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1. INTRODUCTION
LEARNING OBJECTIVES

1) To understand the meaning and different types of strategies.

2) To understand the elements and objectives of strategic management.
3) To understand about the concept of organizational genomics.
4) To understand the importance of Balanced Score Card framework.

QUESTION WISE ANALYSIS OF PREVIOUS EXAMINATIONS OF CMA INTER

NEW SCHEME
OLD SCHEME (2016 SCHEME)
NO. (2022 SCHEME)
J17 D17 J18 D18 J19 D19 D21 D22 JUN23
1. - 4 - - - 8 - - 1
2. - - - - 4 - - -
3. - - - 8 - - - - 6
5 - - 4 - - - - - -
6. - - - - - - - - -
7. 6 - - - - - - 6 -
8. - - - - - - - - -
9. - - - - - - - - -
10. - - - - - - - - -
12 - 6 - - - - - - -

CHAPTER OVERVIEW

DIVISION TOPIC
1. THEORY FOR CLASSROOM DISCUSSION
2. QUESTIONS FOR ACADEMIC INTEREST

DIVISION 1: THEORY FOR CLASSROOM DISCUSSION

INTRODUCTION

Alignment of
Introduction to
Strategy with Objectives of EVA - Driven
Strategy & Organisational Balanced Score
visinon, Strategic responsibility
Strategic Genomics Card
Mission & Management accounting
management
Culture

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TOPIC 1: INTRODUCTION TO STRATEGY AND STRATEGIC MANAGEMENT

Q.No.1. What do you mean by Strategy? (D17-MTP) (D17-4M) (D19-8M) (JUN23-1M) (A)

MEANING:
a) The term strategy is derived from the Greek word strategia, meaning ‘generalship’. Although the word
is Greek, yet the concept has its origins from the classic, The Art of War, written by Sun Tzu written
about 500 BC.
b) A strategy of an organization provides the basic framework through which the organization will achieve
its mission and objectives.
c) The sole objective of a strategy is to provide competitive advantage.
d) Strategy may be defined as the direction and scope of an organization over the long term, which
achieves competitive advantage for the organization through the configuration of resources within a
changing environment and to fulfill stakeholder expectations.

CONCEPT QUESTION:
1) While planning a strategy it is essential to consider that decisions are not taken in a vacuum and that any act taken by a
firm is likely to be met by a reaction from those affected, competitors, customers, employees, or suppliers. Then what is a
strategy?

FILL IN THE BLANKS (SP):

1) Strategy is derived from the Greek word ________ meaning “generalship”.
2) A strategy of an organization provides the basic framework through which the organization will achieve
its _______ and _______
3) The sole objective of a strategy is to provide __________

Q.No.2. What are the characteristics of a strategic decision/strategy? And state its consequences.
(J19-4M) (B)

The characteristics of a strategic decision/strategy are:

a) Strategy is likely to be concerned with long-term direction of an organization.
b) Strategic decisions are normally about trying to achieve some advantage for the organization over
competition.
c) Strategy is likely to be concerned with the scope of the organization’s activities.
d) Strategy can be seen as matching the resources and activities to the environment in which it operates.
e) Strategy can be seen as stretching (=Make bigger) an organization’s resources and competences to create
new opportunities or to capitalize (=to take advantage) on them.
f) The strategy of an organization is affected not only by environmental factors and resource availability
but also by the values and expectations of the stakeholders.
g) Strategic decisions are likely to affect operational decisions.

The consequences of a strategic decision/strategy are:

a) Likely to be complex in nature.
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CONCEPT QUESTION:
2) Strategic decisions are the decisions that are concerned with whole environment in which the firm operates, the entire
resources and the people who form the company and the interface between the two. Then list out the characteristics of
strategic decisions.

FILL IN THE BLANKS (SP):

4) Strategy is likely to be concerned with _______ direction of an organization.
5) Strategic decisions likely to affect ________decisions.
6) Strategy can be seen as matching the resources and activities to the __________ in which it operates.
7) Strategic decisions will help the company to achieve some advantage over _______
8) Strategy is not only affected by environmental factors and resource availability but also the values and
expectations of the __________.
9) Strategic Decisions are likely to be ________ in nature.

Q.No.3. “A typical business firm usually considers three types of strategy”. Explain.
(D18-8M) (JUN23-6M) (B)

a) CORPORATE STRATEGY:
i) It is concerned with the overall purpose and scope of an organization and how value will be added
to the different parts (business units) and product lines of the organization.
ii) The three main categories of corporate strategies are stability, growth, and retrenchment.
iii) Examples for corporate decisions include investment in diversification, vertical integration,
acquisitions, new ventures, the allocation of resources between the different businesses of the firm.
b) BUSINESS STRATEGY:
i) It is about how to compete successfully in particular markets.
ii) It emphasizes improvement of the competitive position of an organization’s products or services in
the specified industry or market segment served by that business unit.
iii) Broad categories of business strategies are competitive and cooperative strategies.
c) FUNCTIONAL STRATEGY OR OPERATIONAL LEVEL STRATEGY:
i) It is concerned with how the component parts of an organization deliver effectively the corporate
and business level strategies in terms of resources, processes, and people.
ii) These strategies are taken at the functional level directed towards maximizing resource productivity.

CONCLUSION:
a) Organizations shall use all the three types of strategies simultaneously.
b) The term ‘hierarchy of strategy’ is commonly used to explain the nesting of one strategy within another
so that they complement and support one another. Functional strategies support business strategies,
which in turn support the corporate strategy.

CONCEPT QUESTION:
3) List the different strategic levels in an organization. (D18-RTP) (J19-MTP1-6M)

FILL IN THE BLANKS (SP):

10) _______ strategy is concerned with overall purpose and scope of an organization.
11) _________ strategy will help to compete successfully in a particular market.

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Q.No.4. Explain Strategic Management and state its four basic elements. (A)

STRATEGIC MANAGEMENT:
a) It refers to a set of managerial decisions and actions that determines the long-term performance of an
organization.
b) The old name for strategic management was ‘corporate planning’. Two prime reasons for such renaming
are:
i) Increasing focus on competition as the central characteristic of the business environment and
ii) Competitive advantage as the primary goal of strategy.

STRATEGIC MANAGEMENT

Environmental Strategy Evaluation and

Strategy Formulation
Scanning Implementation Control

STRATEGIC MANAGEMENT CONSISTS OF FOUR BASIC ELEMENTS:

a) Environmental Scanning:
i) It refers to the monitoring, evaluating, and disseminating of information from the external and internal
environments to key people within the organization.
ii) The purpose is to identify the strategic factors, both internal and external elements, that will shape
the future of the organization.
iii) Systematic techniques as well as intuitive methods are available for environmental scanning.
b) Strategy Formulation:
i) It refers to the development of long-range plans for the effective management of environmental
opportunities and threats, in the light of corporate strengths and weaknesses (SWOT).
ii) It includes.
 Defining the mission,
 Setting objectives,
 Developing strategies, and
 Setting policy guidelines.
c) Strategy Implementation:
i) It is the process by which strategies and policies are put into practice though the development of
programs, budgets, and procedures.
d) Evaluation and Control:
i) It involves the process through which organizational activities and performances are monitored.
ii) The actual performances are compared to the desired performances and corrective actions are
taken to resolve problems.

CONCEPT QUESTION:
4) Strategic Management refers to a set of managerial decisions and actions that determines the long-term performance of an
organization. Explain.

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FILL IN THE BLANKS (SP):
12) _________ refers to a set of managerial decisions and actions that determines the long-term
performance of an organization.
13) _________ refers to monitoring and evaluating of information from the external and internal environment
to key people within the organization.
14) Strategy implementation is the process by which strategies and policies are put into ______ through the
development of programs and procedures.
15) The actual performances are compared to the _______ performances and corrective actions are taken
to resolve problems.

