GM14
Strategic Management and Ethics
Assignment I
Assignment Code : 2014GM14B1 Last Date of Submission: 15th October 2014
Maximum Marks: 100
Attempt all the questions. All questions are compulsory and carry equal marks.
Section A
1. (a) What do you understand by Strategic Management? Why should a student study Strategic Management?
(b) Why do we need it and what are the benefits to the organization?
2. (a) What do you understand by Organizational Appraisal?
(b) What should the strategist look for in sizing up a company's strengths, weaknesses, opportunities and threats?
3. Elaborate the four grand strategies viz. stability, growth, retrenchment and combination to achieve the corporate objectives of the firm.
4. A firm should have an edge over competition in getting customers and defending against competitive forces to have competitive advantage. Discuss the statement with reference to –
a) Generic Strategies
b) Offensive Strategies
c) Defensive Strategies
Section B
Case Study - SUCHI HOTELS AND DIRECT MARKETING LIMITED
Mr. Pulapa hailed from a village near Rajahmundry whose hobby was travelling widely. During his extensive travel in 1950s and 1960s, he faced the problem of non-availability of good hotels in different parts of the country. He got an idea of bridging this gap in hotel industry at least in one town and he started a small hotel by name Suchi Hotel with his own capital of Rs. 50,000 in 1971. He became successful by 1973. His profits cross 30% of his investment. The number of customers went up by 200% between 1971 and 1973. Sales in monetary terms rose by 150% during the period. He was amazed by the progress of Suchi Hotel and started planning to expand the hotel to other towns particularly to Visakhapatnam and Vijayawada. He searched for a partner who can participate in equity, day to day administration and policy making. He could find Mr. Ram Krishna in 1975 and both of them started hotels in Visakhapatnam and Vijayawada after establishing a private limited company under the name of Suchi Hotels (Private) Limited in 1976. Their unit in Vijayawada was a successful project. In fact, they expanded the Vijayawada branch. The Visakhapatnam branch proved to be a failure one and the company harvested it in 1981. The money received from this source was invested in opening another branch in Vijayawada in 1982. The company had plans of opening its hotels in other cities like Hyderabad, New Delhi and Bombay. The company was converted into a public limited company in 1986 and issued share capital for public to the tune of Rs. 50 lakhs. The company was successful in this venture. The company started its branches in Hyderabad, and New Delhi in 1988 and could not start a branch in Bombay as it could not get the right place in Bombay, instead, the company opened its branch in Madras.
All the hotels of the company proved to be successful. The company's management in 1991 seriously considered the issue of supplying a lunch and dinner to the homes and/ or offices. This idea attracted the management from the view point of increasing number of working unmarried women and men. After a thorough discussion of this project, the management decided to implement this idea from janualy 1992. The company received an unexpected response from the customers. Therefore the company invested all its cash for purchasing vehicles, and other necessary equipment for this project. The company earned the profit as high as 30% in 1992 and declared dividend the highest percentage since its establishment i.e., 28%.
Pragathi Direct Marketing Limited was marketing the consumer durables like TVs, washing machines, kitchen appliances, ready-made garments in South India could not survive due to unsound financial position. The management of Suchi Hotels Limited and Pragathi Direct Marketing Limited agreed for merging the latter company with the former one. The name of the new company was decided as "Suchi Hotels and Direct Marketing Limited" and its was also agreed to offer one share of the new company for every three shares of Rs. 10 fully paid to the shareholders of the Pragathi Direct Marketing Limited. This new company of Suchi Hotels and Direct Marketing Limited came into being in April 1993. The management of the new company issued equity shares for the public to the tune of Rs. 2,00 crores in July 1993 and the company had an overwhelming response for this issue.
During this period there was a boom in the capital market. The number of new companies in the country was increasing. Added to this, a number of existing companies either expanded and/or diversified their activities. Almost all the companies went for public issue were successful. The growth of the traditional hotel industry reached a peak stage. In fact, there was cut-throat competition in this industry due to more number of firms in the industry. The new developments in this industry are the emergence of motels far from the busy places of the cities and the emergence of tiffin corners and lunch corners at all the places convenient to the customers. Even, many existing hotels started the home/office delivery of breakfast, lunch and dinners.
The Suchi Hotels and Direct Marketing Limited was affected severely by these environmental changes. The number of customers, sales and profits of all of its hotels started declining from 1995 and reached to their lowest level in 1997. The company viewed this problem very seriously as the sales level is 50% below the break-even level.
