Bangladesh open university Khulna

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Assignment Solution 8th level
Industrial Relation

Assignment-2

1(a) What is industrial relations? Explain the objectives of industrial relation?
The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.” The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.

Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.

1(b) Discuss the approaches of industrial relation.
ndustrial conflicts are the results of several socio-economic, psychological and political factors. Various lines of thoughts have been expressed and approaches used to explain his complex phenomenon. One observer has stated, “An economist tries to interpret industrial conflict in terms of impersonal markets forces and laws of supply demand. To a politician, industrial conflict is a war of different ideologies – perhaps a class-war. To a psychologist, industrial conflict means the conflicting interests, aspirations, goals, motives and perceptions of different groups of individuals, operating within and reacting to a given socio-economic and political environment”.
Psychological approach
The problems of IR have their origin in the perceptions of the management, unions and the workers. The conflicts between labour and management occur because every group negatively perceives the behaviour of the other i.e. even the honest intention of the other party so looked at with suspicion.
Sociological approach
Industry is a social world in miniature. The management goals, workers’ attitudes, perception of change in industry, are all, in turn, decided by broad social factors like the culture of the institutions, customs, structural changes, status-symbols, rationality, acceptance or resistance to change, tolerance etc. Industry is, thus inseparable from the society in which it functions

1(c) Describe the functional requirements of a successful industrial relations program.
Industrial relations scholars have described three major theoretical perspectives or frameworks, that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralist and radical. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulation differently. The radical perspective is sometimes referred to as the "conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories, although they are not limited to kosala.
Unitary Perspective
In unitarism, the organization is perceived as an integrated and harmonious system, viewed as one happy family. A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as unnecessary and conflict is perceived as disruptive.
Pluralistic-Perspective
In pluralism the organization is perceived as being made up of powerful and divergent sub-groups - management and trade unions. This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change.Realistic managers should accept conflict to occur. There is a greater propensity for conflict rather than harmony.

2(a) What is trade union? Why do workers join a trade union?
Trade unions are formed to protect and promote the interests of their members. Their primary function is to protect the interests of workers against discrimination and unfair labor practices
The important forces that make the employees join a union are as follows:

1. Greater Bargaining Power
The individual employee possesses very little bargaining power as compared to that of his employer. If he is not satisfied with the wage and other conditions of employment, he can leave the job. It is not practicable to continually resign from one job after another when he is dissatisfied. This imposes a great financial and emotional burden upon the worker. The better course for him is to join a union that can take concerted action against the employer. The threat or actuality of a strike by a union is a powerful tool that often causes the employer to accept the demands of the workers for better conditions of employment.
2. Minimize Discrimination
The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in nature. The personal relationships existing between the supervisor and each of his subordinates may influence the management. Thus, there are chances of favoritisms and discriminations. A trade union can compel the management to formulate personnel policies that press for equality of treatment to the workers. All the labor decisions of the management are under close scrutiny of the labor union. This has the effect of minimizing favoritism and discrimination.

3. Sense of Security
The employees may join the unions because of their belief that it is an effective way to secure adequate protection from various types of hazards and income insecurity such as accident, injury, illness, unemployment, etc. The trade union secure retirement benefits of the workers and compel the management to invest in welfare services for the benefit of the workers.

4. Sense of Participation
The employees can participate in management of matters affecting their interests only if they join trade unions. They can influence the decisions that are taken as a result of collective bargaining between the union and the management.

5. Sense of Belongingness
Many employees join a union because their co-workers are the members of the union. At times, an employee joins a union under group pressure; if he does not, he often has a very difficult time at work. On the other hand, those who are members of a union feel that they gain respect in the eyes of their fellow workers. They can also discuss their problem with’
the trade union leaders.

6. Platform for self expression
The desire for self-expression is a fundamental human drive for most people. All of us wish to share our feelings, ideas and opinions with others. Similarly the workers also want the management to listen to them. A trade union provides such a forum where the feelings, ideas and opinions of the workers could be discussed. It can also transmit the feelings, ideas, opinions and complaints of the workers to the management. The collective voice of the workers is heard by the management and give due consideration while taking policy decisions by the management.

