strategic planning
Strategic choice
It refers to the decision which determines the future strategy of a firm. It addresses the question
“Where shall we go”. A SWOT analysis is conducted to examine the strengths and weaknesses
of the firm and opportunities that can be exploited are also determine
Strategic Actions
These are projects or programs outside of an organization's day-to-day operational activities that
are meant to help the organization achieve its strategy. They are such things as. instituting
change, creating capability to do something new or better, or improving performance.
Unit-II-Environmental appraisal
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6. Environmental scanning is the ongoing tracking of trends and occurrences in an organization's
internal and external environment that bear on its success, currently and in the future. The results
are extremely useful in shaping goals and strategies The process of environmental scanning
requires both accurate and personalized data on the business environment in which the
organization is operating or considering entering. The enviromental scanning will be of two
categories
1. The external environment scanning and
2. The internal environment scaning
Importance of Environmental Scanning
1. The Identification of Strength
2. Recognizing Weaknesses
3. Recognizing Opportunities
4. Recognizing Threats
5. Optimizing the Use of Resources
6. Survival and Growth
7. To Plan a Long-term Business Strategy
8. Aids in Decision Making
Techniques of Environmental Scanning
SWOT Analysis-
PEST Analysis
ETOP stands for the Environmental Threat Opportunity Profile
QUEST stands for the Quick Environmental Scanning Technique.
Various types of Business Environment
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7. Portfolio analysis in business
A business portfolio analysis is essentially a process of looking at a company's products and
services and categorizing them based on how well they're performing and their competitiveness.
This analysis is done for selecting an optimal portfolio that can strike a balance between
maximizing the return and minimizing the risk in various uncertain environments.
For performing effective portfolio analysis, the organization can use the following models
1.BCG-Matrix
2.GE-Matrix
3.Ad-Little Model
4.SWOT-Analysis
5.Porters’ diamond model and 6. Value Chain analysis
BCG-Matrix
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8. The Boston Consulting group's product portfolio matrix (BCG matrix) is designed to help with
long-term strategic planning, to help a business consider growth opportunities by reviewing its
portfolio of products to decide where to invest, to discontinue, or develop products.BCG matrix
(also called Growth-Share Matrix).
The model is based on the observation that a company’s business units can be classified into four
categories:
1.Cash Cows
2.Stars
3.Question Marks
4.Dogs
Cash Cows - Low Growth, High Market Share These are the products with significant ROI
but operating in a matured market which lacks innovation and growth. These products generate
more cash than it consumes.  Usually, these products finance other activities in progress
(including stars and question marks).
Stars- High Growth, High Market Share A high growth potential that can be used to
increase further cash inflow. With time, when the market matures, these stars become cash
cows that hold huge market shares in a low-growth market. Such cows are milked to fund
other innovative products to develop new stars.
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9. Question Marks-High Growth, Low Market Share
Question marks have high growth potential but a low market share which makes their
future potential to be doubtful.
Since the growth rate is high here, with the right strategies and investments, they can
become cash cows and ultimately stars. But they have a low market share so wrong
investments can downgrade them to Dogs even after lots of investment.
Dogs -Low Growth, Low Market Share
Dogs hold a low market share and operate in a market with a low growth rate. Neither do
they generate cash, nor do they require huge cash. In general, they are not worth investing
in because they generate low or negative cash returns and may require large sums of
money to support. Due to low market share, these products face cost disadvantages.
GE Matrix
This Matrix-model was developed by McKinsey for General Electric in the 1970s.The GE
Matrix is a 3x3 tool that allows to map different products, services or activities based on the
attractiveness of the industry and the strength of the business unit. The GE-McKinsey Matrix
(GE Matrix, General Electric Matrix, Nine-cell matrix) is a portfolio analysis tool used in
formulating corporate strategy to analyze strategic business units or product lines. The GE matrix
helps to evaluate its overall strength of each product, brand, service, or potential product.
