Assignment-01/02

Student Name: Pankaj Prasun

Registration No: 511111577

Learning Centre: IBMR, Wilson Garden

LC Code: 02717

Course: MBA

Subject: Strategic Management and Business Policy – MB0052

Semester: Fourth Semester

Module No.: MB0052

Date of Submission:

Marks awarded:

Director of distance Education

Sikkim Manipal Education

II Floor, Syndicate House

Manipal- 576 104

Signature of Coordinator Signature Of Center Signature Of Evaluator

1. What is meant by „Strategy‟? Differentiate between goals and objectives

Answer: Strategy is the method by which an organisation systematically achieves

its future objectives. A business cannot progress-for a long term without a reliable

strategy. In this unit, you will learn meaning of business strategies, its conceptual

evolution,scope and its importance, distinction between goals and objectives,

analysing strategic intent through vision and mission statements and finding out

the significance of core competencies of business and critical success factors.

2. Define the term “Strategic Management”. What are the types of strategies?

Answer:

Strategic management

Strategic management is a systematic approach of analysing, planning and

implementing the strategy in an organisation toensure a continued success.

Strategic management is a long term procedure which helps the

organisation in achieving along term goal and its overall responsibility lies

with the general management team. It focuses on building a solid foundation-

that will be

subsequently achieved by the combined efforts of each and every

employee of the organisation.

Types of Strategies

Corporate level:

The board of directors and chief executive officers are involved in

developing strategies at corporate level. Corporate levelstrategies are innovative,

pervasive and futuristicin nature.

Business level

Business level strategy relates to a unit within an organisation. Mainly strategic

business unit (SBU) managers are involvedin this level. It is the process of

formulating the objectives of the organisation and allocating the resources among

variousfunctional areas. Business level strategy is more specific and action

oriented. It mainly relates to how a strategy functionsrather than what a strategy is

in corporate level.

Tactical of functional level

The functional strategy mainly includes the strategies related to specific functional

area in the organisation such asproduction, marketing, finance and personnel

(employees). Decisions at functional level are often described as tacticaldecisions.

Operational level

Operational level is concerned with successful implementation of strategic

decisions made at corporate and business level.The basic function of this level is

translating the strategic decisions into strategic actions.

3. Describe Porter‟s five forces Model.

Answer:

Porters Five Force model Michael

E. Porter developed the Five Force Model in his book, Competitive Strategy.

Porter has identified five competitiveforces that influence every industry and

market. The level of these forces determines the intensity of competition in

anindustry. The objective of corporate strategy should be to revise these

competitive forces in a way that improves the positionof the organisation.

Forces driving industry competitions are:

Threat of new entrants

New entrants to an industry generally bring new capacity; desire to gain market

share and substantialresources. Therefore, they are threats to an established

organisation. The threat of an entry depends on the presence of entry barriers and

the reactions can be expected from existing competitors. An entry barrier is a

hindrance that makes it difficult for a company to enter an industry.

Suppliers

Suppliers affect the industry by raising prices or reducing the quality of purchased

goods and services.

Rivalry among existing firms In most industries, organisations are mutually

dependent. A competitive move by oneorganisation may result in a noticeable

effect on its competitors and thus cause retaliation or counter efforts.

Buyers

Buyers affect an industry through their ability to reduce prices, bargain for higher

quality or more services

Threat of substitute products and services Substitute products appear different but

satisfy the same needs as the originalproduct. Substitute products curb the

potential returns of an industry by placing a ceiling on the prices firms can

profitably charge.

Other stakeholders - A sixth force should be included to Porters list to include a

variety of stakeholder groups. Some of these groups include governments, local

communities, trade association unions, and shareholders. The importance of

stakeholders varies according to the industry.

4. What is strategic formulation and what are its processes?

Answer:

Strategy Formulation

Strategy formulation is the development of long term plans. It is used for the

effective management of environmental-opportunities and for the threats which

weaken corporate management. Its objective is to express strategic-al information

to-achieve a definite goal.

The main processes involved in strategy formulation are as follows:

Stimulate the identification Identifying useful information like planning for strategic

management, objectives to achieve thegoals of the employees and the

stakeholders.

