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ASSIGNMENTS- MBA Semester IV

Subject code: MB0052

(3 credits)

Set 1

Marks 60

Subject Name: Strategic Management & Business Policy

Q. 1 What do you understand by the term Strategyin the context of Business Management and Policy?And what are the stages in the formulation of a Strategy? (10 marks)

Ans.A strategy is an operational tool to achieve the goals, and thus, the corporate mission. S tra teg ie s do no t at temptto outline exactly how the enterprise is to accomplish its objectives. A company may view downsizingas a strategy in a competitive market to render cost-effective services. Thus, strategy provides aframework to guide thinking and action. Strategies are very much useful in organizations for guiding;planning andcontrol.Strategy is a way of life both at the macro as well as micro levels for everyone, whether it is anation or a company. To win over in a given complex situation, the organisations, even trans-nationals adoptstrategies. They make changes, if necessary, even to their global strategies. An individual company may formulate itsown strategy to bring out

thedes i red resu l ts . The even tua l success o f the o rgan isa t ion depends upon s t ra tegyfo rmu lation and implementation. The recent ly initi ated moves such as global izati on, privat izati on andli bera li za ti on are strategies to attain a globally competitive economy. Business management must focus onfollowing issuesa. Vision-For proper growth of the company.b.Mission What the company wants to achieve.c.Goals To achieve the above mission.d.Objectives To achieve the set goalse.Strategies

To achieve the above objectivesf.Policies To control strategiesg.Programmes For implementation of objectives The above list outlines some of the key issues at every stage of action illustratinghow: a.The mission springs out from vision statementsb. G o a l s f r o m t h em i s s i o n c . O b j e c t i v e s f r o m g o a l s d . S t ra t eg i es f r om o b je c ti v es e .A n d p ro g ra m me r sf ro m ob je ct iv es It is the crux of the strategic management process. Strategy refers to the courseof action desired to achieve the objectives of the enterprise. Formulation, together with its implementation, constitutesan integral part of the management activity. Managers use strategies for different purposes such as to overcomecompetition, to increase sales,toinc rease p roduc t i on , t o mo t i va te the em p loyees to p rov ide the i r bes t , and so on . Implementation of a strategy is a crucial task as the formulation of it. There may be a lot of resistance during the

implementation process. It is necessary for the manager to be very tactful to involve the members of his group in theformulation of strategy to facilitate the implementation process.Stages in Strategy Formulation and Implementationa . I de nt i f ic at io n o f m is si on a nd o bj ec t i ve sb . E n v i r o n m e n t s c a n n i n g c . G e n e r i cs t r a t e g y a l t e r n a t i v e s d . S t r a t e g y v a r i a t i o n s e . S t r a t e g i c c h o i c e f . A l l o ca t i on o f res ourc es and fo rm u la t ion o f o rga n iza t io na l s t r uc t u reg .Formulat ion o f p lans, pol ic ies,p rogrammers and admini st ra ti onb . h ) E v a l u a t i o n a n d c o n t r o l

Q. 2 What, in brief, are the types of Strategic Alliances and the purpose of each? Supplement youranswer with one real life example of each (10 marks)

Strategic alliances constitute a viable alternative in addition to Strategic Alternatives. Companies can

develop alliances with the members of the strategic group and performMore effectively. These alliances may take any of the following forms. Following are the different types of strategicAlliances:1. Product and/or service alliance :

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Tw o or mo re com pan ie s ma y get to get her to synerg ise thei r operat ions, seeking al l iance for their products and/or services.Am an u f ac t u r i n g C om pa n y ma y g ra n t l i c en s e t o an o t h e r c om pa n y t o p rod u c e i t s products. Thenecessary market and product support, including technical know-how, is p ro v i d ed as p a r t o f t h ea l l i a n c e . E x a m p l e :-Coca-cola initially provided such support to ThumpsUp.Two compan ies may jo in t ly marke t the i r p roducts wh ich a re complementary inna tu re .Example:-1) Chocolate companies more often tie up with toy companies. 2) TV Cha nne ls tie-up wit h Cr icket boards to

te lecast ent ire series of cr icket matcheslive.Two companies, who come together in such an alliance, mayproduce a new product altogether. Example:-Sony Music created a retail corner for itself in the ice-creamparlours of Baskin-Robbins.2. Promotional alliance:Two or more companies may come together to promote their products and services. A company may agree tocarry out a promotioncampaignd u r i n g a g i v e n p e r i o d f o r t h e p r o d u c t s a n d / o r s e r v i c e s o f a n o t h e r c o m pa n y . Example:-The C ricke t Board may permit Cokes products to be di splayed du ring the cricket matchesfor a period of one year.

3. Logistic allianceHere the focus is on developing or extending logistics Support.OneCompany ex te nd s l og is t i cs su pp or t f or a no th er co mp an y s p ro du ct s a nd services. Example:- The

outlets of Pizza Hut, Kolkata entered into a logistic alliance with TDK Logistics Ltd., Hyderabad, to outsource therequirements of these outlets f r o m m o r e t h a n 3 0 v e n d o r s a l l o v e r I n d i a f o r i n s t a n c e ,m e a t a n d e g g s f r o m Hyderabad etc.4. Pricing collaborations:

C o m p a n i e s m a y j o i n t o g e t h e r f o r s p e c i a l p r i c i n g collaborations. Example:-I t i s c u s t o m a r y t o f i n d t h a t h a r d w a r e a n d s o f t w a r e c o mp an ie s i n i n f o rm at io n t ec hn ol o g y s e c t o r o f f e r e a c h o t h e r p r i c e d i s c o u n t s . C o m p a n i e s s h o u l d b e v e r y c a r e f u l i n s e l e c t ing strategic partners. The strategyshould be to select such a partner who has complementaryst rengths and who can offset the present weaknesses.

Q. 3 What is a Business Plan? What purpose does it serve? (10 marks)

A busi ness plan is a de tai led descr ip ti on of how an organ iza ti on intends to prod uce mark et and se ll aproduct or service. Whether the business is housing, commercial or some other enterprise, a goodbusiness plan describes to others and to your own board of directors, management and staff the details of how youintend to operate and expand your business. A so li d bu si ne ss pl an de sc ri be s wh o yo u ar e, wh at yo udo , ho w yo u wi l l do i t , yo ur capacity to do i t, what f inancial resources are necessary to carry i tout, and how you intend to secure those resources. A well-written plan will serve as a guide throught he s t a rt - u p p h a s e o f t h e b u s i n e s s . I t c a n a l s o e s t a b l i s h b e n c h m a r k s t o m e a s u r etheperformance of your business venture in comparison with expectations and industry standards.And most impo rtan t, a good business plan wi ll he lp to at tract nece ssary financi ng by demonst ra tingthe feasib ili ty of your venture and the level of thought and professionalism you bring to the task. A well -written plan will serve as a guide through the start-up phase of the business. It can also establishbenchmarks to measure the performance of your business venture in comparison with expectations andindus try standards. And mos t important, a good business plan will help to attract necessary financing by

demonstrating the feasibility of your venture and the level of thought and professionalism you bring to the task. A goodbusiness plan will help attract necessary financing by demonstrating the feasibility of your venture andthe level of thought and professionalism you bring to the task. A good business plan serves the following purposes:1. Revenue Generation Your organization may hope to create a business thatw il lgene ra te su f f i c i en t ne t i ncome o r p ro f i t t o f i nance o the r p rog rams, ac t i v i t i es o r servicesprovided by your organization.