The GE / McKinsey matrix is a model used to assess the strength of a strategic business unit
(SBU) of a corporation. It analyzes market attractiveness and competitive strength to determine
the overall strength of an SBU. The GE Matrix is plotted in a two-dimensional, 3 x 3 grid
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10. The ADL Matrix or Arthur D Little Strategic Condition Matrix
The ADL Matrix or Arthur D Little Strategic Condition Matrix is a Portfolio Management
technique that is based on the Product Life Cycle (PLC). It is developed in the 1980’s by Arthur
D. Little, Inc. (Like other portfolio planning matrices, the ADL matrix represents a company’s
various businesses in a 2-dimensional matrix. It is a structured methodology for consideration of
strategies which are dependent on the life cycle of the industry. The ADL approach uses the
dimensions competitive Position and Industry Maturity.
The Competitive Position
1.Dominant: This is a comparatively rare and typically short-lived. In many cases is either
to a monopoly or a strong and protected technology leadership.
2.Strong: Market share is strong and stable, regardless of competitors. The firm has a
considerable degree of freedom over its choice of strategies and is often able to act
without its market position being unduly threatened by its competitors.
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11. 3.Favorable: Business line enjoys competitive advantages in certain segments of market.
However there are many rivals, and no clear leader among stronger rivals.
4.Tenable: Position in overall market is small or niche, either geographical or defined by
product. Competitors are getting stronger.
5.Weak: Continuous loss of market share. Business line is too small to maintain
profitability.
Industry Maturity
1.Embryonic:  The introduction stage, characterized by rapid market growth, very little
competition, new technology, high investment and high prices.
2.Growth:  The market continues to strengthen, sales increase, few (if any) competitors
exist, and company reaps rewards for bringing a new product to market.
3.Mature:  The market is stable, there is a well-established customer base, market share is
stable, there are lots of competitors, and energy is put toward differentiating from
competitors.
4.Aging:  Demand decreases, companies start abandoning and companies begin leaving or
consolidating until the market is demise.
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12. SWOT analysis
SWOT analysis is a strategic planning technique used to help an organization identify Strengths,
Weaknesses, Opportunities, and Threats related to business competition or project planning. It is
sometimes called situational assessment or situational analysis
SWOT Analysis Matrix.
Strengths
What do you do
well
What unique
resources you
have
What do others
see as your
strengths
Weaknesses
What could you improve
Where do you have fewer
resources than others
What are others likely to see as
weaknesses?
Opportunities
What opportunities are
open to you
What trends could you
take advantage of
How can you turn your
strengths into
opportunities
Threats
What threats could harm you
What is your competition doing
What threats do your weaknesses
expose to you
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13. Porter's competitive advantage
The term competitive advantage refers to the ability gained through attributes and resources to
perform at a higher level than others in the same industry or market. Competitive strategy as a
long-term plan that an organization executes in order to build a defensible competitive advantage
against other players in the market. Porter identified 4 generic strategies that can be used to both
classify company behavior and drive company behavior. Porter’s generic competitive strategy is
a framework for planning the strategic direction of your business that assists with gaining an
advantage in the marketplace over your competitors
Porter's competitive advantage strategies
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14. Porters-Five force model/Diamond model of competitive advantage
Value Chain Analysis
A value chain is a progression of activities that a firm operating in a specific industry performs
in order to deliver a valuable product /service to the end customer. Value chain analysis is a
means of evaluating each of the activities in a company's value chain to understand where the
improvement is needed for obtaining growth and sustainability
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15. Value chain Model
Value chain analysis is a strategic process where a firm evaluates its internal activities to identify
how each contributes to the firm's competitive advantage. The ultimate goal of a value chain
analysis is to pin down the practices and processes that differentiate a firm from its competitors
for better or worse.
Primary Activities- five
Inbound Logistics: This is how materials and resources are gained from suppliers before
the final product or service can be developed. In your analysis, take a look at the
locations of your suppliers and shipping costs from their facility to yours.
Operations: Operations are how the materials and resources are produced, resulting in a
final product or service. Here, you may look at the cost of running your warehouse,
machinery, and assembly lines.
Outbound Logistics: Once a product or service is finished, it needs to be distributed.
Outbound logistics describes this delivery process. Take into account your shipping costs
to consumers, your warehousing fees, your distributor relations (do they charge a fee per
sale, for example?), and order processing operations.
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16. Marketing and Sales: This is how your product or service is presented and sold to your
ideal target market. In your analysis, take into account advertising costs, promotional
costs, reach, and cost-per-acquisition.
Services: This is the support a business provides for the customer which can include
support and training for the product, warranties, and guarantees. You’ll look at repair
costs, product training costs, product adjustment frequency, and more.