Utilisation and transfer of useful information as per the business

strategies - A number of questions arising during utilisationand transfer of

information have to be solved The questions that arise during utilisation and

transfer of information are thefollowing:Who has the requested information?What

is the relationship between the partners who holds the requested

information?What is the nature of the requested information?How can we transfer

the information.

5. Explain strategic evaluation and its significance.

Answer:

Strategy Evaluation

The core aim of strategic management succeeds only if it generates a positive

outcome. Strategic evaluation and control-consists of data and reports about the

performance of the organisation. Improper analysis, planning or implementation of

the-strategies will result in negative performance of the organisation. The top

management needs to be updated about the-performance to take corrective

actions for controlling the undesired performance.

The strategic-evaluation process with constantly updated corrective actions results

in significant and long-lastingconsequences. Strategy evaluation is vital to an

organisations well-being as timely evaluations can alert the managementabout

potential problems before the situation becomes critical. Successful strategists

combine patience with a willingness totake corrective actions promptly, when

necessary.The process of evaluating the implemented strategy is explained in

Figure 5.2

6. Define the term “Business policy”. Explain its importance.

Answer:

Business Policies

Business policies are the instructions laid by an organisation to manage its

activities. It identifies the range within which thesubordinates can take decisions in

an organisation. It authorises the lower level management to resolve their issues

andtake decisions without consulting the top level management repeatedly. The

limits within which the decisions are made arewell defined. Business policy

involves the acquirement of resources through which the organisational goals can

be achieved.Business policy analyses roles and responsibilities of top level

management and the decisions affecting the organisation inthe long-run. It also

deals with the major issues that affect the success of the organisation.

Importance of Business Policies

A company operates consistently, both internally and externally when the policies

are established. Business policies shouldbe set up before hiring the first employee

in the organisation. It deals with the constraints of real-life business.It is important

to formulate policies to achieve the organisational objectives. The policies are

articulated by the management.Policies serve as a guidance to administer

activities that are repetitive in nature. It channels the thinking and action indecision

making. It is a mechanism adopted by the top management to ensure that the

activities are performed in thedesired way. The complete process of management

is organised by business policies.Business policies are important due to the

following reasons:

Coordination

Reliable policies coordinate the purpose by focusing on organisational activities.

This helps in ensuringuniformity of action throughout the organisation. Policies

encourage cooperation and promote initiative.

Quick decisions

Policies help subordinates to take prompt action and quick decisions. They

demarcate the section withinwhich decisions are to be taken. They help

subordinates to take decisions with confidence without consulting their

superiorsevery time. Every policy is a guide to activities that should be followed in

a particular situation. It saves time by predictingfrequent problems and providing

ways to solve them.

Effective control

Policies provide logical basis for assessing performance. They ensure that the

activities are synchronisedwith the objectives of the organisation. It prevents

divergence from the planned course of action. The management tends todeviate

from the objective if policies are not defined precisely. This affects the overall

efficiency of the organisation. Policiesare derived objectives and provide the

outlinefor procedures.

Decentralisation

Well defined policies help in decentralisation as the executive roles and

responsibility are clearly identified.Authority is delegated to the executives who

refer the policies to work efficiently. The required managerial procedures canbe

derived from the given policies. Policies provide guidelines to the executives to

help them in determining the suitableactions which are within the limits of the

stated policies. Policies contribute in building coordination in larger organisations.

Assignment -2

1. What is meant by “Business Continuity Plan” (BCP)? Discuss the steps

involved in BCP.

Answer:

A document containing the recovery timeline methodology, test-validated

documentation,procedures, and action instructions developed specifically for use

in restoring organisation operationsin the event of a declared disaster. To be

effective, most Business Continuity Plans also requiretesting, skilled personnel,

access to vital records, and alternate recovery resources including facilities.BCP is

a collection of procedures which is developed, recorded and maintained in

readiness for usein the event of an emergency or disaster.

The BCPs senior management committee is responsible for the initiation, planning,

approval, testingand audit of the BCP. The BCPs senior management committee

also implements the BCP,coordinates its activities, supervises its creation and

reviews the results of quality assurance activities.These steps are discussed below

The senior management initiates the project and conducts the meeting to review

the following:Establish a business continuity planning committee The senior

management identifies a team anddiscusses the business continuity planning

project with them. The management forms a team andclearly defines the roles of

project team members.

