MB0052 Strategic Management and Business Policy

Q1. Explain the corporate strategy in different types of organization

Pno 7

unit 1

A well-formulated strategy is vital for growth and development of any organizationwhether it is a small business, a big private enterprise, a public sector company, a multinational corporation or a non-profit organization. But, the nature and focus of corporate strategy in these different types of organizations will be different, primarily because of the nature of their operations and organizational objectives and priorities. Small businesses, for example, generally operate in a single market or a limited number of markets with a single product or a limited range of products. In large businesses or companieswhether in the private sector, public sector or multinationalsthe situation is entirely different. Both the internal and the external environment and the organizational objectives and priorities are different. Multinationals have a greater focus on growth and development, and also diversification in terms of both products and markets. This is necessary to remain internationally competitive and sustain their global presence. For example, multinational companies like General Motors, Honda and Toyota may have to decide about the most strategic locations or configurations of plants for manufacturing the cars. They are already operating multi location (country) strategies, and, in such companies, roles of strategic planning and management become more critical in optimizing manufacturing facilities, resource allocation and control. In public sector companies, objectives and priorities can be quite different from those in the private sector. Generation of employment and maximizing output may be more important objectives than maximizing profit. Stability rather than growth may be the priority many times. Accountability system is also very different in public sector from that in private sector. There is also greater focus on corporate social responsibility. The corporate planning system and management have to take into account all these factors and evolve more balancing strategies. In non-profit organizations, the focus on social responsibilities is even greater than in the public sector. In these organizations, ideology and underlying values are of central strategic significance. Many of these organizations have multiple service objectives, and the beneficiaries of service are not necessarily the contributors to revenue or resource. All these make strategic planning and management in these organizations quite different from all other organizations.The evaluation criteria also become different.

Q2. What is the role consultants play in the strategic planning and management process of a company? Is it an essential role?

Pno 36

unit 2

Management consultants can play very useful roles in the strategic planning process of a company. Consultants render services in different functional areas of management including the strategic planning and management process. In companies with no separate planning division or unit, consultants can fill that gap. They can undertake planning and strategy exercises as and when the company management feels the need for such exercises or consultancies. Even in companies with a corporate planning division/unit, consultants may provide specialized inputs or insights into identified management or strategy areas. Top strategic consultants like McKinsey & Company use or develop latest tools, techniques or models to work out solutions to specific strategic management problems or issuesbe it productivity, cost efficiency, restructuring, long-term growth or diversification. Consultants bring with them diversified skills (most of the consulting companies are multidisciplinary) and experience from various companies which may not be available internally in a single company. This is the reason why even large multinational companies hire consultants for achieving their goals or objectives. There are many international consultants who are in demand in different countries. There are also national consultants. Leading international consultants, in addition to McKinsey & Company, are Boston Consulting Group (BCG), Arthur D Little and Accenture (formerly Anderson Consulting). Prominent Indian consulting companies are A F Ferguson, Tata Consultancy Services (TCS) and ABC Consultants. Consultants, sometimes have a difficult or delicate role to play. In many companies, a situation develops when the chief executive or the top management needs to bank upon the support of an external agency like a consultant to push through a strategic change in the organizational structure or management system of the company. It may be for growth and development or downsizing. In both cases, many companies face internal resistance to change. The resistance is more if it is downsizing even when it is required for turning around a company. This happens particularly in public sector companies where implementing change is always difficult. Consultants are engaged to support or substantiate the companys point of view (in the form of their recommendations) so that change is more easily acceptable to the internal stakeholders of the company. Consultants role may become delicate and, sometimes, tricky in such cases, and they should carefully weigh the ethical implication of their participation.

Q3. What is strategic audit? Explain its relevance to corporate strategy and corporate governance.

Pno 85

unit 4

With increasing pressure on boards from external stakeholders to be more active, many directors are seeking more practical ways to conduct strategic overview of company management without getting directly involved in it. Donaldson (1995) has suggested strategic audit as a new tool for systematic review of strategy by board members without directly involving themselves with management of companies. To understand strategic audit in the correct perspective, one needs to analyse this in terms of its various elements. Donaldson has specified five elements of strategic audit. These are: 1. Establishing criteria for performance 2. Database design and maintenance 3. Strategic audit committee 4. Relationship with the CEO 5. Alert to duty (by board members) For effective strategic audit, a strategic audit committee should be constituted. According to Donaldson, outside directors should select three of their own members to form the committee. A sensitive issue is the strategic audit committees relationship with the CEO. Any CEO would be generally apprehensive of such a committee. The strategic audit committee needs to create and maintain an atmosphere of mutuality. It is true that whenever a question or a discussion on the strategic direction of a company comes up in a board meeting, it is perceived by many CEOs as an implicit criticism of the current strategy and leadership of the company. It is also true that regular strategic process involving the CEO reduces chances of unpleasant or confronting situations. In fact, ideally, the function in of the strategic audit committee should be seen as a low-key operation, positive in approach, designed to lend support and credibility to company leadership and management. The strategic audit committee and also the board should always be alertand vigilant to ensure that there are no slippages. Business cycles indicate that period of success may be followed by a period of slump. The strategic audit committee and the board should be alert enough to get signals so that they can act in time. This is necessary because complacence develops after success both in the board and in the management

Q4. What is Corporate Social Responsibility(CSR ! Which are the iss"es in#ol#ed in analysis of CSR! $a%e three co%panies &ith high CSR rating.

Pno 121 unit 5

As mentioned above, external stakeholders of an organization are too many and varied and many of them represent different sections or social groups. This implies that organizations should be socially responsible; that is, in addition to the interests of the shareholders, businesses or companies should also serve the society. This is corporate social responsibility (CSR). Corporate social responsibility can be defined as the alignment of business operations with social values. The conflict between internal and external stakeholders can go much further than mentioned so far. Some feel that this is the most problematic issue in deciding company responsibility. External stakeholders argue that internal stakeholders demand be made secondary to the greater need of the society; that is, greater good of the external stakeholders. Strong exponents of CSR also talk of social policy for companies. They feel that social responsibilities of companies should be clearly enunciated and declared as social policy. Social policies may directly affect a companys products and services, technology, markets, customers and self-image. According to these thinkers, an organizations social policy should be integrated into all management activities including the mission statement and objectives. Many feel that corporate social policy should be articulated during strategy formulation, administered during strategy implementation and reaffirmed or changed during strategy evaluation Worldwide, companies are trying to integrate corporate social responsibility into their business operations and strategies. Microsoft, Coca-Cola, McDonalds, FedEx, IBM and Johnson & Johnson are some of the leading companies. In India also, many companies are integrating CSR into their business practices and making significant contributions to society. The developmental activities range from conducting rehabilitation to construction of orphanages, setting up libraries and promoting art and culture. ITCs E-choupals have not only helped to meet the information requirements of rural households, but also immensely contributed to the establishment of better relations with customers and rural suppliers. This has helped the process of integrated rural development. Many banks and financial institutions along with FMCG companies like Hindustan Unilever have recognized the importance of development of the rural sector.

Q'. (isting"ish bet&een core co%petence) distincti#e co%petence) strategic co%petence and threshold co%petence. *se exa%ples.

Pno 135

unit 6

Core Competence Core competence of a company is one of its special or unique internal competence. Core competence is not just a single strength or skill or capability of a company; it is interwoven resources, technology and skill or synergy culminating into a special or core competence. Core competence gives a company a clear competitive advantage over its competitors. Distinctive Competence Thompson and Strickland (1992) have defined distinctive competence as: Distinctive competence is the
unique capability that helps an organization in capitalizing upon a particular opportunity; the competitive edge it may give a firm in the marketplace.

Distinctive competences may provide an answer to some of these points. Distinctive competence is based on the assumption that there are different alternative ways to secure competitive advantage and not only special technical and production expertise as emphasized by core competence. Distinctive competence includes core competence as one of the alternatives. But, there are other alternatives that are also based on organizational capabilities. So, distinctive competence is more broad based. Since resources are limited, identification of distinctive competence may also help efficient allocation of resources. Strategic Competence Strategic competence coexists with, or supports, core competence and distinctive competence. Strategic competence is the competence level required to formulate, implement and produce results with particular strategy Strategic competence may also involve combination or convergence of different capabilities as in the case of Hindustan Unilever.

Threshold Competence Threshold competence is the competence level required just for survival in the market or business. The competence level of a company may be weaker than many of its competitors. Companies with threshold competence can, over time, graduate to a higher level of competence. But, continued threshold competence can also lead to closure of business. Multi-product or multi-SBU companies may often possess a portfolio of competences. In some product or business, they may have core competence, but, not in all. ITCs core competence is in tobacco and cigarettes, but, they have distinctive competence in hospitality business and agri-business.

Q+. What is global industry? Explain with examples, international strategy, multi domestic strategy, global strategy and transnational strategy.

Pno 282

unit 11

pno

Definition of an industry should not be thought to be same as definition of the business in which a company wants to compete. Industry may be broadly defined or narrowly defined. If industry is broadly defined, it does not follow that business should also be broadly defined without focus. Global industry In global industry, the strategic position of companies in different countries or national markets are governed by their overall global positions. Distinction should be made between an international industry and a global industry. An industry in a country may be international if it comprises a number of multinational companies. But, industries with multinational competitors are not necessarily global industries. International strategy can be adopted for those products and services which are not available in some countries and can be transferred from other countries. These are standard products with little or no differentiation. International strategies are not very common or popular. Some examples are: Kelloggs, Indian software, and Indian handicrafts. Multidomestic strategy is almost opposite of international strategy. Multidomestic strategy involves high degree of local responsiveness or local content. Products are highly customized to suit local requirements or conditions. Because of high customization, cost pressure is less; cost effectiveness may be also difficult to achieve because of lack of scale economies. Global strategy suits companies which make highly standardized sophisticated products, and, are in a position to reap benefits of economies of scale and experience effects. These also include high technology products which have universal applicability and hardly require any local adaptation. Transnational strategy is the most difficult strategy to follow because this is based on a combination of two apparently contradictory factors, i.e., cost effectiveness and local adaptation. But, this may be a true global strategy because, in global business, there is always a price pressure or cost pressure;

and, also the need to make the product as close to a particular countrys expectation as possible to maximize value offerings.