7. Betterment of relationships
Another reason for employees joining unions is that employees feel that unions can fulfill the important need for adequate machinery for proper maintenance of employer-employee relations. Unions help in betterment of industrial relations among management and workers by solving the problems peacefully.

2(c) Explain tools of achieving trade union objectives.
Trade unions are formed to achieve the following objectives
Representation
Trade unions represent individual workers when they have a problem at work. If an employee feels he is being unfairly treated, he can ask the union representative to help sort out the difficulty with the manager or employer. Unions also offer their members legal representation.
Negotiation
Negotiation is where union representatives, discuss with management, the issues which affect people working in an organization. There may be a difference of opinion between management and union members. Trade unions negotiate with the employers to find out a solution to these differences. Pay, working hours, holidays and changes to working practices are the sorts of issues that are negotiated

Voice in decisions affecting workers
The economic security of employees is determined not only by the level of wages and duration of their employment, but also by the management’s personal policies which include selection of employees for lay offs, retrenchment, promotion and transfer.

Q.2.c Discuss the trade union structure in bangladesh

Structure of Trade Unions:

The structure of unions refers to the basis on which unions are organised (i.e., whether
they are organised on craft or industrial or general union basis) and to the pattern
whereby the plant unions are linked to regional level or national level federations or
unions.

Let us examine these two aspects one by one:
Unions in India are largely organised by industry rather than craft. Although industrial
unionism has been the general trend, craft unions have also emerged here and there;
primarily, they exist among non-manual workers like administrative staff, professionals,
technicians, etc. Ahmedabad Textile Labour Association is the sole example of craft
union of manual workers.
Another aspect of the structure of unions in India relates to their pattern of relationship
between national level, regional level, local level and plant level unions.
Let us see how they are related in India.

I.Plant level Unions:
The first level in the structure from below is the plant level
union. This comprises the unions in one organisation or factory. Please note that
only seven members are required to form a union. This has lead to multiple
unions in one factory. (We will discuss the details of this aspect in the problems
faced by unions in India).

II.Local Level federations.
This is the second level in the structure from below.
The local trade union federation holds together the plant level unions at the local
level in a particular craft and industry. These local level federations might be
affiliated to either some regional level or national level federation or these may be
independent.

III.Regional level federations.
These are the organisations of all the constituent
unions in a particular state or region.

3(a) Compare between industrial relations in Japan and USA.
The industrial relationship between Japan and USA can be compared by the following ways:
Trade Union:
The structure of trade unionism in the USA is relatively straightforward and similar to that in Ireland and the UK. There is a single main national centre, the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO), made up of a relatively large number (currently 64) of industrial and occupational unions. Only a few unions lie outside the AFL-CIO umbrella.
In Japan, there are two confederations of significant size. By far the larger is the Japanese Trade Union Confederation (Rengo), which organises some 64% of unionised workers. Rengo's membership is based largely on enterprise-level unions, organised in sectoral federations (there are thus some similarities with a country like France, where the main union confederations are made up essentially of local unions organised in sectoral federations). The second confederation, the National Confederation of Trade Unions (Zenroren), represents only around 9% of all unionised workers.
Membership and density:
In 2002, union membership declined by 3.7% in Japan, following falls of 2.8% in 2001 and 2.4% in 2000. These figures confirm a continuing, gradual decline in union membership over the long term. In the USA, union membership fell by 1.7% in 2002, following a rise of 0.8% in 2001 and a fall of 1.3% in 2000. No such overall figures are available for the EU, but decline or at best stability seems to have been the overall picture in almost all cases for the past few years.
Employer Organizations:
The USA is unlike Japan and all EU Member States in that it has no identifiable national intersectoral employer body with an industrial relations role. A special organisation has been created to allow US employers to be represented by a single intersectoral body in international organisations and fora - the United States Council for International Business (USCIB). Major business organisations such as the National Association of Manufacturers (NAM) and the US Chamber of Commerce do not deal with trade unions, though they do have some role in developing policy on labour issues. There are few national sectoral employer bodies with any bargaining role, and bargaining takes place predominantly at enterprise or local level (see below under 'Collective bargaining').