TOPIC 2: ALIGNMENT OF STRATEGY WITH VISION, MISSION AND CULTURE

Q.No.5. Define vision? State its elements and important purpose.
(SM, D12-4M, J18-4M) (J22-MTP 4M) (D19-MTP1) (A)

VISION:
a) Vision is the desired future state of an organization.
b) Based on vision statement, a strategist, perhaps a chief executive, might seek to focus the attention and
energies of members of the organization.
c) It is a vividly descriptive image of what a company wants to become in the future.
d) Well-conceived visions are distinctive and specific to a particular organization; they avoid generic, feel-
good statements.
e) Types:
i) Product-oriented vision statements define a business in terms of a good or service provided.
ii) Customer-oriented vision statements define business in terms of providing solutions to customer
needs.
f) Examples:
i) Amazon: ‘To be Earth’s most customer-centric company, where customers can find and discover
anything they might want to buy online.’
ii) Tesla: ‘To accelerate the world’s transition to sustainable energy.’
g) The critical point is that a vision articulates a view of a realistic, credible, attractive future for the
organization.

CONCEPT QUESTION:
5) Very early in the strategy making process, a company’s senior managers must consider the issue of what directional path
the company should take and what changes in the company’s product-market-customer-technology focus would improve
its current market position and prospects. In this context, write about the importance of vision statement.

FILL IN THE BLANKS (SP):

16) _______ is the desired future state of an organization.
17) Vision is a descriptive image of what a company wants to become in the _____
18) Well-conceived visions are _______ and ______ to a particular organization.
19) _________ oriented vision statements defined a business in terms of a goods or service provided.
20) _______ oriented vision statements defined business in terms of providing solutions to customer needs.

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Q.No.6. Write a short note on the benefits of having a vision? (MTP-D19) (SM) (B)

As mentioned by Azhar (2008) organization’s having a good vision enjoys the following benefits:
a) Good visions are inspiring and exhilarating (=exciting).
b) Vision represents a discontinuity, i.e., a company knows what it is to be.
c) Good visions foster (=encourage) risk taking and experimentation.
d) Good visions foster long term thinking.
e) Good visions represent integrity. (Can be used to the benefit of the people)
f) Good vision helps in the creation of a common identity and a shared sense of purpose.
g) Good visions are competitive, original, and unique. They make sense in the marketplace as they are
practical.

CONCEPT QUESTION:
6) The value of a clear vision statement to an organization’s personnel can be enormous. A clear vision statement defines the
direction. Then make a short note on the benefits of having a vision.

FILL IN THE BLANKS (SP):

21) Good visions are inspiring and _________.
22) Good vision encourages _______ thinking.
23) Good vision helps in in the creation of a ______ identity and a ______ sense of purpose.
24) Good vision represents ______.

Q.No.7. Give a brief note on meaning of mission?

(SM, RTP-J18, RTP-D18, D19-4M, J176M, D22-6M, D19-MTP2) (A)

MEANING OF MISSION:
a) A company’s mission describes its purpose and its present business.
i) Who we are?
ii) What we do? and
iii) Why we are here?
b) It announces what the company is providing to society, either a service or a product.
c) A well-conceived mission statement defines the fundamental, unique purpose that sets a company apart
from other firms of its type and identifies the scope or domain of the company’s operations in terms of
products offered.
d) Types:
i) A product-oriented business definition focuses on the characteristics of the products sold and the
markets served, not on which kinds of customer needs the products are satisfying.
ii) A customer-oriented view of a company’s business focuses on customer needs rather than a
particular product (or solution) for satisfying those needs.
e) Examples:
i) Microsoft: to empower every person and every organization on the planet to achieve more. (It is a
customer-oriented mission statement).

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ii) Google: ‘To organize the world’s information and make it universally accessible and useful.’
iii) SpaceX: ‘To make human life multi planetary’.
f) A mission statement may also include the firm’s values and philosophy about how it does business and
treats its employees.

CONCEPT QUESTION:
7) A mission is an answer to the basic question ‘what business are we in and what we do’. It has been observed that many
firms fail to conceptualize and articulate the mission with the required clarity. In this context, write about the mission
statement.

FILL IN THE BLANKS (SP):

25) A company’s mission describes its _____ and its ______.
26) Mission announces what the company is providing to ______.

Q.No.8. What are the differences between vision and mission? (MTP-J17) (MTP-J17-5M) (B)

No. Mission Vision

a) Mission refers to the purpose for which an Vision refers to the long-term growth ambition of
organization is established. a firm.
b) Mission is associated with a way of behaving in Vision is associated with a goal.
the organization.
c) The mission statement of an organization is A vision keeps on changing; when a vision is
permanent and constant. achieved a new vision has to be formulated.
d) An organization through its mission statement An organization through its vision conveys, “what
conveys, “this is what we are, this is what we we want to be in the distant future.”
stand for and this is all we about.”
Vision refers to the future, a condition or state that
e) Mission refers to the present.
is better than what now exists.

FILL IN THE BLANKS (SP):

27) Mission refers to the _______ for which an organization is established.
28) ________ statement of the organization is permanent and constant.
29) Vision refers to the _______ growth ambition of a firm.
30) Mission refers to the ______ and vision refers to the ______
31) Through _______ statement organization conveys “this is what we are, this is what we stand for and
this is all we about.”
32) Through _______ statement organization conveys “what we want to be in the distant future.”

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Q.No.9. Explain about organizational culture and state its four layers? (A)

ORGANIZATIONAL CULTURE: Organizational culture is the ‘basic assumptions and beliefs that are
shared by members of an organization, that operate unconsciously and define in a basic taken-for-granted
fashion an organization’s view of itself and its environment’.

Values

Beliefs

Behaviours

Paradigm or
(Taken for
Granted
Assumptions))

The culture of an organization is often conceived as consisting of four layers.

a) VALUES:
i) The values of a company state how managers and employees should conduct themselves? How
should they do business?
ii) Values control how employees work to achieve an organization’s goals.
iii) Values should not be stated in vague terms such as ‘service to the community or honoring equal
employment opportunities.’
iv) Values may be easy to identify in an organization and are often written down as statements about
an organization’s mission, objectives, or strategies.
b) BELIEFS:
i) Beliefs are more specific, but again they can typically be discerned (=recognize or find out) in how people
talk about issues the organization faces.
ii) For example, a belief that the company should not trade with some other specific countries.
iii) Indeed, it may be that individuals in organizations have values and beliefs that at times run counter
to their organizations, which can give rise to the sort of ethical tensions and problems.
c) BEHAVIORS:
i) Behaviors are the day-to-day way in which an organization operates and can be seen by people
both inside and outside the organization.
ii) Examples: Work routines, how the organization is structured, etc.,
d) Paradigm or (Taken for granted assumptions):
i) Taken-for-granted assumptions are the core of an organization’s culture. They are the aspects of
organizational life which people find difficult to identify and explain.
ii) Here they are referred to as the organizational paradigm. The paradigm is the set of assumptions
held in common and taken for granted in an organization.
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CONCEPT QUESTION:
8) Organizational culture is the ‘basic assumptions and beliefs that are shared by members of an organization, that operate
unconsciously and define in a basic taken-for-granted fashion an organization’s view of itself and its environment’. Explain.

FILL IN THE BLANKS (SP):

33) _________ will have important influence on the development and change of organizational strategy.
34) _____________ is a set of values, norms and standards that controls how employee work to achieve
an organization’s mission and goals.
35) ________ can be seen by people both inside and outside of the organization.
36) __________ is the set of assumptions held in common and taken for granted in an organization.

Q.No.10. Write a short note on Culture’s influence on strategy. (C)

INTRODUCTION: The taken-for-granted nature of culture is what makes it centrally important in relation to
strategy and the management of strategy. There are two primary reasons for this:
a) Managing Culture: Because it is difficult to observe, identify and control that which is taken for granted,
it is difficult to manage.
b) Culture as a driver of strategy:
i) Organizations can be ‘captured’ by their culture and find it very difficult to change their strategy
outside the bounds of that culture.
ii) Managers, faced with a changing business environment, are more likely to attempt to deal with the
situation by searching for what they can understand and cope within terms of the existing culture.

FILL IN THE BLANKS (SP):

37) The taken for granted nature of culture is what makes it centrally important in relation to __________.