MB0053 International Business Management Write a note on !lobali"ation. Q,. Pno 15 unit 1 Globalization is a process where businesses are dealt in markets around the world, apart rom the local and national markets! "ccordin# to business terminolo#ies, #lobalization is de ined as $the worldwide trend o businesses e%pandin# be&ond their domestic boundaries'! (t is ad)anta#eous or the econom& o countries because it promotes prosperit& in the countries that embrace #lobalization!
Benefits of globalization *hile #lobalization creates emplo&ment opportunities in the host countries, it also e%ploits labour at a )er& low cost compared to the home countr&! -ro%otes foreign trade and liberalization of econo%ies. .ncreases the li#ing standards of people in se#eral de#eloping co"ntries thro"gh capital in#est%ents in de#eloping co"ntries by de#eloped co"ntries. /enefits c"sto%ers as co%panies o"tso"rce to lo& &age co"ntries. 0"tso"rcing helps the co%panies to be co%petiti#e by 1eeping the cost lo&) &ith increased prod"cti#ity. -ro%otes better ed"cation and 2obs. leads to free flo& of infor%ation and &ide acceptance of foreign prod"cts) ideas) ethics) best practices) and c"lt"re. -ro#ides better 3"ality of prod"cts) c"sto%er ser#ices) and standardized deli#ery %odels across co"ntries. 4i#es better access to finance for corporate and so#ereign borro&ers. .ncreases b"siness tra#el) &hich in t"rn leads to a flo"rishing tra#el and hospitality ind"stry across the &orld. .ncreases sales as the a#ailability of c"tting edge technologies and prod"ction techni3"es decrease the cost of prod"ction. -ro#ides se#eral platfor%s for international disp"te resol"tions in b"siness) &hich facilitates international trade. Some of the ill-effects of globalization are as follows5 6eads to exploitation of labo"r in se#eral cases. Ca"ses "ne%ploy%ent in the de#eloped co"ntries d"e to o"tso"rcing. 7ar%s the local b"sinesses of a co"ntry d"e to d"%ping of cheaper foreign goods.

 6eads to ad#erse health iss"es d"e to rapid expansion of fast food chains and increased cons"%ption of 2"n1 food. Ca"ses destr"ction of ethnicity and c"lt"re of se#eral regions &orld&ide in fa#o"r of %ore accepted &estern c"lt"re .nfl"ences political decisions in foreign co"ntries. 8he 9$Cs increasingly "se their econo%ical po&ers to infl"ence political decisions. Ca"ses ecological da%age as the co%panies set "p poll"ting prod"ction plants in co"ntries &ith li%ited or no reg"lations on poll"tion.

Q2.

Why do nations trade? #iscuss the relevance of $orter%s diamond model in today%s business context.

Pno 26 n 36

unit 2

countries world o)er are endowed with di erent natural, human, and capital resources! +ach countr& )aries rom the other in combinin# these resources ,land, labour and capital-! (n a #lobalised set.up, e)er& countr& cannot be as e icient as the best in producin# the #oods and ser)ices that their residents demand! /ountries ha)e to trade o their decisions to produce an& #ood or ser)ice based on opportunit& cost! 0pportunit& cost model helps us understand the choice o producin# one #ood or another'! 1he production o the countr& depends on whether it is more e icient to produce the #oods and ser)ices with lower opportunit& cost with increased and specialised production, or to trade those #oods, with #oods o hi#her opportunit& cost! ( a countr& can produce more o an& #oods or ser)ices with the same resources used b& an& other countr&, it is said to ha)e an absolute cost ad)anta#e in the production o those #oods or ser)ices! 2ations e)en i the& ha)e an absolute cost ad)anta#e in the production o #oods that are to be traded )is a )is its counterpart, would like to specialize in hi#her opportunit& cost products! 1he production size and scale ma& be limited b& other constraints! Porters diamond model .n ,::;) 9ichael -orter analyzed thesis o"tlined fo"r broad attrib"tes that shape the en#iron%ent in &hich local fir%s co%pete and these attrib"tes pro%ote the creation of co%petiti#e ad#antage. Factor endowments < /asic factors li1e nat"ral reso"rces) cli%ate) and location and so on and ad#anced factors li1e co%%"nications infrastr"ct"re) research facilities. Demand conditions < 8he role of ho%e de%and in i%pro#ing co%petiti#e ad#antage is e%phasized since fir%s are %ost sensiti#e abo"t the needs of their closest c"sto%ers.

Relating and supporting industries < 8he presence of s"ppliers or related ind"stries is ad#antageo"s since the benefits of in#est%ent in
ad#anced factors of prod"ction spill o#er to these s"pporting ind"stries. S"ccessf"l ind"stries &ithin a co"ntry tend to be gro"ped into cl"sters of related ind"stries. Firm strategy, structure and rivalry < (o%estic ri#alry creates press"re to inno#ate) i%pro#e 3"ality) and red"ce costs &hich in t"rn helps create &orld=class co%petitors. 3e said that these our attributes constituted the diamond and he ar#ued that irms are most likel& to succeed in industries where the diamond is most a)orable! 3e also stated that the diamond is a mutuall& rein orcin# s&stem and the e ect o one attribute depends on the state o others!

Q3.

Why do firms pay so much attention to economic factors while entering in particular mar&et? 'ustify your answer with practical examples

Pno48

unit 3

1he economic en)ironment re ers to the economic conditions under which a business operates and takes into account all actors that ha)e a ected it! (t includes prime interest rates, le#islation concernin# emplo&ment o orei#ners, return o pro its, sa et& o countr&, political stabilit& and so on! ational economic policies $ational econo%ic policies depend on a co"ntry>s socio=econo%ic and c"lt"ral bac1gro"nd. ?"ll e%ploy%ent. @ high econo%ic gro&th rate. @ lo& rate of inflation. @bsence of deficit in the co"ntry>s balance of pay%ents. !conomic structure .nternational /"siness %anagers need to "nderstand and assess international econo%ic forces at &or1. 4e& )ariables that need to be e%amined include Gross 5omestic Product ,G5P- per capita, re#ional distribution o G5P, le)els o in)estment, consumer e%penditure, labor costs, in lation and unemplo&ment Economic structure 6+conomic in rastructure is the sum o all the e%ternal acilities and ser)ices that support the work o irms includin# communication, transportation, electricit& suppl&, bankin# and inancial ser)ices!

"ndustry structure- Entry and exit barriers. $"%ber of co%peting fir%s. 9ar1et share a%ong fir%s in that sector. @#erage size of co%peting "nits.
Market gro t! 6 (t is measured in terms o local currenc& and ad7usted or in lation! 8ocal currenc& is used because con)ersions into other currencies are a ected b& e%chan#e rate luctuations! Income le"els# 2et income is another important )ariable and is without ta% pa&ments rom indi)idual #ross incomes! Sector ise trends 6 Growth acti)it& in a countr& mi#ht )ar& si#ni icantl& amon# certain industries! $%enness of t!e economy 6 1he ratio o a countr&'s imports and e%ports to its Gross 2ational Product ,G2Pindicates its )ulnerabilit& to luctuations in international trade! International debt 6 "n outstandin# loan that one countr& owes to another countr& or institutions within that countr&! 9orei#n debt also includes due pa&ments to international or#anizations!

Degree of urbanization <8here are %a2or differences in inco%es and lifestyles bet&een "rban and r"ral areas in %ost co"ntries s"ch as5 Shopping patterns < shopping fre3"ency) a#erage p"rchase #al"e. $at"re of goods bo"ght. Expectations in 3"ality and technical sophistication.
Ed"cation le#els. Ease of distrib"tion.

Q4.

(ow has India reacted towards regional integration? #iscuss briefly the trade agreements signed by India.

Pno 115n 13:n134

unit 6

(t is de ined as the uni ication o countries into a lar#er whole! (t also re lects a countr&'s willin#ness to share or uni & into a lar#er whole! 1he le)el o inte#ration o a countr& with other countries is determined b& what it shares and how it shares! ;e#ional inte#ration re<uires some compromise on the part o participatin# countries! "ndia and #rade $greements @fter learning abo"t regional trading arrange%ents in the pre#io"s section) &e shall no& disc"ss the trading agree%ents cond"cted by .ndia A considers Regional 8rading @rrange%ents (R8@Bs as the b"ilding bloc1s to&ards the ob2ecti#e of trade liberalization. 8herefore) .ndia participates in a n"%ber of R8@s) &hich incl"de ?ree 8rade @gree%ents (?8@s ) -referential 8rade @gree%ents (-8@s and so on. 8hese agree%ents ta1e place bilaterally or in a regional gro"ping. $o& &e disc"ss so%e of the %a2or agree%ents signed by .ndia. $sia-Pacific #rade $greement %$P#$& 8he @sia=-acific 8rade @gree%ent (@-8@ ) pre#io"sly 1no&n as the /ang1o1 @gree%ent) &as signed on 3,st of C"ly ,:D') as an initiati#e of the *nited $ations Econo%ic and Social Co%%ission for @sia and the -acific (ESC@- . 'ay of 'engal "nitiative for (ulti-Sectoral #echnical and !conomic )ooperation %'"(S#!)& /angladesh .ndia 9yan%ar Sri 6an1a and 8hailand 8echnical and Econo%ic Cooperation (/.9S8EC ) a s"b=regional econo%ic cooperation gro"ping) &as for%ed in /ang1o1 in C"ne ,::D. 9yan%ar 2oined the gro"ping later in (ece%ber ,::D. /h"tan and $epal too 2oined in ?ebr"ary 2;;4. ?i#e %e%bers of S@@RC (.ndia) /angladesh) /h"tan) $epal and Sri 6an1a and t&o %e%bers of @SE@$ (8hailand) 9yan%ar are %e%bers of this agree%ent. &rame ork 'greement on (om%re!ensi"e Economic (o#o%eration bet een India and t!e 'ssociation of Sout! East 'sian )ations#1he "=+"2's political economic and strate#ic importance in the lar#er "sia.Paci ic ;e#ion and its capabilit& to become a ma7or partner o (ndia in trade and in)estment made (ndia to 7oin association with "=+"2! India#ME*($S+* Preferential ,rade 'greement -P,'.# 1he ob7ecti)e o this a#reement is to create an en)ironment or ne#otiations in the irst sta#e, b& #rantin# mutual tari pre erences, and in the second sta#e, to ne#otiate a 91" between the two parties in con ormit& with the rules o the *10! *ther agreements+

 .ndia and Singapore Co%prehensi#e Econo%ic Cooperation @gree%ent (CEC@ . .ndia=Sri 6an1a ?ree 8rade @gree%ent (.S?8@ . .ndia=Chile -referential 8rade @gree%ent (-8@ . .ndia=@fghanistan -referential 8rade @gree%ent (-8@ . .ndia=/h"tan 8rade @gree%ent. .ndia=$epal 8rade 8reaty. ?ra%e&or1 @gree%ent for Establishing ?ree 8rade bet&een .ndia and 8hailand. ?ree 8rade @gree%ent (?8@ bet&een .ndia and 4"lf Cooperation Co"ncil (4CC . .ndia= Capan 8rade @gree%ent. Coint St"dy 4ro"p bet&een .ndia and Eorea. 8rade @gree%ent bet&een .ndia and /angladesh. Co%prehensi#e Econo%ic Cooperation and -artnership @gree%ent (CEC-@ bet&een .ndia and 9a"riti"s.

Q'.

What is global so"rcing! What %a1es .ndia so attracti#e for global so"rcing!

