Strategic Management

Q1. Strategists are individuals or groups who are involved in formulating, implementing and evaluating strategy. Briefly discuss their role in the context of Corporate Management. The strategic planning is the seed that functionally provides the following: Opportunity to determine the environmental impact on the organization / business. Opportunity to assess the organization's strengths/ weaknesses. Opportunity to determine the business opportunities/ threats to business. Opportunity to develop strategic plans for the company. Opportunity to develop long term/short term plans. Opportunity to develop a vision for the organization. Opportunity to develop a mission statement for the organization. Opportunity to develop business objectives for the organization. Opportunity to develop business strategies for the organization. Opportunity to develop the action/ implementation planning guidelines, which provides the platform which: o Helps to set up and develop organization and staffing. o Helps to set direction for the organization approach. o Helps to select the right leadership. Helps to select / set the most appropriate control.

Strategic planning in the business is the premier function, without this: You cannot organize your business Without business organization , you cannot direct Without direction, you cannot control. Without control , you cannot get results. For successful results in business, one needs to apply Strategic Planning. Hence strategic planning is the primary seed of any business organization be it small or large The process of strategic planning has become essential for the Business organization interested in obtaining significant results. It matters little whether the organization is large or small or whether it is in the private sector or government service. When an organization has the need to move into the future with a high degree of confidence in what that future holds it needs strategic planning. The integrated approach of deciding on a set of long-range goals and then developing the objectives and plans to reach them is the most reliable tool that the organization can use to define its own future and ensure success. In other words, it is the surest way that the management team can become "system makers"people who are willing to take the time to make things happen instead of responding only when their buttons are pushed. The Strategic Planning -- helps you tie those opportunities to plan and optimize at a high level over the long term. You can set overall objectives for capital utilization for capital intensive equipment, inventory and materials (direct and indirect), and labor.

With strategic planning system, you can: Drive tactical and operational plans based on STRATEGIC vision and direction Optimize asset utilization including capacity and materials Support growth by identifying and proactively removing constraints Reduce risk by evaluating alternatives and outcomes before deciding Simplify make/buy decisions. The strategic planning system integrates the necessary competitive analyses, peer comparisons, and industry averages that give strategic planning the proper context. You see the entire set of business opportunities and tie the financial analytics to the business issues, activities, and processes that drive them. The result: a well aligned organization thats positioned for long-term success. React faster to market changes Measure and compare your supply chain performance against competition Adjust your strategic plan frequently Analyze the ramifications of M&A opportunities Avoid excess warehouse capacity and unused equipment Perform long-range planning and analysis to determine the impact of simultaneous business decision combinations Confidently optimize your supply chain network

The strategic planning system delivers solutions that synchronize corporate planning with operations planning and execution on a local and enterprise level, to ensure all assets are utilized to achieve strategic objectives. This enables manufacturers to reduce the cost of goods sold, shorten lead-times for orders and reduce inventory costs with improved supply chain collaboration and management. Strategic Planners Conduct The Process 1. External Assessment of The Economy: Areas for opportunities and threats in the economy: a. Markets [what is the market situation, which is forcing the change requirements] b. Customers [how can service the customer-internal / external-better. c. Industry [is the industry trend] d. Competition [ is it the competitive situation. e. Factors of business [ causing the change] f. Technology [ is it technology change ] Planning -- Environmental strategy interface as the business expanded, the operation was affected by various environmental factors and hence was incorporated into the planning.