During the 1990s, there has been favourable conditions for the direct marketing industry. The industry's growth rate is nearly 20%. In fact, new items are added to the direct marketing by many companies. The Suchi Hotels and Direct Marketing Limited also expanded its operations of its direct marketing portfolio. Further, this portfolio's sales went up by 100% between 1995 and 1997, profit went up by 50% during the period. The General Manager of the company has been designing many new programmes which have been proving successful. The company could not approve some of the worthwhile projects proposed by the general manager of the Direct Marketing Portfolio of the company due to the cash crunch. The company also realised that it has been unable to exploit the opportunities offered by the direct marketing industry due to the setbacks from the hotel portfolio of the company. The genera! manager of the direct marketing wing threatened the management in September 1997, that he would leave the company by March 1998, if the company fails to make further investments.
Questions
1- Discuss the strategic alternatives available in the company.
2- Should the company go for a public issue? Turn around programme of the hotel and expansion programme of direct marketing.
GM14
Strategic Management & Ethics
Assignment II
Assignment Code : 2014GM14B2 Last Date of Submission: 15th November 2014
Maximum Marks: 100
Attempt all the questions. All questions are compulsory and carry equal marks.
Section A
1. Briefly discuss –
a) Corporate Culture
b) Shared Values
c) Power
d) Social Responsibilities
e) Ethics
2. (a) What are the factors influencing organizational leadership and empowerment?
(b) Discuss the choice of leaders with reference to their qualities and selection from inside or outside the organization.
3. Strategic control focuses on monitoring and evaluating the strategic management process to ensure that it function in the right direction. Discuss the purpose of strategic control and its processes.
4. (a) What do you understand Strategic Decision Making?
(b) Discuss its approaches and process.
Section B
CASE STUDY- DIVERSIFICATION PROGRAMMES OF HINDUSTAN MACHINE TOOLS (HMT)
Among Indian public enterprises, Hindustan Machine Tools could be cited as a unique example of an enterprise which started in 1953, relatively small in each of its diversifications, grew rapidly in the course of time. It grew very fast, both production-wise and product-wise. Taking birth in Bangalore, the enterprise has succeeded through its diversification strategy and-today it has plants and offices spread all over India. Commending its operations as a manufacturing enterprise of machine tools it has diversified its activities broadly covering a wide range of machine tools, presses, printing machines, horological machines, watches, tractors, lamps and consultancy services and has displayed a fairly good profit performance. The late fifties and early sixties have witnessed a rigorous diversification of the machine tool product line. Subsequently, it moved on to other profitable and export oriented areas of production. The primary activity was to produce a limited range of machine tools to enable building up the industrial infrastructure of the country.
However, the rate of growth in machine tools demand outstripped all expectations by 1960-61, with HMT well on the way to attaining its full rated capacity. As the rest of the machine tool industry in the country was making slow and tardy efforts to raise the production potential matching with the rapidly increasing needs of the country, HMT took upon itself the task of recasting the role of the machine tools industry in support of the country's visions of industrialisation. With the success achieved in absorbing the technology and in attaining production competence far ahead of the original plans, and with a strategic move, the company launched a bold plan for diversification and expansion which resulted in the duplication of the Bangalore unit and the setting up of new units at Pinjore, Kalamassery and Hyderabad. Further, based on the projections of the Planning Commission, a ten-year plan, which may be termed as the first Corporate plan for HMT, was developed in 1962 to set up five more machine tools units that would raise the aggregate annual capacity to around Rs. 50 crore by 1972. This plan was complete with a statement of objectives and the strategies for integrated technical and manpower development, internal generation of financial resources, equitable sharing of surpluses with investors and employees, and so on. The actual growth of the country's consumption of machine tools, and HMT's own growth, were absolutely on-course with this plan, until 1966.
During the period 1960-66, as if encouraged by the success of HMT, other machine tool makers in the country also proportionately increased their production capacity and widened their product base. In 1967, a recession struck the Indian engineering industry and the consumption of machine tools decreased drastically, down to Rs. 42 crore in 1969-70 instead of reaching Rs. 84 crore as envisaged by the earlier projections.
The traumatic years of recession, difficult as they were to endure at the time, did indeed serve to bring to the fore two latent strengths of HMT: the urge to survive and the confidence to innovate. With these strengths at full play, the company emerged from the recession.