Secondary activities Support Activities-Four activities
Firm Infrastructure: This entails all the management, financial, and legal systems a
business has in place to make business decisions and effectively manage resources.
Human Resource Management: Human resource management encompasses all the
processes and systems involved in managing employees and hiring new staff. This is
especially important for companies that provide in-person service, and excellent
employees can be a competitive advantage.
Technology Development: Technology development helps a business innovate. And
technology can be used in various steps of the value chain to gain an advantage over
competitors by increasing efficiency or decreasing production costs.
Procurement: This is how the resources and materials for a product are sourced and
suppliers are found. The goal is to find quality supplies that fit the business' budget.
Core Competency
Typically, a core competency refers to a company's set of skills or experience in some
activity, rather than physical or financial assets. An organizational core competency is an
organization's strategic strength.
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17. Unit-III-Strategy Formulation
Strategy Formulation
Strategy formulation is the process of using available knowledge to document the intended
direction of a business and the actionable steps to reach its goals. This process is used for
resource allocation, prioritization, organization-wide alignment, and validation of business goals.
Strategy formulation is the process of developing the strategy for achieving vision. The three
levels of strategy formulations are
1. Corporate Level Strategy
This is among the most important types of strategy formulation as it’s used to outline the precise
requirement of an organization—growth, acquisition, stability or retrenchment. This in turn
shapes the nature of the work that an organization does, the timeline it has to follow and the
resources that are at its disposal.
2. Business Level Strategy
As one of the levels of strategy formulation that requires the most research and investment of
time and personnel, the business level strategy has a specific purpose. That purpose is to answer
the question—how exactly is an organization going to compete? This takes into account an
organization’s abilities to expand and retain a competitive edge in the market. This type of
strategy formulation is particularly useful for those organizations that have several small units of
business, each one of which is considered to be a strategic business unit (SBU).
3. Functional Level Strategy
This level of strategy is concerned less with ideation and more with logistical management and
execution. The focus of this level is primarily on growth and how daily actions, including
allocation of resources, can help deliver corporate and business level strategies for the
organization to reach its business goals.
Growth Strategies: A growth strategy is an organization's plan for overcoming current and
future challenges to realize its goals for expansion. Examples of growth strategy goals include
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18. increasing market share and revenue, acquiring assets, and improving the organization's products
or services-There are four types of Growth strategies
Offensive and Defensive competitive strategies
Offensive strategy
An offensive competitive strategy is a type of corporate strategy that consists of actively trying
to pursue changes within the industry. Companies pursuing offensive strategies directly target
competitors from which they want to capture market share Companies that go on the offensive
generally make acquisitions and invest heavily in research and development (R&D)
Defensive strategy
Defensive strategies are used to retain the customers from being attracted by competitors. A
defensive strategy is a tool that management uses to defend their business from potential
competitors
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19. Flanking strategy
A competitive strategy in which one company attacks another in a weak spot, commonly by
paying maximum attention either a geographic region or a market segment in which the rival is
under-performing so as to capture market and penetrate in segment
Guerrilla Strategy
The company adopts and implements small attacks on competitors through un-conventional
methods which also include word of mouth, buzz marketing etc.
Generic strategies
It was given by Michael Porter. A generic strategy is a general way of positioning a firm within
an industry.
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20. Industry Life cycle analysis
Industry life cycle refers to the stages Launch, Early growth, Growth, Shakeout, Maturity and
Decline of an industry from market. This analysis is very much helpful for the new startups to
deicide about entering the market, it gives clear idea about the potential growth associated with
market growth. The industry life cycle describes how an industry begins, evolves, and eventually
declines.
The industry life cycle describes how an industry begins, evolves, and eventually
declines.
The industry life cycle framework can also be applied to technology or service offerings
(not just “industries,” specifically).
An emerging industry is a group of companies in a line of business formed around a new product
or idea that is in the early stages of development. An emerging industry typically consists of just
a few companies and is often centered on new technology.
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21. Example: Robotics, virtual reality, 5G networks, block chain technology, artificial intelligence,
and self-driving cars, Machine learning, E-vehicles etc.