Political & Legal: Environmental regulations and protection [what are the government regulations/ protection laws that must be observed Tax policies [what tax hinder the business and what taxes incentives are available] International trade regulations and restrictions [does the government encourage exports / with high tariffs on imports] Contract enforcement law/Consumer protection [does the government enforce on consumer protection] Employment laws [is the government encouraging skilled immigrants with temperature permits] Government organization / attitude [does the government have a very positive attitude towards this industry] Competition regulation [are there regulation for limiting competition] Political Stability [politically, does the government have a very stable government] Safety regulations [has the government adopted some of the modern safety regulations]

Economic: Social: Income distribution [is there balanced income distribution policy] Economic growth [what is the economic growth rate / what are the reasons] Interest rates & monetary policies [are the interest rates under control / is there a sound monetary policies] Government spending [is government spending is significant and is it under control] Unemployment policy [what is the employment / unemployment policies of the government Taxation [has the taxation encouraged the industry] Exchange rates [is there well managed exchange controls and is it helping the industry] Inflation rates [is the inflation well under control] Stage of the business cycle [is your industry is on the growth pattern] Consumer confidence [is the consumer confidence is high / strong and if not, why]

Demographics, Population growth rates, Age distribution [what is the population growth and why] Labor / social mobility [what are the labor policies and is there labor mobility] Lifestyle changes [are there significant lifestyle changes taking place--more modernization] Work/career and leisure attitudes [are the population career minded and are seeking better lifestyle] Education [what are the education policies / is it successful] Fashion, hypes [are the people becoming fashion conscious] Health consciousness & welfare, feelings on safety [are the people becoming health consciousness] Living conditions [is the living conditions improving fast and spreading rapidly]

Technological: Government research spending [is the government spending on research and development] Industry focus on technological effort [are the industries focused on using improved technology] New inventions and development [are new inventions being encouraged for developments] Rate of technology transfer [is the rate of technology transfer is speeding up] Changes in Information Technology [is the information technology rapidly moving and is there government support] Changes in Internet [is the internet usage rapidly increasing and why] Changes in Mobile Technology [is the Mobile technology rapidly developing and is there government support]

Based on the external economic analysis and judgment, we conduct the following 2. Internal Assessment Areas for strengths, weaknesses, and barriers to success Organization Dimensions: a. Culture [ is the working culture change ] b. Organization [ is the organization demanding change ] c. Systems [ is it the systems change ] d. Management practices [ change in management process] Other Key Dimensions:

a. b. c. d. e. f. g. h. i. j.

Cost-efficiency[ is it for cost efficiency ] Financial performance [is it for financial performance improvement ] Quality [ is it for quality performance improvement Service [ is it for service performance improvement Technology [ is it for technology performance improvement Market segments [ is it for sales performance improvement Innovation [ is it for performance improvement New products [ is it for new product performance improvement Asset condition [ is it for financial performance improvement Productivity [ is it for financial performance improvement

Source Strategic objectives and programs The critical issues that must be addressed if the organization is to succeed are: Strengths Weaknesses Opportunities Threat

From the above, determine the core issues which needs to solved with your investment Strategic Programs: From the above core issues, determine your strategic programs Mission Statement & Vision Statement. The core purpose The core objectives The core markets The core strategic thrusts. Business Definition: The arena of products, services, customers, technologies, distribution methods, and geography in which you'll compete to get results. Values: Desired attitudes and behavior toward internal and external stakeholders that will yield the culture and business results you want and that you will execute and turn into action through Policy, Programs, Processes, Procedures, Personnel selection. Internal development Divest Restructure

Competitive Advantage Cost /Value/ differentiation

External Strategies: Product Convenience Service Image Target customer Geography Distribution Product design Delivery Quality Value Reliability Pricing Advertising/promotion

Internal Strategies: People Skills & Facilities Organizational Product structure & development Management style Incentives & rewards Training Equipment Sourcing/ manufacturing Technology Systems R&D Service Financing - Quality

Strategy Statement Content: Priorities and Posture Business unit Market Product Strategic thrust/competitive advantage External strategies Internal strategic thrust Internal strategies Strategic fixes