Draw up business continuity policies The team establishes the basic principles and

frameworknecessary to ensure emergency response for resumption and recovery,

restoration and permanentrecovery of the organisational operations and business

activities during a business interruption event.

Business impact analysis (BIA)

BIA is the most important element of the continuity plan. BIA reveals the financial

and operationalimpact of a major disruption. BIA report describes the potential

risks specific to the organisation. It willprovide the organisation with the following

details:

The identification of time sensitive business operations and services.An analysis of

the organisations financial status and operational impacts.The time-frames in

which the time-sensitive processes, operations and functions must resume.An

estimation of the resources necessary for successful resumption, recovery and

restoration.The BIA will provide a basis and cost justification for risk management,

response, recovery and restoration.

Disaster readiness strategies

The disaster readiness strategies include the following activities:Define business

continuity alternatives Using the information from BIA, the project team

shouldassess the alternative strategies that are available to the organisation and

identify two or threestrategies that are more credible.Estimate cost of business

continuity alternatives Based on these strategies, the organisation developsthe

budgetary plan. The resumption timeframe plays an important role in examining

which elementsmay require pre-positioning.Recommend disaster readiness

strategy - Based on the needs of the business and evaluation ofalternatives, the

project team should develop recommendations of strategies to provide funds

forimplementation. Prepare a formal report based on the findings of the BIA for the

strategy alternatives that were developed and analysed Take approval from senior

management to proceed with theproject

Develop and implement the plan

Develop and implement the plan includes the following activities:Emergency

response and operations It establishes a crisis management process to respond to

theseincidents.Develop and implement a business continuity plan The plan

describes specifically how to deal withthe incidents. It should focus on the priorities

of overall business continuity strategy.Apply business unit plans for each

department Describe the roles that each department has toperform in the event of

an emergency. Example It should detail the actions that the IT department willhave

to carry out if IT services are lost.

Maintenance and testing

Maintenance and testing includes the following activities:Establish a plan exercise

program BCP should develop and schedule the exercises to achieve andmaintain

high levels of competence and readiness. Document the objectives of each

exercise and itshould include the measurement criteria. Evaluate the results of

each exercise against pre-statedvalues and document the results along with

proposed plan enhancement.Awareness and training plans It should ensure that

the personnel is aware of the importance ofbusiness continuity plan and can

operate effectively in case of an event .Review the effectiveness ofawareness

training and identify the need for further training.Sample emergency response

exercises Emergency response exercises should be ongoing. The exercises can

be repeated using alternate setup and it should involve whole organisation within

aparticular facility that may be affected by a system disaster.Audit and update the

plans regularly It should regularly audit the plans to check if it meets the needsof

the organisation and ensures that the documentation remains accurate and

reflects any changesinside or outside the business.

Q2. What is meant by “Business plan”? Describe the strategies to create a

business plan.

Answer:

A business plan is a complete internal document that summarises the operational

and financialobjectives of a business. It also contains the detailed plans which

show how the objectives are being accomplished.

An accurately made business plan helps to allocate resources properly, to handle

unforeseen complications like financial crisis and to make good business

decisions.

On the other hand, business venture is a start-up enterprise which is formed with

expectations andplans of achieving financial gain. Once the need of the

organisation is identified, it can be started by asmall investor that has valuable

resources and time. Other investors involve themselves by providingsupport for

further development of the venture once the business is created. In the case

ofestablishing a business venture, a formal business plan is written to outline the

purpose and missionof the business for the future use.

Strategies for creating a business plan

Strategies for creating a business plan. Every entrepreneur creates a business

plan and itscompletion will determine the feasibility of the plan. The strategies for

creating a business plan are as follows

Q3. What are the benefits of MNCs?

Answer.

MNCs have certain unique advantages in their operations that are not benefited by

domesticoriented companies. The international success of MNCs is mainly

because of the ability to capitalisethe advantages. The advantages widely depend

on the nature of individual corporations and the typeof their business. Benefits are

1. To the companySuperior technical knowledge The most important advantage of

MNCs is the patented technicalknowledge which enables them to compete

internationally. Large MNCs have access to advancedlevels of technology which

are either developed or acquired by the corporation. These technologiesare

patented. It can be in the areas of management, services or production. Extensive

application ofthese technologies gives a competitive advantage to the MNC in

international market, as it results inefficient, low-priced, hi-tech products and

services that dominate a large international market. This results in efficient

production and services like that of IBM or Microsoft.Large size of economy

Generally, MNCs are large like Wal-Mart and Exxon Mobil which has saleslarger

than the gross national products of many countries.

