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8/3/2019 Assignment Advance Strategic Management
http://slidepdf.com/reader/full/assignment-advance-strategic-management 1/5
SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)School of Distance Learning
SUBJECT: ADVANCE STRATEGIC MANAGEMENT
Q1 ) Explain various levels of Corporate Strategy?
Ans – 1) To explain the various levels of corporate strategy, first let us try and understand what
is corporate strategy. It can be explained as the common thread among the organizations,
activities and product markets that defines the essential nature of business that the organization
was or planned to be in future.The term corporate strategy is gaining importance in the era of
privatization,globalization and liberalization.A few aspects regarding the nature of strategy are as
follows:
a) Corporate strategy is related mostly to external environment.
b) Corporate strategy is related to the long run.
c) It provides overall framework for guiding enterprise thinking and action.
d) It requires systems and norms for its efficient adoption in any organization.
Corporate strategy may exist at three levels in an organization.They may be at corporate
lavel,business level and operational level.Briefly these three levels are explained below:
1) Coprorate level strategy – It is believed that strategic decision making is the
responsibility of the top management.At the corporate level, the board of directors
and chief executive officers are involved in strategy making.Corporate planners and
consultants may also be involved.Mostly, corporate level strategies are
futuristic,innovative and pervasive in nature.Decision like spreading the range of
business interests,acquisitions,diversification,structural
redesigning,mergers,takeovers,liquidations come under corporate level strategy.
2) Business level strategy – Strategic business unit (SBU) managers are involved at this
level in taking strategic decisions.These strategies relate to a unit within an
organization. At business level, the objectives are formulated for SBUs and resources
are allocated among functional areas.These strategies operate under the defined scope
of corporate level strategy.Business level strategy is more specific and action
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SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)School of Distance Learning
oriented.It relates mainly with “how” aspect.The corporate level strategy is related to
“what” aspect of corporate strategy.
3) Operating level strategy – This level of strategy is at the operating end of the
organization.It is also known as the functional level strategy.These decisions relate to
training, investment in plant, advertisement, sales promotion, total qualitymanagement, market segmentation etc.This decision is almost tactical.They deal with
a relatively restricted plan providing objectives for specific function, allocation of
resources among different operations within the functional area and coordination
between them.
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SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)School of Distance Learning
Q2 ) Explain the concepts of Social Responsibility and its importance with examples?
Ans) Corporate social responsibility has its roots in thinking of the twentieth century where the
theologians and the religious thinkers suggested the application of religious principles to
business activities.First was the principle of philanthropy in which the wealthy individual
contributed to the resources for aiding the unfortunate.The next was the stewardship principle, a
biblical doctrine, which requires business and wealthy individuals to see themselves as stewards
or caretakers of society.
The first publications in this field dates back to 1953 with Bowen’s ‘social responsibility of the
businessman’.In this work, Bowen enumerates the following:
1) That businesses exist at the pleasure of society and that their behavior and methods of operation must fall within the guidelines set by the society.
2) Businesses act as moral agents within the society.
A growing number of scholars take the view that firms can no longer be seen purely as private
institutions but as social institutions instead.The benefits flowing from the firms need to be
shared collectively.
However, Friedman differed from this and felt that the corporation is an economic institution and
thus should specialize in the economic sphere alone and the socially responsible behavior will be
rectified by the market through profits.
Traditionally in the USA, CSR has been defined much more in terms of a philanthropic
model.Corporate philanthropy is the practice of the companies of all sizes and sectors making
charitable contributions to address a variety of social, economic, and other issues as part of an
overall corporate citizenship strategy.The second generation of CSR is now developing where
companies and whole industries see CSR as an integral part of the long term business
strategy.Now a days lot of companies are taking it seriously for good of business.In the last
decade , CSR and related concepts such as corporate citizenship and corporate sustainability
have expanded.This has perhaps occurred in response to new challenges such as those emanating
from increased globalization on the agenda of business managers as well as for related
stakeholder communities.
A third generation of CSR is needed in order to make a significant contribution to addressing
poverty and environmental degradation.This will go beyond voluntary approaches by individual
companies and will involve leadership companies and organizations influencing the market in
which they operate and how it is regulated to re-mould whole markets towards sustainability.
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SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)School of Distance Learning
In many ways CSR is important to an organization , these can be enumerated as follows:
a) Improved financial performance – While it remains difficult to determine a direct casual
relationship between increased accountability and financial performance, a variety of
study suggest that such a link exist. For example, according to 2002 Global Investor
Opinion Survey released by McKinsey & Company, a majority of investors are prepared
to pay a premium for companies exhibiting high governance standards.The study also
found that more than 60 % of investors state that governance considerations might lead
them to avoid individual companies with poor governance.
b) Hightened Public Credibility – Companies that demonstrate a willingness to provide
information that is credible,verifiable and accessible can garner increased trust among
stakeholders.At the same time, companies that make a public commitment to
increaseaccountability and transparency need to ensure that they have robust systems for
implementation, lest the company might risk negative public backlash for failing to live
up to its commitment.
c) Reduced Cost – The enhanced communication that is often part of corporate
accountability efforts can help build trust between companies and stakeholders, which
can reduce costly conflict and improve decision – making.
d) Increased attractiveness to Investors – Investors welcome the increased disclosure that
comes with corporate accountability.A growing number of investors are including non – financial metrics in their evaluation and analysis of their investment.New metrics cover
labour and environmental practices,board diversity, independence and other corporate
governance issues.A survey conducted by McKinsey and Company and World Bank
found that three quarters of stakeholders consider board practices as important as
financial performance when evaluating companies for investment.
e) Improved relationship with Investors – Companies that make an effort to be transparent
and accountable for their actions and decisions are better able to build trust among their
stakeholders.Many govt. agencies and stakeholders look favourably at companies that
self-identify and publicly disclose accounatability challenges and demonstrate that theyare working on solving them.
f) Maeketplace advantages – Accountability can make entry and success in new markets
easier by helping establish direct relationships with key customers and business
partners.These relationships can contribute to innovation in product development or
delivery, help mitigate potential negative media coverage and enhance market
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SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)School of Distance Learning
presence.Some companies have used dialogue with stakeholders to help make decisions
on overseas investments and operations, or to overcome the challenges of operating in
markets with different cultures,laws and languages.For example, Uniliver’s Indian
subsidiary, Hindustan Lever , has worked with local stakeholders to dwvwlop a new
delivery system for laundry detergent in Indian villages.
g) Improved Overall Management – Many companies that have developed clear notability
CSRperformance and accountability systems inside their organization report experiencing
an improvement in their management practices overall.Increasingly companies are
finding that the impact of systems designed to increase accountability for CSR
performance is not limited to CSR realm, but can also impact performance in other areas
as the culture of the organization undergoes change.Ananalysis of Fortune 500 companies
conducted at the Boston College,carroll School of Management found that companies
judged as treating their stakeholders well are rated by peers as also having superior
management.
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