• With the world's widest range of machine tools and associated services under a single corporate entity;
• With action plans firmly launched for diversification into tractors, printing machines, etc,, which are considered to have economic cycles that are different from those of machine tools;
• With additional capacities for watch production in the offing to provide a greater cushion against cyclical fluctuations in capital goods markets; and
• With export markets of enormous potential under active development.
From an enterprise manufacturing a fairly narrow range of machine tools valued at about Rs. 34 million and employing about 4,200 employees in 1960-61, the Company has today (i.e., in 1993-94) grown into a giant, with 16 units (24 divisions) spread over ten states, producing goods worth nearly Rs. 6.3 billion, employing 24,919 employees and marketing a wide range of capital and consumer goods including a full spectrum of general purpose machine tools, sophisticated machines like CMC turning centres, CMC turret punch presses, etc., printing machinery, dairy machinery, tractors, watches from wrist watches to top line quartz analog watches and lamps including fluorescent and sodium vapour lamps.
HMT has three subsidiaries viz., HMT International Ltd., through which exports of all HMT units are routed, HMT Bearing Ltd., a company producing a wide range of ball, cylindrical and tapered bearings and Praga Tools Ltd, a company which also manufacturers machine tools.
The merger planks of HMT's growth in the eighties were R&D, corporate planning, and human resources development^ However, during the following decade, 1980-1990 the corporate strategy pursued by HMT preferred to confine its diversification programmes and plans mostly to its main line of activity, i.e., engineering products and machine tools. It did not venture into any new field in view of the decreasing returns on the investment and losses suffered due to diversification into unrelated fields, particularly lamps and its inability to go for technological upgradation with a view to keeping pace with its competitors. Since 1990, HMT preferred to consolidate its existing line of activity. An important landmark which influenced the corporate strategy of HMT has been the study conducted by Japan International Co-operation Agency (JICA) which provided a totally new direction for its diversification plans.
Efforts have been made by the researcher to study and analyse the strengths and weaknesses of the company's corporate policy from the point of view of its commitment to diversification plans.
Questions
1- What were the corporate mission, objectives and goals of HMT Ltd.?
2- Review the preparation of HMT with regard to strengths, weaknesses, opportunities and threats.
Strategic Management and Ethics
Assignment I
Assignment Code : 2014GM14B1 Last Date of Submission: 15th October 2014
Maximum Marks: 100
Attempt all the questions. All questions are compulsory and carry equal marks.
Section A
1. (a) What do you understand by Strategic Management? Why should a student study Strategic Management?
(b) Why do we need it and what are the benefits to the organization?
2. (a) What do you understand by Organizational Appraisal?
(b) What should the strategist look for in sizing up a company's strengths, weaknesses, opportunities and threats?
3. Elaborate the four grand strategies viz. stability, growth, retrenchment and combination to achieve the corporate objectives of the firm.
4. A firm should have an edge over competition in getting customers and defending against competitive forces to have competitive advantage. Discuss the statement with reference to –
a) Generic Strategies
b) Offensive Strategies
c) Defensive Strategies
Section B
Case Study - SUCHI HOTELS AND DIRECT MARKETING LIMITED
Mr. Pulapa hailed from a village near Rajahmundry whose hobby was travelling widely. During his extensive travel in 1950s and 1960s, he faced the problem of non-availability of good hotels in different parts of the country. He got an idea of bridging this gap in hotel industry at least in one town and he started a small hotel by name Suchi Hotel with his own capital of Rs. 50,000 in 1971. He became successful by 1973. His profits cross 30% of his investment. The number of customers went up by 200% between 1971 and 1973. Sales in monetary terms rose by 150% during the period. He was amazed by the progress of Suchi Hotel and started planning to expand the hotel to other towns particularly to Visakhapatnam and Vijayawada. He searched for a partner who can participate in equity, day to day administration and policy making. He could find Mr. Ram Krishna in 1975 and both of them started hotels in Visakhapatnam and Vijayawada after establishing a private limited company under the name of Suchi Hotels (Private) Limited in 1976. Their unit in Vijayawada was a successful project. In fact, they expanded the Vijayawada branch. The Visakhapatnam branch proved to be a failure one and the company harvested it in 1981. The money received from this source was invested in opening another branch in Vijayawada in 1982. The company had plans of opening its hotels in other cities like Hyderabad, New Delhi and Bombay. The company was converted into a public limited company in 1986 and issued share capital for public to the tune of Rs. 50 lakhs. The company was successful in this venture. The company started its branches in Hyderabad, and New Delhi in 1988 and could not start a branch in Bombay as it could not get the right place in Bombay, instead, the company opened its branch in Madras.