The large size gives the advantage ofsignificant economic growth to the MNCs.

The higher volume of production leads to lower fixed costsper-unit for the

companys products. Competitors, whose volume of production of goods is smaller.

must raise the price to recover the higher fixed costs. This situation implies to

capital-intensiveindustries like steel, automobiles etc., in which fixed costs form a

major proportion of total costs.Example MNC like Nippon Steel of Japan can sell

its products at lower prices than those ofcompanies with smaller plants.

Lower input costs due to large size The production levels of MNCs are large and

thus the purchase ofinputs is in large volumes. Bulk purchases of inputs enable

the corporation to bargain for lower inputcosts and obtain considerable amount of

discount. Lower input costs means less expensive and morecompetitive products.

Example Nestle, which buys huge quantities of coffee from the market, canbargain

for lower prices than small buyers can. Wal-Mart sells products at lower prices

relative to itscompetitors due to bulk purchasing and efficient inventory control. By

identifying which product selleffectively, Wal-Mart combines low-cost purchasing

with efficient inventor to achieve competitiveadvantage in retail market.

Ability to access raw materials overseas By accessing raw materials in foreign

countries, many MNCslower the input and production costs. In many cases, MNCs

supply the technology to extract rawmaterials. Such access can give MNCs

monopolistic control over raw materials because they supplytechnology in

exchange for monopolistic control. This control enables them to supply or deny

rawmaterials to their competitors.

Ability to shift production overseas Another advantage of MNCs is the ability to

shift the productionoverseas. MNCs relocate their production facilities to take

advantage of lower labour costs, rawmaterials and other incentives offered by the

host countries. They take advantage of the lower costsby exporting lower-cost

goods to foreign markets. Many MNCs have set up factories in low-cost areaslike

China, India, Mexico, etc.

Brand image and goodwill advantage Most of the MNCs possess product lines that

have created agood reputation for quality, value and service. This reputation

spread to other countries throughexports and promotion and adds to the goodwill

or brand image of the company. MNCs are able toinfluence this brand image by

standardizing their product lines in different countries. Example SonyPlayStations

do not have any modifications for different countries and the parent factory

producesstandardised products for the world market. Brand names like Sony help

the company to chargepremium prices for its products, because the customers are

ready to buy quality products at premium prices.

Information advantage MNCs have a global market view with which it collects,

analyses, andprocesses the in-depth knowledge of worldwide markets. This

knowledge is used to create newproducts for potential market niches and expand

the market coverage of their products. The MNCshave good information gathering

capabilities in all aspects of their operations. Through thisinformation network, the

MNC is able to forecast government controls and gather commercialinformation.

The network also helps in providing important information about economic

conditions,changing market trends, social and cultural changes that affect the

business of MNCs in differentcountries. With these information MNCs can position

themselves appropriately to contingencies.

Managerial experience and expertise The MNCs function in large number in

different countries simultaneously. This enables them to integrate wealth for

valuable managerial experience. Thisexperience helps them in dealing with

different business situations around the globe. Example AnMNC located in Japan

can attain knowledge of Japanese management techniques and apply

themsuccessfully in a different location.

2. To the nations where it operates (domestic nations)MNCs bring advantage to the

countries in which they operate. The benefits of MNCs to the nationswhere it

operate are:

Economic growth and employment An MNC comes to a country with more

amount of money to investthan any local company. The countries from where the

MNCs operate are also called host countries.It brings inward investment to the

host countries. This helps in boosting the national economy.Example Constructing

new plants requires resources like land, capital and labour. It providesemployment

to a large number of people which helps in dealing with the unemployment

problem inthe host countries. The inward investment can help in generating wealth

in the local economy because it increases the spending ability of the people by

providing them employment. As the MNCsprovide employment to the people, they

pay taxes to the local government. The people have moremoney to spend which

provides market for local companies to sell their goods. The MNCs alsoattracts

other smaller firms to the area where it is located. These firms provide different

services to theMNCs.