2. Employment Creation A new business venture may create job opportunities for community residents orthe constituency served by your organization.

3. Neighborhood Development Strategy A new business venture mi ght serveasan anchor to a de te r io ra t ing ne ighborhood commerc ia l a rea , a t t rac t add i t iona lbus inessesto the area and fill a gap in existing retail services. You may need to

finda u s e f o r a v a c a n t c o m m e r c i a l p r o p e r t y t h a t b l i g h t s a s t r a t e g i c a r e a o f y o u r ne ighbo rh ood . O r you r bus iness m igh t focus on the rehab i l i t a t i on o f d i l ap ida ted singlefamily homes in the community.

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4. Establish Goals: Once you have identified goals for a new business venture,then e x t s t e p i n t h e b u s i n e s s p l a n n i n g p r o c e s s i s t o i d e n t i f y a n d s e l e c t t h e r i g h tb u s i n e s s . M a n y o r g a n i z a t i o n s m a y f i n d t h e m s e l v e s s t a r t i n g a t t h i s p o i n t i n t h e p r o c e s s .B u s i n e s s o p p o r t u n i t i e s m a y h a v e b e e n d r o p p e d a t y o u r d o o r s t e p . Depending on thegoals you have set, you might take several approaches to identify potential business opportunities.

5. L o c a l M a r k e t S t u d y :W h e t h e r y o u r g o a l i s t o r e v i t a l i z e o r f i l l s p a c e i n a neighborhood commercialdistrict or to rehabilitate vacant housing stock, you should conduct a local market study. A good market study will

measure the level of existing goods and services provided in the area, and assess the capacity of thearea to support existing and additional commercial or home-ownership activity. A bad or insufficientmarket study could encourage your organization to pursue a business destined to fail, with potentiallydisastrous results for the organization as a whole. Through a market study you will be able to identifygaps in ex is ti ng produc ts and services and unsatisfied demand for additional or expanded products and services.

6. Analysis of Local and Regional Industry Trends: Another method of investigatingpotential business opportunities is to research

L oc a l a nd re g i o n a l b us i ne s s an d industry trends. You may be able to identify which business or industrialsectors aregrow ing o r de c l i n in g in your c i t y , met ropo l i t an a rea o r reg ion . Ther eg i o n a l o r metropolitan area planning agency for your area is a good source of data on industry trends.7.

Internal Capacity: T h e b o a r d , s t a f f o r m e m b e r s h i p o f y o u r o r g a n i z a t i o n m a y p os se ss knowl edge a nd sk i l l s i n a pa r t i cu la r bus iness sec to r o r i ndu s t r y . You r o rganizat ion maywish to draw upon this internal expert ise in select ing potent ial business opportunities.8. I n t e r n a l P u r c h a s i n g N e e d s / C o l l a b o r a t i v e P r o c u r e m e n t: P e r h a p s , theorganization frequently

P u r c h a s e s a p a r t i c u l a r s e r v i c e o r p r o d u c t .

I f ne a rb y affiliate organizations also use this

Service or product, this may present a businesso p p o r t u n i t y . E x a m p l e s o f s u c h p r o d u c t s o r s e r v i c e s

Inc lude p r in t in g o r copy ing serv ices, t rave l

Services, transportation services, property management services, office supplies, catering services, andother products.

Q. 4 What is the chief purpose of a Business Continuity Plan and what are its components for effectiveimplementation. Explain in a sentence or two as to how it is different from a Business Plan (10 marks)Ans.The Business Continuity Plan is a tool to allow organizations to consider the factors and s tepsnecessary to prepare for a crisis (disaster or emergency) so that it can manage and survive thecrisis and take all appropriate actions to help ensure the organizations continued viability. The advisoryportion of the plan is divided into two parts:

Planning process: It provides step-by-step Business Continuity Plan preparation and activation guidance, including readiness,prevention, response, and recovery/ resumption.Implementation and maintenance: It gives the details of tasks required for the Business Continuity Plan to be maintained as a livingdocument, changing and growing with the organization and remaining relevant and executable. T h e pu r pos eof th e b us ine ss co nt i nu i t y p lan is to pre par e t o f ace the unt h in ka ble situations that maythreaten an organizations future. This new challenge goesbeyondt h e m e r e e m e r g e n c y r e s p o n s e p l a n o r d i s a s t e r m a n a g e m e n t a c t i v i t i e s t h a tw e previously employed. Organizations now must engage in a comprehensive process best described generically asBusiness Continuity.

It is no longer enough to draft aresponsep l a n t h a t a n t i c i p a t e s n a t u r a l l y , a c c i d e n t a l l y , o r i n t e n t i o n a l l y c a u s e d d i s as t e r o r emergency scenarios. Todays threats require the creation of an on-going,interactive process that serves to assure the continuation of an organizations core activities before,during, and most importantly, after a major crisis event. In the simplest of terms, it is good business for a company

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to secure its assets. CEOsand shareholders must be prepared to budget for and secure the necessary resources tomake this happen. It is necessary that an appropriate administrative structure be Putin place to effectively dealwith crisis management. Following steps are required to fulf ill for effective implementat ion of t hebusiness continuity plan:1. Educate and Train:The BCP is only as valuab le as the knowledge tha t others have of it. Education and training are necessarycomponents of the BCP process. They require a time commitment from the Crisis Management Team, the ResponseTeams, and the general employee population.2. Educate and Train Teams

: The Crisis Management and Response Teams should be educated about their responsibilities and duties.Check lists of critical action sand information to be gathered are valuable tools in the education andresponse processes.3. Educate and Train All Personnel:All personnel should be trained to perform their individual responsibilities in case of a crisis. Such training couldinclude procedures for evacuation, shelter-in-place, check-in processes to account for employees,arrangements at alternate worksi tes, and the handling of media inquiries by the company.4. Review of BCP: The BCP should be regularly reviewed and evaluated. Reviews should occur according to a pre-determined schedule, and documentation of their view should be maintained as necessary. Thefollowing factors can trigger are view and should otherwise be examined once a review is scheduled:

Risk Assessment

Sector/Industry Trends

Regulatory Requirements

Event Experience

Test/Exercise Results5. M a i n t e n a n c e o f B C P: R e g u l a r m a i n t e n a n c e o f t h e B C P c a n n o t b eoveremphasized. Clear responsibil ity for BCP maintenance should be assigned . Maintenance can beeither planned or unplanned and should reflect changes in the operation of the organization that will affect theBCP.Difference between a Business plan & Business continuity Plan

a.A Bu s i ne s s p l an i s a d e t a i l ed d es c r i p t i o n o f ho w a n o r ga n i z a t i o n i n t e nd s t o produce, marketand sale a product or service. A Business continuity plan is an ongoing process supported by senior management andfunded to ensure that the necessa ry s teps are t aken to i dentif y the impact of po tenti al losse s, mainta inviable recove ry strat egies and plans , and ensure the conti nuity of operat ions through personnel training,plan ,testing and maintenance.b.A Busines s cont inui ty plan is a too l wh ich all ows organiza tions to consi der the f a c t o r s an d s t ep snecessary to prepare for a crisis.(disaster or emergency).Whereas a business plan is not preparedfor such type of disaster or emergency.c.In a business continuity plan, a necessary Administrative structure is put in place to effectively deal with crisismanagement, whereas, in a business plan, no such administrative structure is available.