3(b) Describe the role of the state in industrial relation.
The role of the government on industrial relations is very important as it sets the legal framework that industrial relations operates in. Appropriate industrial relations legislation should recognize the requirements of both employers and employee’s. Both the employee and the employer want to profit from each other but are also reliant on each other. This means that the equal bargaining power of employers and workers must be recognized (Peetz, David. 2006). Appropriate industrial relations laws should address any imbalance of power and give both groups an equal degree of control. Appropriate industrial relations should not only allow a mixture of both collective and individual bargaining but also facilitate employee participation in day to day workplace decisions. After all it’s the structure and framework of the employment relationship, which is governed by legislation that leads to good Industrial Relations. One of the main debates concerning industrial

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relations in Australia is the method used to organise and manage labour. Although both the current government and the opposition share differing opinions on the current industrial relations laws, most of the issues concern the use of third parties or unions, individualist and collectivist frames of reference and individual vs. collective bargaining. According to Accel-Team, appropriate industrial relations laws are there to protect both parties by protecting the weak (hence minimum wage); outlaw discrimination (race, s*x, etc); determine minimum standards of safety, health, hygiene and minimum employment conditions (sick leave, annual leave, etc) to prevent the abuse of power by either party (Accel-team. 2005). If all these areas are addressed in the best interest of both the workers and managers, then this has the potential to lead to good...

Assignment -2

1(1) What is industrial disputes? Explain the various forms of industrial disputes.
Thus form the legal point of view, industrial dispute does not merely refer to difference between labour and capital as is generally thought, but it refers to differences that affect groups of workmen and employers engaged in an industry. Essentially, therefore, the differences of opinions between employers and workmen in regard to employment, non-employment, terms of employment or the conditions of labour where the contesting parties are directly and substantially interested in maintaining their respective contentious constitute the subject-matter of an industrial dispute.

The HR Employee Relations Manager directs the organization's employee relations function. They develop employee relations policies and ensure consistent application of company policies and procedures. In addition, they are responsible for employee dispute resolution procedures, performing internal audits, and taking appropriate action to correct any employee relations issues.
The causes of industrial disputes can be broadly classified into two categories: economic and non-economic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc.

• Wages and allowances: Since the cost of living index is increasing, workers generally bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.
• Personnel and retrenchment: [Forced lay-off of employees by a firm, usually to cut down its payroll.] The personnel and retrenchment have also been an important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively.

2(a) Why does conflict occur? Explain.
The causes of industrial conflict can be broadly classified into two categories: economic and non-economic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc.

• Wages and allowances: Since the cost of living index is increasing, workers generally bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.
• Personnel and retrenchment: [Forced lay-off of employees by a firm, usually to cut down its payroll.] The personnel and retrenchment have also been an important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4% were caused by retrenchment.

2(b) Conflict is one of the most important hindering elements of industrial productivity. How can you manage the industrial conflict? Discuss it step by step.
The main cause for the conflict are:
1) Economic conflict: Under this type of strike, labors stop their work to enforce their economic demands such as wages and bonus. In these kinds of strikes, workers ask for increase in wages, allowances like traveling allowance, house rent allowance, dearness allowance, bonus and other facilities such as increase in privilege leave and casual leave.

2) Sympathetic conflict: When workers of one unit or industry go on strike in sympathy with workers of another unit or industry who are already on strike, it is called a sympathetic strike. The members of other unions involve themselves in a strike to support or express their sympathy with the members of unions who are on strike in other undertakings. The workers of sugar industry may go on strike in sympathy with their fellow workers of the textile industry who may already be on strike.

3) General conflict: It means a strike by members of all or most of the unions in a region or an industry. It may be a strike of all the workers in a particular region of industry to force demands common to all the workers. These strikes are usually intended to create political pressure on the ruling government, rather than on any one employer. It may also be an extension of the sympathetic strike to express generalized protest by the workers.