Pno 317n328

unit 15

$Global sourcin#' is described as $the practice of sourcing cost effective and best goods and services across geopolitical boundaries in order to cater to global markets. Global sourcin# strate#& is aimed at e%ploitin# global efficiencie in all areas o manu acturin#, tradin# and ser)ices to enable o erin# clients and customer the best possible product or ser)ice! ,lobal Sourcing )hallenges to "ndian "ndustries 0nce it beco%es clear for any co%pany that it is strategically in its interest to o"tso"rce) strategic planning and re#ie& of the ad#antages and disad#antages of each scenario "nder &hich it &ill o"tso"rce its b"siness operations to other co"ntryFregion sho"ld be done. Recruiting competent and s-illed wor-force .ndia has the largest cost effecti#e) professional talent pool of English spea1ing people in the &orld. ;ecruitment market or pro)idin# ser)ices to clients is (ndia is #ettin# e%tremel& competiti)e and companies in (ndia are compelled to open o ices in second tier cities to e%pand their business operations b& recruitin# cost e ecti)e talent pool! #raining and development for manpower ?or creating a s"ccessf"l platfor% in ser#ices sector so"rcing in global %ar1ets) .ndia has to ha#e trained &or1force that is co%petent to respond to oneti%e floor challenges. )ontrolling attrition and managing retention .n .ndia>s .8 and .8es co%paniesG attrition le#els are in the range of ,'H=+;H per year. 8he a#erage attrition le#el for a #oice=based call center in .ndia is aro"nd 4;H. 8here is h"ge challenge in &or1force %anage%ent in .ndia. 9ost yo"ng e%ployees lea#e the /-0s ind"stry d"e to the %onotono"s &or1) and the physical toil of night=shift 2obs Ensuring satisfactory customer satisfaction/ser"ice le"els /ompanies rom de)eloped countries that outsource their established processes to (ndian ser)ices pro)ider e%pect that the <ualit& and per ormance standards should be o hi#hest le)el! /ustomers must be satis ied rom such o shorin# o business operations with at least the same le)el o or e)en hi#her le)el o per ormance standards! "nfrastructural and logistical challenges

.ndia has infrastr"ct"ral bottlenec1s in all areas) i.e.) roads) rail) air and %ariti%e transport. E#en #irt"al infrastr"ct"re li1e internet access) teleco%%"nication) etc.) &hich are #ital for gro&th of ser#ices o"tso"rcing is poor in .ndia. -o&er and connecti#ity are the %ost i%portant co%ponents for s"stainable gro&th of ser#ices sector o"tso"rcing fro% .ndia.

Q+.

Write short notes on5 a Cross c"lt"ral %anage%ent b W80

Pno7>

unit 4

pno 142 unit 7

a Cross c"lt"ral %anage%ent= .n international %anage%ent) &here people are fro% different c"lt"res) yo" ha#e to de#elop and apply yo"r 1no&ledge abo"t c"lt"res and not "se a standard process for e#eryone. 8his is called cross c"lt"ral %anage%ent. 8he factors to be considered in cross c"lt"ral %anage%ent are5 Cross c"lt"ral %anage%ent s1ills. = 1he most important aspect to <uali & as a mana#er or positions o international responsibilit& is communication skills! 1he mana#ers must adapt to other cultures and ha)e the abilit& to lead its members! 7andling c"lt"ral di#ersity.= /ultural di)ersit& in a work #roup o ers opportunities and di iculties! +conom& is bene ited when the work #roups are mana#ed success ull&! 1he or#anisation's capabilit& to draw, sa)e, and inspire people rom di)erse cultures can #i)e the or#anisation spirited ad)anta#es in structures o cost, creati)it&, problem sol)in#, and ad7ustin# to chan#e! ?actors controlling gro"p creati#ity.= 0n complicated problem sol)in# 7obs, di)erse #roups do better than identical #roups! 5i)erse #roups re<uire time to sol)e issues o workin# to#ether! 1he work e%perience helps to o)ercome #ender, racial, or#anisational and unctional discriminations!

.gnoring di#ersity.= .t %ay be diffic"lt to %anage di#ersity. .t is better to ignore) &hich is also an alternati#e. 8he %anage%ent %"st5 .gnore c"lt"ral di#ersity &ithin the e%ployees.
(o&n=play the i%portance of c"lt"ral di#ersity. denial to identify diversity happens when management5 ?ails to ha#e s"fficient a&areness and s1ills to identify di#ersity. .dentifies di#ersity b"t does not ha#e the s1ill to %anage the di#ersity. Recognizes that the negati#e conse3"ences of identifying di#ersity &ill ca"se greater iss"es than ignoring it.

=trate#ies to i#nore di)ersit& ma& be possible when culture #roups are #i)en )arious 7obs, and sharin# re<uired resources are independent in the workplace! Groups and #roup members are e<uall& incorporated and work to#ether! (n such cases, con usion occurs when the di)erse )alue s&stems held b& di erent sta #roups are not identi ied! b W80= World 8rade 0rganization (W80 . W80 &as established on ,st Can"ary ,::'. 8he W80 is the s"ccessor to the 4eneral @gree%ent of 8ariffs and 8rade (4@88 . .ndia is one of the fo"nders of W80. W80 represents the latest atte%pts to create an organizational focal point for liberal trade %anage%ent and to consolidate a global organizational str"ct"re to go#ern &orld affairs. W80 has atte%pted to create #ario"s organizational attentions for reg"lation of international trade. *b.ectives and functions 7elping trade flo&s by enco"raging nations to adopt discri%inatory trade policies. -ro%oting e%ploy%ent) expanding prod"ctions) trade and raising standard of li#ing and inco%e and "tilizing the &orld>s reso"rces. ens"ring that de#eloping co"ntries sec"re a better share of gro&th in &orld trade. pro#iding for"% for trade negotiations. Resol#ing trade disp"tes.

M+0005 (om%ensation Benefits

Q,. (isc"ss the ele%ents of co%pensation pac1age. -no ' "nit , !lements of compensation- 8he pri%ary ele%ents of a co%pensation pac1age are5 'ase pay+ .t is the fixed rate of co%pensation that an e%ployee recei#es for perfor%ing the standard d"ties and assign%ent of a 2ob. E%ployers need to ens"re that base=pay progra%s are designed to re#eal %ar1et practices &ithin their identified co%petitor gro"p. 8o achie#e this) organizations %"st first identify their co%petiti#e %ar1et. 8his can be achie#ed by considering different factors) incl"ding the nat"re of the ind"stry) geographic location) total e%ploy%ent and ann"al re#en"e. $ext) they need to cond"ct an assess%ent of %ar1et pay practices for si%ilar 2obs within the reco#nized competitor #roup! 1his assessment should in)ol)e the duties, skills, and impact le)els o each 7ob e)aluated 6 that is, each 7ob o similar size and scope! Pa& structures t&picall& consist o a series o pa& ran#es or bands that re)eal competiti)e rates o pa& or speci ic 7obs, as well as allowin# room or salar& #rowth! 1ariable %ay2 1his pa& continues to achie)e momentum as a more success ul wa& to identi & and reward emplo&ee per ormance! "lso known as pa&.per.per ormance, )ariable pa& is popular in toda& %s corporate world! ?& includin# a percenta#e o )ariable pa& in the compensation plan, or#anizations ensure that two people with di erent e icienc& le)els do not #et the same bene its! (n a )ariable pa& plan, the size o the award )aries amon# emplo&ees and rom one per ormance period to another, based on le)els o achie)ement measured, as well as a#ainst pre established compan& and emplo&ee per ormance tar#ets! Skill and com%etency#based %ay2 1his pa& o ers emplo&ees e%tra compensation when the& ha)e new skills speciall& reco#nized b& the compan& as essential to achie)e a competiti)e ad)anta#e! =kill.based pa& can be particularl& use ul or emplo&ees who like their current 7obs but are lookin# or new challen#es! /ompetenc&.based pa& is more widespread than skill.based pa& because the criteria co)er not onl& measurable skills but also knowled#e, per ormance beha)iors and personal attributes! 3ong#term incenti"e com%ensation2 1his compensation )ehicle, such as stock.option plans and other de erred. compensation plans, which are not usuall& used to reward per ormance, are achie)in# desirabilit& amon# emplo&ees! 1hese lon# term incenti)e compensation plans appreciate emplo&ees based on compan& per ormance o)er a lon# term

that is t&picall& three to i)e &ears! =tock.option plans are a common orm o lon#.term compensation at public or#anizations! (n most pri)ate companies, incenti)es that re lect stock plans are used or ke& emplo&ees!

Q). *ist and explain various economic theories of wages. $no +, unit +
+conomists )iew compensation as a labour market determinant! +conomic theories speci & the economic actors that determine emplo&ee compensation, the manner in which the& do so, and the importance o each! Subsistence t!eory#emplo&ees should be paid towards their labour in producin# #oods so as to enable them to sur)i)e, thereb& neither increasin# nor diminishin# the human race! (n other words, wa#es cannot all below subsistence le)el because without subsistence, labourers will be unable to work! 0n the contrar&, i the compensation increases be&ond the subsistence le)el, then the number o emplo&ees would also increase, because the emplo&ees will be in a better position to support lar#er amilies! 4ages fund t!eory#1his theor& assumes that e)er& or#anization has a i%ed und o capital to pa& wa#es! 1he in)entor& o #oods or capital is termed as the wa#es und, and its source is the sa)in#s o the industrialists! Sur%lus "alue t!eory#"ccordin# to this theor&, an emplo&ee was an article o commerce, which could be purchased on pa&ment o the @subsistence price-2! 1he price o an& product and the time needed or producin# it was determined b& an emplo&ee! *esidual claimant t!eory#1his states that, a ter all other actors o production ha)e recei)ed compensation or their contribution to the process, the amount o mone& le t o)er will #o to the remainin# actors like wa#es! Marginal %roducti"ity t!eory# 1his theor&, the rate o wa#es paid to the emplo&ees tends to be e<ual to the mar#inal net product o emplo&ees emplo&ed at the mar#in! 1his theor& assumes that all units o the actors are homo#eneous! Bargaining t!eory of ages#"ccordin# to this theor&, wa#es are determined b& the relati)e bar#ainin# power o workers, the trade unions and emplo&ers! *hen a trade union is in)ol)ed, basic wa#es, bene its, 7ob di erentials and emplo&ee di erences tend to be determined b& the relati)e stren#th o the or#anization and the trade union! ' neoclassic com%etiti"e t!eory#1he basic idea or this ar#ument is that emplo&ees can decide what is best or them! 3owe)er, in matters o emplo&ee bene its, wa#es or compensation, there are se)eral rules which de ine the ran#e o choices!

