CORPORATE STRATEGY FORMULATION• FORMULATING A SUCCESSFUL STRATEGY MEANS ADDING VALUE FOR THE TARGETED

CUSTOMERS, WHICH AN ORGANISATION CAN ACHIEVE BY CONSISTENTLY BETTERING FROM ITS COMPETITORS AS REGARD MEETING CUSTOMER NEEDS

• WITH APPROPRIATE STRATEGY, A COMPANY CAN BETTER UNDERSTAND HOW IT CAN

POSITION ITSELF AGAINST THE COMPETITION & GAIN A SUSTAINABLE COMPETITIVE ADVANTAGE. A STRATEGY ALSO DETERMINES A COMPANIES KEY STRATEGIC PRIORITIES.

• STRATEGY FORMULATION IS VITAL TO A FIRM’S WELL BEING

• STRATEGY DIVIDED AS CORPORATE STRATEGY(CO DECIDES THE LINE OF BUSI TO GET INVOLVED IN)

COMPETITIVE STRATEGY(WHERE THE FRAMEWORK FOR ACHIEVING SUCCESS IS STRUCTURED)BOTH ARE EQUALLY IMPORTANT FOR THE COMPANIES CAUSE

THEY INVOLVE:-

1. MARKETING ANAYSIS

2. PLANNING

3. SETTING OF GOALS & OBJECTIVES

4. STRINGENT MONITORING

5. COMMITMENT OF RESOURCES ETC

MISSION STATEMENT:- IMPORTANT NOT ONLY IN SHORT BUT ALSO IN LONG RUN

THOSE BELONGING TO THE COMPANY WORK TOGETHER WITH A UNIFORM PURPOSE

IDENTIFIES SCOPE OF THE COMPANIES OPERATIONS, DESCRIBES THE COMPANIES PRODUCT,

IDENTIFY THE MARKET TECHNOLOGICAL AREAS, REFLECT THE VALUE & PRIORITIES OF STRATEGIC

DECESION MAKERS

REFLECTS THE INTENTION OF THE COMPANY(FUTURE INTENTION)

FORMULATED WITH GREAT CAUTION..KEEPING IN MIND THE PRODUCT, ITS MARKET, TECHNOLOGY

USED, IMAGE OF COMPANY, ITS GOALS, & PHILOSOPHY.

COVERS NOT ONLY OWN EMPLYOEES , CUSTOMERS, SHAREHOLDERS BUT ALSO LOCAL COMMUNITY

& SOCIETY.

ETHICS & NORMS TO BE FOLLOWED.

UNDERSTANDING MISSION & PURPOSEMISSIONIS DIVIDED AS “A STATEMENT WHICH DEFINES PURPOSE AS “ ANYTHING WHICH AN ORGN STRIVES THE ROLE THAT AN ORGN PLAYS IN THE SOCIETY”. FOR”.BOTH MISSION & PURPOSE GO HAND IN HAND & USED TOGETHER, MAINTAINING THE BASIC DIFFERENCE BETWEEN THEM.MISSION STRICTLY REFERS TO THE PARTICULAR NEEDS OF THE SOCIETY FOR INSTANCE:- ITS INFORMATIONAL NEEDS.PURPOSE RELATES TO WHAT THE ORGANISATION STRIVES TO ACHIEVE IN ORDER TO FULFILL ITS MISSION TO THE SOCIETY.

CHARACTERSTICS OF MISSION STATEMENT:-1. IT SHD BE FEASIBLE:- IT SHD BE REALISTIC & ACHIEVEABLE EG:- IN THE SIXTIES, THE US

NATIONAL AERONAUTICS & SPACE ADMINISTRATION(NASA) HAD A MISSION TO LAND ON MOON. IT WAS A FEASIBLE MISSION THAT WAS ULTIMATELY REALISED.

2. IT SHD BE PRECISE:- SHD NOT BE NARROW AS TO RESTRICT THE ORGN ACTIVITIES NOR SHD BE TOO BROAD TO MAKE ITSELF MEANINGLESS.