Strategic Program Content: Leadership

Objectives People - numbers and skills

Coordination Requirements: People and organizational units outside your control who must contribute Leverage - the high leverage individuals and units who must contribute at lower levels Quarterly - Programs and strategic numbers' progress Individual Objectives - Performance appraisal Rewards & Consequences - Based on strategic performance of teams and individuals So now, we can see how the micro business decisions are affected by the general economic factors. Q3.Describe the characteristics of dynamic and stable environments and the strategic options available to firms in these environments. The characteristics of stable environment are as below: Consistency in most major factors. Dependable factors Mostly known factors Steadfast factors Not subject to sudden or extreme changes Maintain equilibriums The characteristics of dynamic environment, the major characteristics are: Unpredictability. Asynchronous Concurrent Varying priority Limited response time. The pestle factors play an important role in the value creation opportunities of a strategy. However they are usually outside the control of the corporation and must normally be considered as either threats or opportunities Below are the examples: Political: Environmental regulations and protection Tax policies International trade regulations and restrictions Contract enforcement law/Consumer protection Employment laws Government organization / attitude

Competition regulation Political Stability Safety regulations

Economic: Social: Income distribution Demographics, Population growth rates, Age distribution Labor / social mobility Lifestyle changes Work/career and leisure attitudes Education Fashion, hypes Health consciousness & welfare, feelings on safety Living conditions Economic growth Interest rates & monetary policies Government spending Unemployment policy Taxation Exchange rates Inflation rates Stage of the business cycle Consumer confidence

Technological: Government research spending Industry focus on technological effort New inventions and development Rate of technology transfer Changes in Information Technology Changes in Internet Changes in Mobile Technology

All these factors affect the business organization. In various combinations At different times At various emphasis

The strategic management process helps to understand how one adapts the business to the needs of the consumers. Below are the factors taken into consideration : Needs of the consumer Demand for the product Market potential Cultural -culture & social class Social o Household type o Reference groups Psychological o Motivation o Perception o Beliefs o Attitudes Personal o Age brackets o Occupations o Educations Economy Technology Political Trade o Import/export laws o Tariff o Local laws Environment Competition

The adaptation of the business is carried out for the following reasons: To meet the local regulations. To meet the customs/ beliefs. To meet the customer needs. To meet the customer wants. To meet the customer satisfaction. To meet the challenge of the competition. To increase the sales volume. To increase the market share. To increase the profit. To improve / increase the return on investment

Based on the analysis, the organization could use various combinations of levels of strategy:

1. Mission/Domain- Before identification of strategy can occur, one must clearly identify the mission or domain of the organization. The domain of an organization consists of the population it serves and the functions it performs (satisfies) for that population. Sometimes the domain is defined in terms of products or services offered (rather than functions performed), but this tends to be more limiting because it defines the mission more in terms of means rather than ends.

2. Corporate Level Strategy. a. Vertical Integration Strategy b. Forward Integration- Gaining ownership or control over distributors. c. Horizontal Integration Strategy - Seeking ownership or control over competitors d. Market Penetration Strategy - Seeking increased market share for present products through greater marketing efforts e. Market Development Strategy - Introducing present products in new markets f. Product Development Strategy - Seeking increased sales by improving present products g. Diversification Strategy i. Concentric- Adding new or related product lines ii. Conglomerate- Adding new, but unrelated product lines 3. Competitive or Business Level Strategy - Competitive strategies involve determining the basis of costumer or client decision making. Generally, they are based on some combination of quality, service, cost, time, and quality of the experience. a. Cost Leadership Strategies With this strategy you are competing on price. Your various functional strategies all emphasize cost reduction. This is an effective strategy when the market is comprised of many price sensitive buyers, when there are few ways to achieve product differentiation, when buyers do not care much about differences from brand to brand , or when there are a large number of buyers with significant bargaining power. b. Differentiation Strategies Differentiation strategies rely on some basis of product differentiation such as flexibility, specific features, service, time and availability, low maintenance, etc. as the basis for competition. Product development and market research are generally necessary components of a differentiation strategy. Generally, a successful differentiation strategy allows a firm to charge a higher price for its product. Organizations generally need strong R & D departments with strong coordination between R & D and marketing departments. Human Resource strategies must place emphasis maintaining a competitive skill base and motivating employees toward the basis for differentiation. c. Focus or Niche Strategies A successful focus strategy depends upon an industry segment that is

of sufficient size, has good growth potential, and it not crucial to the success of other major competitors. Focus strategies are pursued in limited markets in conjunction with cost leadership and/or differentiation strategies. Focus strategies are the most effective when consumers have distinctive preferences or requirements and when rival firs are not attempting to specialize in the same target segment.