Q.No.11. To foster ethical behavior business must build an organizational culture. Comment (C)

To foster ethical behaviour, businesses must build an organization culture that places a high value on ethical
behaviour. Three actions are particularly important.
a) Firstly, businesses must explicitly articulate values that place a strong emphasis on ethical behavior. It
can be done by drafting a code of ethics, a formal statement of the ethical priorities to which a business
adheres.
b) Secondly, after preparing code of ethics or some other document, it is important that leaders in the
business give life and meaning to those words by repeatedly emphasizing their importance and then
acting on them.
c) Finally, building an organization culture that places a high value on ethical behavior requires incentive
and reward systems, including promotional systems that reward people who engage in ethical behavior.

FILL IN THE BLANKS (SP):

38) Building an organization culture that places a high value on ethical behavior requires ___________ and
________ system.
39) Business must explicitly articulate values that place a strong emphasis on ___________.

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TOPIC 3: ALIGNMENT OF STRATEGY WITH VISION, MISSION AND CULTURE

Q.No.12. Define Objectives and Characteristics of Objectives. (D17-6M) (A)

MEANING OF OBJECTIVES:
a) Objectives form the basis of the functioning of an organization. It is the setting of strategic objectives
that translates the strategic vision of a firm into a specific performance target.
b) They define the organization’s relationship with the environment, help an organization pursue its vision
and mission, provide the basis for strategic decision making and provide the standards for performance
appraisal.

Objectives should possess certain desirable characteristics to be effective. They are as follows:
a) Specific: The first step towards setting objectives is to specify what the company wants to achieve.
i) Making specific objectives involves answering the following questions.
 What the organization wants to achieve?
 Why the company wants to achieve?
 Who are being involved in the process?
 Which are the resources and constraints that needs to be identified?
b) Understandable: The objectives should be understandable to those who are expected to achieve them.
Clarity in objectives helps to avoid ambiguity which in turn helps to achieve the desired results.
c) Measurable: Objectives should be precise and measurable. There must be a standard against which
they can judge their performance. It is often considered to be a good practice to quantify objectives
rather than to state them in qualitative terms.
d) Attainable: Objectives must be challenging but realistic or attainable so that employees look for ways
of improving the operations of an organization. If an objective is unrealistic, employees may give up.
Too easy objectives may fail to motivate managers and other employees.
e) Relevant: Objectives must be linked to the overall vision and mission of the organization. There should
not be any conflict between the objectives that the management has set with the goals of the
organization.
f) Time Bound: Objectives should specify a time. Time constraints tell employees that success requires
an objective to be attained by a given date, not after that date.

CONCEPT QUESTION:
9) Objectives with strategic focus relate to outcomes that strengthen an organization’s overall business position and
competitive vitality. Hence, they should have certain characteristics. List out the characteristics of the objectives.

FILL IN THE BLANKS (SP):

40) _________ will convert the strategic vision into a specific performance target.
41) ________ are defined as the ends that state specifically how the goals shall be achieved.
42) ______ provide basis for strategic decision making and provide the standards for performance appraisal.
43) Objectives should be such that they are _________ to those who expected to achieve them.
44) Objectives should specify a ___________.

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Q.No.13. Explain about important issues that need to be kept in mind while setting objectives. (B)

a) SPECIFICITY: Specificity is related to the organizational level for which a set of objectives have been
stated. Objectives may be stated at different levels of specificity. At one extreme they might be very
broadly stated goals and on the other extreme it may be translated into performance targets.
b) MULTIPLICITY: The issue of multiplicity arises from the fact that it is rare for an organization to work on
a single objective or a few objectives. The issue of multiplicity considers the number and types of
objectives that are being set.
c) PERIODICITY: Objectives may be set for different time frame. It is possible to set long term, medium
term, and short-term objectives. Normally organizations determine objectives for the long term and the
short term.
d) VERIFIABILITY: Verifiability means deciding whether an objective has been met or not. A definite way
to measure an objective is to quantify it. Objectives if not quantified, may require some value judgements
of experts.
e) REALITY: It is often found that organizations have two set of objectives namely, official, and operative.
While the official objectives are those which the organization professes to attain, the operative objectives
are those which they seek to attain in reality. (For example, HR development versus allocation)
f) QUALITY: The capability of an objective to provide a specific direction and a tangible basis for
evaluating performance determines the quality of an objective. (For example, “to increase revenue”
versus “to increase the revenue by 30% in the next 6 months”)

FILL IN THE BLANKS (SP):

45) Objectives may be set for different time frame. It is possible to set __________, __________, and
___________ objectives.
46) The capability of an objective to provide a specific direction and a tangible basis for evaluating
performance determines the ___________ of an objective.
47) The issue of ____________ considers the number and type of objectives that are being set.
48) The issue of _______________ revolves around the question of deciding whether an objective has been
met or not.
49) While the ____________ objectives are those which the organization professes to attain, the ________
objectives are those which they seek to attain in reality.

TOPIC 4: OBJECTIVES OF STRATEGIC MANAGEMENT

Q.No.14. Explain about objectives of Strategic Management. (B)

MEANING:
a) Strategies do not happen just by themselves. Strategy involves people, especially the managers who
decide and implement strategy.
b) An operational manager is most often required to deal with problems of operational control such as the
efficient production of goods, the management of a sales force, the monitoring of financial performance
or the design of some new system that will improve the level of customer service.
c) Strategic management involves a greater scope than that of any one area of operational management.
d) Strategic management is concerned with complexity arising out of ambiguous and non-routine situations
with organization wide rather than operation-specific implications.

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THE OBJECTIVES OF STRATEGIC MANAGEMENT MAY BE LISTED AS UNDER:

a) To identify opportunities and adapt resources to exploit the opportunities created.
b) To create opportunities by stretching the resources and competences of the organization and capitalize
them.
c) To identify the critical success factors and meet the needs and wants of the customers.
d) To monitor and remain responsive to the demands of key stakeholders.
e) To avoid failure by focusing on the building blocks of competitive advantage (superior efficiency, superior
quality, superior innovation, and superior responsiveness to customers), instituting continuous
improvement and learning, tracking the best industrial practices, and using benchmarking.
f) To overcome inertia and accept the changes in the ever-changing environment to remain competitive
and at times to survive.
g) To help an organization enjoy competitive advantage.

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10) What is Strategic Management? What are its Objectives?

FILL IN THE BLANKS (SP):

50) One of the _________ of Strategic Management is to help an organisation enjoy competitive advantage.
51) An _________ manager is most often required to deal with problems of operational control.
52) ___________ deals with ambiguous and non-routine situations with organization wide rather than
operation specific implications.
53) To develop a creative and innovative attitude and to think strategically is ____ of strategic management.

Q.No.15. Distinguish between Objectives and Goals of Business. (SM) (J20-MTP2) (B)

OBJECTIVES AND GOALS: These terms are used in a variety of ways, many of them conflicting.
a) First, these terms are used interchangeably meaning one and the same thing. To make distinction
between long-term and short-term orientations, these prefixes are used either with objectives or goals.
b) Second, some authors use goals as the long-term results which an organization seeks to achieve and
objectives as the short-term results.
c) Third, some writers reverse the usage referring to objectives as the desired long-term results and goals
as the desired short-term results.

The difference between objectives and goals may be drawn in terms of the following four
dimensions:
a) Time Frame: Objectives are timeless, enduring, and unending; goals are temporal, time-phased, and
intended to be superseded by subsequent goals.
b) Specificity: Goals are much more specific, stated in terms of a particular result that will be accomplished
by a specific date.
c) Focus: Objectives are usually stated in terms of some relevant environment which is external to the
organization; goals are more internally focused and carry important implications about how resources
utilized in the future.
d) Measurement: Both objectives and goals can be stated in terms which are quantitatively measured but
the character of measurement is different.

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FILL IN THE BLANKS (SP):
54) Goals are much more ___________.
55) Both objectives and goals can be measured ________.
56) Goals are more ______ focused and objectives are stated to relevant environment which is _______ to
the organization.

