The stability grand strategy is adopted by an organization when it attempts at an incremental improvement of its functional performance by marginally changing one or more of its businesses in terms of their respective customer groups, customer functions, and alternative technologies — either singly or collectively. E.g: A copier machine company provides better after sales service to its existing customer to improve its company product image, and increase the sale of accessories and consumables. This strategy may be relevant for a firm operating in a reasonably certain and predictable environment. Stability strategy can be of three types; No Change Strategy, Profit Strategy, Pause/ Proceed with caution Strategy. 1. No-Change Strategy It is a conscious decision to do nothing new. The firm will continue with its present business definition. When a firm has a stable internal and external environment the firm will continue with its present strategy. The firm has no Continue reading
Strategic Management Concepts
The Nature of Strategic Decisions
Although the process of creating strategy is often discussed as if it were an unconstrained design process, keep in mind that while strategists evaluate strategy, the firm is operating. This evaluation involves assessing the extent to which present strategy is meeting expectations. It may be the case that only a small part of, say, marketing strategy would have to be changed to correct a problem. In effect, then, such a change would constitute an acceptance of corporate- and business-level strategy, and also of the firm’s functional strategy set. Marketing strategy would be all that was rejected. When a firm’s performance is less than satisfactory, the reason often is a functional strategy shortcoming. One might say that a “good” business-level strategy would have been poorly implemented by part of its functional strategy set. For this simple example, a change in marketing strategy could improve performance while other levels of strategy would Continue reading
Definitions of Corporate Governance
The concept of corporate governance is poorly defined because it covers various economics aspects. As a result of this different people have come up with different definitions on corporate governance. It is hard to point on any one definition as the ultimate definition on corporate governance. So the best way to define the concept is to provide a list of the definitions given by some noteworthy people. Various Definitions of Corporate Governance 1. According to Sir Adrian Cadbury “The system by which companies are directed and controlled Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society” 2. According Continue reading
The Reasons for Mergers and Amalgamations
A number of mergers, take-overs and consolidation have take place in the recent times. The major reason for mergers and amalgamations, is the liberalization of economy. Liberalization is forcing companies to enter new business, exit from others, and consolidate in some simultaneously. The following are the other important reasons for mergers or amalgamations: Economies of scale: An amalgamation company will have more reasons at its command that the individual companies. This will help in increasing the scale of operations and the economies of large scale will be available. These economies will occur because of more intensive utilization of production facilities, distribution network, research and development facilities, etc. these economies will be available in horizontal mergers were scope of more intensive use of resources is greater. Operating economies: A number of operating economies will be availed with the merger of two or more companies. Duplicating facilities in accounting, purchasing, marketing, etc. Continue reading
Difference between Business Vision and Company Mission
Vision Statement of a Company Business success almost always begins with a vision, a perception of marketplace needs and the methods an organization can use to satisfy them. Vision serves as the target for a firm’s actions, helping to direct the company toward opportunities and differentiating it from its competitors. Vision is a concept, that refers to one’s mental image of the future. Vision refers to the optimum future state of affairs that one can imagine for an individual or for an institution. (Wallace, Engel et al, 1997) A vision consists of three characteristics: 1) an organization’s fundamental reason for existence beyond just making money or providing more service 2) its timeless unchanging core values, and 3) a “big picture” aspiration for its own future. The vision of an organization defines who and what the organization is about, why it exists, and where it is going in the grand scheme Continue reading
What is Due Diligence? Definition and Meaning
Of course, your commercial partner will need some reassurance about the quality of the offer you are making to them. If you are involved in licensing technology or seeking commercial support for your research you are likely to hear of due diligence. When a future partner is considering whether or not to license technology, to buy a share of patent rights, or to support your research, they will need to satisfy themselves that it is a viable proposition. The process of assessing the viability, risk, potential liabilities and commercial prospects of a project is known as due diligence. Indeed, if a potential partner seems not to be interested in this kind of issues, it may actually raise questions about their commitment to the project or the credibility of their business plan, particularly if the relationship assumes some degree of risk and investment on their part. Generally, due diligence will involve Continue reading