All the hotels of the company proved to be successful. The company's management in 1991 seriously considered the issue of supplying a lunch and dinner to the homes and/ or offices. This idea attracted the management from the view point of increasing number of working unmarried women and men. After a thorough discussion of this project, the management decided to implement this idea from janualy 1992. The company received an unexpected response from the customers. Therefore the company invested all its cash for purchasing vehicles, and other necessary equipment for this project. The company earned the profit as high as 30% in 1992 and declared dividend the highest percentage since its establishment i.e., 28%.
Pragathi Direct Marketing Limited was marketing the consumer durables like TVs, washing machines, kitchen appliances, ready-made garments in South India could not survive due to unsound financial position. The management of Suchi Hotels Limited and Pragathi Direct Marketing Limited agreed for merging the latter company with the former one. The name of the new company was decided as "Suchi Hotels and Direct Marketing Limited" and its was also agreed to offer one share of the new company for every three shares of Rs. 10 fully paid to the shareholders of the Pragathi Direct Marketing Limited. This new company of Suchi Hotels and Direct Marketing Limited came into being in April 1993. The management of the new company issued equity shares for the public to the tune of Rs. 2,00 crores in July 1993 and the company had an overwhelming response for this issue.
During this period there was a boom in the capital market. The number of new companies in the country was increasing. Added to this, a number of existing companies either expanded and/or diversified their activities. Almost all the companies went for public issue were successful. The growth of the traditional hotel industry reached a peak stage. In fact, there was cut-throat competition in this industry due to more number of firms in the industry. The new developments in this industry are the emergence of motels far from the busy places of the cities and the emergence of tiffin corners and lunch corners at all the places convenient to the customers. Even, many existing hotels started the home/office delivery of breakfast, lunch and dinners.
The Suchi Hotels and Direct Marketing Limited was affected severely by these environmental changes. The number of customers, sales and profits of all of its hotels started declining from 1995 and reached to their lowest level in 1997. The company viewed this problem very seriously as the sales level is 50% below the break-even level.
During the 1990s, there has been favourable conditions for the direct marketing industry. The industry's growth rate is nearly 20%. In fact, new items are added to the direct marketing by many companies. The Suchi Hotels and Direct Marketing Limited also expanded its operations of its direct marketing portfolio. Further, this portfolio's sales went up by 100% between 1995 and 1997, profit went up by 50% during the period. The General Manager of the company has been designing many new programmes which have been proving successful. The company could not approve some of the worthwhile projects proposed by the general manager of the Direct Marketing Portfolio of the company due to the cash crunch. The company also realised that it has been unable to exploit the opportunities offered by the direct marketing industry due to the setbacks from the hotel portfolio of the company. The genera! manager of the direct marketing wing threatened the management in September 1997, that he would leave the company by March 1998, if the company fails to make further investments.
Questions
1- Discuss the strategic alternatives available in the company.
2- Should the company go for a public issue? Turn around programme of the hotel and expansion programme of direct marketing.
GM14
Strategic Management & Ethics
Assignment II
Assignment Code : 2014GM14B2 Last Date of Submission: 15th November 2014
Maximum Marks: 100
Attempt all the questions. All questions are compulsory and carry equal marks.
Section A
1. Briefly discuss –
a) Corporate Culture
b) Shared Values
c) Power
d) Social Responsibilities
e) Ethics
2. (a) What are the factors influencing organizational leadership and empowerment?
(b) Discuss the choice of leaders with reference to their qualities and selection from inside or outside the organization.
3. Strategic control focuses on monitoring and evaluating the strategic management process to ensure that it function in the right direction. Discuss the purpose of strategic control and its processes.
4. (a) What do you understand Strategic Decision Making?
(b) Discuss its approaches and process.