Skills, techniques and quality human capital The MNCs bring with them new ideas

and newtechniques to improve the quality of production. This helps in improving

the quality of human capital inthe host country. The MNCs employ local labour and

train them in new skills to improve productivityand efficiency. Example Sunderland

is one of the most productive car manufacturing plants in Europe.The workers had

to get used to different ways of working that were used in other British firms.

Thiscan be a challenge and can also lead to improvement in productivity. The

skills that the workers buildup can be passed on the other workers which help in

improving the supply of skilled labour in that area.

Availability of quality goods and services Generally, production in a host country is

aimed at theexport market. However, in some cases, the inward investment can

gain access to the host countrymarket to avoid trade barriers. Availability of quality

goods leads to improved quality in other relatedindustries. Example The UK has

access to high quality vehicles at cheaper price; this competition hasled to

improvement in prices, working practices and quality in other related

industries.Improvement in infrastructure The MNCs invest in a country for

production and distribution facilities. Inaddition to this, the company might also

invest in additional infrastructure facilities like road, port andcommunication

facilities. This can benefit the entire country.

Q4. Define the term “Strategic Alliance”. Differentiate between Joint ventures

and Mergers.

Answer.

Strategic alliance is the process of mutual agreement between the organisations to

achieveobjectives of common interest. They are obtained by the co-operation

between the companies.Strategic alliance involves the individual organisations to

modify its basic business activities and joinin agreement with similar organisations

to reduce duplication of manufacturing products and improveperformance. It is

stronger when the organisations involved have balancing strengths.

Strategicalliances contribute in successful implementation of strategic plan

because it is strategic in nature. Itprovides relationship between organisations to

plan various strategies in achieving a common goal.Joint venture is the most

powerful business concept that has the ability to pool two or moreorganisations in

one project to achieve a common goal. In a joint venture, both the

organisationsinvest on the resources like money, time and skills to achieve the

objectives. Joint venture has beenthe hallmark for most successful organisations

in the world. An individual partner in joint venture mayoffer time and services

whereas the other focuses on investments. This pools the resources amongthe

organisations and helps each other in achieving the objectives. An agreement is

formed betweenthe two parties and the nature of agreement is truly beneficial with

huge rewards such that the profitsare shared by both the organisations.

If the organisation enters into joint venture agreement with unprofessional

selfish organisation, thenit increases the risk of hurting business reputation and

devastating customers trust.Example The China Wireless Technologies, a mobile

handset maker is getting into an agreement withthe Reliance Communications Ltd

(RCom) to launch its new mobile. The joint venture between thetwo companies is

to gain profits and provide affordable mobile phones to the market that consists

ofadvanced features and aims to earn eight billion dollars in the next five years.

The new mobileconsists of dual SIM smart phone with 3G technology at a cheaper

rate.

Merger is the process of combining two or more organisations to form a single

organisation andachieve greater efficiencies of scale and productivity. The main

reason to involve into mergers is to join with other company and reap the rewards

obtained by the combined strengths of twoorganisations. A smart organisations

merger helps to enter into new markets, acquire morecustomers, and excel among

the competitors in the market. The participating organisation can helpthe active

partner in acquiring products, distribution channel, technical knowledge,

infrastructure todrive into new levels of success.

With the perception of the organisation structure, here are a few types of mergers.

The different types of mergers are:

Basically, a joint venture is when two or more companies make an agreement to

do business in one specific area. They can share the insurance, shipping and

liability costs and produce higher profits. It is usually a short lived collaboration.

A merger is when two companies come together to form a single company. They

combine their respective resources. Sometimes there are losses of jobs, but not

all. Those decisions are specified in the merger contract well in advance of the

deal.

An acquisition is when one company is buying and taking over another. If it is

friendly, often the seller can stipulate who keeps their job and so forth. If it is

unfriendly, the company taking over gets to make all the final decisions. They

cannot take away benefits already earned.

When you are running a small business, you are often limited by your size. One

way of increasing your capacity is by working together with another firm. Two

methods of doing this are via a joint venture or through a merger. Both options

involve collaboration between firms, but they differ significantly.