Q+. What is pay structure? Explain why it is necessary to develop a proper pay structure. Explain the method to develop pay structure. $no ./ unit0
Pa& structure is the #roupin# o pa& #rades or pa& bands! 1here can be more than one pa& structure in a compensation plan! 9or instance, there ma& be one pa& structure or ser)ice and maintenance positions, one or sales positions and one or mana#erial positions! 0r, the or#anization ma& ha)e 7ust one structure or all positions! 1he process o de)elopin# the pa& structure deals with internal and e%ternal anal&sis to assess the compensation packa#e or the speci ic 7ob pro ile! Pa& structure helps in anal&zin# the emplo&ee's role, )alue and status in the or#anization! (t also helps in the assessment o incenti)es! 1he main #oal o de)elopin# a pa& structure is to mana#e and demonstrate an or#anization's compensation philosoph& and to re lect and support the ad)ancement o the compan&'s culture! "n e ecti)e pa& structure also helps to attract and retain the e icient emplo&ees! 8he follo&ing three factors ha#e to be deter%ined &hile de#eloping a pay str"ct"re5 8he proper data for establishing the relati#e #al"e of a partic"lar 2ob to the organization. 8he proper pay range for a 2ob &ith the defined #al"e to the organization. 8he #al"e of each 2ob position &ithin the specified pay range. 0nce the abo#e factors are deter%ined) pay str"ct"res can be de#eloped thro"gh the follo&ing steps5 ,. 4ro"p the 2obs &ith those that ha#e a si%ilar #al"e in the organization. 2. 9eas"re these gro"ps to find o"t the n"%ber of pay ranges needed to gro"p the 2obs on the basis of their #al"e to the organization. 3. Create a salary range that has a %ini%"% point) a %id=point and a %axi%"% point for a%o"nts allotted &ithin the range and deter%ine the pay for each 2ob gro"ping. " success ull& de)eloped pa& structure identi ies career de)elopment in addition to promotion! (t demonstrates and pa&s or the business results on which an or#anization places )alue! "n e ecti)e pa& structure is worth the time and attention!

3ow an or#anization structures its base salar& pro#ram is basicall& a matter o or#anizational philosoph&, althou#h marketplace practices are )er& essential to consider in hi#hl& competiti)e situations!

Q1. Explain the components of wages. $no 110 unit 2

*a#e pa&ment in (ndia consists o basic wa#e, 5earness "llowance ,5"-, bonus and rin#e bene its! *hile the basic wa#e has some relation to the economics o the irm, the other wa#e components are much less in luenced b& internal than b& e%ternal )ariables, such as #o)ernment re#ulations and in lationar& trends in the economics! mana#ements do not possess a complete control o)er wa#e costs! 1he inter erence o e%ternal )ariable introduces a certain de#ree o uncertaint& in creatin# an internal wa#e polic&! (om%onents of ages# 'asic /age+ .t can be defined as pay%ent for labo"r or ser#ices to an e%ployee) especially pay%ent on an ho"rly) daily) or &ee1ly basis. 8he &ages of an e%ployee are fixed depending on the follo&ing5 @ basic rate of &ages in addition to special allo&ance (that is cost of li#ing allo&ance . @ basic rate of &ages &hich %ay incl"de either cost of li#ing allo&ance or cash #al"e of concessions for s"pplies of essential prod"cts. @ rate that incl"des basic rate) cost of li#ing allo&ance and cash #al"e of concessions. 5earness allo ance2 1he dearness allowance is a part o the total compensation emplo&ees recei)e or ha)in# per ormed their 7ob! (t is a part o the ori#inal salar&! 1he percenta#e is re.e)aluated and ma& be chan#ed e)er& si% months! Bonus2 (t is an e%tra pa& #i)en to emplo&ees in appreciation to their per ormance! 1he ad)anta#e o bonus is that in case o low paid workers, such sharin# increases their earnin#s and there ore, helps in brid#in# the #ap between the actual wa#e and the need.based wa#e! &ringe benefits2 1he term rin#e bene it re ers to the e%tra bene its pro)ided to emplo&ees, apart rom the compensation paid in the orm o wa#es or salar&! Wage pay%ent in .ndia consists of basic &age) dearness allo&ance) bon"s and fringe benefits. Wage concession and co%pression are disc"ssed here.

.n case e%ployees s"cc"%b to an accident at &or1 s"ch that they are "nable to &or1 for a partic"lar period of ti%e) they can 3"alify for &or1ers> co%pensation.

Q0. #escribe 3ost to 3ompany and its components. $no 14) unit ,
Cost to Co%pany (C8C is the a%o"nt that yo" cost yo"r co%pany. 8hat is) it is the a%o"nt that the co%pany directly or indirectly spends on yo" beca"se of e%ploying yo". )omponents of )#) 8he follo&ing are the co%ponents of C8C5 /asic. (earness @llo&ance ((@ . 7o"se Rent @llo&ance (7R@ . 9edical allo&ance. Con#eyance allo&ance. Special @llo&ance. Iehicle @llo&ance. .ncenti#es or bon"ses. 6ea#e 8ra#el @llo&ance or Concession (68@ F 68C . 8elephone F 9obile -hone @llo&ance. C8C incl"des the salary directly paid to the e%ployees) the benefits directly attrib"table to the e%ployees s"ch as co%pany%s contrib"tion to the pro#ident f"nd) pension f"nds) %edical ins"rance pre%i"%) life ins"rance pre%i"%) cost of loans offered to the e%ployees) telephone expenses for %obile phone

connections and land=line connections) benefits offered for #isiting the ho%e co"ntry or ho%eto&n and so on. e)en a lower /1/ mi#ht mean a hi#her take home pa& than an o er with hi#her /1/, i the other components are arran#ed di erentl&! separatel&! Aost companies usuall& talk in terms o /1/ as the i#ures look more impressi)e! 3owe)er, the& are o ten misleadin#! Bou should care ull& look at their o er and calculate &oursel how much &our take home pa& will be! all deductions are based on i%ed percenta#es and &ou can easil& arri)e at the ri#ht i#ure! +)en the compan& will #uide &ou on this! Bou also ha)e to look at certain other criteria like work timin#s, number o holida&s, emplo&ee centric schemes or urther education, and so on! 1he total compensation includes the )alue o all the perks and bene its the emplo&ee is o ered b& the compan& in addition to the emplo&ees salar&! /alculatin# the annual /1/ is important rom the emplo&ees - and the or#anization%s perspecti)e! 1his helps the or#anization ascertain the 3; cost and the emplo&ees understand what the& are bein# o ered, as the& can benchmark their /1/ with other comparable or#anizations! (t is di icult to arri)e at the /1/ as man& components o the /1/ considered b& the compan& ma& not be considered as a part o total compensation packa#e!

Q4. What is Executive 3ompensation? 5ention the different components of executive compensation. $no)/4n )/. unit 11
Exec"ti#e co%pensation is the financial co%pensation that a top exec"ti#e recei#es &ithin a corporation. 8his incl"des basic salary) any and all bon"ses) shares) options) and any other co%pany benefits. 8he high le#el e%ployees are co%pany presidents) chief exec"ti#e officers (CE0s ) chief financial officers (C?0s ) #ice presidents) occasionally directors) and other "pper le#el %anagers.

)omponents of !0ecutive )ompensation 8he process of selecting and hiring senior exec"ti#es capable of %oti#ating people and leading a co%pany to its goal can be challenging. With concerned in#estors closely %onitoring co%pany perfor%ance) today>s b"sinesses are "nder tre%endo"s press"re to retain 3"alified exec"ti#es once they hire the%. Exec"ti#e Co%pensation is negotiated bet&een the potential exec"ti#e and the e%ployer. .n today>s b"siness &orld) exec"ti#es en2oy %ore negotiating po&er than e#er) as they can co%%and a high salary and co%pensation plan o&ing to the tre%endo"s need for capable candidates.
Exec"ti#e co%pensation incl"des5 'ase salary 8his is the basic salary paid to the exec"ti#es excl"ding the bon"ses. 8his is paid at the end of the %onth. 'onuses /on"ses are standardised in exec"ti#e co%pensation plans) &here thereBs often %ore pay for good perfor%ance. 8his is tied to the perfor%ance of the b"siness area that the exec"ti#e %anages. "ncentives such as stoc- options

Exec"ti#es &o"ld prefer a share in the e3"ity of the co%pany instead of cash. 8he a%o"nt of stoc1 options gi#en to senior=le#el e%ployees &ill depend on the type of the ind"stry and the #al"ation of the co%pany>s stoc1. So%e co%panies offer exec"ti#es a higher percentage of e3"ity each year) based on co%pany perfor%ance or shareholder ret"rn. 1his is issued as a orm o non cash compensation, and a call option on the common stock o a compan&! 1his is o ered to mana#ement as part o their e%ecuti)e compensation packa#e! Aan& issues are present in desi#nin# e%ecuti)e compensation! 1here are a lot o actors to be taken into account to ensure an optimum compensation packa#e or e%ecuti)es! +%ecuti)e compensation is one o the most interestin# topics in the sub7ect o compensation bene its! +%ecuti)e compensation re ers to the remuneration packa#e o ered to the top e%ecuti)es in the compan& which includes salar&, bonus bene its and so on! 1he top le)el e%ecuti)es include chie e%ecuti)e o icers ,/+0s-, chie inancial o icers ,/90s-, )ice presidents, occasionall& directors, and other upper le)el mana#ers! 1he e%ecuti)e pa& components include base salar&, bonuses, income protection #uarantees, incenti)es such as stock option, se)erance packa#e, si#nin# bonus and per<uisites!

M+0006 Performance Management and '%%raisal Q1. What are the aims of performance management? $no 1 unit1
0ne o the important ob7ecti)es o per ormance mana#ement is identi &in# the stren#ths and weaknesses o emplo&ees and indin# wa&s to o)ercome their shortcomin#s! 1his is done b& e)aluatin# emplo&ee output and the compan&'s o)erall abilit& to meet the #oals b& ha)in# <uarterl& or annual audits! "nother ob7ecti)e is to disco)er where emplo&ees and the compan& are allin# short! 1his is done b& #oin# throu#h details such as pro its earned, new clients ac<uired and the contribution o emplo&ees to make these thin#s happen! 1he e)aluation o an emplo&ee's per ormance is based on their work output and the amount o time spent b& them on the pro7ect! "lthou#h time spent in an o ice is not an accurate wa& o measurin# per ormance, most companies still ha)e the notion that better emplo&ees put in lon#er hours o work! 0)erall e)aluation o a compan& and its abilit& to set and reach #oals is another important ob7ecti)e o per ormance mana#ement! (ncreasin# re)enue is the o)erall #oal o an& compan&! 0ther #oals ma& be to ac<uire more or speci ic clients, de)elop new products or hire new talent! 1he inabilit& o a compan& to meet the #oals is mainl& due to poor leadership, poor plannin#, poor implementation or poor emplo&ee per ormance! +conomic actors also pla& a ma7or role, but it is better or companies to concentrate on actors that are within their control! 1he best wa& o impro)in# a compan&'s o)erall output is moti)atin# the emplo&ees and impro)in# their per ormance! 1his includes replacin# underper ormin# emplo&ees, #ainin# new clients, de)elopin# new strate#ies or reachin# the #oals and discussin# strate#ies that ha)e worked in the past! 8he ai%s of perfor%ance %anage%ent are5 8o assist in the achie#e%ent of enhanced standards of &or1 perfor%ance of an e%ployee or class of e%ployees. 8o assist e%ployees to identify the 1no&ledge and s1ills to perfor% their 2obs efficiently.