4) Sit down conflict: In this case, workers do not absent themselves from their place of work when they are on strike. They keep control over production facilities. But do not work. Such a strike is also known as 'pen down' or 'tool down' strike. Workers show up to their place of employment, but they refuse to work. They also refuse to leave, which makes it very difficult for employer to defy the union and take the workers' places. In June 1998, all the Municipal Corporation employees in Punjab observed a pen down strike to protest against the non-acceptance of their demands by the state government.

5) Slow Down conflict: Employees remain on their jobs under this type of strike. They do not stop work, but restrict the rate of output in an organized manner. They adopt go-slow tactics to put pressure on the employers.

6) Hunger conflict: in this form of industrial protest, workmen resort to fasting near the workplace in order to demand the employer to redress their grievances.
By making good solution mentioned above the industrial conflict can be solved.

3(a) Why do we use the grievance handling procedure? Explain.
1. Directive observation:
Knowledge of human behaviour is requisite quality of every good manager. From the changed behaviour of employees, he should be able to s***f the causes of grievances. This he can do without its knowledge to the employee. This method will give general pattern of grievances. In addition to normal routine, periodic interviews with the employees, group meetings and collective bargaining are the specific occasions where direct observation can help in unfolding the grievances.

2. Grip boxes:
The boxes (like suggestion boxes) are placed at easily accessible spots to most employees in the organisation. The employees can file anonymous complaints about their dissatisfaction in these boxes. Due to anonymity, the fear of managerial action is avoided. Moreover management’s interest is also limited to the free and fair views of employees.

3. Open door policy:
Most democratic by nature, the policy is preached most but practiced very rarely in Indian organizations. But this method will be more useful in absence of an effective grievance procedure, otherwise the organisation will do well to have a grievance procedure. Open door policy demands that the employees, even at the lowest rank, should have easy access to the chief executive to get his grievances redressed.

4. Exit interview:
Higher employee turnover is a problem of every organisation. Employees leave the organisation either due to dissatisfaction or for better prospects. Exit interviews may be conducted to know the reasons for leaving the job. Properly conducted exit interviews can provide significant information about the strengths and weaknesses of the organisation and can pave way for further improving the management policies for its labour force.

3(b) Describe the grievance procedure steps in unionized organization.

In handling grievances, a considerable amount of time must be spent in talking to employees; gathering data from them and passing on various types of information. Such talks to be most effective, should conform to definite patterns and adhere to well tested rules.
• The manager must seek to develop an attitude towards employees that should be helpful in gaining their confidence. The management should also display a sincere interest in the problems of employees and their constructive willingness to be to help to them with a view to gain not only their confidence but also their utmost loyal by and genuine cooperation.
• The procedure adopt by the management in handling the grievances must be apparent.
• Grievances should be handled in terms of their total effect on the organisation and not solely their immediate or individual effect.

4(b) What is ILO? Explain the principles and objectives of ILO.
The International Labour Organization (ILO) is a UN specialized agency which seeks the promotion of social justice and internationally recognized human and labour rights. The ILO was founded in 1919 and became the first specialized agency of the United Nations in 1946.
These objectives are realized in a number of ways:
• formulation of international policies and programmes to promote basic human rights, improve working and living conditions, and enhance employment opportunities;
• creation of international labour standards in the form of Conventions and Recommendations, backed by a unique system to supervise their application;
• an extensive programme of international technical cooperation;
• training, education, research, and publishing activities to help advance all of these efforts.
The ILO has a tripartite structure unique in the United Nations, in which employers and workers’ representatives – the “social partners” of the economy – have an equal voice with those of governments in shaping its policies and programmes. The ILO also encourages this tripartism within its member States by promoting a "social dialogue" between trade unions and employers in the formulation and implementation of national policy on social, economic and many other issues.