3. IT SHD BE CLEAR:- CLEAR ENOUGH TO LEAD TO ACTION.. NOT BE MEANT FOR PUBLICITY PURPOSE. MANY ORG’S DO

SO FOR EMPHASISING THEIR IDENTITY & CHARACTER. FOR EG:- ASIAN PAINTS STRESSES ‘ LEADERSHIP THROUGH EXCELLENCE’. & BAJAJ AUTO’S BELIEVE IN PROVIDING ‘ VALUE FOR MONEY FOR YEARS’.4. IT SHD BE MOTIVATING:- A MISSION STATEMENT SHD BE MOTIVATING FOR MEMBERS OF THE ORGN & OF THE SOCIETY. A BANK WHICH LAYS GREAT EMPHASIS ON CUSTOMER SERVICE IS LIKELY TO MOTIVATE ITS EMPLOYEES TO SERVE ITS CUSTOMERS WELL & TO ATTRACT CLIENTS.5. IT SHD BE DISTINCTIVE:- A MISSION STATEMENT WHICH IS INDISCRIMINATE IS LIKELY TO HAVE LESS

IMPACT. IF ALL SCOOTER MANUFACTURING DEFINED THEIR MISSION IN A SIMILAR FASHION , THERE WOULD NOT BE MUCH OF DIFFERENCE AMONG THEM. BUT IF ONE DEFINES IT AS SCOOTER THAT PROVIDES ‘ VALUE FOR MONEY’ FOR YEARS IT CREATE AN IMPORTANT DISTINCTION IN THE PUBLIC MIND.

6. IT SHD INDICATE MAJOR COMPONENTS OF STRATEGY:- IT SHD INDICATE THAT THE CO WILL FOLLOW A COMBINATION OF STABILITY, GROWTH, & DIVERSIFICATION STRATEGIES IN FUTURE.

7. IT SHD INDICATE HOW OBJ’S ARE TO BE ACCOMPLISHED:- MISSION STATEMENT SHD ALSO PROVIDE CLUES REGARDING THE MANNER IN WHICH THE OBJ’S ARE TO BE ACCOMPLISHED.

VISION• VISION IS A POWERFULL MOTIVATOR & KEEPS AN ORGN MOVING FIND IN THE INTENDED

DIRECTION.• MOSTLY VISION & MISSION MAY SEEM OVERLAPPING OR SIMILAR, FACT IS VISON OF CO IS

NOT ALWAYS AS SPECIFIC AS THE MISSION STATEMENT.• USUALLY VISION IS IMPERSONAL & NOT EVEN WRITTEN DOWN• EG:- CADILA HEALTHCARE LTD FOUNDED IN- 1952- IS TO COME UP WITH HEALTH CARE SOLUTION, PRODUCE ACTIVE PHARMACEUTICAL

INGRIENTS, HERBAL PRODUCTS, VACCINES ETC.1955-GROUP CAME TO BE KNOWN AS ZYDUS CADILA GROUP.ZYDUS GROUP NOT AIMING TO BE GLOBAL PLAYER BUT ALSO PURSUING AN AMBITION OF

BECOMING TOP THREE HEALTH CARE COMPANIES IN INDIA.ALREADY MADE ITS PRESENCE IN MARKETS OF US, BRAZIL, SOUTH AFRICA & ALGERIA.NOW ITS VISION:- ‘ZYDUS SHALL BE A LEADING HEALTHCARE PROVIDER WITH A ROBUST

PRODUCT PIPELINE & SALE OF OVER $ 1 BILLION BY 2010. WE SHALL ACHIEVE SALES OF OVER $3 BILLION BY 2015 & BE A RESEARCH BASED PHARMACEUTICAL COMPANY BY 2020’.

OBJECTIVES &GOALS• GOALS &OBJ’S ARE USED MANY TIMES INTERCHANGEABLY BUT MANY SCHOLARS HAVE MADE

DISTINCTION BETWEEN THEM.• KING & CLELAND STATE THAT OBJ’S ARE BROAD AND TIMELESS STATEMENT IN QUANTITATIVE TERMS• GOALS ON THE OTHER HAND ARE MORE SPECIFIC & POSITIVE & TIME BASED• GOALS EMPHASIZE ON MEASUREMENT OF PROGRESS TOWARDS ACHIEVING THE OBJECTIVES• OBJ’S ARE OPEN ENDED(LONG TERM) ATTRIBUTES THAT DENOTES THE FUTURE STATE OR OUTCOME.• GOALS ARE CLOSE ENDED(SHORT TERM) ATTRIBUTES WHICH ARE PRECISE & EXPRESSED IN SPECIFIC

TERMS.

USE OF COMPANY’S OBJECTIVES:- OBJ’S ARE VITAL FOR AN ORGN. THEY• EXPRESS THE MISSION IN A CLEARER WAY• PROVIDE A SPECIFIC DIRECTION TO ALL ORGANIZATIONAL AREAS & LEVELS.• ARE CHANGED REGULARLY TO KEEP UP WITH THE CHANGES IN THE ENVIRONMENT.• AID IN STRATEGIC DECISION MAKING• ARE USEFUL WHILE EVALUATING ORGANIZATIONAL PERFORMANCE.