CONCEPT QUESTION:
11) Time Frame of Objectives. (D17-4M)

TOPIC 5: ORGANIZATIONAL GENOMICS

Q.No.16. Explain about organizational genomics. (B)

ORGANIZATIONAL GENOMICS:
a) Genomics is the study of a person’s genes (the genome), including interactions of those genes with
each other and with the person’s environment.
b) Organizational behavior is about how people may be motivated to work together in more effective ways.
c) The interaction required to direct a group toward a set of common goals is called organizational
communication. A manager must discover various barriers to communication; analyze the reasons for
their occurrence and take preventive steps to avoid those barriers. Organizational communication may
be formal or informal.
d) Thus, the primary responsibility of a manager is to develop and maintain an effective communication
system in the organization.
FOR ACADEMIC INTEREST ONLY: (Organizational Genomics)
In a work environment, a person performs certain activities which may be observed. Through
interaction, communication, and perception, certain feelings develop within one’s personality which
may be demonstrated publicly or be hidden in verbal and symbolic expressions which can also be
interpreted differently from one individual to another. The reason for that is that everyone has an
established attitude about a certain type of behavior and verbal and symbolic meanings.
Employees constantly judge and compare themselves to others in a work environment. Based on those
comparisons, they form an opinion of their own worth and abilities. But there is the question of how
objectively and to what extent can individuals estimate him/her. It depends on the nature, personality,
and mental health of that individual which have to be in accordance with reality and perceiving real-life
value.
Incorrect self-estimation can result from underestimating people in the following situations:
a) People with lower qualifications.
b) People who do not tolerate on a higher social, educational, and financial level.
c) People who hold a high opinion of themselves which is not based on facts.
d) People who feel inferior.
e) People who do a great job even though they conceal their true opinion of themselves.

FILL IN THE BLANKS (SP):

57) Genomics is the study of a person’s ________________.
58) Organizational communication can be ____________ or ____________.
59) ____________ is about how people may be motivated to work together in more effective ways.

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Q.No.17. Explain about Strategic Leadership. (B)

STRATEGIC LEADERSHIP:
a) Strategic leadership is about how to effectively manage a company’s strategy making process to create
competitive advantage.
b) Strategic leaders must strive towards maximizing shareholders value by balancing the profit growth and
profitability of the organization.
c) A strategic leader is seen as an individual upon whom strategy development and change are seen to
be dependent.

Strategic leaders should possess some key characteristics that can lead to high performance.
a) Strategic leader should be a visionary. He should have a strong sense of direction and a clear and
compelling vision of where the organization should go.
b) He should be capable of eloquently communicating the vision to others within the organization.
c) A good strategic leader must have the ability to identify and articulate the business model the
organization will use to attain the vision. This requires a fit between strategies and vision.
d) A good strategic leader should demonstrate a sense of commitment towards the vision and business
model through his words and action.
e) A good strategic leader should be able recognize and empower subordinates to make decisions He
should develop a strong network of both formal and informal sources to remain well informed about
whatever is happening in and around the organization.
f) A good strategic leader should try to develop a consensus for his ideas among his subordinates rather
than attempt to use his authority to force the ideas through.

CONCEPT QUESTION:
12) Explain the key characteristics that should be possessed by Strategic Leader.

FILL IN THE BLANKS (SP):

60) ____________ must strive towards maximizing shareholders value by balancing the profit growth and
profitability of the organization.
61) _______seen as an individual upon whom strategy development and change are seen to be dependent.
62) Strategic leader should have a strong sense of direction and a clear and compelling vision of where the
organization should go. Hence strategic leader is ____________.
63) A good strategic leader should be able recognize and empower subordinates so that they can make___.

Q.No.18. Explain about Emotional Intelligence. (B)

EMOTIONAL INTELLIGENCE:
a) To estimate someone’s psychological capabilities, Daniel Goleman (1998) used a term called emotional
intelligence.
b) Emotional intelligence is used to describe a bundle of psychological attributes that many strong and
effective leaders’ exhibit. They are as follows:
i) Self-Awareness: Ability to understand one’s own moods, emotions, and drives, as well as their
effect on others.
ii) Self- Regulation: Ability to control or redirect disruptive impulses or moods, that is, to think before
acting.
CH.1 | INTRODUCTION | MAIN MATERIAL 1.14
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iii) Motivation: Passion for work that goes beyond money or status and a propensity to pursue goals
with energy and persistence.
iv) Empathy: Ability to understand the feelings and viewpoints of subordinates and to take those into
account when making decisions.
v) Social skills: Friendliness with a purpose.

CONCEPT QUESTION:
13) To estimate someone’s psychological capabilities Goleman used a term called emotional intelligence. Explain briefly about
Emotional intelligence.

FILL IN THE BLANKS (SP):

64) To estimate someone’s psychological capabilities Goleman (1998) used a term called ______.
65) Emotional intelligence is a term that Daniel Goleman coined to describe a bundle of ____________ that
many strong and effective leaders’ exhibit.
66) ____________ is the ability to understand one’s own moods, emotions, and drives, as well as their effect
on others.
67) _________ is the ability to control or redirect disruptive impulses or moods, that is to think before acting.
68) ____________is the ability to understand the feelings and viewpoints of subordinates and to take those
into account when making decisions.

Q.No.19. What is organizational change? Explain about The Association of Professional Change
Management (ACMP) (B)

ORGANIZATIONAL CHANGE: In any business environment, change should happen. It shows one’s
commitment to the kind of growth and evolution it takes to stay modern, relevant, and competitive. Change
can include things like:
a) Introducing new software,
b) Updating marketing practices and/or business processes,
c) A full-on restructuring and Leadership changes, Copyrights Reserved To MASTER
MINDS COMMERCE INSTITUTE PVT.LTD.
d) Budget constraints and Shifts in strategy.

There are countless organizational change management (OCM) methods. Each involves a basic
series of steps or practices that could be linear or cyclical in approach. Some of the most popular
methods include:
a) Kotter 8-Step Process for Leading Change:
Create → Build → Form → Enlist → Enable → Generate → Sustain → Institute.
b) McKinsey & Company’s 7-S Framework:
Style, Skills, Systems, Structure, Staff, and Strategies = Shared Values & Goals
c) Kurt Lewin’s Change Model: Unfreeze → Change → Refreeze.
d) ADKAR Model: Awareness → Desire → Knowledge → Ability → Reinforcement
e) The Kubler-Ross Model: Shock → Anger → Bargaining → Depression → Acceptance
f) Satir Change Management Model:
Late Status Quo → Resistance → Chaos → Integration → New Status Quo
g) William Bridges’ Transition Model: Ending → Neutral Zone → New Beginnings

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THE ASSOCIATION OF PROFESSIONAL CHANGE MANAGEMENT (ACMP):

a) The ACMP Standard includes a definition of practices, processes, tasks, and activities for change
management.
b) Any method can facilitate smooth transitions and positive change. The best method depends on the
needs and preferences of both the organization and stakeholder.
c) The following are the steps as recommended by ACMP:
i) Evaluate Change Impact & Readiness.
ii) Formulate Your Strategy.
iii) Develop Change Management Plans. Copyrights Reserved To MASTER
MINDS COMMERCE INSTITUTE PVT.LTD.
iv) Executing Change Management Plan,
v) Closing the Change Management Effort, and
vi) Look at employee involvement during this process.
d) Organizations can’t run successful change management without people’s power. That’s why companies
should involve employees in the organization’s change management process from start to finish.

FILL IN THE BLANKS (SP):

69) ____________ helps businesses to respond to change.
70) Introducing new software, updated business processes, leadership changes these are the examples of
____________.
71) In Kurt Lewin Change Model Process steps are Unfreeze ____________ and refreeze.
72) Kotter 8 step process for leading change are create, build, form _______________ enable, generate,
sustain, institute.