Maturing Industry
A mature industry is one with a strong and set customer base and has typically reached the
maximum amount of people that the industry will reach throughout its life cycle. A mature
industry is an industry that has passed the introduction stage, growth stage, and shake out stage,
but has not yet reached the declining stage. The company needs to adopt a strategy towards
retaining the customers and persuading them to increase their purchases. It is better for a firm to
increase the average sales per existing customer than trying to 'steal away' customers of the
competitors.
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22. Example: Oil industry, English breakfast industry, tobacco industry, grocery industry etc.
Fragmented industry
A fragmented industry is one in which many companies compete and there is no single or small
group of companies which dominate the industry
Market leaders and Leader’s Strategies
A market leader could be a product, brand, company, organization, group name which has the
highest percentage of total sales revenue of a particular market. Market leader dominates the
market by influencing the customer loyalty towards it, distribution, pricing, etc.
Expand the current share
consider revenue with the share expansion
Maintain the current share
Expansion of the whole market –
Market Challengers and strategies
A market challenger is a firm that has a market share below that of the market leader, but enough
of a presence that it can exert upward pressure in its effort to gain more control. Market
challengers are able to jockey for industry leadership in several ways: Challenging the market
leader on price (direct approach)
Expand the share and get to the top -To deprive
Guard against the leader’s homogenization
To implement the differentiation that the leader cannot homogenize
Market Followers and strategies
A market follower is a company that follows what the leader in its sector does. A market
follower does not like taking risks, i.e., it is the opposite of a maverick. Instead, it waits and
observes what its competitors do, especially the market leader. It then only adopts the leader's
successful strategies.
Keep on surviving
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23. To target at a market segment which is not attractive to high-ranking firms
Imitate the leader’s marketing mix by downgrading it by one level
Market Niches and strategies: A niche market is a very specific segment of consumers who
share characteristics and, because of those characteristics, are likely to buy a particular product
or service. As a result, niche markets comprise small, highly specific groups within a broader
target market you may be trying to reach.
Maintain a high profit ratio in the limited niche segment
To provide a specific segment with a limited product line of the quality above the level
To prevent other firms’ entry into the niche market –
To leverage own unique capacity no other firms possess
Various types of Business Crisis
Financial Crisis : Financial crisis is when a business not having funds to pay its dues such as
paying dividends, interests, making repayments of loans This crisis is handled by mobilizing
requisite funds as a short term solution and in taking major financial decisions such as
restructuring, changing business operations, etc as long term solutions.
Technological Crisis : The technological crisis occurs as a result of break downs in the common
scientific and technological tools and appliances that we use in a business. Common
technological crisis includes software failure, industrial accidents, etc. The usual means of
management would include primarily mitigating the losses and stopping the effects of the failure
from affecting more people or elements.
Crisis of Malevolence: The crisis that happens as a result of the extreme tactics employed by a
competitor or a miscreant to ruin the business is known as a crisis of malevolence. These crises
include those which are created by hacking into a company’s server, tampering with their
products, etc.
Natural Crisis: Natural Crisis refers to those that are created as a direct result of a natural event
such as a volcano or earthquake etc. These crises are completely out of management’s hands and
cannot be prevented, unlike the other crisis. The crisis management steps include evacuating the
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24. area and taking mitigating actions as precautions such as building Earthquake resistant buildings,
preparing evacuation plans, etc beforehand.
Crisis of Deception: Crisis of deception: A deception crisis occurs when an employee from a
company misrepresents information about the organization, which damages its reputation and
misleads others. Taking legal and disciplinary action against the employee is an effective
strategy for managing this crisis
Crisis of Skewed Management Values: Crisis of Skewed management values is created when
short term economic gains are sought by neglecting social values, stakeholders, and investors. It
arises when the business gives more importance to revenue over its functioning and its
commitment to customers or employees or to the world. These can be resolved by changing the
policies of the business and by embracing what it really should
Crisis of Management Misconduct: Crisis of Management misconduct is a result of illegal
activities taken by the management for achieving its ends or achieving the personal ends of those
in power.
Managing Business Crisis
Crisis management is the application of strategies designed to help an organization deal with a
sudden and significant negative event. A crisis can occur as a result of an unpredictable event or
an unforeseeable consequence of some event that had been considered as a potential risk.
Crisis management is the process through which an organization tackles an unfavorable event
that negatively affects the organization, its stakeholders, or the general public. An effective crisis
management plan has the following essential elements.