Q. 5 Take any three examples of the components of a Decision Support System and explain how theyhelp decision making (10 marks)

Following are the three components of a Decision Support System1. A n n u a l B u d g e t : I t i sReal ly a bus iness p lan . The budget a l loca tes amounts o f money to every act iv i tyand/ or depa rtment of the fi rm. As time passes, the actual expenditures are compared to the budgetin a feedback loop. During the year, or at the end of the fi sca l year, the firm gene rates its financ ialstatements: the income

Statement, the balance sheet, the cash flow statement. When putti ng to gether, these four documents arethe formal edifice of the firms finances. However, they cannot serve as day-to-day guides to the General Manager.2.Daily Financial Statements:The Manager shoul d have access to cont inuously updated statements of income, cash flow, and a balancesheet. The most important statement is that of the cash flow. The manager should be able to know, at each and

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every stage, what his real cash situation is as opposed to the theoretical cash situation whichincludes accounts payable and account recei vable in t he f orm of expenses and income.3.The Daily Ratios Report:This is the most important part of the decision support system. It enables the Manager to instantly analyzedozens of important aspects of th e f un ct io ni ng of hi s co mp an y. I t al lo wshim to compare the behavior of these parameters to historical data and to simulate the future functioningof his company under d i f fe r en t sce nar i os . I t a ls o a l lo ws h im to com pare thep e r f o rma n c e o f h i s company to the performance of his competitors, other firms in his branch and to the overall

performance of the industry that he is operating in. The Manager can review these financia l andproduction ratios. Where there is a strong deviation from historical patterns, or where the ratios warn aboutproblems in the future management intervention may be required. Examples of the Ratios to be Included in theDecision System

SUE measure deviation of actual profits from expected profits

ROE the return on the adjusted equity capital

Debt to equity ratios

ROA the return on the assets

The financial average

ROS the profit margin on the sales

ATO asset turnover, how efficiently assets are used

Tax burden and interest burden ratios

Compounded leverage

Sales to fixed assets ratios

Inventory turnover ratios

Days receivable and days payable

Current ratio, quick ratio, interest coverage ratio and other liquidity and coverage ratios

Valuation price ratios

And many others A dec i s i o n s ys t e m has g r e a t i m pa c t on t h e p ro f i t s o f t h e c o mp any . I tf o r c e s t h e management to rationalize the depreciation, inventory and inflation policies. It warns the managementagainst impending crises and problems in the company. It specially helps in following areas:a. The management knows exactly how much credit it could take, for how long (f or which maturities )and in which interest rate. It has been proven that without proper feedback, managers tend to taketoo much credit and burden the cash flow of their companies.

b. A decision system allows for careful financial planning and tax planning. Profits group, non cashoutlays are controlled, tax liabilities are minimized and cash flows are maintained positive throughout. T hedec is i on sys tem i s an i n teg ra l pa r t o f f i nanc ia l managemen t i n the Wes t . I t i s completelycompatible with western accounting methods and derives all the data that it needs from information extant inthe company. So , the est ab l i shm ent o f a dec i s io n sy ste m do es n o t h inde r th e fu nct ion i ng o f the company in any way and does not interfere with the authority and functioning of the financialdepartment, but infec t he lps the manager to t ake quick decis ions and make profit to the company.

Q. 6 Name and explain any three ways in which a Companys CSR can be expressed.(10 marks)

CSR is a concept whereby companies integrate social and environmental concerns in their business operations and

in their interaction with their stakeholders on a voluntary basis as they are increasingly aware that

responsible behavio r leads to sustainable business success.CSR is also about managing change at company

level in a socially responsible manner. Thi s happens when a company seeks to set the trade-off s between

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the requirements and the needs of the various stakeholders into a balance, which is acceptable to all

parties. If companies succeed in managing change in a socially responsible manner, this will have a

positive impact at the macro-economic level. Following are the different ways in which company's CSR can be

expressed.

1. Employment and Social Affairs PolicyWithin a business CSR relates to quality employment, life-long learning, information, consultation andparticipation of workers, equal opportunities, integration of people with disabilities anticipation of industrial change and

restructuring. Social dialogue is seen as a powerful instrument to address employment-related issues. Employmentand social policy integrates the principles of CSR, in particular, through the European Employment Strategy, aninitiative on socially responsible restructuring, the European Social Inclusion Strategy, initiativesto promo te equal it y and diversit y in the workplace, the EU Disability Strategy and the Health and SafetyStrategy. In its document "Anticipating and managing change: a dynamic approach to the social aspectsof corporate restructuring", the Commission has stressed that properlytak ing in to account and address ing the soc ia l impact o f res t ruc tu r ing con t r ibu tes to i tsacceptance and to enhance its positive potential. The Commission has called upon the so c ia l p a r t ne r s t o g i ve t he i rop in io n in re la ti on to th e us ef ul ne ss of es ta bl is hi ng at Community level a number of principles foraction, which would support business good practice in restructuring situations. Deeply rooted societal changes suchas increasing participation of women in the labor market should be reflected in CSR, adapting structural changes andchanging theworke n v i r o n m e n t i n o r d e r t o c r e a t e m o r e b a l a n c e d c o n d i t i o n s f o r b o t h g e

n d e r s acknowledging the valuable contribution of women as strategies which will benefit the societyas well as the enterprise itself.2. Enterprise policyOnly competitive and profitable enterprises are able to make a long-term contributiontosus ta i nab le deve lopmen t by gene ra t i n g wea l th a nd job s w i t hou t compromi s ing thesocialand environmental needs of society. In fact, only profitable firms are sustainable and have better chancesto adopt/develop responsible practices. The role of enterp rise pol icy is to help create a bus inessenvi ronment, wh ich suppor ts the Lisbon objective of becoming the worlds most dynamic knowledge-driveneconomy, supports entrepreneurship and a sustainable economic growth. Its objective is to ensure balanced approachto sustainable development, which maximizes synergies between its economic, social and environmental dimensions.3. Consumer PolicyC S R h a s p a r t l y e v o l v e d i n r e s p o n s e t o c o n s u m e r d e m a n d s a n d e x p e c t a t i o n s . C onsum ers, in th e i r p urch as i ng beh av io ur , i ncr eas ing l y requ i re i n fo rmat ion an d reassurance

that their wider interests, such as environmental and social concerns, are being taken into account. Consumers andtheir representative organizations have an important role to play in the evolution of CSR. If CSR is therefore tocont inue to serve its purpose, st rong lines of communication between enterprises and consumers need to becreated

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ASSIGNMENTS- MBA Semester IV

Subject code : MB0036

(3 credits)

Set 2

Marks 60

Subject Name : Strategic Management & Business Policy

Q 1 Having formulated a Business Strategy, what are the steps in its implementation? Explain each in a sentence ortwo (10 marks).