 8o ens"re that the e%ployees &or1 to&ards the defined goals. 8o ens"re that the e%ployees recei#e reg"lar feedbac1 on perfor%ance. 8o assist the e%ployees to achie#e personal gro&th thro"gh ac3"iring rele#ant 1no&ledge and s1ills and attit"des. 8o e#al"ate the co%pany and its ability to set and reach goals. 8o identify and re%edy sit"ations that are hindering co%pany perfor%ance.

Q). 6a7 #efine motivation. 6b7 Explain 5c!regor%s theory 8 and theory 9. pno a7 1. b70+ unit + a7Definition of motivation
9oti#ation is defined by goal=directed beha#io"r. 9oti#ation is concerned &ith the strength and direction of that beha#io"r. .t i%plies that %oti#ation takes place when people e%pect that a course o action is likel& to lead to the attainment o a #oal and a )alued reward . one which satis ies their particular needs! 5ou#las A! AcGre#orC1he task o mana#ement is to arran#e or#anisational conditions and methods o operation so that people can achie)e their own #oals best b& directin# their own e orts towards or#anisational ob7ecti)es!D ;ensis 8ikert, 1he /ore o Aana#ement, e%plained moti)ation as Cthe core o mana#ement which shows that e)er& human bein# earnestl& seeks a secure, riendl& and supporti)e relationship which #i)es him a sense o worth in ace. to. ace #roups which are most important to him! " super)isor should stri)e to treat indi)iduals with di#nit& and reco#nition o their personal worth!D b7 Mc7regor8s t!eory#1he irst is called cate#or& E which is basicall& ne#ati)e, and the other is basicall&positi)e, which alls under the cate#or& B! " ter )iewin# the wa& in which the mana#er dealt with emplo&ees, AcGre#or concluded that a mana#er-s )iew o the nature o human bein#s is based on a certain #roupin# o assumptions! 1he mana#er-s beha)iour towards subordinates is based on these assumptions! *nder the ass"%ptions of theory J5 E%ployees inherently do not li1e &or1 and &hene#er possible) &ill atte%pt to a#oid it. /eca"se e%ployees disli1e &or1) they ha#e to be forced or threatened &ith p"nish%ent to achie#e goals. E%ployees a#oid responsibilities and do not &or1 "ntill for%al directions are iss"ed. 9ost &or1ers place a greater i%portance on sec"rity o#er all other factors and display little a%bition.

 -hysical and %ental effort at &or1 is as nat"ral as rest or play. -eople do exercise self=control and self=direction if they are co%%itted to those goals. @#erage h"%an beings are &illing to ta1e responsibility and exercise i%agination) ingen"ity and creati#ity in sol#ing the proble%s of the organisation. 6oo1ing at the &ay the things are organised) the a#erage h"%an being-s brainpo&er is only partly "sed. theor& E assumes that lower.order needs dominate indi)iduals and theor& B assumes that hi#her.order needs dominate indi)iduals! "n or#anisation that is run on the lines o 1heor& E tends to be authoritarian in nature that is such or#anisations belie)e that the& ha)e the power to en orce obedience and the ri#ht to command! 1heor& B or#anisations can be described as Cparticipati)eD, aims o the or#anisation and o the indi)iduals in it are inte#ratedF indi)iduals can achie)e their #oals best b& directin# their e orts towards the success o the or#anisation!

Q+. Explain managers% responsibility in $erformance $lanning. $no ., unit 0

1here are si% basic responsibilities o a mana#er! /efore the %eeting) the %anager has to5 Re=exa%ine the organisation>s %ission state%ent) or #ision and #al"es) and tea%>s goals. *nderstand the e%ployee>s 2ob description. 8hin1 abo"t the goals and ob2ecti#es the person needs to achie#e in the "pco%ing appraisal period. Recognise the %ost i%portant co%petencies that are expected fro% the e%ployees in perfor%ing the 2ob. (eter%ine &hat can be considered as f"lly s"ccessf"l perfor%ance in each area. ("ring the %eeting the %anager has to5 (isc"ss and co%e to agree%ent &ith the e%ployee on the %ost i%portant co%petencies) 1ey position responsibilities) and goals. (isc"ss and co%e to agree%ent on the e%ployee>s de#elop%ent plan. 1he mana#er will discuss the #oals or the department and the compan& as a whole durin# the meetin#! 1he mana#er works with the subordinates to set si#ni icant, <uanti iable, and meanin# ul #oals that will help accomplish the department's and the or#anisation's mission! 3ence it is important or the mana#er to ha)e some speci ic ideas or areas in which the indi)idual should consider settin# #oals! 1he mana#er and the subordinate then re)iew the most important parts o the indi)idual's 7ob and talk about which responsibilities are the most essential to success! 0nce the #oals and responsibilities ha)e been identi ied and re)iewed, the mana#er and subordinate will need to talk about how the 7ob will be done! ( the compan& has reco#nised some core competencies that it e%pects e)er&

emplo&ee to e%hibit, #oin# throu#h these will allow the mana#er and the indi)idual to identi & the ones that are o particular importance in the emplo&ee's 7ob! ( the mana#er is well prepared, then 45 to 6: minutes should be su icient to discuss ke& responsibilities, set #oals, discuss competencies, talk about how per ormance will be measured, and re)iew the emplo&ee's ideas about plans or de)elopment! the %anager sho"ld be able to5 *nderstand the e%ployee>s day=to=day 2ob responsibilities better. 7a#e a clear "nderstanding of ho& carrying o"t those responsibilities contrib"tes to the &or1 "nit. /e con#inced that both the higher a"thority and the e%ployee ha#e a shared "nderstanding of the 2ob and perfor%ance expectations. 7a#e dealt &ith %ethods to help the e%ployee s"cceed and be co%%itted to any actions re3"ired to help the e%ployee. 7a#e a fe& doc"%ents of the perfor%ance=planning process and decisions %ade 3ence, the plannin# process ocuses on where the emplo&ee needs to be and not as much on where the mana#er needs to be!

Q1. #escribe the traditional methods of performance appraisal. $no 1), unit 2
!ssay appraisal method .t incl"des an e#al"ated report created by the appraiser) &hich basically incl"des appraising an e%ployeeBs perfor%ance based on facts and e#idences. ?esides usin# the in ormation or decisions on pa& rise, promotion or termination o emplo&ees, it can also be used or de)elopmental purposes! Straig!t ranking met!od#"re compare emplo&ees with each other, resultin# in an orderin# o emplo&ees in relation to one another! ;ather than in speci ic 7ud#ments about a number o 7ob components, rankin# re#ularl& results in #eneral e)aluation o emplo&ees! =trai#ht rankin# demands an e)aluator to order a #roup o emplo&ees rom best to worst o)erall, or rom best e ecti)e to worst e ecti)e in terms o a certain condition! Paired com%arison met!od#1his comparison methodolo#& s&stemizes rankin# and enables better comparison amon# indi)iduals to be rated! +ach member o the #roup is compared with all others in the #roup one at a time! (ritical incidents met!od#(t suits well in per ormance re)iew inter)iews, it has a drawback in that the e)aluator has to make a note o the critical incidents as and when the& occur! 1hat ma& be an unrealistic task, and ma& hold.up the eedback to emplo&ees! &ield re"ie c!ecklist met!od#+)er& indi)idual di ers in <ualit& and attitude, the& unintentionall& introduce bias in their ratin#s! 1o o)ercome this, essa& and #raphic ratin# measures can be combined in an or#anised re)iew process! (n the ield re)iew method, Ga representati)e o the 3;A sta meets a chunk o e)aluators rom the super)isor& units to discuss each ratin#, anal&ticall& noti &in# areas o inter.e)aluator disa#reement! ,raphic ratings scale method .t re3"ires an e#al"ator to %eas"re on a scale) the angle to &hich an e%ployee reflects a partic"lar trait) beha#ior) or perfor%ance res"lt. +)aluatin# orms comprise a number o scales, each relatin# to a certain 7ob or per ormance.related measurement, such as 7ob skills, responsibilit& or <ualit& o work! +ach scale is a band o de inite points, or anchors, which ran#e rom hi#h to low, rom #ood to poor, rom most to least e ecti)e, and so orth! =cales mainl& ha)e i)e to se)en points, althou#h the& can ha)e more or less!

&orced distribution met!od#is primaril& used to remo)e ratin# errors such as compassion and centralisation, but the process itsel can cause ratin# errors because it orces subtle di erences between emplo&ees e)en where 7ob per ormance is <uite similar! (t is a structure o comparati)e e)aluation in which an e)aluator rates subordinates accordin# to speci ied directions!

Q0. What are the causes of sub:ectivity and how does error in rating occur?
Pno 171 unit >
Sub.ectivity @s long as the e#al"ation and co%parison of indi#id"als &o"ld be concerned) a definite extent of s"b2ecti#ity is li1ely to occ"r. S"b2ecti#ity or biases tend to occ"r &hen the grading allotted by any e#al"ator to any indi#id"al is deri#ed %ore fro% aspects rather than the presentational or beha#ioral %anner exhibited by indi#id"al on the aspects "nder e#al"ation. =ometimes e)aluators accept or re7ect some particular acts or attributes o the indi)idual enormousl& and, thus #rade himHher con identl& on all other measures -called 9alo effect.: +)aluators eel to belie)e that the& should be air to their appraisee and thus lean to assi#n them compassionate #rades -leniency effect.: other e)aluators mi#ht adapt a re)erse theor& while inspectin# their appraisee and thus lean to rate them too harshl& -Se"erity effect.: +)aluators assi#n nearl& e<ual #rades to their appraisee due to their conscious nature, that is, the& lean to #rade most o their appraisees around the a)era#e -(entral tendency and a"eraging.: =ome appreciate those who posses uni<ueness which the e)aluator does not ha)e but would like to incur -called assimilation or differential effects.: e)aluators make opinion about indi)iduals on account o their irst impression and are likel& to carr& these eelin#s o)er a lon# period o time -&irst im%ression errors.: e)aluators allocate #rades on account o the current beha)ior the& ha)e noticed in their appraisee without recallin# about the past deeds o)er a period o time -*ecency effect.: rating errors#1here are se)eral ar#uments a#ainst the wei#ht.a#e o scores deduced rom #rades! People bein# #raded ma& not be presentin# in their natural beha)iour! 1he condition or assi#nment ma& not draw out normal attitude! 0r the #raders ma& ha)e accidentall& dis i#ured the results!