3(b) Describe the grievance procedure steps in unionized organization.
Discuss the process of grievance.
Process Steps
There are four main grievance process steps: discovery, conciliation, internal review and arbitration. A summary of what happens at each of these step appears below. Click on a link here, or at the bottom of the page, to see a full discussion of what happens at that step in the grievance process.

Discovery
The date when the grieving faculty member (grievant) discovered, or reasonably could have discovered, the circumstances leading to the grievance.

Conciliation
The informal, confidential effort to resolve the grievance between the faculty member and the Board at the lowest possible administrative level before a formal grievance can be filed. This effort is normally assisted by a FA-appointed campus conciliator.

Internal Review Hearing
An informal meeting scheduled by the college president, or the president's designee. The president listens to the grievant, the responding administrator and their representatives as they address the allegations contained in a timely Notice of Grievance that has been filed with the District. The president writes an Internal Review Hearing decision regarding the Notice of Grievance allegations.

Arbitration Hearing
A formal hearing before an arbitrator chosen from a list of seven possible candidates supplied by the State Conciliation Service. Legal counsel represents both parties and all testimony by witnesses is under oath. After reviewing evidence, testimony and argument briefs from both parties, the arbitrator renders a written decision that is binding on both parties.

Assignment Solution 8th level

Strategic Management

Ques: What is strategic Management?
Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.
Ques: Describe the code of ethics of issues in strategic management.
There are many different frameworks and methodologies for strategic planning and management. While there is no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases: 1) analysis or assessment, where an understanding of the current internal and external environments is developed, 2) strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented 3) strategy ex*****on, where the high level plan is translated into more operational planning and action items, and 4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs.

Ans 2(a) What do you mean by SMART? Explain SMART objectives with example.
S.M.A.R.T. is an acronym for the 5 steps of specific, measurable, achievable, relevant, and time-based goals. It’s a simple tool used by businesses to go beyond the realm of fuzzy goal-setting into an actionable plan for results.
Specific: Great goals are well-defined and focused. “Obtain 2 new billion dollar corporate clients in the Boston property insurance market” is more meaningful to mobilize your team than “Get more business.” Ryan Blair, The Goals Guy eloquently states,"Focus creates a powerful force: goal power. The moment you focus on a goal, your goal becomes a magnet, pulling you and your resources toward it. The more focused your energies, the more power you generate."
Measurable: A goal without a measurable outcome is like a sports competition without a scoreboard or scorekeeper. Numbers are an essential part of business. Put concrete numbers in your goals to know if you’re on track. A goal white board posted in your office can help as a daily reminder to keep yourself and your employee focused on the targeted results you want to attain.
Attainable: Far too often, small businesses can set goals beyond reach. No one has ever built a billion dollar business overnight. Venture capitalists and angel investors discard countless business plans of companies with outlandish goals. Dream big and aim for the stars but keep one foot firmly based in reality. Check with your industry association to get a handle on realistic growth in your industry to set smart goals.
Relevant: Achievable business goals are based on the current conditions and realities of the business climate. You may desire to have your best year in business or increase revenue by 50%, but if a recession is looming and 3 new competitors opened in your market, then your goals aren’t relevant to the realities of the market.
Time-Based: Business goals and objectives just don’t get done when there's no time frame tied to the goal-setting process. Whether your business goal is to increase revenue by 20% or find 5 new clients, choose a time-frame to accomplish your goal.

2(b) Who perform the task of strategic management?
Developing a strategic vision and mission, establishing objectives, and deciding on a strategy are basic direction-setting tasks. They map out where the organization is headed, its short-range and long-range performance targets, and the competitive moves and internal action approaches to be used in achieving the targeted results. Together, they constitute a strategic plan. In some companies, especially large corporations committed to regular strategy reviews and formal strategic planning, a document describing the upcoming year's strategic plan is prepared and circulated to managers and employees (although parts of the plan may be omitted or expressed in general terms if they are too sensitive to reveal before they are actually undertaken). In other companies, the strategic plan is not
put in writing for widespread distribution but rather exists in the form of consensus and commitments among managers about where to head, what to accomplish, and how to proceed. Organizational objectives are the part of the strategic plan most often spelled out explicitly and communicated to managers and employees