Ans. A strategy is an operational tool to achieve the goals, and thus, the corporate mission.St ra te gies do no tattempt to outline exactly how the enterprise is to accomplish itsobjectives. A company may viewdownsizing as a strategy in a competitive market torender cost-effective services. Thus, strategyprovides a framework to guide thinkingand action. Strategies are very much useful in organizationsfo r gu id ing, planning andcontrol.Strategy is a way of life both at the macro as well as micro levels for everyone,whether it is a nation or a company. To win over in a given complex situation, the organizations,even trans-nationalsadopt strategies. They make changes, if necessary, even to their global strategies. An individual company mayformulate its own strategy to bring outthedes i red resu l ts . The even tua l success o f the o rgan iza t ion depends upon s t ra tegyfo rmu lation andi m p l e m e n t a t i o n . S t r a t e g y r e f e r s t o t h e c o u r s e o f a c t i o n d e s i r e d t o a c h i e v e t h e o b j e c ti v e s o f t h e enterprise. Formulation, together with its implementation, constitutes an integral part of themanagement activity. Managers use strategies for different purposes such astoove rcome compe t i t i on , to i nc rease sa les , to i nc rease p roduc t i on , to mo t i va te theemp loyees to provide their best, and so on. Implementat ion of a st rategy is a c rucial task as the formulation of it.There may be a lot of resistance during the implementationprocess. It is necessary for the manager to be very tactfulto involve the members of hisgroup in the formulation of strategy to facilitate the implementation process

Following are the steps for implementing the business strategy1. I d en t i f i c a t i on o f m i s s i ona nd o b je c t iv es 2 . E n v i r o n m e n t s c a n n i n g 3 . G e n e r i c s t r a t e g ya l t e r n a t i v e s 4 . S t r a t e g y v a r i a t i o n s 5 . S t r a t e g i c c h o i c e 6.Allocation of resourcesand formulation of organizational structure7.Formulation of plans, policies, programmes andadmini st rat ion 8 . E v a l u a t i o n a n d c o n t r o l . Af ter f ormulat ing a busi nes s st rat egy ,the process of strategy implementation calls for an integrated set of choices and activities. These include1.

Allocating Resources:A good strategy with effective implementation has a higher probability of success. There source allocation decisions,such as, which departmentis sanctioned how much of money and resources, in the name of the budget, and soon set the operative strategy of the firm. Budgets are formulated after a series of negotiations across different levels inthe organization. Budgets may be of differenttypes: corpora te budgets, cap ital budgets, depa rtmentalbudgets, sales budgets,expense budgets, and others.2.

Organising:An ef fec ti ve co-ord inat ion and ef fic ient di vis io n of labou r requ ir es anapprop riate organiza tio na lstructure. The best structure is one, which fits into theorganizational environment. Also its internalcharacter ist ics should g ive r ise to aneffect ive stra tegy. Appropr ia te changes in theo r g a n i z a t i o n s t r u c t u r em a y b e i n i t i a t e d t o e n s u r e s t r a t e g i c i m p l e m e n t a t i o n o f t h e p r o p o s e d s t r a t e g y . E f f e c t i v e s tr ategi c managemen t p racti ces sugges t t hat organization st ructu re should alsochange if the strategychanges or if the organization experiences any bottlenecks inthis regard3.

F o r m u l a t i o n O f P o l i c i e s , P l a n s , P r o g r a m m e s A n d A d m i n i s t r a t i o n :Theresources allocated are said to be well-utilized only when they are well-monitored.For this purpose,it is essential:To develop policies and plans.

To ass ign and reas s ign lead ers the tas ks and dec i s io ns to supp or t thechosen strategy.To p rov id e a c ond uc ive env iro nme nt i n th e or gan iza t i on t hro ugh pro per administration toachieve the given objectives directly and indirectly.The implementation of plans and policies is designed inaccordance with the strategychosen. The firm creates plans and policies to guide managerialperformance, andthese make the chosen strategies work. The corporate success lies ultimately in theabil it y

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to convert corporate strate gy into plans and policies that are compatible andworkable.4.

Evaluation And Control Of Strategy:Evaluation is the last pha se of the st ra tegicmanagement process. It is at this stage that the success of theprogrammes can beass es se d. The re sho ul d b e a bui l t - i n m ec han is m t o e xam in e t hede vi at io ns an dinitiate corrections as and when required. This assures that the chosen strategieswillbe implementedproper ly .The con t ro l p rocess requ i res iden t i fy ing a se t o f parameters fo r eva lua t ing andmeasuring the performance at the individual level and also at the department level.Th e pe rf or ma nc e

ha s to be ev al ua te d to id en ti f y de vi at io ns an d ta ke co rr ec ti ve action. The control and evaluationtake place not only at the SBU level but also at thecorporate level. This process may involve the participation of all theexecutives at alllevels. Corrective actions are required wherever the evaluation revealsdeviationsbetween the actual performance and the projected one, over a given period of time.

Q . 2 H o w d o w e c o p e w i t h c r i s e s a n d h o w d o w e u s e t h e B u s i n e s s C o n t i n u i t y P l a nt o manage and recover from crisis?Ans.The Bus i ness Co n t inu i t y Gu ide l i ne i s a too l t o a l l ow o rgan iza t i ons to cons id e r the factorsand steps necessary to prepare for a crisis (disaster or emergency) so that it canm an a ge and su r v i ve t hecr is is an d t ak e a ll ap pr op ri at e a c ti on s t o h el p e ns ur e t he organizations continued viability.Theadv iso r y po r t i on o f t he gu i de l i ne wh ich he lps us t o co pe w i th the c r i s i s and tomanage andrecover from the crisis is divided into two parts:1.

T h e P l a n n i n g P r o c e s s- p r o v i d e s s t e p - b y - s t e p B u s i n e s s C o n t i n u i t y P l a n preparation and activation guidance,including readiness, prevention, response, andrecovery/ resumption. The following steps are important:i . A s s i g nA c c o u n t a b i l i t y i i . P e r f o r m R i s k A s s e s s m e n t i i i . C o n d u c t B u s i n e s s I m p a c tA n a l y s i s ( B I A ) i v . A g r e e o n S t r a t e g i c P l a n s v . C r i s i s Ma na ge m en ta nd R e s p on s e T ea m D e ve l op me n v i . M i t i g a t i o n S t r a t e g i e s v i i . A v o i d a n c e ,D e t e r r e n c e a n dD e t e c t i o n v i i i . P o t e n t i a l C r i s i s R e c o g n i t i o n i x . C o m m u n i c a t i o n s x . R e s o u r c eM a n a g e m e n t x i . F i n a n c i a lS u p p o r t x i i . F i n a n c i a l I s s u e s a n d I n s u r a n c e x i i i . S u p p l i e r s / S e r v i c e P r o v i d e r s x i v. M u t u a l A i d A g r e e m e n t s x v . D a m a g e a n d I m p a c tA s s e s s m e n t xv i . R e s u m p t i on o f C r i t i c a l an d R em a in i n g P ro c e s s es x v i i . R e t u r n t oN o r m a l O p e r a t i o n s