Risk analysis, Activation of protocol,
Chain of command, Command center plan,
Response action plans, Internal and external communication
Resources, training, and a review.
Unit-IV- Alternative strategies
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25. Strategic alternatives are long term plans that businesses develop to set their direction. When
setting the organizational direction, the human and organizational resource availability will be
considered and the goals will be set based on the resource availability Strategy Analysis and
Choice is a process that reconciles strategic actions, market opportunities, corporate strengths
and resources, values of managers, and legal requirements and social responsibilities to select a
"best" mission, strategic thrust, and set of strategic actions. Strategic analysis allows you to have
clarity of the internal positive attributes of the organization that are under control. By knowing
these positive attributes an organization can focus on the factors that lead to positive
performance and can replicate the strategy wherever applicable.
Corporate Strategy Corporate strategy is a unique plan or framework that is long-term in
nature, designed with an objective to gain a competitive advantage over other market participants
while delivering both on customer/client and stakeholder promises (i.e. shareholder value). The
corporate strategy works to establish the overall value of a business, set strategic goals and
motivate employees to achieve them
Stability Strategy: Seeks to maintain its position in market
Expansion strategy : To grow its operations, increase its market share
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26. Retrenchment strategy : Strategic decision of a company to downsize its operations,
reduce costs
Combination Strategy: Making the use of other strategies from above simultaneously
Corporate level International strategy
It is a business plan or strategy created by a company to do its business in international
markets. The corporate level international strategy requires analyzing the international
market, studying international resources, defining international goals, understanding
Multi domestic –market & develop offerings. Types of international corporate strategies
Growth strategy and value creation
A growth strategy is an organization's plan for overcoming current and future challenges
to realize its goals for expansion. Examples of growth strategy goals include increasing
market share and revenue, acquiring assets, and improving the organization's products or
services.
Types of Growth Strategies
Intensive Growth Strategies
Integrative Growth Strategies
Diversification Growth Strategies
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27. The Business growth strategies will help the organization in adding these value,
Increase your resources and stock, Generate more sales and profits.
Reach new customers or markets, Rut more money back into your business.
Influence market price, Reduce external risks
Integration strategies
Integration strategies are processes that businesses can use to enhance their competitiveness,
efficiency or market share by expanding their influence into new areas. These areas can include
supply, distribution or competition
Strategic Alliance
Strategic alliances are agreements between two or more independent companies to cooperate in
the manufacturing, development, or sale of products and services, or other business objectives.
The most common types of SA are as follows
Joint Venture
Two companies forming a strategic alliance is said to be a joint venture when an alliance results
in a new child company. For example, suppose two companies, X and Y, combine to form an
alliance resulting in a new company XYZ.
Equity S.A
A strategic equity alliance is when one company buys a significant amount of equity in another
company.
Non-Equity S.A
A non-equity strategic alliance is when two companies agree to share resources to result in
synergy.
Mergers and acquisitions
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28. Mergers and acquisitions, or M&A is the process of combining two companies into one. The
goal of combining two or more businesses is to try and achieve synergy. Mergers and
acquisitions (M&A) are collaborations between two or more firms. In a merger, two or more
companies functioning at the same level combine to create a new business entity. In an
acquisition, a larger organization buys a smaller business entity for expansion. The collaboration
between merger and acquisition companies is to eliminate competition, improve operations, or
gain a larger market share. Mergers and Acquisitions
Out sourcing strategy
An outsourcing strategy is a plan that describes how a company hires third-party companies or
individuals to perform various tasks. As an alternative from relying completely on internal
employees, this approach can reduce expenses, increase productivity and improve the overall
quality of the final product
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29. Reasons for outsoaring/ Drivers for outsourcing/ Advantages for outsourcing
Organizational Structure and Approaches
An organizational structure is a system that outlines how certain activities are directed in order to
achieve the goals of an organization. These activities can include rules, roles, and
responsibilities. The organizational structure also determines how information flows between
levels within the company.
Types of organizational structures
1.Hierarchical org structure
2.Functional org structure
3.Horizontal or flat org structure
4.Divisional org structures (market-based, product-based, geographic)
5.Matrix org structure
6.Team-based org structure
7.Network org structure
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30. Hierarchical org structure the pyramid-shaped organizational chart we referred to earlier is
known as a hierarchical org chart. It’s the most common type of organizational structure—
the chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level
and low-level employees), and each employee has a supervisor. 