4. Functional Strategies - How do organizational functional units contribute to the business level strategies? How can functional strategies be integrated to achieve competitive advantage? a. Marketing Strategies- How do we communicate our strengths to the customer? How do we identify customer requirements and changes in customer requirements? b. Human Resource Strategies- How do we recruit, train, develop, motivate, compensate, and place employees so that behavior is directed toward the competitive strategy and works to build competitive advantage? c. Financial Strategies- How do we secure financial resources necessary to carry our competitive strategy? d. Operations Strategies- How do we design our processes to produce products and/or service that meet customer requirements as specified in our strategy? e. Information System Strategies- How do we provide decision makers, at all levels, with information necessary to make decisions consistent with strategy? f. Technological (R & D) Strategies- How do we develop products consistent with customer requirements as specified in strategy? For strategic management under the dynamic environment, the approach is: 1. Stay put and defend. 2. Go for the results, at all cost. 3. Self adapt / self organize/solve multiple tasks and get the results. 5. Plan and Progress.: Consider these five principles as a single entity composed of five complementary and interconnected sets of activities, each balancing the other. .a Implementation of any one principle and its impact on project success depends on the implementation of all the others. To compensate for inability to fully adhere to a principle, be prepared to modify the implementation of the others as well as adjust project expectations. .b Embrace and apply these principles as general guidelines that must be tailored to each unique context of the project (e.g., stability of objectives, speed, tasks complexity, organizational culture, top management support, team members experience and skills).

* Planning & Control - Plan and Control to Accommodate Change - Adopt a learning-based planning mind-set: start by defining project objectives that are dictated by customers needs, however, dont finalize them before you quickly explore the means and the solutions. - Start planning early and employ an evolving planning and control process continuously and throughout project life collect feedback on changes in the environment and in planning assumptions, and on project performance. - Use an appropriate amount of redundancy to contain the impact of uncertainty and enhance the stability of the plan: add reserves; loosen the connections between uncertain tasks; prepare contingency plans for extremely uncertain and crucial tasks. * Implementation: Create a Results-Oriented Focus - Create and maintain a focus; decide what NOT to do. - Right from the beginning and throughout, focus on resultsboth long-term and short-term. In particular, prepare tangible intermediate products (e.g., prototypes) that provide you rich and quick feedback and that the customer can easily understand and assess. - Develop a pragmatic mode of operation: invest in planning yet be ready to respond swiftly to frequent, unanticipated events; identify areas where the search for optimal solutions is worthwhile, but for the rest of the project, be ready to embrace good enough solutions; for repetitive activities or critical areas (i.e., safety), employ formal/standard work processes, otherwise, employ those that are informal or ad hoc. * Attitude: Develop a Will to Win - Develop a sense of a mission and own the project. (When needed, engage in politics and work hard to sell your project). - When necessary, challenge the status quo and be willing to take calculated risks. - Persevere; keep trying until you get it right. Yet, know when it is time to change course or retreat. * People & Organization: Collaborate through Interdependence and Trust - Take recruiting very seriously and spend as much energy as possible on getting the right people. - Develop trust-based teamwork and make sure that team members feel dependent upon each other and share the conviction that they are mutually responsible for project results. - Throughout project life, assess team functioning, ensure its alignment on project objectives, and renew its energy. * Communication: Pull and Push Information Intensively: - Frequently and vigorously pull and push (ask for and provide) information within and across functions and teams, including all project stakeholders. - Employ multiple communication mediums; in particular, extensive frequent face-toface communication and modern information technology. - Adopt a moving about mode of communication. (Moving about helps you affect project performance by better understanding what is going on and by influencing peoples behavior in a timely, natural, and subtle way.)