2.Successful Implementation And Maintenance- details those tasks required for the Business Continuity Plan to be maintained as a living document,changing andgrowing with the organization and remaining relevant and executable. The variousstepsinvolved are:i . E d u c a t e a n d T r a i n i i . T e s t t h e B C P i i i . D e v e l o p B C PR e v i e w S c h e d u l e i v . D e v e l o p B C P M a i n t e n a n c e S c h e d u l e In order to use the BusinessContinuity Plan to manage and recover from the crisis, thefollowing checklists on the basis of the above advisoryportion of the guideline needs tobe checked and necessary requirements as per the same, needs to bekept in readymode for immediate applications.Accountability:1.Does your organizations policy include a definition of crisis?2 . H a s t h e p e r s o n r e s p o n s i b l e f o r c r i t i c a l s y s t e m s a n d b u s i n e s s p r o c e s s e s b e e nidentified?3 . H a s a B C P T e a m b e e n a p p o i n t e d , a n d d o e s i t i n c l u d e s e n i o r b u s i n e s s

f u n c t i o n leaders?4 .Has the BCP been commun ic a ted th roughou t t he o r gan iza t i on?5 .Has aperson been assigned with the responsibility to update the BCP?Risk Assessment

1 . Ha s yo u r o r ga n iz a ti o n co n du c t ed a Ri s k As s es s me n t? 2 . H a v e t h e t y p e s o f r i s k st h a t m a y i m p a c t y o u r o r g a n i z a t i o n b e e n i d e n t i f i e d a n d analyzed?3 . Ha s t h e l i ke l ih o odf o r e a c h t y p e o f r i s k b e e n r a t e d ?Business Impact Analysis1 . H a v e t h e c r i t i c a l b u s i n e s s p r o c e s s e s b e e n i d e n t i f i e d ? 2 . H a v e t h e b u s i n e s s p r o c e s s e sb e e n r a n k e d ( l o w , m e d i u m , h i g h ) ? 3 . I f a c r i s i s w e r e t o h a p p e n , h a s t h e i m p a c t , i n t e r m sof hu ma n an d f in an ci al co st s, been assessed?4 . H a v e t h e m a x i m u m a l l o w a b l e o u t a g e a n d r e c o v e r y t i m e o b j e c t i ve s b e e n determined?5 . H a s t h e l e n g t h o f t i m e y o u r o r g a n i z a t i o n s b u s i n e s s

p r o c e s s e s c o u l d b e n o n - functional been determined?6.Ha ve the reco very t im e ob je ct i vesbe en id en t if ie d? 7.Have the resources required for resumption and recovery been identified?Strategic Plans1 .Have me thods to m i t i ga te the r i sks i den t i f i ed i n the Bus iness Impac t Ana lys i s andRiskAssessment been identified?2 . Ha v e p la n s a nd p ro c edu r es t o r e sp o nd t o an y i n c i den t be en

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d ev el op ed ?3 . H a v e s t r a t e g i e s t h a t a d d r e s s s h o r ta n d l o n g t e r m b u s i n e s s i n t e r r u p t i o n s b e e n selected?4 . A r e t h e s t r a t eg i e s a t t a i na b l e ,t e s t e d , a n d c o s t e f f e c t i v e ?Compliance with Corporate Policy & Mitigation Strategies1.Have compliance audits been conducted to enforce BCP policy and procedures?2.Have thesystems and resources that will contribute to the mitigation process beenidentified, including personnel,facilities, technology, and equipment?3. Ha ve th e sy st em s an d re so ur ce s be en mo ni to re d to en su reth ey wi l l be av ai la bl ewhen needed?Avoidance, Deterrence, and Detection

1 . A r e e m p l o y e e s m o t i v a t e d t ob e r e s p o n s i b l e f o r a v o i d a n c e a n d d e t e r r e n c e a n d detection?2.Have facil itysecur ity programs to support avoidance and deterrence and detec tionbeen established?3.Haveoperational policy and procedures to protect the facil it ies been developed?4.Is it ensured thatsuf f i c i en t p hys ic a l sec ur i ty sy st em s a nd p la nni ng are in p l ace to protect the facility?R e s p o n s e : P o t e n t i a l C r i s i s R e c o g n i t i o n a n d T e a m N o t i f i c a t i o n1 . W i l l t h e r e s p o n s e p r o g r a m r e c o g n i z e w h e n a c r i s i s o c c u r s a n d p r o v i d e s o m e l e v e l of response?2.Have the danger signals been identified that indicate a crisis is imminent?3.Have personnel been trained to observe warning signs of an imminent crisis?4.Has a notificationsystem been put in place, including redundant systems?5.Is the noti f ication contact l istc o m p l e t e a n d u p t o d a t e ?Assess the Situation1 . H a s a n a s s e s s m e n t p r o c e s s t o a d d r e s s t h e s e v e r i t y a n d i m p a c t o f t h e c r i s i s

beendeve loped?2.Has the respons ib i l i ty fo r dec la r ing a cr is is , w i th f i r s t and secondal te rn at es , be en assigned?Declare a Crisis1.Have the criteria been established for when a crisis should be declared?2.Has the responsibility fordeclaring a crisis been clearly defined and assigned?3.Has an alert network for BCP Teammembers and employees been established?4.Is it ensured that there is an alternate means ofwarning if the alert network fails?5 . H a v e t h e a c t i v i t i e s t h a t w i l l b e i m p l e m e n t e d i ne v e n t o f a c r i s i s b e e ni d e n t i f i e d , i n c l ud i n g n o t i fi c a t i on , e v a c u a t io n , r e l o c at i o n , a l t e rn a t e s i t e a c t i v a ti o n , t e a m deployment, operational changes, etc?Execute the Plan

1 . H a s c o n s i d e r a t i o n b e e n g i v e n t o d e v e l o p i n g t h e B C P a r o u n d a w o r s t

c a s e scenario?2.Has the BCP been prioritized to save lives, protect assets, restore criticalbusinessprocesses and systems, reduce the length of the interruption, protect reputation,control mediacoverage, and maintain customer relations?3.Have the severi ty of the cri sis and the appropr iateresponse been determined?Communications1 . H a s a c r i s i s c o m m u n i c a t i o n s s t r a t e g y b e e n d e v e l o p e d ? 2 . A r e c o m m u n i c a t i o n s t i m e l y ,ho ne st , an d ob je ct iv e? 3.Are communications with al l employees occurr ing at approximately thesame time?4.Are regular updates provided, including notification of when the next update willbe issued?5.Has a p r imary spokesperson and back-up spokespersons been des igna tedwh o will manage and disseminate crisis communications to the media and others?Resource Management Logistics1 . H a s a d e s i g n a t e d C r i s i s M a n a g e m e n t C e n t e r b e e n i d e n t i f i e d , a n d d o e si t h a v e n e c e s s a r y l i f e s u p p o r t f u n c t i o n s , i n c l u d i n g u n i n t e r r u p t i b l e p o w e r s u p p l y a n d comm

unications equipment?2.Have a lterna te wo rksit es f or bus iness resump tion and recovery been identi fied?3.Have critical and vital records been stored at an offsite storage facility?4.How long caneach busines s funct ion operate effectively without normal data inputstorage processes?5 .W ha t m us tbe don e to res to re dat a to th e sam e pre vio us poi nt in t i me wi t h i n the recovery time objective?6 . C a n a n y a l t e r n a t e d a t a s t o r a g e p r o c e s s e s b e u s e d , a f t e r t h e i n i t i a l d a t a r e c o v e r y , tospeed the forward recovery to the present time?R e s o u r c e M a n a g e m e n t F i n a n c i a l I s s u e s a n d I n s u r a n c e , T r a n s p o r t a t i o n , Suppliers/Service Providers, and Mutual Aid1.Has the appropriate insurance coverage been identified and obtained?2.Are cash and credita v a i l a b l e t o t h e B C P T e a m ? 3 . H a v e t r a n s p o r t a t i o n a l t e r n a t i v e s b e e n a r r a n g e d i nadvance?4.Have critical vendor and service provider agreements been established?5.Have mutualaid agreements been establ ished?6.If so, are they legal ly sound, properly documented, andunderstood by all parties?