HIERARCHY OF OBJ’S:- OBJ’S HAVE A HIERARCHY. THEY ARE AS FOLLOWS: (IMP ACC TO QUES IN PAPER)

• CORPORATE LEVEL• SBU OR DIVISIONAL LEVEL• FUNCTIONAL LEVEL• DEPARTMENTAL LEVEL• SECTIONAL LEVEL• INDIVIDUAL LEVEL

AREAS OF OBJECTIVE SETTING:-• MARKET STANDING • INNOVATION• PRODUCTIVITY• PROFITABILITY• PHYSICAL & FINANCIAL RESOURCES• MANAGER’S PERFORMANCE & DEVELOPMENT• WORKER PERFORMANCE & ATTITUDE• PUBLIC RESPONSIBILITY

GUIDELINES FOR EFFECTIVE OBJ’S:-• SPECIFIC• CLEAR• MULTIPLE(COVER ALL ASPECTS)• PERIODICAL• TIME BOUND• CHALLENGING• VERIFIABLE• REALISTIC• MEASUREABLE

ROLE OF OBJECTIVES:- (IMP ACC TO QUES PAPER FROM GUPTA)

OBJ’S DEFINES THE ORGN’S RELATIONSHIP WITH ITS ENVIRONMENT. OBJ’S HELP AN ORGN TO PURSUE ITS MISSION & PURPOSE. OBJ’S PROVIDE THE BASIS FOR STRATEGIC DECISION MAKING OBJ’S PROVIDE THE STANDARD FOR PERFORMANCE APPRAISAL

CHARACTERSTICS:- OBJ’S SHD BE UNDERSTANDABLE OBJ’S SHD BE CONCRETE & SPECIFIC OBJ’S SHD BE RELATED TO A TIME FRAME OBJ’S SHD BE MEASUREABLE & CONTROLABLE OBJ’S SHD BE CHALLENGING DIFFERENT OBJ’S SHD CORRELATE WITH EACH OTHER OBJ’S SHD BE SET WITHIN CONSTRAINTS

POLICIES(STRATEGIC INTENT):- • A POLICY IS TYPICALLY DESCRIBED AS PRINCIPLE OR RULE TO QUIDE DECISIONS &

ACHIEVE RATIONAL OUTCOMES.• POLICY WILL CONTAIN THE “ WHAT” & “WHY” , PROCEDURE OR PROTOCOLS CONTAIN ‘

WHAT” , “HOW” , “WHERE” & “WHEN”.• POLICIES ARE GENERALLY ADOPTED BY BOARD OF OR SENIOR GOVERNANCE BODY WITHIN

AN ORGANISATION WHEREAS PROCEDURES OR PROTOCOLS WOULD BE DEVELOPED & ADOPTED BY SENIOR EXECUTIVE OFFICERS.

• A POLICY MAY BE CONSIDERED AS A “ STATEMENT OF INTENT” OR A “COMMITMENT”. FOR THAT REASON AT LEAST, WE CAN HELD ACCOUNTABLE FOR OUR POLICY.

CORPORATE PHILOSOPHY• PEOPLE WHO MAKE UP THE ORGANISATION ARE LIVING ENTITIES & WHAT THEY SHARE IN COMMON

OVER A CERTAIN TIME PERIOD CONSTITUTE VALUE.THESE SHARED VALUES MAKE UP THE CORPORATE CULTURE.

• A GOOD CORPORATE CULTURE RESULTS IN SUCCESSFUL ORGANIZATION.• MANY SMALL BUSINESS OWNERS IMPLEMENT A CORPORATE PHILOSOPHY WITHIN THE FRAMEWORK OF

THEIR BUSINESS. A CORPORATE PHILOSOPHY ENLIGHTENS A COMPANY’S CUSTOMERS & EMPLOYEES OF THE INTENTION OF THE ORGANIZATION, HELPING TO BUILD MORE MEANINGFUL RELATIONSHIPS.

• A BUSINESS OWNER SHOULD SPEND TIME DEVELOPING A PHILOSOPHY THAT ALIGNS HIS GOALS & VISION FOR HIS BUSINESS

• CORPORATE PHILOSOPHY STATEMENTS CAN HELP A BUSINESS OWNER DEVELOP A POLICY CATERED TO HIS BUSINESS.