2(c) Describe the general environmental factors of business organization.
The general environment of an organization refers to a range of factors or forces outside an organization that may influence the performance and operation of a business. When compared to a firm's task environment, the impact of these dimensions is less direct. Key dimensions of the environment that bear on the institution include the economic context, technology context, sociocultural context, political-legal context, and international context. An analysis of all this dimensions are an attempt to understand the conditions outside its boundaries and help to shape how the organization defines itself and how it articulates what is good and appropriate to achieve. Managers of the organization do consider all the aspects of the general environment as the plan, organize, lead and control all the operation of the organization

In the economic dimension, the organizational analysis should focus on those areas of the economic system that directly impact the type of project being considered. The economic dimension consists of factors that may affect the purchasing power and spending patterns of the consumer. It also reflects worldwide financial conditions. Certain economic factors of special concern to the organization include interest rates, inflation, unemployment rates, disposable income, recession, tax systems, commodity prices, monetary and fiscal policies, internal regulation and bureaucracy and exchange rates. Changes in major economic may have a great impact on the marketplace.

3(a) Discuss the Thompson and striclkland’s seven factors model.
Thompson and Strickland developed several models of strategic management.
According to Thompson and Strickland strategic management is an ongoing process: "nothing is final and all prior actions and decisions are subject to future modification."
This process consists of five major five ever-present tasks:
1. Developing a concept of the business and forming a vision of where the organization needs to be headed.
2. Converting the mission into specific performance objectives.
3. Crafting a strategy to achieve the targeted performance.
4. Implementing and executing the chosen strategy efficiently and effectively.
5. Evaluating performance, reviewing the situation, and initiating corrective adjustments in mission, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities.
Thompson and Strickland suggest that the firm's mission and objectives combine to define "What is our business and what will it be?" and "what to do now" to achieve organization's goals. How the objectives will be achieved refers to the strategy of firm.
In general, this model highlights the relationships between the organization's mission, its long- and short-range objectives, and its strategy.

3(b) Why is the porter’s five forces model a widely used technique for an industry’s competition analysis? Explain the porter’s five model.
Five Forces model of Michael Porter is a very elaborate concept for evaluating company's competitive position. Michael Porter provided a framework that models an industry and therefore implicitly also businesses as being influenced by five forces. Michael Porter's Five Forces model is often used in strategic planning.
Force 1: Barriers to entry
Barriers to entry measure how easy or difficult it is for new entrants to enter into the industry. This can involve for example:
• Cost advantages (economies of scale, economies of scope)
• Access to production inputs and financing,
• Government policies and taxation
• Production cycle and learning curve
• Capital requirements
• Access to distribution channels
Patents, branding, and image also fall into this category.
Force 2: Threat of substitutes
Every top decision makes has to ask: How easy can our product or service be substituted? The following needs to be analyzed:
• How much does it cost the customer to switch to competing products or services?
• How likely are customers to switch?
• What is the price-performance trade-off of substitutes?
If a product can be easily substituted, then it is a threat to the company because it can compete with price only.
Force 3: Bargaining power of buyers
Now the question is how strong the position of buyers is. For example, can your customers work together to order large volumes to squeeze your profit margins? The following is a list of other examples:
• Buyer volume and concentration
• What information buyers have
• Can buyers corner you in negotiations about price
• How loyal are customers to your brand
• Price sensitivity
• Threat of backward integration
• How well differentiated your product is
• Availability of substitutes
Having a customer that has the leverage to dictate your prices is not a good position.
Force 4: Bargaining power of suppliers
This relates to what your suppliers can do in relationship with you.
• How strong is the position of sellers?
• Are there many or only few potential suppliers?
• Is there a monopoly?
• Do you take inputs from a single supplier or from a group? (concentration)
• How much do you take from each of your suppliers?
• Can you easily switch from one supplier to another one? (switching costs)
• If you switch to another supplier, will it affect the cost and differentiation of your product?
• Are there other suppliers with the same inputs available? (substitute inputs)
The threat of forward integration is also an important factor here.
Force 5: Rivalry among the existing players
Finally, we have to analyze the level of competition between existing players in the industry.
• Is one player very dominant or all equal in strength/size?
• Are there exit barriers?
• How fast does the industry grow?
• Does the industry operate at surplus or shortage?
• How is the industry concentrated?
• How do customers identify themselves with your brand?
• Is the product differentiated?
• How well are rivals diversified?
Rivalry is the fifth factor in the Five Forces model but probably the one with the most attention.