Recovery and resumption1 . D a m a g e a n d I m p a c t A s s e s s m e n t , P r o c e s s R e s u m p t i o n , a n d R e t u r n t oN o r m a l Operations2 .Has a dam age as sessmen t bee n pe r fo rmed as s oon as poss ib l e?3 .Hast h e D a m a g e A s s e s s m e n t T e a m b e e n m o b i l i z e d t o t h e s i t e ?4 . H a s b u s i n e s s p r o c e s s r e c o v e r y b e e n p r i o r i t i z e d t o r e c o v e r t h e m o s t c

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r i t i c a l business processes first?5.Is the schedule of the processes to be restored in accordance withthe pr ior i t izat ionschedule?6.Is there documentat ion of when the processes were resumed?7 . H a s t h e o r g a n i z a t i o n r e t u r n e d t o n o r m a l o p e r a t i o n s ?8 . H a s t h e d e c i s i o n t o r e t u r n t o n o r m a l o p e r a t i o n s b e e n d o cu m e n t e d a n d communicated?The preparation and readiness of the resources as per the above checklists on thebasis of the BusinessContinuity Plan helps us to manage and recover from the crisis ina successful manner.

Que. 3 What are the main components of Business Plan, explai ning the role of each i nthe Plan?

Ans.A business plan is a de tai led descript ion of ho w an organizat io n in tends to produce ,market andsell a product or service. A solid business plan describes who you are, whatyou do, how you will do it, your capacity todo it, what financial resources are necessaryto car ry it out , and how you intend to secure those resources .A we ll -wr it ten plan wi ll se r ve a s a gu i de t h ro u gh t h e s t a r t - u p p ha se o f t he bu s i ne s s . I t c ana l s o e s t a b l i s benchmarks to measure the performance of your business venture in comparison withexpecta tionsand industry standards. And most important, a good business plan willhelp to attract necessary financingby demonstrating the feasibility of your venture andthe level of thought and professionalism you bring to thetask.A good bus iness p lan wi l l he lp a t t rac t necessary f inanc ing by demonst ra t ing the feas ib i lity of your venture and the level of thought and professionalism you bring to thetask.A business plan should containthe following components:1.Executive Summary:The purpose of this component is to provide direction andhelp you establish your goals as clearly as

possib le . With th is clear ly spel led out,bot h ma nag eme nt and emp lo yee s can fo cust h e i r e f f o r t s . A l s o i t w i l l h e l p w i t h i n v e s t o r s a n d b a n k e r s i n t h a t t h e y c a n c l e a r l yu nd e rs t a nd w ha t y o u r. I t s ho u l d include the following information.A hi st or y of the company (i f you' re already in business) or a hi st or y of the ideadevelopment.A description of the products or services you plan to develop and sell.2.Company and Product Description:In this component one should provide typeof b u s i n e s s , r e a s o n o f c r e a t i n g b u s i n e s s u n i t , r e f e r e n c i n g t h e g o a l a n d a t t a c h ref erences of business plan.

Produc t or Service-Focus on the f eature that dist inguis hes f rom res t of market and what will attractconsumers to your product or service.Price-Provide realistic price estimate and discuss the rationale behind that price.Describe where this price positionsyou in the market place: at the high end, lowend or in the middle of the existing range for a similar product or service.Pla ce- Des cr ib e t he loc a t i on and i ts adva ntag es wher e y ou wi l l p rodu ce o r distribute your product or provide your service.Customers-Providing detail description of the customer base depending upontheir characteristics i.e.demographics, geography and socio economic status.Pro vid e st at is t i ca l dat a to des cr i be th esi ze of ta rg et cu st om er ba se an d i ts growth potential.

C o m p e t i t i o n - E x p l a i n t h e r e a s o n f o r e n t e r i n g i n t h e n e w v e n t u r e a n d w h a t

differentiate your proposed venture from existing business.Sa les Pr o je ct io ns -P res ent an est ima te bas ed on si ze of you r m ark et , t he characteristic of your customers and the share of market you will gain over your competition.3.

Market Description:A key compos ition of the operat ion of your busi ness wi ll beyour sa les and mark et ing st ra tegy, so onemust describe how you will inform your target market about your product or service and how youwill convince customer topurchase.Production Description:-Describe the steps from raw material to finished goods,packaged and ready fo r

distribution and sale. Avoid using industry jargon todescribe the production process.Staffing:-Describe the type of staff, their qualification, skill, salaries, other benefitand how they will be recruited.4.

Equipment and Material:

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In this component one must describe the special type of machines and materials required to purchase, their cost andsource.Facility:-Facilities and other infrastructure required for the company, specializedfeatures if any are to be described.Marke t Descr i p t i on : -S t ra te gy f o r l o ca t i ng you r ta rge t ma rke t , i n fo rm i ng o r educatingcustomers about your product or service and convincing them to buyit . Discuss the product s feature you planto emphasize to gain the attention of your target market.5.

Operations:I n t h i s c o m p o n e n t c o m p a n y m u s t h i g h l i g h t t h e s e n i o r m a n a g e r r es po ns ib le f or o ver s ee i ng th e st ar t -u p an d op er at io n of yo ur bu si ne ss , th ei r background and their responsibility inthe business. Ownership- Potential investorsand lenders will be interested in ownership stake of the board of directorsand also inwhat portion of the companys equity is available. An investor or banker must knowthis because each formhas certain legal and tax implications. The typical forms are:Sole proprietor.Partnership.Limited Liability Company

Corporation.Sub-Chapter S Corporation6.Management and ownership:Providing a brief description of the different financialstatements of the business to be attached such as .Sta r tu p bu dget -Des cr ib e t he in i t ia l e xpen ses wh ic h m ay inc ur to ge t your business up andrunning.Cash flow projection-Provide month to month schedule of estimated cash inflowand outflows from the business for thefirst year. This include how much moneyand when.

I n c o m e s t a t e m e n t - P r e p a r e a m u l t i y e a r s t a t e m e n t o f p r o j e c t e d r e v e n u e , expenses,capital expenditure and cost of goods sold. This should be supportedby documents of growth pattern of similarcompanies or studies that forecast anindustry wise forecast.Balance sheet-Provide a copy of balance sheet of sponsoring organization.7.Financial information and timeline:Capital Requirement- Describe the Requirement of type of capital for financingand repayment period, amount ofexpected return and explain any commitmentor investment that you may have already secured. Types of requirementof fundsare.Seed Capital

Fixed asset financingWorking CapitalInit ial Start -up t imeline-Prov ide a t imeli ne o f ta sk and events necessary to getyour business operational.Be sure to record stage as on today also. Set realisticdead line to capacity to complete these tasks. There may beseveral reasons todelay the project which are in not ones hand but explain in details.describe any asset that will be allocated to the start-up of the business.8.Risks and their mitigation:Although it is imposs ib le to know exac tly what wi ll gowrong in staring and running your business plan,thinking upon different challengeswill strengthen plan.