Section B
CASE STUDY- DIVERSIFICATION PROGRAMMES OF HINDUSTAN MACHINE TOOLS (HMT)
Among Indian public enterprises, Hindustan Machine Tools could be cited as a unique example of an enterprise which started in 1953, relatively small in each of its diversifications, grew rapidly in the course of time. It grew very fast, both production-wise and product-wise. Taking birth in Bangalore, the enterprise has succeeded through its diversification strategy and-today it has plants and offices spread all over India. Commending its operations as a manufacturing enterprise of machine tools it has diversified its activities broadly covering a wide range of machine tools, presses, printing machines, horological machines, watches, tractors, lamps and consultancy services and has displayed a fairly good profit performance. The late fifties and early sixties have witnessed a rigorous diversification of the machine tool product line. Subsequently, it moved on to other profitable and export oriented areas of production. The primary activity was to produce a limited range of machine tools to enable building up the industrial infrastructure of the country.
However, the rate of growth in machine tools demand outstripped all expectations by 1960-61, with HMT well on the way to attaining its full rated capacity. As the rest of the machine tool industry in the country was making slow and tardy efforts to raise the production potential matching with the rapidly increasing needs of the country, HMT took upon itself the task of recasting the role of the machine tools industry in support of the country's visions of industrialisation. With the success achieved in absorbing the technology and in attaining production competence far ahead of the original plans, and with a strategic move, the company launched a bold plan for diversification and expansion which resulted in the duplication of the Bangalore unit and the setting up of new units at Pinjore, Kalamassery and Hyderabad. Further, based on the projections of the Planning Commission, a ten-year plan, which may be termed as the first Corporate plan for HMT, was developed in 1962 to set up five more machine tools units that would raise the aggregate annual capacity to around Rs. 50 crore by 1972. This plan was complete with a statement of objectives and the strategies for integrated technical and manpower development, internal generation of financial resources, equitable sharing of surpluses with investors and employees, and so on. The actual growth of the country's consumption of machine tools, and HMT's own growth, were absolutely on-course with this plan, until 1966.
During the period 1960-66, as if encouraged by the success of HMT, other machine tool makers in the country also proportionately increased their production capacity and widened their product base. In 1967, a recession struck the Indian engineering industry and the consumption of machine tools decreased drastically, down to Rs. 42 crore in 1969-70 instead of reaching Rs. 84 crore as envisaged by the earlier projections.
The traumatic years of recession, difficult as they were to endure at the time, did indeed serve to bring to the fore two latent strengths of HMT: the urge to survive and the confidence to innovate. With these strengths at full play, the company emerged from the recession.
• With the world's widest range of machine tools and associated services under a single corporate entity;
• With action plans firmly launched for diversification into tractors, printing machines, etc,, which are considered to have economic cycles that are different from those of machine tools;
• With additional capacities for watch production in the offing to provide a greater cushion against cyclical fluctuations in capital goods markets; and
• With export markets of enormous potential under active development.
From an enterprise manufacturing a fairly narrow range of machine tools valued at about Rs. 34 million and employing about 4,200 employees in 1960-61, the Company has today (i.e., in 1993-94) grown into a giant, with 16 units (24 divisions) spread over ten states, producing goods worth nearly Rs. 6.3 billion, employing 24,919 employees and marketing a wide range of capital and consumer goods including a full spectrum of general purpose machine tools, sophisticated machines like CMC turning centres, CMC turret punch presses, etc., printing machinery, dairy machinery, tractors, watches from wrist watches to top line quartz analog watches and lamps including fluorescent and sodium vapour lamps.
HMT has three subsidiaries viz., HMT International Ltd., through which exports of all HMT units are routed, HMT Bearing Ltd., a company producing a wide range of ball, cylindrical and tapered bearings and Praga Tools Ltd, a company which also manufacturers machine tools.
The merger planks of HMT's growth in the eighties were R&D, corporate planning, and human resources development^ However, during the following decade, 1980-1990 the corporate strategy pursued by HMT preferred to confine its diversification programmes and plans mostly to its main line of activity, i.e., engineering products and machine tools. It did not venture into any new field in view of the decreasing returns on the investment and losses suffered due to diversification into unrelated fields, particularly lamps and its inability to go for technological upgradation with a view to keeping pace with its competitors. Since 1990, HMT preferred to consolidate its existing line of activity. An important landmark which influenced the corporate strategy of HMT has been the study conducted by Japan International Co-operation Agency (JICA) which provided a totally new direction for its diversification plans.
Efforts have been made by the researcher to study and analyse the strengths and weaknesses of the company's corporate policy from the point of view of its commitment to diversification plans.
Questions
1- What were the corporate mission, objectives and goals of HMT Ltd.?
2- Review the preparation of HMT with regard to strengths, weaknesses, opportunities and threats.
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