 #he halo effect1 8he parody that an e#al"ator rates an e%ployee on one para%eter can contradict his or her notion of that indi#id"al on other para%eter. Stereotyping1 8he parody that an e#al"ator de#elops abo"t a &hole gro"p can #ary &hen co%pared &ith a single %e%ber of the gro"p. Perception differences1 8he perspecti#es and pre#io"s incidents of an e#al"ator can infl"ence hisFher "nderstanding of one>s beha#io"r. 2eniency3stringency error1 When an e#al"ator doesnBt ha#e s"fficient data to ded"ce an ob2ecti#e grading) heF she %ay %anage by allotting grades that are thoro"ghly higher or lo&er. Scale shrin-ing1 8he end of a scale is not "tilised by %ost of the 2"dges.

Q4. What are the methods to measure performance? $no 4. unit 1 pno 1). unit 2
Measuring Performance (t is )er& important to know what the current per ormance is in order to impro)e per ormance! 1he criteria that will be used to assess the e%tent to which ob7ecti)es ha)e been achie)ed is identi ied and a#reed upon durin# the plannin# sta#e! 1hese could be strai#ht orward per ormance measures or metrics re errin# to <uanti ied outputs or the& could be clear per ormance indicators which re er to a task or pro7ect bein# completed which meets speci ied re<uirements! Per ormance assessments or these are based on ob7ecti)e e)idence o beha)iour and the outcomes o beha)iour otherwise per ormance assessment becomes 7ud#emental and there ore potentiall& biased, un air or con lictin#! (t is important to ensure that 7ud#ements are based on actual e)idences! 9or e%ample, i a sales representati)e is bein# assessed! 1he e)idence or per ormance le)el with re#ard to promptness would be computer records o speed o response! ;ecords o ollow.up <ueries or complaints rom customers would ser)e as an e)idence or e icienc&! 1he e)idence or politeness would be customer satis action sur)e&s!
-erfor%ance %eas"res or %etrics can be classified as5 Finance+ 8hese can be %eas"red in ter%s of inco%e) shareholder #al"e) added #al"e) rates of ret"rn) costs *utput+ 8hese are %eas"red in ter%s of "nits prod"ced or processed) thro"ghp"t) sales) ne& acco"nts "mpact+ .t is the attain%ent of a standard s"ch as 3"ality or le#el of ser#ice) changes in beha#io"r) co%pletion of &or1 or pro2ect) le#el of ta1e="p of a ser#ice) inno#ation

 Reaction+ .t is 2"dge%ent by others s"ch as colleag"es) internal and external c"sto%ers #ime+ .t is the speed of response or t"rnaro"nd) achie#e%ents co%pared &ith ti%etables) a%o"nt of bac1log) ti%e to %ar1et and deli#ery ti%es.

M+000; ,alent Management

Q1. Explain the need for talent management? $no 2 unit 1
*ork orce cost is the ma7or portion o resources spends or most or#anisations! "utomation and anal&sis o the recruitin# and hirin# processes pro)ides the immediate work orce needs and insi#hts re<uired to si#ni icantl& impro)e the bottom line! Per ormance mana#ement pro)ides the on#oin# processes and practices to maintain a stron# work orce! Aan& or#anisations are acin# a lot o problems o 3; processes and technolo#ies! 1he uture o talent mana#ement is enclosed in solutions desi#ned rom the #round le)el to pro)ide business.centric unctionalit& on a uni ied talent mana#ement plat orm! 1op or#anisations rel& on 1alent Aana#ement solutions and ser)ices to assess, ac<uire, de)elop, and ali#n talent with business ob7ecti)es while si#ni icantl& reducin# process costs, impro)in# <ualit& o hire, reducin# risk, and achie)in# hi#her le)els o per ormance! 8ho"gh it %ay see% spontaneo"s) it is &orth&hile to express the f"nda%ental significance of s"ccessf"l talent %anage%ent practices as follo&s5 8he 1ey enabler of any organisation is talent. 8he 3"ality of the people is the last tr"e co%petiti#e differentiator. 8alent dri#es perfor%ance. 8alent %anage%ent re3"ires strong exec"ti#e s"pport) along &ith syste%s and processes all directed to&ards ha#ing the right talent doing the right &or1 at the right ti%e. 8hat>s &hen talent tr"ly dri#es higher b"siness perfor%ance.

1alent mana#ement in)ol)es indi)idual and or#anisational de)elopment with respect to a )ar&in# and comple% operatin# en)ironment! (t also includes the creation and maintenance o a supporti)e, people oriented or#anisation culture0r#anisations that o iciall& decide to mana#e their own talent carr& out a strate#ic anal&sis o their current 3; processes! 1his is to make sure that a co.ordinated, per ormance oriented approach is adopted! 9any organisations are adopting a 89 approach &hich foc"ses on co=ordinating and integrating %ethods &hich are gi#en as5 Recr"it%ent5 8o ens"re the right people are attracted to the organisation. Retention5 8o de#elop and i%ple%ent practices that re&ard and s"pport e%ployees. E%ployee de#elop%ent5 8o ens"re contin"o"s infor%al and for%al learning and de#elop%ent. 6eadership and Khigh potential e%ployeeK de#elop%ent5 Specific de#elop%ent progra%s for existing and f"t"re leaders. -erfor%ance %anage%ent5 Specific processes that n"rt"re and s"pport perfor%ance) incl"ding feedbac1F%eas"re%ent. Wor1force planning5 8o plan for b"siness and general changes) &hich incl"de the older &or1force and c"rrentFf"t"re s1ills shortages. C"lt"re5 8o de#elop of a positi#e) progressi#e and high perfor%ance &ay of operating.

Q). *ist the &ey elements of talent management system. Explain any two of them. $no 02 unit +
0: Selection ). Induction and training +. (a%ability de"elo%ment 1. Performance 0. *etention and succession Selection2 1he process o choosin# a candidate amon#st a number o probable candidates! ;ecruitment and ;etention has become a bi# challen#e or or#anizations due to the continuin# #lobal talent shorta#e, the chan#in# o work b& new #eneration emplo&ees enterin# the work orce, and the e)er increasin# e)idence that poor recruitment decisions ha)e a direct impact on the bottom line! 0r#anizations need to ilter their attraction, recruitment and selection approaches to ensure the& ha)e the ri#ht talent on board to enable them to remain competiti)e! Induction and training2 =elected candidates into the or#anization and 1rainin# is to de)elop their knowled#e, skills and competencies b& teachin# with respect to the or#anizational re<uirement! +mplo&ers should not assume that new hires can co)er or themsel)es, and will onl& need brie introductions and a chunk o corporate in ormation to #et them started! "n e ecti)e, use ul and timel& trainin# e%perience should be the pro#ressin# de)elopment chances that support the indi)idual in the role, but also the or#anization in achie)in# its broader ob7ecti)es! =uch trainin#, where possible

and practical, should be Cin.timeD rather than Cin.caseD to pro)ide trainin# en)ironments and materials that chan#e to meet indi)idual or small #roup demands precisel& at the time when new skills are needed! $t!er key elements $ focus on high impact positions+ @ talent %anage%ent policy re3"ires %anagers and 7R to deter%ine an organization>s s"ccess by filling top talent in the appropriate 2obs. $ccountability+ 8alent %anage%ent assigns acco"ntability to the chief talent exec"ti#e for %anaging the talent pool) &ho is responsible for res"lts) not effort. Rewards and metrics+ 8alent %anage%ent b"ilds s"pport and relationship bet&een earlier independent efforts thro"gh its co%%on ob2ecti#es) %etrics and re&ards. 'alanced metrics+ 8alent %anage%ent attracts %anagers> attention by instit"ting a syste% of %ethods and re&ards that ens"res e#ery exec"ti#e is ac1no&ledged and re&arded for excellence in h"%an reso"rce %anage%ent.

'usiness approach+ .t is created fro% and replicates other s"ccessf"l b"siness process %odels) li1e s"pply chain %anage%ent) finance) and lean %an"fact"ring.
Recognition of the business cycle+ 8he talent %anage%ent strategy in#ol#es identifying the different types of talent re3"ired &ith respect to changing b"siness sit"ations. #ruly global+ 8alent %anage%ent enco"rages attracting) retaining) and de#eloping the best talent no %atter &here it is. Focus on service+ ?la&less ser#ice is the expectation of talent %anage%ent. C"sto%er satisfaction) process speed) 3"ality) and co%%it%ent are contin"ally %eas"red.

Q+. *ist and explain the ;alent <election processes? $no ,) unit 0
3a)in# the ri#ht person in the ri#ht 7ob is the ke& to the success o an& business, while ha)in# the wron# person in a ke& position ad)ersel& a ects an or#anisation! +)er& ke& 7ob or position has a number o comple% re<uirements that mi#ht be di icult to identi &! 1alent =election is an endurin# procedure that re<uires proper plannin# in order to achie)e the e%pected results! 8he 8alent Selection consists of fi#e selection processes. 8hey are5 41 5ob benchmar-+ 8his process deter%ines 1ey responsibilities of the 2ob &hich is being bench%ar1ed) as &ell as indi#id"al co%petencies) %oti#ation and s1ills re3"ired by the 2ob. @ll of this can be acco%plished in a three ho"r %eeting of fo"r to ten people &ho really 1no& the 2ob. 8he process is bac1ed by a 3; %in"te online e#al"ation of the 2ob that each participant has to attend indi#id"ally to create a co%posite %odel of the 1ey attrib"tes re3"ired by the 2ob for s"ccess. 61 $ssess candidates+ 8his process is "sed to @ssess Candidates &ith the -ersonal 8alent Report. 8his report reflects a candidate-s personal co%petencies) %oti#ators and s1ills &ith #ery high #alidity and precision. 71 )ompare .ob and talent+ 8he third process is to co%pare the re3"ire%ents of the 2ob and the talents inherited by the candidate. 8he p"rpose here is not to 2"dge the character of a person) b"t rather to analyse ho& &ell they fit the partic"lar needs of a specific 2ob.

81 'ehavioural interviewing+ 8he fo"rth selection process is to enhance the assess%ent data &ith effecti#e beha#io"ral inter#ie&ing. 8he 1ey to effecti#e inter#ie&ing is ha#ing the right 3"estions for the partic"lar 2ob. 91 Selection+ 8he last stage of the process is %a1ing the selection. $o& that all the infor%ation is collected abo"t the candidate-s 3"alifications) this process has a &hole different perspecti#e. While it %ay not be possible find the perfect fit for a partic"lar 2ob) a candidate-s li%itations are 1no&n and i%portance of those partic"lar attrib"tes are lin1ed to other attrib"tes for s"ccess in the 2ob. 0nce the selection is %ade the applicant is gi#en proper training and de#eloping to ass"re their s"ccess going for&ard.