Q.4Explain the concept, need for a nd importance of a Decision Support System.A n s . C o n c e p t : Decision support systems constitute a class of computer-based informationsystems including knowledge-based systems that support decision-making activities.I t i s a l so e xp l a i ne d as ac l a s s o f i n f o r m a t i o n s y s t e m s ( i n c l u d i n g b u t n o t l i m i t e d

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t o c o m p u t e r i z e d s y s t e m s ) t h a t s u p p o r t b u s i n e s s a n d o r g a n i z a t i o n a l d e c i s i o n -m ak i ng activities. A properly designed DSS is an interactive software-based system intendedtohe lp de c i s ion make rs comp i le use fu l i n fo rma t ion f r om a comb ina t i on o f r a w da ta ,documents, personal knowledge, or business models to identify and solve problems andmake decisions.Typical informationthat a decision support application might gather and present are:a n i n v e n t o r y o f a l l o f y o u r c u r r e n t i n f o r m a t i o n a s s e t s ( i n c l u d i n g l e g a c y a n d relational data sources, cubes, data warehouses, and data marts),

comparative sales figures between one week and the next,projected revenue figures based on new product sales assumptions.Need:Many companies in developing countries have a very detailed reporting systemgoing down to the leve l of asingle product, a single supplier, a single day. However,these reports which are normally providedto the General Manager should not beused by them at all. They are too detailed and, thus, tend to obscurethe true picture. AGeneral Mana ger must have a bird s eye view of hi s company. He must be ale rtedtounusual happenings, disturbing financial data and other irregularities.As things stand now, the following phenomenacould happen:That the management will highl y l everage the company by assuming excessivedebts burdening the cashflow of the company.

That a false Profit and Loss (PNL) picture will emerge both on the single productleve l and genera ll y. Th iscould lead to wrong decision-making, bas ed on wrongdata.That the company will pay excessive taxes on its earnings.That the inventory will not be fully controlled and appraised centrally.That the wrong cash flow picture will distort the decisions of the management andlead to wrong (even to dangerous)decisions.Importance:A de c i s i o n s y s t e m ha s g re a t i m pa c t on t h e p r o f i t s o f t he c om pa n y . I t forces the management torationalize the depreciation, inventory and inflation policies. Itwa rn s t he m an a gem en t a ga i n s t i m pen d i n g

crises and problems in the company. Itspecially helps in following areas:The management knows exact ly how much credi t i t could take, for how long (for which maturities) and inwhich interest rate. It has been proven that without proper feedback, managers tend to take too much credit andburden the cash flow of their companies.A decision system allows for careful financial planning and tax planning. Profits goup, non cash outlays are controlled,tax liabilities are minimized and cash flows aremaintained positive throughout.Th e de c i s i o n s ys t e m i s anin te gr al pa rt of f in an c ia l ma na ge me nt in th e W es t. It is completely compatible with westernaccounting methods and derives all the data that itneeds from information extant in the company.So , t h ees tab l i shmen t o f a d ec i s ion sys tem does no t h inde r the func t i o n ing o f thecompany in anyway and does not interf ere w ith the author ity and funct ioning of the financial department.

Q.5 Explain the importance of any five aspects of a Licensing Agreement that you w ill look forwhen negotiating the right to use an Intellectual PropertyAns. A license is a grant of permission made by the patent owner to another to exercise any specified rights as agreed

.Licensing is a good way for an owner to benefit from their work as they retain ownership of thepatented invention while granting permission to others to use it and gaining benefits, such as financialroyalties, from that use. However, it normally requires the owner of the invention to invest time and resources inmonitoring the licensed use, and in maintaining and enforcing the underlying IP right.A license is merely the grant of permission to undertake some of the actions covered by intellectual property rights, and the patentholder retains ownership and control of the basic patent.Licensees are oft en limited to specif ic right s, te rritories and time periods. If an inventor owns patentson the same invention in five different countries, they could assign (or sell)these patents to five different owners

in each of those countr ies. Port ions of a patent right can also be assigned so that in order to finance yourinvention, you might chooseto sell a half-share to a commercial partner.A lot of aspects are to be taken care ofvery caref ul ly whi le negot ia ting or making alicensing agreement to give right to use an intellectual property.Some of the important aspects of a Licensing Agreement that we will look for when negotiating the right touse an Intellectual Property are explained below:

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1.The Parties To The Licence:The parties to the licence are the entities (individualpeople, companies or institutions) that are bound by the licenceas a legal contract.They normally sign (or execute) the licence to confirm in a legally clear-cut way thatthey agree tocomply with its terms. The parties can be individual persons, but theyare normally legal entities such as a researchinstitution, a university or a company.It is important to ensure that the licence is signed in a way that is legally binding,andby a person authorized to sign for their institution.In some cases, the licence is not directly signed (thinkof the I Agree block wh ichyou are often asked to click when installing a software package on a computer), andinthe national law of many countries, contractual obligations can arise even withouta formal signed document.2.Licensor And Licensee:

The person granting the licence the licensor typicallyho lds r i gh ts to techno l ogy , b io log i ca l ma te r ia l , IP r i gh ts , know-how , o r o th e r information. The person receiving the licence the licensee is the party which isseeking to use or exploit thatmaterial.The basic idea of the licence is that the person granting the licence (the licensor) isgi v i n g a no th e rperson ( the l i censee ) the r igh t to do someth ing tha t they cou ldo therwise p reven t themfrom doing, in exchange for some kind of benefit (this maybe financial, but may be other forms ofbenef i t) . So the l icensor might permit thel i ce ns ee to us e a te ch nol ogy th at is cov ere d b y apa te nt an d i f th er e wa s no l icense, the l icensor could take legal action under the patent toprevent thi s use of the technology.3.Sole, Exclusive Or Non-Exclusive Licences:The choice taken among theseoptions is very important.A n e xc l us i ve l i c e nc e m ea ns t h a t t he l i c e n s o r a g r ee s no t t o g ra n t a no th e r l ic ence to anyother party, and agrees not to use the licensed rights (in

other w o r d s , t h e l i c e n s o r c a n n o t b e c o m e a c o m p e t i n g u s e r o f t h e l i c e n s e d technology).A so le l ic ence means that the li censor gran ts a l ic ence to on ly one li ce nsee,the sole licensee, but thelicensor retains the right to use the technology itself.

Under a non-exclusive licence, the licensor grants the licensee a right to

uset h e t e c h n o l o g y , b u t t h e l i c e n s o r c a n s t i l l g i v e t h e s a m e r i g h t s t o o t h e r

l i censees.The k ind o f l i cense g ran ted wi l l depend on severa l fac to rs , and wi l l do mucht o influence the pattern of use, and the scale of royalties or other payments, made bythe licensee.4.Sub-Licences:A sub-licence is a further licence, when the licensee of the originallicence itself grants a licence to a third party. Thesub-licence may extend to some or all of the rights granted under the original licence. The original licence may needtomake clear whether sub-licences can be granted, and if so, to who, and on whatterms o r conditions.