Assignment -2

1(a) What is business level strategy? Explain its importance in competitive business
A competitive advantage allows a company to produce or sell goods more effectively than another business. Business owners commonly develop business strategies in order to maintain a competitive advantage. Several types of strategies are available in the business environment. Business owners can use standard strategies or develop their own strategy. Flexibility is an important feature of competitive business strategies.
usiness owners use competitive business strategies to differentiate their goods or services from others in the industry. Differentiation may be actual or perceived. Actual differentiation involves creating products that are not currently available in the economic marketplace. Perceived differentiation takes a little more work on the part of companies. Companies typically use advertising messages that describe a product similar to those in the market with a few subtle differences. This strategy encourages consumers to differentiate the product in their minds.
1(b) Explain the SWOT analysis of company situation analysis.
SWOT analysis, method, or model is a way to analyze competitive position of your company. SWOT analysis uses so-called SWOT matrix to assess both internal and external aspects of doing your business. The SWOT framework is a tool for auditing an organization and its environment.
SWOT is the first stage of planning and helps decision makers to focus on key issues. SWOT method is a key tool for company top officials to formulate strategic plans. Each letter in the word SWOT represents one strong word: S = strengths, W = weaknesses, O = opportunities, T = threats.
SWOT model analyzes factors that are internal to your business and also factors that affect your company from outside. Strengths and weaknesses in the SWOT matrix are internal factors. Opportunities and threats are external factors.
SWOT can be used in conjunction with other tools for strategic planning, such as the Porter's Five-Forces analysis or the Balanced Scorecard framework. SWOT is a very popular tool in marketing because it is quick, easy, and intuitive.
2(a) How to sustain competitive advantage? Discuss.
A sustainable competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources or access to highly trained and skilled personnel human resources. It is an advantage (over the competition), and must have some life; the competition must not be able to do it right away, or it is not sustainable. It is an advantage that is not easily copied and, thus, can be maintained over a long period of time. Competitive advantage is a key determinant of superior performance, and ensures survival and prominent placing in the market. Superior performance is the ultimate, desired goal of a firm; competitive advantage becomes the foundation. It gives firms the ability to stay ahead of present or potential competition and ensure market leadership.
2(b) What is low cost strategy? Discuss the benefits of low cost strategy to the business organization
A company offers a relatively low price as a pricing strategy, seeking to stimulate demand and gain market share. One of three generic marketing strategies. Refer to differentiation strategy and focus strategy. These can be adopted by any company. Product with few or no competitive advantages, or product volume achieving an economies of scale is the best use of these strategies. Also known as low price strategy.