Legal Structure

When two firms merge, they cease to exist as independent firms. For example,

when the U.S.-based Anheuser--Busch merged with Beligium's InBev, the two

companies no longer existed and were replaced by Anheuser--Busch In Bev, a

new and separate legal entity controlling the assets of both firms. In a joint

venture, a new separate firm is formed, but the original companies continue to

exist on their own.

Ownership

When a joint venture is created, it is owned by the original firms that created it. For

example, when Microsoft and NBC Universal created MSNBC as a joint venture,

the two mother companies maintained ownership of the new entity. In the case of

a merger, the owners of the newly formed company are the same as the owners of

the original two companies.

Commitment

A joint venture involves a lower level of commitment from the two parties than a

merger. A joint venture can be a good way to test the waters to see how well two

firms work together. It can also be used for a temporary arrangement to work on a

short-term project. A merger, in contrast, involves a virtually permanent

commitment. Although it is possible to break up a company, doing so can be

difficult, costly and disruptive to business.

Scope

A merger is useful when two businesses wish to become fully integrated -- that is,

when two firms have enough overlap that they can perform most of their business

together. A joint venture, on the other hand, typically has a much more limited

scope. A joint venture normally focuses on a specific area where two firms overlap

and can work together, but the bulk of their business remains separate.

5. What do you mean by „innovation‟? What are the types of innovation?

Answer:

Innovation is the production or implementation of ideas. Innovation can be

described as anaction or implementation which results in an improvement; a gain,

or a profit. The National InnovationInitiative (NII) defines innovation as " The

intersection of invention and insight, leading to the creationof social and economic

value.

Innovation is defined as using new ideas to apply current thinking in different ways

that results in asignificant change.

Innovation is often in the eye of the beholder - what may be new and radical for

one person, may be old news for another. Despite this subjectivity in identifying

and classifying innovation, there has been useful work in thinking about the focus

of different innovation processes, guided by the question: what is it that innovation

processes seek to change and improve?

The „4Ps‟ model developed by John Bessant and Joe Tidd provide a powerful tool

for such analysis. It builds on the hypothesis that successful innovation is

essentially about positive change, and puts forward four broad categories where

such change can take place:

'Product innovation‟ – changes in the things (products/services) which an

organisation offers

'Process innovation‟ – changes in the ways in which products and services are

created or delivered

'Position innovation‟ – changes in the context in which the products/services are

framed and communicated

'Paradigm innovation‟ – changes in the underlying mental models which shape

what the organisation does

Product innovation

Perhaps the most commonly understood form of innovation is that which

introduces or improves a product or service – a change in what is offered to end

users. The Bic ballpoint pen is an example of a product innovation, which has also

benefited from a range of incremental innovations since its original invention. The

emblematic humanitarian product is food, which is the dominant form of

assistance. Different forms of food aid might be seen as incremental innovations.

There may also be innovative products which help to achieve humanitarian goals.

For example, the LifeStraw is a portable water filter developed by Vestergaard-

Frandsen which enables individuals to drink clean water from almost any source.

Another example is PlumpyNut, a therapeutic food which is both durable and can

be dispensed outside of traditional medical settings.

Process innovation

Innovations can also focus on processes through which products are created or

delivered. Because so many of the products used in relief settings are initially

developed for non-relief contexts, a natural focus for humanitarian innovation is to

consider how an existing product might be used in resource-poor or rapidly

changing settings. Examples of process innovations that have had a positive effect

on the humanitarian sector are the increasing stockpiling of goods in strategic

locations, or the use of pre-made packs and kits.

Position innovation

The third focus of innovation involves re-positioning the perception of an

established product or process in a specific context. Position-based innovations

refer to changes in how a specific product or process is perceived symbolically and

how they are used. For example, Levi-Strauss jeans are a well-established global

product line, originally developed as manual workers‟ clothing materials, but then

re-branded as a fashion item.

In the humanitarian context, position innovations include changes in the signals

that are disseminated about a humanitarian organisation and its work. This may

relate to the way in which aid is marketed and packaged for potential donors.