Q1. Explain the components that help in developing an adaptive talent strategy. $no 1+4 uint 2
1he three main components :nowing about the talent possessed by a person Iisibility into the co%pany-s acti#e &or1force %"st be si%ply a#ailable for recr"iting p"rpose. External recr"it%ent %ainly infor%s abo"t the strengths) &ea1nesses) and gaps. 8he talent ac3"isition leaders can s"ccessf"lly de#elop a recr"it%ent strategy and direct assets &hen they ha#e this infor%ation. 8his is done by 2oining &ith their organisational gro&th peer to detect the re3"ired s1ills and abilities to s"pport the organisation. @n internal talent %anage%ent syste% helps in deli#ering %any benefits. 0ne of the benefits is co%petency to the talent planning process. 5e"elo%ment of a talent %lan. (t is an important phase in recruitment process! 1here is a #reat chance that or#anisations ma& e%perience si#ni icant talent loss rather than unctionin# as an adapti)e, )alue.oriented talent strate#& when there is no clarit& with the below.mentioned <uestions! 7o& the organisation thin1s abo"t talent today and in the f"t"re! Which positions are s"itable for a partic"lar geographic location! Which role or position is flexible to p"rs"e the best talent despite of location! Where is flexibility introd"ced in &or1force thro"gh part=ti%e) contingent and 2ob share roles!

 When do yo" b"ild and &hen do yo" Lac3"ireM talent! 7o& do yo" broaden the reach by recognising the &or1place o"tside the organisation! 7o& do yo" initiate the co%bined tea%&or1 to create ne& ideas and concepts and dri#e inno#ation! 7o& is preparation done for a gro&ing &or1force &ith different needs! 7o& is s"pply and de%and for the talent #is"alised that is re3"ired to s"pport the strategic b"siness directi#es! "nfluence of technology 0ther than an internal talent %anage%ent syste%) a CR9 (Candidate Relationship 9anage%ent tool plays a cr"cial role in de#eloping s"ccessf"l recr"iting technology sol"tions. CR9 helps the recr"iting f"nction-s ability to ad%inister effecti#e co%%"nication) b"ilds strong bonding) and co%bines %odern so"rcing capability. .t also gi#es #isibility into the readiness of talent pipeline) &hich enables to %aintain an adapti#e talent strategy. .t also helps in pro#iding better assistance to the b"siness partners and also assists in deciding on distrib"tion of reso"rces to external recr"it%ent. 8he benefits to the talent f"nction incl"de5 Enhanced clarity aro"nd strategic b"siness directi#e. .%pro#ed ability to be %ore s1ilf"l in de#eloping and exec"ting a s"pporting strategy. .ncreased capability to pro#ide greater #al"e to the organisation &ith significant R0. (Ret"rn on .n#est%ent . Red"ced third=party recr"it%ent fees. (ecreased ti%e=to=hire.

Q0. 6a7 What is talent engagement? 6b7 What are the ob:ectives of talent engagement? $no a7 120 b7 12. unit , a7 1alent en#a#ement is a process wherein emplo&ees work b& puttin# in more e orts as their morals and interests
are associated with that o the or#anisation! "ccordin# to 5a)id /! 9orman 1alent +n#a#ement represents the e%tent to which the work orce identi ies with the compan&, is committed to it and pro)ides discretionar& e ort so that it can be success ul! +n#a#ement is a ke& leadin# indicator or hi#h per ormance workplaces, impro)ed emplo&ee producti)it& and subse<uent turno)er!D 1alent is considered to be the most essential asset o an or#anisation! 1he le)el o producti)it& o the or#anisation increases i the labour orce is e icient and competent and there ore decides the e icienc& o or#anisational s&stems and processes! I1alent +n#a#ementI, a concept which is almost similar to a le)el to which a talent is emotionall& related to the or#anisation and the emplo&ees bein# )er& obsessi)e about their work! 1alent en#a#ement is an e%tent to which an emplo&ee is committed and in)ol)ed towards hisHher work in the or#anisation and its )alues! 1alent en#a#ement is a si#ni icant element o an indi)idual and or#anisational achie)ement! 8eadership <ualit& and or#anisational eatures stron#l& control talent en#a#ement! 1he talent en#a#ement is considered to be a theoretical stud&! (t is planned to )eri & i the possibilit& o en#a#in# talents in the work can be predicted durin# their initial sta#es o work application!

b7 8he ob2ecti#es of talent engage%ent incl"de5

 Creating an e%otional ass"rance and strong t&o=&ay rapport bet&een the e%ployees and the organisation. Expecting clear perfor%ance and a clear ret"rn fro% the co%pany) for exa%ple) &or1ing at%osphere) gro&th) incenti#e) career opport"nities) so on) &hich enable e%ployees to lin1 bet&een their contrib"tion and the gro&th of the co%pany. 9oti#ating and allo&ing people to achie#e their goals and re&ard the% based on their contrib"tion and then pro#ide the% &ith excellent career opport"nities. (e#eloping a learning c"lt"re &hich pro%otes personal gro&th and professional 3"ality and s"pports ethics of professionalis%) %odernisation) practicality) tea% spirit) and reliability) so on. @d%iring and #al"ing indi#id"als) their di#ersity and enco"raging the% to balance their professional and personal li#es.

Q4. Explain the role of (= in talent management. $no )). unit 11

1he 3; acts as a backbone or 1alent Aana#ement! 1he 3; is responsible or the trainin# and de)elopment "cti)ities o an emplo&ee in an or#anisation! *hen it comes to talent mana#ement the 3;'s role is concerned with enhancin# the de)elopment, attraction, and retention o their emplo&ees! 1he 3; is responsible to establish talent mana#ement initiati)es! (n an or#anisation, apart rom transactions and administrations, the 3; is burdened to take more responsibilit& to become a talent e%pert J the responsibilit& o the 3; to )iew talent assets o an emplo&ee at an indi)idual le)el! 1his helps the 3; to know what skills, e%perience, and trainin# each emplo&ee brin#s to the table or needs to ac<uire! ,etting the best employee 7R is responsible for i%ple%enting the planned &or1force in an organisation. Wor1force planning is getting Kthe right n"%ber of people &ith the right s1ills) experiences) and co%petencies in the right 2obs at the right ti%e.K Gettin# the best emplo&ee is nothin# but hirin# the ri#ht talent! 3ere ;i#ht talent means candidates with rele)ant skill sets and <uali ications! ;i#ht emplo&ee creates a oundation or more e ecti)e per ormance b& the emplo&ees, teams, and the compan& on the whole! Paying employees and providing benefits 7R is responsible for ad%inistrating the pay and benefits of the e%ployees. 8he e%ployee>s pay and the benefits pro#ided to the% play an i%portant role in %oti#ating the%. 8he 7R calc"lates and s"%%arises

the salary str"ct"re to the e%ployee) explaining the e%ployee the pay offered apart fro% the bon"ses) co%%issions) and other perfor%ance related pay. ,raining em%loyees 1he trainin# pro#rams are an inte#ral part o the 3; department to achie)e the ob7ecti)es o the or#anisation! (t helps the emplo&ees to de)elop a #reater sense o sel .worth, di#nit&, and well.bein#! !nsuring compliance to regulations 7R co%pliance is i%portant for any b"siness in the present day>s legal en#iron%ent. Effecti#e 7R co%pliance progra%s need to be integrated into any b"siness strategies. Ensuring safe ork en"ironments#1he mana#ement must be train emplo&ees on sa et& issues with the help o sa et& pro#rams! 1his helps in brin#in# in accountabilit& and compliance! 1he best wa& to make emplo&ees e%cited with sa et& issues is to in)ol)e them in sa et& committees, make the part o sa et& inspection, set #oals and so on! Sustaining !ig!#%erforming em%loyees#+mplo&ee retention is di icult to handle because there are man& actors that a ects it! 1he 3; conducts sur)e&s to know the reason wh& emplo&ees lea)e the 7ob!

M+000< (!ange Management

Q1. 6a7 What is change management? 6b7 Explain the importance of change management. $no a7 ) b7 1 unit 1 a7 /han#e Aana#ement is a s&stematic approach o dealin# with chan#e, both rom or#anisation and indi)idual
perspecti)e! (t can be seen rom two perspecti)es, one is rom those implementin# chan#e and the other is the recipients- perspecti)e! Bour )iew on chan#e mana#ement )aries i &ou are an e%ecuti)e who is demandin# a chan#e, )ersus an emplo&ee on whom the chan#e is e%ecuted! /han#e mana#ement is the success ul mana#ement o a business chan#e, wherein the e%ecuti)e leaders, the mana#ers and the ront line emplo&ees work in order to success ull& implement the needed process, technolo#&, or or#anisational chan#es!

b7 (t pla&s an important role in an& or#anisation, as the task o mana#in# chan#e is not an eas& one! *hen we sa& mana#in# chan#e, it means makin# chan#es in a planned and s&stematic ashion! *ith re erence to the (1 pro7ects, the chan#e means the )ersions o a pro7ect and mana#in# these )ersions properl&! 1echnolo#& has compressed the distances across or#anisations! (nternet and web technolo#ies ha)e #i)en rise to honest corporations! "utomation, mechanisation, manu acturin# s&stems a ects at both micro and macro le)els o the

or#anisation! 1hese technolo#ical ad)ancements are e%amples o an e%ternal actor that impacts on chan#e within the or#anisation! 1echnolo#& not onl& re ers to machiner&, e<uipment, and tool but is concerned with the use o in ormation and knowled#e as inputs that are trans ormed into inal outputs! 1his process in)ol)es technolo#&F hence choice o appropriate technolo#& is a ke& actor or competiti)e ed#e in the new en)ironment! Change %anage%ent process "ndergoes li1e belo&5 ,. .dentifying the need for change in an organisation. 2. (esigning the changes as per organisation-s re3"ire%ent. 3. 9a1ing others to "nderstand the need for change for the proper f"nctioning of an organisation. 4. @ltering so%e organisational processes s"ch as technology) perfor%ance %eters to incorporate changes. '. 9anaging both prod"ction and changes in s"ch a &ay that the c"sto%ers and sta1eholders are bonded &ith each other in a long r"n. 9anaging the changes in an organisation re3"ires certain set of s1ills li1e political s1ills) analytical s1ills) people s1ills) syste% s1ills) and b"siness s1ills. ( &ou ha)e #ood anal&tical skills, &ou can be a #ood chan#e a#ent! Bou should e%amine the inancial and political impacts o the chan#es that can take place! =o, chan#e mana#ement is important in the business world, where the thin#s are assessed based on their per ection and capacit& to address the needs o customers and clients!