Many businesses develop pricing strategies to maintain a competitive advantage. These include pe*******on, economy, skimming, bundle and promotional strategies. Pe*******on pricing uses low initial prices to gain market share and slowly increases the price to its normal level. Economy pricing offers basic products that have the lowest customer price possible. Skimming is a price strategy in which companies set high initial product prices that decrease to match lower prices from new competitors. Bundle pricing is a strategy where companies include several different products under one price. This allows a business to provide more products to consumers at a slightly lower price. Promotional pricing strategies may allow businesses to offer additional benefits to consumers, such as a buy-one-get-one-free business strategy.
2(A) What is strategic alliance? State the reasons for failure of strategic alliances.
Strategic alliances occur when two or more people come together for mutual gain. Some alliances are more formal and structured than others. I like to refer to alliances as “projects” with a set time line – rather than an alliance. The expectation with alliances is often that they are open ended and will last forever. This can often be one of the reasons why the alliance does not get off the ground as the participants can be overwelmed with that never ending alliance concept. If the alliance is treated as a project with a start and finish – or a six month trial with this project with a “Let’s see how this alliance/project works for six months” – can often increase the potential results.
1.NO TRUST – allies are reluctant to share ideas and support. This might be due to strangers being grouped together and told to form an alliance. This sometimes happens in organisations where two or more teams are brought together with no mutual connection. Alternately, there is previous negative history that has influenced the lack of trust.
2. NO DRIVER – lots of great ideas, but no one actually creating an action plan or moving the alliance forward. Firstly, the problem needs to be put on the table. “We are not getting anywhere with this, what do we need to do to make it happen?” If the project/alliance can be broken down into stages, then people can nominate how involved they wish to be in each stage.
3. NO RESOURCES – Lots of great ideas, but either no time, expertise or money to execute the alliance. A good use of your allies time may be to brainstorm other people who could become involved with your project who may have the expertise or who may sponsor the project on a win/win basis.
4. LACK OF CULTURAL AWARENESS – In this global marketplace, this is a “biggie”. Organisations bring in a multi-cultural workforce or international students being brought into a university – without significant cultural diversity training being given to current staff members. This can result in major insults unknowingly happening.
5. DIFFERENT VALUES - Beware the cowboys! I describe this potential ally as someone who wants to ride on your coat tails. They are keen to use your organisation’s name and reputation to further their own career.
2(b) Describe the advantage and disadvantage of vertical integration.
Advantages:
• Some economies of scale such as risk bearing economies, financial economies. Lower costs could lead to lower prices for consumers.
• Firm not subject to losing control of supply. e.g. they can’t be held to ransom by suppliers demanding higher price at critical time.
• Maybe some overlap of technology and expertise. e.g. A bookshop may know what kind of books sell well so they can develop the right kind of paper and attractive design.
• Arguably the splitting up of the rail network created more confusion and less incentive to look after the track. It would make more sense for train operating companies to be responsible for the track as they would have greater interest in maintaining it satisfactorily.
Disadvantages:
Vertical mergers will have less economies of scale because most of the production is at different stages of production. There is still scope for monopoly power. Also a vertical merger can lead to monoposony power. e.g. tied pubs can charge higher price to consumers and they have less choice of beer.
4(a) What are possible strategies to pursue in emerging industry?
Win early race for industry leadership by employing a bold, creative strategy
Push hard to perfect technology, improve product quality, and develop attractive performance features
Consider merging with or acquiring another firm to
Gain added expertise
Pool resource strengths
When technological uncertainty clears and a dominant technology emerges, try to capture any first-mover advantages by moving quickly
Form strategic alliances with
Companies having related technological expertise or
Key suppliers
Pursue new customers and user applications
Enter new geographical areas
Make it easy and cheap for first-time buyers to try product
Focus advertising emphasis on
Increasing frequency of use
Creating brand loyalty
Use price cuts to attract price-sensitive buyers
4(b) What are the strategy implementation tasks of managers? Explain.
Strategic implementation put simply is the process that puts plans and strategies into action to reach goals. A strategic plan is a written document that lays out the plans of the business to reach goals, but will sit forgotten without strategic implementation. The implementation makes the company’s plans happen. Which is applied by the company’s managers.
Strategic implementation is critical to a company’s success, addressing the who, where, when, and how of reaching the desired goals and objectives. It focuses on the entire organization. Implementation occurs after environmental scans, SWOT analyses, and identifying strategic issues and goals. Implementation involves assigning individuals to tasks and timelines that will help an organization reach its goals.
A successful implementation plan will have a very visible leader, such as the CEO, as he communicates the vision, excitement and behaviors necessary for achievement. Everyone in the organization should be engaged in the plan. Performance measurement tools are helpful to provide motivation and allow for followup. Implementation often includes a strategic map, which identifies and maps the key ingredients that will direct performance. Such ingredients include finances, market, work environment, operations, people and partners.