Q.No.20. State the reasons why aligning individual goals to organizational goals is important. (N) (B)

a) Personal or Individual objectives refer to the job-specific goals of each individual employee. They are
important because they communicate to employees what is important and what is expected of them.
b) Managers usually set between five and seven goals per employee.
c) For example, number of sales calls per week and/or outcome-based measures such as closed sales in
Rupees.
d) When completed at the individual level, managers may add more objectives specifically designed to
maximize team efforts. The goal is to achieve quantity and quality of effort between individuals and the
team.
e) The reasons why aligning individual goals to organizational goals is important:
i) When personal goals are aligned, an individual takes accountability of the tasks in hand. They relate
with the contributions they make and measure the success and way forward.
ii) Aligning goals also help in prioritization of tasks and responsibilities.
iii) When individuals understand how their personal goals relate to one another and to the larger goals
of the organization, collaboration, and team cohesiveness increases.

Q.No.21. State the meaning of performance objectives and example. (N) (B)

a) Performance objectives for employees are set so that they can know what is expected of them and
understand what they are accountable for.

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b) The following are some of the examples of performance objectives for employees:
i) Productivity: This has to do with the amount of work that an employee is expected to perform within
a specific time. In the service industry such as banking, this could be the number of clients that a
service consultant has assisted. This helps to increase productivity within a business, and it can
increase sales and revenue.
ii) Quality and efficiency: It deals with the manner of performing activities. It also takes quality into
consideration. Not only should the service be fast, but it must be of good quality. It takes productivity
further to deal with how fast the worker can perform a task.
iii) Education and self-development: It focuses on the goals workers set to develop themselves. For
example, employee learning a new skill, doing a new course. It makes workers more valuable due
to continuous growth in their respective fields.

Q.No.22. Creation of Objective should be SMART. Explain (B)

To create effective objectives, they should follow the SMART framework:

a) SPECIFIC: Specific goal provides the employee with the exact result needed for their performance to
be successful. A clear objective can optimize productivity and effectiveness.
b) MEASURABLE: Successful goals can usually be measured using metrics that determine an employee’s
success or progress. A quota, for example, is one way to measure an employee’s success.
c) ATTAINABLE: Effective goals are often those which are ambitious and possible to achieve. Consider if
and how an employee can attain their objectives with the tools and resources available to them within a
specified time frame.
d) RELEVANT: A relevant objective contributes to the larger goals of a company. Consider the upward
impact of employees achieving certain goals, like how they tie to bigger company strategies like growth.
e) TIME BASED: Set realistic timelines for employees to complete their tasks. If a task is ongoing, you
might consider your next review as a deadline for achieving objectives.

FILL IN THE BLANKS (SP):

73) SMART acronym stands for Specific, Measurable, Attainable ____________ and Time Bases.
74) Set realistic timelines for employees to complete their tasks relates to ______ of the SMART framework.
75) _____ goals provide the employee with the exact result needed for their performance to be successful.
76) Successful goals can usually be measured using metrics that determine an employee’s success or
progress is _____ of the SMART framework.

Q.No.23. Explain about FAST Framework as a modern concept of setting goals. (B)

The modern concept views goals to be FAST and not SMART. The four core principles that underpin
effective goal systems can be summarized into the acronym FAST.

Acronym Term Definition Advantages

Goals should be frequently  Gives guidance for important decisions.

discussed to see the progress,  Helps employees remain focused on the
Frequently allocate resources as and most important matters.
F discussed when needed, prioritize
 Links performance feedback to concrete
initiatives, and provide
goals.
feedback

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Acronym Term Definition Advantages

 Motivates performance of individuals and
Goals should be challenging
teams towards goal.
A Ambitious or ambitious but not
 Focuses on the innovative ways to
impossible to achieve
achieve goals.
Goals should be translated  Clearly mentions what the employees are
into specific metrics so that expected to deliver.
S Specific
there is clarity in achieving the  Enhances performance of individuals and
goals. teams.
 Clearly showcases the activities and
contribution of the employees towards
Goals and their achievements
goal achievement.
T Transparent should be made public for all
 Helps employees understand the agenda
employees to see.
of other employees and the teams.
 Use of peer pressure to perform on goals.

FILL IN THE BLANKS (SP):

77) FAST framework acronym stands for Frequently discussed, ________, Specific and Transparent.
78) Goals should be challenging but not impossible to achieve refers to ________ of FAST framework.
79) Goals and their achievements should be made public for all employees to see refers to ________ of
FAST framework.
80) Goals should be translated into specific metrics so that there is a clarity in achieving the goals refers to
________ of FAST framework.

TOPIC 6: BALANCED SCORE CARD

Q.No.24. Explain about Balanced Score Card approach. (A)

Financial
“To succeed
financially, how
should we
appear to our
shareholders?”

Customer Internal Business Process

“To achieve our “To satisfy our
vision how Vision shareholders
Should we and and customers,
appear to our Strategy what business
customers? processes must
we excel at?”

Learning and Growth

“To achieve our
vision, how will
we sustain our
ability to
change and
improve?”

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BALANCED SCORE CARD: A framework to translate a strategy into operational terms. The sole purpose
of setting objectives is to convert the vision and mission into specific measurable targets. There are broadly
two types of objectives namely, financial, and strategic.
a) Financial objectives:
i) They relate to the financial performance targets that the management has established for the
organization to achieve.
ii) Examples: increasing the annual revenues, annual increase in the earnings per share, profit
margins of fixed percent, increased shareholder value, generating internal cash flows, etc.
b) Strategic objectives:
i) They relate to target outcomes that indicate whether a company is strengthening its market standing,
competitive position and future business prospects.
ii) Examples: Winning a certain per cent of market share, achieving lower overall costs than
competitors, developing better technological capabilities than rivals etc.
There is a need to balance the financial objectives with the strategic objectives.
The balance score card model requires an evaluation of organizational performance from four different
perspectives.
a) Financial Perspective: It considers the financial measures such as revenues, earnings, return on
capital and cash flow arising out from the strategic intent of the organization.
b) Customer’s Perspective: This measures the ability of the organization to provide quality goods and
services, effective delivery, and overall customer’s satisfaction. Customer’s perspective includes market
share, customer satisfaction measures and customer loyalty.
c) Internal Business Perspective: The mechanisms through which the performance expectations are
achieved are called as internal businesses processes. This provides data regarding the internal
business results that have led to financial success and satisfied customers. Identify the key business
processes that should be excelled to meet the organizational objectives and customer satisfaction.
d) Learning and Growth Perspective: This perspective focuses on the ability of the organization to
manage its business and adapt to changes in the environment.

CONCEPT QUESTION:
14) The balance score card model requires an evaluation of organizational performance from four different perspectives.
Explain the concept of Balanced Score Card in a detailed manner.

FILL IN THE BLANKS (SP):

81) ________ Is a framework to translate a strategy into operational terms.
82) Balanced Score Card deals with two types of objectives namely financial and ________.
83) ________ relate to the financial performance targets that the management has established for the
organisation to achieve.
84) ________ relate to target outcomes that indicate whether a company is strengthening its market
standing, competitive position and future business prospects.

TOPIC 7: ECONOMIC VALUE ADDED (EVA)

Q.No.25. A widely used measure of economic profit is Economic Value Added (EVA). Explain (B)

a) A widely used measure of economic profit is economic value added (EVA), devised and popularized by
the New York consulting firm Stern Stewart & Company.
EVA = Net Operating Profit After Tax (NOPAT) minus Cost of Capital

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b) Cost of capital = Capital employed X Weighted average of capital (WACC).

c) Economic profit has two main advantages over accounting profit as a performance measure.
i) First, it sets a more demanding performance discipline for managers, because profitability
disappears once cost of capital is considered.
ii) Improves the allocation of capital between the different businesses of the firm by taking account of
the real costs of more capital-intensive businesses.

CONCEPT QUESTION:
15) Explain the role of Economic Value Added (EVA) in measuring economic profit.

FILL IN THE BLANKS (SP):

85) __________ Is devised and popularized by the New York consulting firm Stern Stewart & Company.
86) EVA= Net Operating Profit After Tax (NOPAT) minus __________.