Q). *ist and explain the stages in organi"ational *ife cycle? $no 01 unit +
0rganisational life cycle is di#ided into the follo&ing phases5 ,. Start="p (or /irth . 2. 4ro&th5 8his phase is so%eti%es di#ided into an early gro&th phase (fast gro&th and %at"rity phase (slo& gro&th or no gro&th . 7o&e#er) %at"rity phase f"rther leads to decline. 3. (ecline5 While declining) an organisation &ill "ndergo either rene&al or death. 4. Rene&al. '. (eath. #he Start-;p phase .n this phase) the entreprene"r thin1s abo"t the b"siness) for%s a %anage%ent gro"p) &rite a b"siness plan. 8he co%pany goes into the gro&th phase &hen the in#estor &rites the chec1. 8he start="p ends for those that donBt need o"tside f"nds. #he growth phase .n the gro&th phase) &e expect to see re#en"es increasing) ne& ser#ices and prod"cts de#eloping) %ore e%ployees- recr"iting and so on. (n or#anisations that ha)e been runnin# or a ew &ears, dr& rot sets in! 5r& rot

re ers to deca&in# o timber in buildin#s and wooden urniture caused b& un#i! =o, man& companies ha)e their own t&pes o pro#rams relatin# to or#anisational de)elopment in place! #he decline phase Corporate insanity is seen in this phase. Corporate insanity can be defined as doing the sa%e thing in sa%e &ay b"t expecting different res"lts. 9anage%ent expects to be better next year) b"t doesnBt 1no& or is "n&illing to change to get better res"lts. ' http5FF&&&.legacee.co%F?ast4ro&thF0rg6ifeCy 9any organisations &ill not enter decline phase "nless there are precise progra% of transfor%ational leadership de#elop%ent. .f senior leaders detect the sy%pto%s of decline at early stage) they can easily deal &ith it. #he renewal phase 0nce the organisation starts declining) it doesn-t %ean that it sho"ld contin"e. So%e of the external experts ha#e foc"sed on the i%portance of organisational de#elop%ent as a &ay for pre#enting decline or red"cing its effects. 5r& rot can be re)ersed throu#h the use o trainin# as a wa& o in7ectin# new knowled#e and skills! Bou can also ha)e ri#orous pro#rams to chan#e and trans orm the or#anisationGs culture! 1his assumes that thou#h &ou ha)e enou#h trans ormational leaders to chan#e the status <uo, without the ri#ht t&pe o leadership, the or#anisation will #o down to bankruptc&! #he death phase @bo"t N;H of b"siness fail"res occ"r d"e to the factors related to leadership control. E#en fir%s that are close to ban1r"ptcy can o#erco%e this ad#ersity and n"rse the%sel#es to be financial healthy. @ #ery good exa%ple is 6ee .acocca-s t"rnaro"nd of the Chrysler Corporation.

Q+. Explain briefly the recent approaches to organisational development and change. $no ,1 unit 0
(t includes structural and technolo#ical chan#es and ocuses on the workin# en)ironment amon# the emplo&ees within the or#anisation! (t is a modern approach to mana#e chan#e or human resource de)elopment! 1he basic approaches o or#anisational de)elopment are techno.structural approach and human process oriented approaches! 1he recent approaches to or#anisational de)elopment and chan#e are broadl& di)ided into two cate#oriesK 41 #he top down approach+ #he classical paradigm 0rganisations consist of f"nctional areas s"ch as prod"ction) sales and acco"nting) etc. 8he top %anage%ent &ill dri#e these areas thro"gh co%%and and control. 8he ass"%ption here is that %anage%ent sho"ld try hard to %aintain change. 61 #he bottom up approach+ #he systems paradigm 8his approach deals &ith organisation as a syste% &hich easily gets affected by en#iron%ental changes. .t is also 1no&n as the li#ing=syste%s approach beca"se the organisation is considered to be a learning

organisation &hich has %any feedbac1 syste%s bet&een its s"b=syste%s. 7ere) change occ"rs contin"o"sly and is considered nat"ral &hen an opport"nity is present and is not dri#en externally. "ccordin# to s&stems approach, or#anisations should simultaneousl& pursue both process and structural inter)ention strate#ies in order to brin# about chan#e! Process inter)ention strate#ies ocus on chan#in# people -s beha)iour, culture, attitudes, interpersonal and inter.#roup interactions, and also or#anisational communication st&les and low o in ormation ,?eer, 1>8:-! 1hese strate#ies help to brin# in team work, cultural chan#e, and s&stems maintenance in the or#anisation! "nother wa& o anal&sin# chan#e models is to consider the e%ternal or internal orces as in luencin# chan#e! 1he adaptation model ocuses on the role o e%ternal actors in brin#in# about chan#es in the or#anisation! =ome o the e%amples include a new #o)ernment polic&, competiti)e en)ironment! 1he proaction model sa&s that e%planation comes rom within the or#anisation as actions and chan#e b& itsel ! "ccordin# to process model, success ul chan#e needs to be planned b& helpin# people to de)elop process competencies! =ome o the e%amples are wa&s o plannin#, decision.makin#, problem sol)in#, communicatin#, etc! People will ind new wa&s o or#anisin# thin#s b& this! So%e of the change %odels ha#e had rele#ance and existed o#er a span of ti%e. 8hese %odels are categorised based on their nat"re of change) analysis) and treat%ent into three gro"ps. 8hey are5 -rocess=based %odels. Content=based %odels. .ntegrated %odels.

Q1. #iscuss in brief about the role of leaders in the change process. $no 11) unit 2
8he leaders at different le#els in the organisation &ill ha#e different roles to play. 8he leaders &or1 to&ards achie#ing the goals in the organisation. (ifferent people react in different &ay for the changes5 8he opinion of different people #aries in a different &ay. So%e people li1e to follo& the old syste% and they &ant things to be as it is) so they li1e to be at the stability end of the spectr"%. So%e other people enco"rage for the ne& "pco%ing change) so they li1e to be at the change end. 9any proble%s co%e &hen the people find that their opinions do not %atch &ith the sit"ations. .n s"ch a condition the indi#id"als &ill be dissatisfied) experience stress) and disli1e indi#id"als at the other end. E#eryone has f"nda%ental needs that ha#e to be %et5

8he need #ary depending on the people. 8here is so%e degree for each of the needs. 8he change progra%%e has to %eet the control) incl"sion and openness needs o the indi)iduals otherwise there is chance or ne#ati)e reactions ran#in# rom the resistance to the opposition! )hange often involves a loss, and people go through the <loss curve<+ 8he loss of c"r#e explains the feelings of the indi#id"als as the ti%e proceeds in the change process. Expectations need to be %anaged realistically5 So%e of the enforced changes do not %eet the expectations of the e%ployees that ti%e certainly they &ill be "nhappy and the expectations ha#e to be set at the realistic le#el. ?or exa%ple5 S"ppose that &e are a contractor for any pro2ect and &e expect to be paid in ,4 days b"t the contract says 3; days then &e need to disc"ss and %a1e s"re that &e get &hat &e are expecting. .f this not happening then &e %"st %a1e s"re that the expectations are %anaged by both contractor and b"yer. ?ears ha#e to be dealt &ith5 .t is the tendency of h"%an beings to go o"t of the &indo&) &hene#er there are so%e significant changes. So%e people fear the &orst since their %inds &ill not be #ery conscio"s to 1no& the things better. 9any fears &hich an e%ployee faces d"ring a changing phase. 6oosing the 2ob. .nability to s"r#i#e in changed set"p $ot getting a ne& 2ob. ?"t"re proble%s arising d"e to loss of 2ob. 1he ears ha)e to be addressed b& leaders in an understandin# wa& b& makin# them understand that the redundant people can #et the better 7ob!

Q0. Explain the strategies for competitive advantage. $no 1,2 unit ,
@ co%petiti#e ad#antage 3is an ad#antage o#er co%petitors gained by offering cons"%ers greater #al"e) either by %eans of lo&er prices or by pro#iding greater benefits and ser#ice that 2"stifies higher prices. 9ichael -orter 4has gi#en fo"r generic b"siness strategies that are analysed by hi% on his &or1 in the co%petiti#e ind"stry. 7e has gi#en fo"r strategies takin# consideration o the scope o a business )ersus the de#ree o product di erentiation! Strategy+ Differentiation 8hese are the strategies &hich incl"de the selection of one or %ore criteria that can be "sed by the c"sto%ers for ta1ing the prod"ct in the %ar1et. @ccording to the criteria>s) the organisation can de#elop the special strategy to %eet the needs of the c"sto%ers. 1his in)ol)es the product with the premium price to demonstrate the production costs and the )alue added eatures that are present or the customer needs! Strategy+ )ost leadership

8he %ain ai% of this strategy is to pro#ide the prod"ct &ith the less cost in the %ar1et. 8he lo&est cost prod"cer is its %ain ai%. E#en the %ar1et seg%ents s"ggest the sa%e thing. 1he lowest cost producer will be bene ited when the product rate is at minimum e<ual to the a)era#e price in the market! Lsuall& this t&pe o strate#& is associated with the lar#e scale industries which aim at o erin# the standard products with a minimum di erentiation and per ect product! Strategy+ Differentiation focus 8his strategy ai%s at differentiating the prod"ct &ith a %ini%"% n"%ber of target %ar1et seg%ents. 8his strategy is applicable to the special needs of the c"sto%er. 8he c"sto%er &ell in ad#ance infor%s the ind"stry for the prod"ction of the special &ith the needs that &ill be differentiated &ith the already existing prod"ct in the %ar1et. 1here is a )alid actor or the di erentiation and the e%istin# competitor products are not meetin# those needs! Strategy+ )ost focus 8his strategy foc"sses on the cost of the prod"ct &hich is the base for the b"siness of the organisation. 8here are so%e prod"cts) &hich ha#e feat"res that are not needed for the c"sto%ers. 8hat ti%e the sale &ill also be less since the cost is %ore) &hich is not &orth according to their needs. ("ring that ti%e) it &ill be #ery helpf"l if the organisation pro#ides the prod"ct &ith the) less cost and the specific needs that are re3"ired for the c"sto%ers.

Q4. 6a7 #efine learning organi"ation. 6b7 Explain the need for learning organi"ation. $no a7 )+) b7 )+4 unit 11 a7 =en#e2 de ines 8earnin# 0r#anisation as the Cor#anisation in which &ou cannot $not' learn because learnin# is
so insinuated into the abric o li e!I "lso, he de ines 8earnin# 0r#anisation as Ia #roup o people continuall& enhancin# their capacit& to create what the& want to create!I *e can de ine learnin# or#anisation as the or#anisation which has embedded the philosophies like anticipatin#, reactin# and respondin# to chan#e, comple%it& and uncertaint&! 1he competiti)e ad)anta#e mainl& depends on the rate at which the or#anisation can learn! b7 Aan& o the companies in the world ocus on impro)in# the e%istin# products and ser)ices, and inno)atin# thin#s to e%cel in the business strate#&! 1his resulted in the startin# o man& acti)ities like 1MA ,1otal Mualit& Aana#ement- and ?P; ,?usiness Process ;een#ineerin#-! 1hese pro#rammes can be success ul or a ailure, dependin# on some actors likes indi)idual skills, attitudes and or#anisation culture!

8here are fe& factors that are needed for learning organisation to deal &ith. 8hey are to5 ?ace s"dden and "nexpected changes &here there are no responses for the existing progra%%es. Expect the changing sit"ations. @llo& the staff to respond to the c"sto%er needs in a proper &ay.