Functional org structure Similar to a hierarchical organizational structure, a functional org
structure starts with positions with the highest levels of responsibility at the top and goes down
from there. Primarily, though, employees are organized according to their specific skills and their
corresponding function in the company. Each separate department is managed independently. 
Horizontal or flat org structure A horizontal or flat organizational structure fits companies
with few levels between upper management and staff-level employees. Many start-up businesses
use a horizontal org structure before they grow large enough to build out different departments,
but some organizations maintain this structure since it encourages less supervision and more
involvement from all employees.
Divisional org structure In divisional organizational structures, a company’s divisions have
control over their own resources, essentially operating like their own company within the larger
organization. Each division can have its own marketing team, sales team, IT team, etc. This
structure works well for large companies as it empowers the various divisions to make decisions
without everyone having to report to just a few executives. 
Market-based divisional org structure Divisions are separated by market, industry, or
customer type. A large consumer goods company, like Target or Walmart, might separate its
durable goods (clothing, electronics, furniture, etc.) from its food or logistics divisions. 
Product-based divisional org structure Divisions are separated by product line. For example, a
tech company might have a division dedicated to its cloud offerings, while the rest of the
divisions focus on the different software offerings—e.g., Adobe and its creative suite of
Illustrator, Photoshop, InDesign, etc.
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31. Geographic divisional org structure Divisions are separated by region, territories, or districts,
offering more effective localization and logistics. Companies might establish satellite offices
across the country or the globe in order to stay close to their customers.
Matrix org structure A matrix organizational chart looks like a grid, and it shows cross-
functional teams that form for special projects. For example, an engineer may regularly belong to
the engineering department (led by an engineering director) but work on a temporary project (led
by a project manager). The matrix org chart accounts for both of these roles and reporting
relationships.
Team-based org structure It’ll come as no surprise that a team-based organizational structure
groups employees according to (what else?) teams—think Scrum teams or tiger teams. A team
organizational structure is meant to disrupt the traditional hierarchy, focusing more on problem-
solving, cooperation, and giving employees more control.
Network org structure These days, few businesses have all their services under one roof, and
juggling the multitudes of vendors, subcontractors, freelancers, offsite locations, and satellite
offices can get confusing. A network organizational structure makes sense of the spread of
resources. It can also describe an internal structure that focuses more on open communication
and relationships rather than hierarchy.
The McKinsey 7-S Model is a change framework based on a company's
organizational design. It aims to depict how change leaders can
effectively manage organizational change
by strategizing around the
interactions of seven key
elements: structure,
strategy, system, shared values, skill,
style, and staff.
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32. Unit-V Strategy Implementation and Control
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33. Evaluation of strategies and control
Strategic evaluation and control could be defined as the process of determining the effectiveness
of a given strategy in achieving organizational objectives and taking corrective action wherever
required.
Corporate Social Responsibility
Corporate Social Responsibility is a management concept whereby companies integrate social
and environmental concerns in their business operations and interactions with their stakeholders.
(CSR) is the idea that a company should play a positive role in the community and consider the
environmental and social impact of business decisions.  The purpose of corporate social
responsibility is to give back to the community, take part in philanthropic causes, and provide
positive social value. Common CSR initiatives include donating to charity, providing disaster
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34. relief, promoting renewable energy, encouraging gender equality, addressing racial
discrimination
Types of CSR
Corporate governance and corporate citizenship
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35. Corporate governance is the system by which companies are directed and controlled. Boards of
directors are responsible for the governance of their companies. The shareholders' role in
governance is to appoint the directors and the auditors and to satisfy themselves that an
appropriate governance structure is in place. The CSR involves these four aspects risk oversight,
corporate strategy, executive compensation, and transparency. Corporate governance involves
these principles of good governance
Corporate citizenship
Corporate citizenship refers to a company's responsibilities towards society. Corporate
citizenship is growing increasingly important as both individual and institutional investors begin
to seek out companies that have socially responsible orientations such as their environmental,
social, and governance (ESG) practices. The various benefits of corporate citizenship are as
follows
Better brand recognition.
Positive business reputation.