DIVISION 2: QUESTIONS FOR ACADEMIC INTEREST

CASE STUDY 1
RED OCEANS vs. BLUE OCEANS: Red oceans represent all the industries that are currently in existence
and are the known market space. In the red oceans, industry boundaries are defined and accepted, and the
competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater
share of product or service demand. As the market space gets crowded, prospects for profits and growth
are reduced. Products become commodities or niche, and cutthroat competition turns the ocean bloody;
hence, the term “red oceans”.
In a red ocean market or a red ocean strategy, there is a concentrated market and will be highly competitive.
These are normally found by the small but unpopular market. In a red ocean market, the competition would
normally be high, and the existing companies compete with each other using competitive methods.
One of the examples of a red ocean company can be different automobile companies. All the various
companies are competing with each other to solve the same problem, or the demand faced by the consumers.
A red ocean market is highly competitive and would be riskier for a new company especially a startup.
The concept of Blue Ocean Strategy was first coined by W. Chan Kim and Renee Mauborgne in their
book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant,
published in 2004. According to them blue oceans denote all the industries which are currently not existence
and remain unexplored, unknown, and untainted by competition. In blue oceans, demand is created rather
than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans,
competition is irrelevant as the landscape is new and unexplored.
Blue ocean has been used here as an analogy to describe the wider, deeper potential of market space that
is not yet explored. A blue ocean strategy is focused more on the new trends and demands of the consumers
in creating a new market based on it. Blue oceans are a more unoccupied market and not much known. The
blue ocean market is mostly concentrated on providing value and is created based on that.
In the blue ocean strategy, a new product or service is created which is not available in the market which
would solve a problem that is already there in the market. The blue ocean market pays a lot of attention to
value and innovation aspects. This is what the authors call the reconstructionist view.
Red Ocean Strategy vs. Blue Ocean Strategy
Red Ocean Strategy Blue Ocean Strategy
Focus on current customers Focus on noncustomers
Compete in existing markets Create uncontested markers to serve
Boat the competition Make the competition irrelevant

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Exploit existing demand Create and capture new demand

Make the value-cost trade-of Break the value-cost trade-of
Align the whole system of a firm’s activities with its Align the whole system of a firm’s activities in pursuit
strategic choice of differentiation or low cost of differentiation and low cost.

CASE STUDY 2
TESLA’S SECRET STRATEGY: IN 2017, TESLA INC.- an American manufacturer of all-electric cars—
boasted a market capitalization1 of over $ 60 billion, an appreciation of more than 1,400 percent over its
initial public offering price in 2010. How can a California startup achieve a market valuation that exceeds
that of GM, the largest car manufacturer in the world, making some 10 million vehicles a year?
The answer: Tesla’s Secret Strategy. Elon Musk, Tesla’s co-founder, and CEO explained the start-up’s
master plan: 1. Build sports car. 2. Use that money to build an affordable car. 3. Use that money to build an
even more affordable car. 4. While doing above, also provide zero-emission electric power generation
options.
In 2008, Tesla introduced its first car: the Roadster, a $110,000 sports coupe with faster acceleration than
a Porsche or a Ferrari. Tesla’s first vehicle served as a prototype to demonstrate that electric vehicles can
be more than mere golf carts. Tesla thus successfully completed Step 1 of the master plan.
In Step 2, after selling some 2,500 Roadsters, Tesla discontinued its production in 2012 to focus on its next
car: the Model S, a four-door family sedan, with a base price of $73,500 before tax credits. The line appeals
to a somewhat larger market and thus allows for larger production runs to drive down unit costs.
The Model S received an outstanding market reception. It was awarded not only the 2013 Motor Trend Car
of the Year, but also received the highest score of any car ever tested by Consumer Reports (99/100). Tesla
manufactures the Model S in the Fremont, California, factory that it purchased from Toyota. By the end of
2016, it had sold some 125,000 of the Model S worldwide.
Hoping for an even broader customer appeal, Tesla also introduced the Model X, a crossover between an
SUV and a family van with futuristic falcon-wing doors for convenient access to second- and third-row
seating. The $100,000 starting sticker price of the Model X is quite steep, however: thus, limiting mass-
market appeal. Technical difficulties with its innovative doors delayed its launch until the fall of 2015.
Tesla has now reached Step 3 of its master plan. In 2017, Tesla delivered the company’s newest car: the
Model 3, an all-electric compact luxury sedan, with a starting price of $35,000. Tesla had received over
500,000 pre orders. This customer enthusiasm amounted to $500 million in interest free loans for Tesla.
The Model 3 was slated for delivery by late 2017. Tesla hoped to sell 500,000 total vehicles by the end of
2018. To accomplish this ambitious goal, Musk also promised that Tesla would increase its annual
production from 50,000 in 2015 to 1 million vehicles a year by 2020.
Step 4 of Musk’s master plan for Tesla aims to provide zero-emission electric power generation options. To
achieve this goal, Tesla acquired Solar City, a solar energy company, for more than $2 billion in the fall of
2016. This joining creates the world’s first fully integrated clean-tech energy company by combining solar
power, power storage, and transportation. A successful integration of Tesla and Solar City, where Musk is
also chairman and an early investor, would allow completion of Step 4 of Tesla’s master plan.

1) What was the vision of the Tesla Inc.? How is Tesla trying to achieve its mission?
ANSWER:
a) “Tesla was founded with the vision to “accelerate the world’s transition to sustainable transport.”
b) To accomplish this mission, Tesla is building zero-emission electric vehicles that are attractive and
affordable.
c) Beyond achieving a competitive advantage for Tesla, Musk is working to set a new standard in
automotive technology. He hopes that zero-emission electric vehicles will one day replace gasoline-
powered cars.

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d) Tesla’s competitive challenge is sizable:

i) To succeed it must manufacture attractive and affordable vehicles using its new technology,
which will compete with traditional cars running on gasoline.
ii) It also needs the required infrastructure for electric vehicles, including a network of charging
stations to overcome “range anxiety” by consumers.
iii) Many mass-market electric vehicles cannot drive as far on one charge as gasoline-powered cars
can with a full tank of gas. Gas stations can be found pretty much on any corner in cities and
every couple of miles on highways.

2) Explain the mission of the Tesla Inc.?

ANSWER:
a) Tesla is investing billions of dollars to equip its car factory in California with cutting-edge robotics
and to build the Giga factory producing lithium-ion batteries in Nevada.
b) These investments by Tesla are examples of strategic commitments because they are costly, long-
term, and difficult to reverse.
c) They are clearly supporting Tesla’s vision to accelerate the world’s transition to sustainable
transport.
d) Tesla hopes to translate this vision into reality by providing affordable zero-emission mass-market
cars that are the best in class, which captures Tesla’s mission.

3) How does Tesla address the competitive challenge?

ANSWER:
To address the competitive challenge:
a) Tesla’s current guiding policy is to build a cost competitive mass-market vehicle such as the new
Model 3.
b) Tesla’s formulated strategy is consistent with its mission and the competitive challenge identified. It
also requires significant strategic commitments such as Tesla’s $5 billion investment in a new
lithium-ion battery plant in Nevada, the so-called Giga factory.
c) Batteries are the most critical component for electric vehicles. To accomplish this major undertaking,
Tesla has partnered with Panasonic of Japan, a world leader in battery technology.
d) To achieve its massive scale-up in Model 3 production, Tesla invested over $2 billion in a new
manufacturing facility.
4) Customer-oriented visions also frequently change over time – Explain this statement in the
context of Tesla Inc.?
ANSWER:
a) When Tesla was founded in 2003, its mission was to accelerate the world’s transition to sustainable
transport.
b) Over the last decade or so, Tesla completed several steps of its initial master plan, including
providing zero emission electric power generation options, through the acquisition of the Solar-City.
c) Tesla, therefore, no longer views itself as a car company but as a fully integrated clean-tech
company.
d) To capture this ambition more accurately Tesla changed its vision to accelerate the world’s transition
to sustainable energy.
e) To reposition Tesla as an integrated clean-tech energy company, in 2017, Tesla changed its official
name from Tesla Motors to Tesla, Inc.

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5) How does TESLA become successful auto manufacturing start-up in the United States?