For Strategic Management Under the dynamic environment, the approach is: Concentric Diversification: Type of diversification where a firm acquires or develops new products or services (closely related to its core business or technology) to enter one or more new markets. Concentric diversification results when the new products are related to current products but are introduced into new markets.

Concentric diversification is a growth strategy in which a company seeks to develop by adding new, but related, products to its existing product lines to attract new customers. See Conglomerate Diversification; Horizontal Diversification. Concentric diversification results in new product lines or services that have technological and/or marketing synergies with existing product lines, even though the products may appeal to a new customer group. Concentric Diversification; Conglomerate Diversification. Horizontal Integration

These are the strategies for growth in which a company develops by seeking ownership of or some measure of control over, some of its competitors. Marketing department must study these factors in depth and then use the 4Ps: Product Price Promotion Place

Marketing must respond to the following challenges / opportunities by meeting the needs: Fashion trends: Consumer values Changing attitudes of society Organized consumer groups and pressure groups Cyclical fluctuations Population trends Industry sector trends Availability of materials Average disposable income. Competitiveness compared with overseas companies Changes in the structure of the population (e.g. impact of declining birthrate and an ageing population) Population drift to and between capital cities

Product range Marketing and channels of distribution Price structure

In all the factors, the organization which responds to the internal /external factors, with timely action plan, will survive / expand. While the ones which do not respond to the internal/external factors, with timely action plan, will contract/ perhaps demise. Other areas to consider for the strategic management process are as follows: Local Manufacturing or Import. Local Marketing Set Up or Use Distributors. Selection of Geographical Areas. Selection of Market Segments. Understanding Local Consumer Values. Seasonal Trends. Availability of Products. Selection of Product Range. Competition. Price / Pricing Distribution Selection of Distribution Channels. Promotion Mix. Sales Promotion Mix. Sales Organization. Pre Sales After -Sales Service. Customer Service. Training Marketing Research. Q4. The concepts of creativity and innovation are often used interchangeably. Explain this statement in the light of factors influencing creativity and innovation. Developing a systematic innovation strategy from scratch is a challenge many companies are facing in today's fast-paced world. Steps to Begin a Systematic Innovation Practice Step One: Innovation is frequently discussed and is on almost every CEOs agenda. Not enough executives, however, know how to pursue and execute innovation. There are ongoing debates about the definition of innovation, its differentiation from creativity, innovation methodologies; measures of innovation, innovation strategy and, of course the types of innovation. The first step in pursuing innovation is to understand what type of innovation a company needs and how many resources a

company should commit to developing a systematic innovation practice. Types of Innovation: Outcome-Based Innovations: One of the common breakdowns of innovations represents the incremental, radical and general purpose types of innovation. o Incremental innovation represents more of a continual improvement when an existing product, process, service or solution is improved creatively. o Radical innovation represents the replacement of an existing solution with a significantly different approach (e.g., a transistor replacing vacuum tubes in electronics or email replacing conventional mail). A radical innovation causes a disruption in the current way of doing things. o General purpose innovation describes significant innovations that fundamentally change the way of thinking and doing. Such innovations have wide impact, scope of improvement and a broader range of uses (e.g., the discovery of electricity or Einsteins theory of relativity). Process-Based Innovations: Four categories of innovation are defined by their processes: o Continuous process improvement - Continuous process improvement innovation represents methodologies such as LEAN. The focus is on incremental innovations. o Process revolutions - Process revolutions relates to the implementation of new technology, such as RFID, for improving supply chain management productivity. o Product or service innovations - Product or service innovations represent new products or services, such as the i-Phone, without changing business models. o Strategic innovations - Strategic innovations include new products or services but with new business models such as Segway rentals or webbased applications. Operations-Based Innovations: Some organizations differentiate between categories and types of innovation. There are four categories of innovations including: o Finance - Finance innovation relates to business models, networks and alliances for innovations such as Dells personal computer business and supply chain management. o Process - Process innovation relates to enabling processes for innovations such as the compensation and benefits packages at Starbucks and real-time inventory management at Wal-Mart. o Offerings - Offerings innovations include innovative product performance through unique features in an automobile, a product system such as Microsoft Office with multiple products and service innovations as seen in Singapore Airlines flights. o Delivery - Delivery innovations include innovations in channel (e.g., Martha Stewart products), brands (e.g., the iPod) and customer experience (e.g., Harley Davidson).