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36. Increased sales and customer loyalty.
Operational costs savings.
Better financial performance.
Greater ability to attract talent and retain staff.
Organizational growth.
Easier access to capital.
SMART-Approach for designing and implementing strategy
Setting specific, measurable, achievable, relevant, and time-bound (SMART) objectives is a
good way to plan the steps to meet the long-term goals in your grant. It helps you take your grant
from ideas to action.
S = specific. Your goal should include details of what you want to accomplish.
M = measurable. You should be able to measure your progress
A = attainable. Your goals should challenge you. ...
R = realistic. ...
T = timely.
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37. The significance of using and implementing the SMART approach is with this the strategy can
be designed as per the vision and mission and also it will be implementable. It is suggested for
any organization to use only SMART approach for strategies formulation
Re-designing Organizational structure
Organizational redesign involves the integration of structure, processes, and people to support
the implementation of strategy and therefore goes beyond the traditional tinkering with “lines
and boxes.” Today, it comprises the processes that people follow, the management of individual
performance, the recruitment of 
The process of re-designing involves these steps
Streamlining – the reduction of the number of steps required to complete a task so that the
efficiency increases by reducing overall time taken
Re-sequencing – the re-ordering of tasks to improve flow and/or reduce wastage by increasing
the coordination of various tasks
Centralizing – bringing together common activities to achieve economies of scale there by
finding out the less important activities to save resources
De-centralizing – the distribution of activities to improve responsiveness and flexibility for
obtaining the efficacy in work by extending accountabilities to other departments
Balancing – the adjustment of throughput and capacity so that the approach and the performance
is as per the vision and mission of the company
Corporate Failure
Corporate failures refer to the collapse or bankruptcy of a business organization, often as a result
of mismanagement, financial misdeeds, or external factors such as economic downturns, changes
in consumer behavior, or unexpected events such as natural disasters or any other business crisis
beyond control
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38. Causes for failure of corporate governance
Ineffective governance mechanisms, lack of board committees
Lack of audit committee members
Misleading and bypassing internal controls
Appointing underqualified board members
Ignorance of the financial results and risk evaluation,
Insufficient attention paid to risk management
Improper delegation of authorities, Poor ethical leadership
lack of integrity, fraud and Corruption
Strategic control and Types
Strategic control is a method of managing the execution of a strategic plan. It is considered as
one of the core and unique function of top management it can handle and perform tracking of
strategy’s implementation and the subsequent results. Strategic control is a method of managing
the execution of a strategic plan. Strategic controls are intended to steer the company towards its
long-term strategic direction, the strategic control mainly helps in three areas Measurement of
organizational progress, Feedback for future actions, and Linking performance and rewards.
Types of strategic control
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39. Special alert controls 
It refer to management actions undertaken to thoroughly, and often very rapidly, reconsider a
firm’s strategy because of a sudden, unexpected event. "A special alert control is the need to
thoroughly, and often rapidly, reconsider the firm's basis strategy based on a sudden, unexpected
event."
Implementation Control
It is designed to assess whether the overall strategy should be changed in light of unfolding
events and results associated with incremental steps. Implementation control is targeted at
determining whether the programs, policies, and plans are actually guiding the company towards
its predetermined goals and objectives or not.
Strategic Surveillance
Strategic surveillance is a strategic approach based on 5 strategic drivers
The five strategic drivers are as follows:
Differentiation
Cost
Innovation
Growth and
Alliance
These areas are analyzed and reviewed in association with three main strategic targets that is
Customers, Suppliers, and Competitors.
Premise Control
A strategy is based on an assumption of how certain events will take place in the future. Premise
control allows us to examine whether or not that assumption holds true after the strategy has
been implemented and adapt to changes accordingly
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40. Social and Cultural Responsibilities of Corporate Organization
Social and cultural responsibility means that besides maximizing shareholder value, businesses
should operate in a way that benefits society. Socially responsible companies should adopt
policies that promote the well-being of society and the environment while lessening negative
impacts on them, few of the most significant responsibilities are as follows
Organizational governance, Human rights
Labor practices, Environment
Fair operating practices, Consumer issues
Community involvement and development
Accountability, Transparency
Ethical behavior, Respect for stakeholder interests 
Respect for the rule of law, Respect for international norms of behavior
Respect for human rights
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