ANSWER:
a) Tesla’s manufacturing process was highly automated, with extensive use of 8 to 10-foot-tall red
robots. Each robot had a single, multi jointed arm.
b) While typical auto factory robots perform only one function, Tesla’s robots perform up to four tasks:
welding, riveting, bonding, and installing a component.
c) Eight robots might work on a single car at each station of the assembling line in a choreographed
pattern. The robots produce up to 83 cars a day and can be reprogrammed to produce the Model X
on the same assembly line.
d) Musk saw the franchise-dealership arrangements that U.S. car companies use to sell cars as an
expensive, margin-killing model. Furthermore, selling an electric vehicle is more complicated than
selling an internal combustion vehicle. Because consumers are less familiar with electric vehicles,
they required more explanation about the electricity costs, service issues, potential resale value
issues, and more.
e) Musk thus chose to sell direct to consumers with boutique-like stores in upscale shopping malls
where salespeople could provide high-touch service and answer customer questions without using
high-pressure sales tactics. The company also sold direct to consumers on the Internet.
f) Tesla spends no money on advertising, nor does it have any plans to hire advertising agencies or
run ads in the future. Its in-house marketing team has only seven people on staff, and an internal
team runs the website. Nissan, by contrast, spent $25 million advertising the Leaf in 2012.
g) According to Tesla spokesperson, “Right now, the stores are our advertising. We’re very confident
we can sell 20,000 plus cars a year without paid advertising …It may be something we’ll do years
down the road. But it’s certainly not something we feel is crucial for sales right now.

6) What are the competitive challenges faced by TESLA?

ANSWER:
a) In order to succeed in the all-electric - car segment TESLA must manufacture attractive and
affordable vehicles using its new technology, which will compete with traditional cars running on
gasoline.
b) It also needs the required infrastructure for electric vehicles, including a network of charging stations
to overcome “range anxiety” by consumers; many mass-market electric vehicles cannot drive as far
on one charge as gasoline powered cars can with a full tank of gas. Gas stations can be found pretty
much on any corner in cities and every couple of miles on highways.
c) In this context, Tesla must build zero-emission electric vehicles that are attractive and affordable.
d) Beyond achieving a competitive advantage for Tesla, Musk is working to set a new standard in
automotive technology. He hopes that zero-emission electric vehicles will one day replace gasoline-
powered cars.

CASE STUDY 3
TEACH FOR AMERICA: How Wendy Kopp Inspires Future Leaders
Teach for America (TFA) is a cadre of future leaders who work to ensure that underprivileged youth get an
excellent education. The non-profit organisation recruits both graduates and professionals to teach for two
years in economically disadvantaged communities in the United States.
TFA’s vision is: One day, all children in this nation will have the opportunity to attain an excellent education.
The idea behind TFA was developed by then-21-yearold Wendy Kopp as her college senior thesis (in 1989).
Kopp was convinced that young people generally search for meaning in their lives by making a positive
contribution to society.

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The genius of Kopp’s idea was to turn on its head the social perception of teaching - to make what could
appear to be an unattractive, low-status job into a high-prestige professional opportunity. Kopp works to
eliminate educational inequality by enlisting the nation’s most promising future leaders in the effort. Thus, to
be chosen for TFA is a badge of honor.
In the first four months after creating TFA, Kopp received more than 2,500 applicants. Her marketing
consisted of flyers in dorm rooms. During its first academic year (1990–91), TFA was able to serve five
states and reached some 36,000 students. After 25 years, during the 2015–16 academic year, some 20,000
TFA corps members were teaching in 36 states (and Washington, D.C.) and more than 1,000 schools. To
date, TFA has reached over 10 million students.
To see how all three components - vision, mission, and values - work together, see Exhibit 1.1, which
provides a snapshot of aspirations at Teach for America. While initially targeted at college seniors, today,
one-third of all TFA corps members applied as graduate students or professionals.
In 2015, TFA added 4,100 new teachers to its corps from over 27,300 applications, representing more than
800 colleges and universities throughout the United States. This equates to about 15 percent acceptance,
roughly equivalent to the admission rate of highly selective universities such as Northwestern, Cornell, or
University of California, Berkeley.
TFA’s teaching cohort is also much more diverse than the national average: While some 20 percent of
teachers nationwide are people of color, about 50 percent of TFA corps members are. TFA corps members
receive the same pay as other first-year teachers in the local school district. Most importantly, TFA makes
a significant positive impact on students. Some 95 % of all school principals working with TFA members say
these teachers make a positive difference. A study commissioned by the U.S. Department of Education
found that students being taught by TFA corps members showed significantly higher achievement,
especially in math and science.
In 2016, after celebrating its 25th anniversary, TFA CEO Elisa Villanueva Beard recalls that she was inspired
to sign up for TFA (when a freshman in high school) by Wendy Kopp’s “audacity to believe young people
could make a profound difference in the face of intractable problems standing between the ideals of a nation
I loved and a starkly disappointing reality; who were bound by a fierce belief that all children, from American
Indian reservations in South Dakota to Oakland to the Rio Grande Valley to the Bronx, should have the
opportunity to write their own stories and fulfill their true potential

Describe the vision, mission, and values of Teach for America.

ANSWER:
VISION: One day, all children in this nation will have the opportunity to attain an excellent education.
MISSION: Our mission is to enlist, develop, and mobilize as many as possible of our nation’s most promising
future leaders to grow and strengthen the movement for educational equity and excellence.
VALUES:
a) Transformational Change:
i) We seek to expand educational opportunity in ways that are lifechanging for children and
transforming for our country.
ii) Given our deep belief in children and communities, the magnitude of educational inequity and its
consequences, and our optimism about the solvability of the problem, we act with high standards,
urgency, and a long-term view.
b) Leadership:
i) We strive to develop and become the leaders necessary to realize educational excellence and
equity.
ii) We establish bold visions and invest others in working towards them.

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iii) We work in purposeful, strategic, and resourceful ways, define broadly what is within our control to
solve, and learn and improve constantly.
iv) We operate with a sense of possibility, persevere in the face of challenges, ensure alignment
between our actions and beliefs, and assume personal responsibility for results.
c) Team:
i) We value and care about each other, operate with a generosity of spirit, and have fun in the process
of working together.
ii) To maximize our collective impact, we inspire, challenge, and support each other to be our best and
sustain our effort.
d) Diversity:
i) We act on our belief that the movement to ensure educational equity will succeed only if it is diverse
in every respect.
ii) In particular, we value the perspective and credibility that individuals who share the racial and
economic backgrounds of the students with whom we work can bring to our organisation,
classrooms, and the long-term effort for change.
e) Respect & Humility:
i) We value the strengths, experiences, and perspectives of others, and we recognize our own
limitations.
ii) We are committed to partnering effectively with families, schools, and communities to ensure that
our work advances the broader good for all children.

BRITISH AIRWAYS AND THEIR STRATEGY: British Airways is a leading global airline. Privatized in 1987,
the company enjoyed strong growth and profitability throughout the 1990s. After 2000 BA’s fortunes dipped
in the face of competition from ‘no-frills’ operators, government failure to establish Open Skies agreements
with the US and the terror attacks in September 2001 that led to a slump in demand for air travel. BA’s
website explains how it developed new strategies in this context:

VISION: ‘The BA Way’ – Service that matters for people who value how they fly Goals/Objectives
The BA Way outlines five over-riding goals with associated measures (in brackets)
a) Profitability, in terms of operating margin (a 10% target)
b) Customer advocacy (the number of customers who recommend BA)
c) Safety and security (the number of customers who feel safe with BA)
d) Respected company (the number of community stakeholders who respect BA)5. Employee motivation
(the number of employees who feel motivated to deliver BA’s goals)

VALUES: The BA Way is based upon five core values:

a) Understanding c) Cost-conscious
b) Focused d) Supportive
e) Trustworthy

STRATEGIES: The BA Way provides a high-level statement of strategies:

a) To be the best UK-based network
b) To understand customers better than competitors
c) To develop a powerful brand that people know and trust.
d) To establish a competitive cost base Copyrights Reserved To MASTER
e) To work together as one team MINDS COMMERCE INSTITUTE PVT.LTD.