Alternatively, it may involve a repositioning of humanitarian assistance within a

particular operational context or for particular users. An example of the former can

be seen in attempts by humanitarian agencies in different complex emergencies to

develop principle based cross-agency positions in relation to belligerent parties in

complex emergencies which amount to a set of conditions under which

humanitarian aid would be delivered, and a clear articulation of the situations

where it would not. Agencies such as Disability International or HelpAge

International are position innovators in that they call for the delivery of

humanitarian products and services to groups that are often excluded.

Paradigm innovation

The final „P‟ relates to innovation that defines or redefines the dominant paradigms

of an organisation or entire sector. Paradigm-based innovations relate to the

mental models which shape what an organisation or business is about. Henry Ford

provides a pithy quote, when talking about the development of the Model T motor

car: „If I asked people what they wanted, they would have asked for a five-legged

horse‟.

Examples of paradigm innovation in the international humanitarian sector include

an increasing emphasis on local ownership and leadership of responses to crises

as an alternative to internationally dominated responses. A greater and more

central role for aid recipients is another example, and finally, perhaps the most

radical innovation is the idea of disaster risk reduction approaches, which if

successful can negate the need for any kind of response.

The development of community-based feeding therapy is one of the most recent

examples of such innovations, with the combination of a product (PlumpyNut), a

process (community-based distribution) , a re-positioning (the idea that aid

agencies do not need to do the feeding themselves directly) and a paradigm shift

(the notion that families and communities can treat malnutrition at home). Similarly,

cash-based programming at its most radical involves a new product (cash), new

processes (means of distributing cash), new position (a change in how aid is

perceived by donors) and new paradigms (a change in how recipients are

perceived by aid agencies).

6. Describe Corporate Social Responsibility.

Answer: Corporate Social Responsibility (CSR) is the continuing obligation of a

business to behaveethically and contribute to the economic development of the

organisation. It improves the quality of lifeof the organisation. The meaning of CSR

has two folds. On one hand, it exhibits the ethical behaviourthat an organisation

exhibit towards its internal and external stakeholders. And on the other hand,

itdenotes the responsibility of an organisation towards the environment and society

in which itoperates. Thus CSR makes a significant contribution towards

sustainability and competitiveness ofthe organisation.

CSR is effective in number of areas such as human rights, safety at work,

consumer protection,climate protection, caring for the environment, sustainable

management of natural resources, andsuch other issues. CSR also provides

health and safety measures, preserves employee rights anddiscourages

discrimination at workplace. CSR activities include commitment to product quality,

fairpricing policies, providing correct information to the consumers, resorting to

legal assistance in caseof unresolved business problems, so on.

Example TATA implemented social welfare provisions for its employees since

1945.

A) Features of CSRCSR improves the customer satisfaction through its products

and services. It also assists inenvironmental protection and contributes towards

social activities. The following are the features of CSR:

Improves the quality of an organisation in terms of economic, legal and ethical

factors CSR improvesthe economic features of an organisation by earning profits

for the owners. It also improves the legaland ethical features by fulfilling the law

and implementing ethical standards.Builds an improved management system CSR

improves the management system by providingproducts which meets the essential

customer needs. It develops relevant regulations through the utilisation of

innovative technologies in the organisationContributes to countries by improving

the quality of management CSR contributes high qualityproduct, environment

conservation and occupational health safety to various regions and

countries.Enhances information security systems and implementing effective

security measures CSR enhancesthe information security measures by

establishing improved information security system anddistributing them to

overseas business sites. The information system has improved by enhancing

better responses to complex security accidents.

Creates a new value in transportation CSR creates a new value in transportation

for the greater safetyof pedestrians and automobiles. This is done by utilising

information and technology for automobiles.The information and technology helps

in establishing a safety driving assistance system.Creates awareness towards

environmental issues CSR serves in preventing global warming byreducing the

harmful gases emitted into the atmosphere during the process of business

activities.B) Roles played in terms of ethical conduct CSR plays a significant role in

maintaining ethical conduct in an organisation. The following are theroles played

by CSR:Improves the relationships with the investment community and develops

better access to capital andrisksEnhances ability to recruit, develop and retain

staffImproves the reputation and branding of the organisationImproves innovation,

competitiveness and market positioningImproves the ability to attract and build

effective and efficient supply chain relationships Improves relationships with

regulatorsReduces the costs through re-cycling processEnhances stronger

financial performance and profitability through operational efficiency gains.