There may be issues such as prot ect ing the con fid ent ial ity of licensed material, liability for use of thetechnology, or the interests of the licensor ingranting direct licenses to the same third parties.A sub-licensingprogram may be of considerable benefit to the licensor, as it willincrease the scope of use ofthe licensed technology, and may be an effective wayof exporting the technology to new overseasmarkets. The original licensor mightretain an entitlement to a share of any royalties or other payments paid bythe sub-licensee. T he original lic ensor might retain the right to investigate and approve theeligibilit yof a sub-lic ensee, especially if the sub-l icensee has no direct relat ionship with the original licensee.5.Diligence And Milestones:T h e l i c e n s e e m a y b e r e l y i n g o n t h e l i c e n s e a sthep r in c ipa l mechan is m fo r r ecove r in g i t s i nve s tmen t i n r es ea rch a nd fo r de r i v ing benefitsfrom the patent or other IP. So it may be important to the licensor toensuretha t the l i c ens ee d oes ever y th ing the y c an t o de ve lo p an d co mmer c ia l i ze the l icensedIP. If a licensee gains an exclusive license, subject to a royalty payment on profits, and then decides to shelve

the technology for several years because i ts imme di at e i n t ere st s l ie e l se whe re, the n t he who leva lu e of th e IP is lo st to th e l icensor. So l icenses wil l frequently include obl igations on thelicensee to develop and apply the licensed technology diligently and to meet specificdeadlines. Where possible, certain defined points or milestones should be identified possibly based onthe business plan originally proposed by the licensee. The license could require t he li c en se e tobr in g t he p rod uct to the mark e t as soon as p rac t ic ab le , a nd to con tinue to make the p roductavailable to the public on reasonable terms. These obligations may also be built into sub-licenses grantedunder the license.6.Payments and Pricing:A license will normally involve a valuable consideration something of value which is given in exchange for the rightto use this technology. It need not be f inancial considerati on it could be a right in exchange to useanother technology (a cross-license), or valuable access to other facilities or resources. There are manypotent ial mode ls for payment. It is always dif ficult to establ ish value for intellectual property, even more so

if it relates to unproven technology that will require a licensee to take a considerable commercial risk. The options boildown to lump sum payments, and royalties based on the extent of use of the technology. Its not unusual to see amixture of both

Q . 6 W h a t i s C o r p o r a t e S o c i a l R e s p o n s i b i l i t y ? W h y i s i t b e c o m i n g i n c

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r e a s i n g l y relevant in todays Business?

A n s . C o r p o r a t e s o c i a l r e s p o n s i b i l i t y ( C S R ) , a l s o k n o w n a sCorporate responsibility,Corporate citizenship,Responsible business,

Sustainable responsible business (SRB), orCorporate social performance, i s a f o r m o f c o r p o r a t e s e l f - r e g u l a t i o n integrated into a business model. Ideally, CSR policy wouldfunction as a built-in, self-regulating mechanism whereby business would monitor and ensure itsadherence tolaw, ethical standards, and international norms. Business would embraceresponsibilityf o r t h e i m p a c t o f t h e i r a c t i v i t i e s o n t h e e n v i r o n m e n t , c o n s u m e r s , e m p lo y e e s , communities, stakeholders and all other members of the public sphere. Furthermore,bus iness wou ld p roac t i ve l y p romo te the pub l i c i n te res t by encou rag ing commun i t yg rowthand development, and voluntarily eliminating practices that harm the public sphere, regardless of legality.

Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honor ing of a tr iple bottom line: Peop le, Planet and Profit.The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong

business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broaderand longer than their own immediate, short-t ermp r o f i t s . C r i t i c s a r g u e t h a t C S R d i s t r a c t s f r o m t h e f u n d a m e n t a l e c o n o m i c r o l e o f b u s i nesses ; o the rs a rgue tha t i t i s no th ing more than supe r f i c i a l w indow- d ress in g ;others yetargue that it is an attempt to pre-empt the role of governments as awatchdogover powerful multinational corporations. Corporate Social Responsibil ity has beenr e d e f i ne d t h r o u g h o u t t h e y e a r s . H o w e v e r , i t e s s e n t i a l l y i s t i t l e d t o a i d t o a n o r gan i za t ion ' s mi ss i on as we l l as a gu id e to what the c ompa ny s tand s f o r an d wi l luphold to itsconsumers.Relevancy In Todays Business:Business ethics is one of the forms of applied ethics that examines ethical principles and moral orethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and

actions (known as ethicist) is increasing.Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws(e.g. higher UK road tax for higher-emission vehicles).Busines s ethics can be bot h a norma tive and adescriptive discipline. As aco rpo ra tep rac t i ce and a ca ree r spec ia l i za t i on , the f i e ld i s p r ima r i l y no rma t i ve . In academia, descriptive approaches are also taken. The range and quantity of business ethical i ss ue s re f le ct sth e deg ree to whi ch bus in es s is per ce ive d to be at odd s wi th non -economic social values.Historically, interest in business ethics accelerated dramatically dur ing the 1980s and 1990s, both wi th in ma jorcorporations and within academia.For examp le , today m os t ma j o r co rpo ra te webs i tes l ay emphas is on com mi tmen t top romo ting non -econom ic social values under a variet y of headings (e.g. ethic s codes, social responsibilitycharters). In some cases, corporations have re-branded their core va lues in the light of business ethica lconsi derati ons (e.g. BP's "beyond pe troleum environmental tilt).The t erm CSR came in t o common use

in the early 1970s, after manymul ti nat ionalco rpo ra t i ons fo rmed , a l though i t wa s se l dom abb re v ia ted . The te r m s tak eho lde r , meaning those impacted by an organization's activities, was used to describe corporate owners beyondshareholders as a result of an influential book by R Freeman in 1984.Whilst there is no recognized standard for CSR,public sector organizations (the United Nations for example) adhere to the Triple Bottom Line (TBL). It is widelyaccepted thats adheres to s imil ar pri ncipl es bu t wit h no formal act of le gislat ion. The UN has developedthe Principles for Responsible Investment as guidelines for investing entities The scale and nature of the benefits ofCSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though thereis a large bodyof l i t e ra tu re exho r t i ng bus ines s to adop t measu res beyond f i nanc ia l ones . Howeve r , businesses may not be looking at short-run financial returns when developing their CSRstrategy.The definition of CSR usedwithin an organization can vary from the strict"stakeholder impa cts " de f in i t i on us ed b y man y CS R adv oca t es a nd wi l l o f t en i nc l ude c har i ta

bleefforts and volunteering. CSR may be based within the human resources, business developmentor public relat ions departments of an organization, or may be given sepa ra te un it re po rt in g to th eC E O o r i n so m e c a se s di r ec t l y t o th e b o ar d . S o me c o m p a n i e s m a y i m p l e m e n t C S R -t y p e v a l u e s w i t h o u t a c l e a r l y d e f i n e d t e a m o r p r o g r a m m e .

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