• CORPORATE PHILOSOPHY CONSISTS OF FOUR PILLARS:-MISSIONBUSINESS DOMAINMANAGEMENT GOALSACTION GUIDELINES

CORPORATE GOVERNANCE• C.G. HELPS TO MANAGE A CO FOR THE BENEFIT OF SHAREHOLDERS, CUSTOMERS, EMPLOYEES,

SUPPLIERS ETC.• GOVERNANCE IS AN AGE OLD CONCEPT PARTICULARLY IN CONTEXT OF STATE ADMINISTRATION.• CONTENTS OF C.G. CODE:-1. CONSTITUTION OF BOD:-CODE COVERS THE CONSTITUTION OF BOD, NON EXECUTIVE,

DIRECTORS ROLE, THE BOARD MEETING, IMPORTANT MATTERS THAT NEED TO BE LOOKED INTO BY THE BOARD.

2. DISCLOSURE OF INFORMATION:- THE ANNUAL & PERIODICAL REPORT MUST HAVE FINANCIAL & OTHER INFORMATION.

3. MANAGEMENT PRACTICES:- THE PRACTICES SHD PROTECT THE INTEREST OF CONSUMERS, FINANCERS, CREDITORS, DISTRIBUTORS, GOVERNMENT & SOCIETY.

• C.G. IS SET OF PROCESSES ,CUSTOMS , POLICIES. LAWS & INSTITUTION AFFECTING THE WAY A CORPORATION IS DIRECTED , ADMINISTERED OR CONTROLLED.

• C.G. IS THE TERM THAT REFERS BROADLY TO THE RULES, PROCESSES OR LAWS BY WHICH BUSINESSES ARE OPERATED, REGULATED & CONTROLLED..

FOUR PILLARS OF CORPORATE GOVERNANCE1. ACCOUNTABILITY2. FAIRNESS3. TRANSPARENCY4. INDEPENDENCE

1.ACCONTABILITY:-• ENSURE THAT MANAGEMENT IS ACCOUNTABLE TO THE BOARD• ENSURE THAT THE BOARD IS ACCOUNTABLE TO SHAREHOLDERS2. FAIRNES• PROTECT SHAREHOLDER RIGHTS• TREAT ALL SHAREHOLDERS INCLUDING MINORITIES, EQUITABLY• PROVIDE EFFECTIVE REDRESS FOR VIOLATIONS

3. TRANSPARENCY:- • ENSURE TIMELY , ACCURATE DISCLOSURE ON ALL MATERIAL MATTERS, INCLUDING THE FINANCIAL

SITUATION , PERFORMANCE, OWNERSHIP, AND CORPORATE GOVERNANCE.

4. INDEPENDENCE:-• PROCEDURES & STRUCTURES ARE IN PLACE SO AS TO MINIMISE , OR AVOID COMPLETELY CONFLICTS

OF INTERESTS..

• INDEPENDENT DIRECTORS AND ADVISERS I.E. FREE FROM THE INFLUENCE OF OTHERS.

CORPORATE CULTURE• ACCORDING TO J.A PEARCE II & R.B. ROBINSON JR. CORPORATE CULTURE IS “ THE SET OF IMPORTANT

ASSUMPTIONS OFTEN UNSTATED- THAT MEMBERS OF ORGN SHARE IN COMMON.• A BLEND OF VALUE, BELIEFS, SYMBOLS, RITUALS & MYTHS ALL COMPANIES DEVELOP OVER TIME.• WHETHER WRITTEN AS MISSION STATEMENT, SPOKEN OR MERELY UNDERSTOOD, CORPORATE CULTURE

DESCRIBES & GOVERNS THE WAY A COMPANIES OWNERS & EMPLOYEES THINK, FEEL & ACT.• YOUR OWN BUSINESS CULTURE MAY BE BASED ON BELIEFS SPELLED OUT IN YOUR MISSION STATEMENT• IT COULD CONSIST IN PART OF A CORPORATE SYMBOL LIKE THE RAINBOW COLORED APPLE THAT

SYMBOLIZES APPLE COMPUTER.• WHATEVER SHAPE IT TAKES YOUR COMPANIES CORPORATE CULTURE PLAYS A BIG ROLE IN DETERMINING

HOW WELL YOUR BUSINESS WILL DO…• CORPORATE CULTURE CA BE SEEN IN :-SHARED FEELINGS:- WHAT PEOPLE FEEL ABOUT ORGANIZATIONSHARED SAYING :- WHAT PEOPLE TALK ABOUT ORGANIZATIONSHARED THING :- THE THING THAT PEOPLE SHARE IN COMMON E.G.-DRESS CODESHARED ACTION:- ACTION THAT PEOPLE UNDERTAKE TOGETHER E.G.- PARTICIPATION IN SOCIAL SERVICE..