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COMPETITIVE STRENGTHS: Within this BA identifies its competitive strengths as:
a) A ‘full service’ airline with a strong brand identity, associated with high standards of service, comfort and
safety.
b) Clearly defined and well-branded products targeting specific customer segments (e.g., Club World,
developed to address the needs of long-haul business travellers).
c) Membership of the One World Alliance providing customers with . . . a far more extensive network than
BA could provide alone.
d) Dominance of national and international slot allocations at London Heathrow airport.
e) A modern, flexible, and cost-effective aircraft fleet.
f) As a listed company, BA must satisfy shareholder expectations, achieving profitability through a
combination of service quality and operational efficiency.

CASE STUDY 4
STRATEGY AT APPLE: In 2000, Apple Computer held a loyal customer base but was limping along as a
relatively minor player in the personal computer market. Launched by Steve Jobs and Steve Wozniak, Apple
was one of the pioneers in the industry. Unlike other PC makers that relied on Microsoft’s operating system
and application software, Apple wrote its own operating system software and much of its application
software, which was known as being easy to use.
In fact, Apple was the first to introduce software on a low-cost personal computer with drop-down menus
and a graphical user interface that allowed customers to easily complete a task, such as dragging a file to
the trash to delete it. However, Apple’s investment in unique software led to high-priced computers and
created files that were originally incompatible with those of Microsoft’s Windows operating system and Office
software suite. As a result, Apple rarely achieved more than about a 5 percent share of the computer market.
That all changed in 2001, however, when Apple entered an entirely new market with the launch of an MP3
portable music player called the iPod. Apple’s MP3 player was not the first on the market. A company called
Rio had offered an MP3 player for a couple of years before iPod’s entry into the market. But iPod quickly
took market share from the Rio, for three primary reasons:
a) iPod had a mini hard drive that allowed it to hold 500 songs, as opposed to the roughly 15 songs the
Rio could hold using flash memory.
b) iPod was the first to introduce a “fly wheel” navigation button—the round button that was easy to use
and allowed users to quickly scroll through menus and songs.
c) iPod was backed with Apple’s name and an innovative design.
These advantages helped iPod quickly move to industry leadership, despite the fact that an iPod cost 15 to
25 percent more than a Rio. At the time the iPod was launched, it was difficult for most consumers to access
digital download of songs legally. Initially, the iPod was snapped up only by a relatively small group of users,
mostly teenagers and college students, who were illegally downloading songs through Napster and other
free downloading sites.
Apple recognized that to grow the market for iPods, it needed to help consumers legally access songs to
play on their iPods. As a result, Apple developed software called iTunes, allowing customers to legally
download songs.
One main reason iTunes was able to provide legal downloads before its competitors was because Steve
Jobs, as CEO of both Apple and Pixar (the animation movie production company), understood that music
companies, like movie companies, were concerned about people pirating their products. So, Apple worked
with the music companies to sell songs that had been digitized using software that prevented customers
from copying the songs to more than a few computers. I Tunes was designed o be easy to use with the
iPod.

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Customers now could easily and legally access songs simply by connecting their iPods to their computers
and letting the software do the rest. Even a technology challenged grandparent could do it. But Apple wasn’t
done with its music player strategy.
Apple’s experience in the computer business was that other companies could make similar products, often
at lower prices. Indeed, while Apple and IBM were the pioneers of the personal computer industry and
dominated it during the early years, lower-priced competitors such as Dell, Hewlett-Packard, Lenovo, and
ASUS eventually came to dominate the market.
Apple realized it needed to prevent easy imitation of its music offering. So, it created proprietary software
called Fair play that restricted the use of music downloaded from iTunes to iPods only. That meant
consumers couldn’t buy a lower-priced MP3 player and use it with iTunes because it was incompatible. If
they wanted to use a different MP3 player, they would have to download and pay for music a second time.
Now Apple has bundled an MP3 player into the i Phone, which makes it more convenient for customers
because they don’t have to carry two devices. To top it off, Apple did something that no other maker of
computers, music players, or any other electronic device company had done. It opened its own stores to
sell Apple products. This required that Apple learn how to operate retail stores. The Apple Stores helped
Apple create a direct link to its customers, making it easier for consumers to learn about and try out Apple
products—and get their products serviced.
As a result of Apple’s strategic initiatives, it has built a very secure market position in music players, currently
holding over 70 percent of that market. But the battle isn’t over. Amazon has entered the industry, offering
music buyers unrestricted use of its songs with a subscription to Amazon Music Unlimited. Moreover, other
competitors offering music via subscription include e Music, Pandora.com, and Spotify. Users can listen to
any song they want for a small monthly subscription fee. The $17 billion music industry is so large that it will
continue to attract new competitors who want to dethrone Apple.

1) How did Apple enter the music industry and within 10 years become the dominant seller of both
songs and music players?
ANSWER:

a) Apple’s theory of how to gain a competitive advantage in the music download business was to create
cool and easy-to-use MP3 players and smartphones that could easily - and legally - download digital
songs from a computer through the iTunes store.
b) Apple sought to sustain its advantage by making it difficult for competitor MP3 players or phones to
download songs from the iTunes store.

c) The Apple Stores contributed to Apple’s advantage by providing a direct physical link to customers
that competitors couldn’t match. In this particular instance, Apple’s plan to gain, and sustain,
competitive advantage worked. But there have been other times, such as with the Apple Newton
Message Pad (the first handheld computer that Apple sold as a personal digital assistant), that
Apple’s approach to gaining and sustaining competitive advantage did not work.

2) ‘Leaders must choose the industries a company competes in and the specific customer
segments or needs it will address within those industries’–What industry, customer segment,
and geographic markets have been chosen by Apple?
ANSWER:
a) Before iPod, Apple competed only in the computer industry. Its product markets included desktop
and laptop computers. Launching iPod and iTunes took Apple into the music industry. Later, when
Apple launched the iPhone, it entered the cell phone business.
b) Apple targets the high-end customer segments within its industries. Its customers want the latest in
technology, see themselves as innovators, appreciate design and elegance, and are not price
sensitive. It is also important to select geographic markets to serve.

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c) Apple competes on a worldwide basis, which allows it to spread heavy research and development
costs across its many geographic markets. By contrast, Walmart started by focusing on rural
markets, which allowed it to offer lower prices than the “mom and pop” retail stores in small towns.
3) After a company chooses the markets in which to compete, it then attempts to offer unique value
in those markets. This is often referred to as a company’s value proposition – Explain the value
proposition of Apple.
ANSWER:
a) Apple’s unique value is offering iPods (music players), iPhones (smart phones), and iPads (tablets)
that are well designed, innovative, easy to use, and have features that competing products don’t
have (“there’s an App for that”).
b) In similar fashion, Starbucks wins through differentiation by offering multiple blends of high-quality
coffee in convenient location.

4) How Apple create barriers to imitation to prevent other companies from offering that same value?
ANSWER:
a) By being the first to offer music downloads through its easy- to-use iTunes software, Apple
encouraged its customers to store their entire music libraries on iTunes. Designing iTunes so that it
wouldn’t easily download songs to other music players helped Apple to prevent competing MP3
players from taking market share from iPod.
b) Apple’s brand image and its Apple Stores also prevent competitors from easily imitating its products
and services. These actions helped Apple capture and sustained the value it created.

5) Vertical integration, or the make–buy decision, is also a vehicle for achieving objectives –
Explain this statement in the context of Apple.
ANSWER:
a) When Apple decided to move into retailing by establishing Apple Stores, the company made a
decision to “make” stores that sold their own products, rather than simply “buy” the retailing services
of stores run by other companies, such as Best Buy or Walmart.
b) Finally, companies use international expansion as a vehicle to achieve economies of scale, access
key resources, or learn new skills. Indeed, some companies use international expansion as a
primary source of competitive advantage.’

6) Which products made transform from Apple Computer Inc. to Apple Inc?
ANSWER: Apple’s transformation from a computer company to a company known mostly for its music
players and cell phones was the result of a strategy that emerged after the introduction of the iPod. The
iPod opened up opportunities - such as the i Phone and i Pad - that the company’s senior executives
did not necessarily foresee.

MATERIAL PREPARED BY PROF. KAREEM SIR

MATERIAL REVIEWED BY PROF. CHANDRA SEKHAR SIR

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