Pathways-Based Innovations: The four types of pathway-based innovations include: o Product - Product innovations are most apparent in the mobile phone market with new phones arriving frequently. o Process - Process innovations include new methodologies such as sixsigma, Lean and TRIZ. o Positioning - Positioning innovation implies repackaging an existing product or service, and branding it innovatively (e.g., the increasing camera capabilities of cell phones could lead to it being branded as a camera). o Paradigm - Paradigm innovation represents a shift in thinking and doing. For example, mainframe computers in the late 1970s led to the personal computer, a new paradigm of computing. Today, mobile phones are making conventional landline phones obsolete and Internet phones are in some cases replacing mobile phones. Hierarchy-Based Innovations: In order to build a portfolio of innovations and have a strong causative relationship between innovation and allocated resources there may be a variety of innovations. Depending upon the primary responsibility for managing innovation and key steps in the innovation process, there include the following types: o Business model - is critical as it sets the direction and the approach of a corporation. o Managerial - relates to innovative approaches to managing people, technology and resources. o Process - implies a revolutionary improvement to, or re-engineering of, an existing activity. o Service - means developing new ways to deliver services or creating new services altogether. o Product - involves creating products that offer new capabilities for significant economic payoff. Thought-Based Innovations: While all of the previously-defined classifications have their merits, fundamentally speaking innovation is an intellectual activity. Creativity is a unique combination of two events or ideas the ability to discover the unique combination is critical. Applied creativity is innovation. The breadth of an organizations creativity is controlled by people, influenced by the environment and opportunities provided by a companys leadership. By reviewing the contributions of great innovators, specifically Einstein, Galileo and Edison, it is clear that Einstein engaged in mostly theoretical innovation, Edison innovated practical or business solutions, and Galileo did a combination of the two. Einsteins work was more fundamental in nature, while Edisons work was more tangible. Einstein conducted mostly thought experiments (e.g., riding the light wave), while Edison conducted experiments in his laboratory. Looking at various innovations, they can be classified into four categories based on the amount of effort and the speed-of-thought components (knowledge, play and imagination): fundamental, platform, derivative and variation. Fundamental Innovation: Fundamental innovation is a creative idea that leads to a revolution in thinking. Such innovations are based on extensive research,

knowledge-driven, theoretically proven and lead to follow-up research and development. Such innovations occur with the collaborations of academia, commercial laboratories and even corporations. These innovations may lead to changes in thinking, extend an existing theory or be a breakthrough concept with enormous impact perhaps even leading to the evolution of a new industry. Examples of such fundamental innovations include Einsteins theory of relativity, electricity, penicillin, the telephone, wireless communication, the transistor, computer software, UNIX and the Internet. A fundamental innovation has a significant academic component of science, which makes it available for the common good and also less protected, commercially speaking. Platform Innovation: The platform innovation is defined as one that leads to the practical application of fundamental innovations. Such innovations normally are launching pads for a new industry. Examples of platform innovations include personal computers, silicon chips, cell phones, digital printers, Microsoft Windows, databases, Linux, drug delivery devices, satellites and the space shuttle. The platform component increases the portion of the laboratory or development component more so than do fundamental innovations. Platform innovations launch industries and change ways of life. Derivative Innovation: A derivative innovation is a secondary product or service derived from a platform innovation. Derivative innovations include new server-client configurations based on a new network architecture or operating system for a cell phone, for example. These innovations are slight modifications of the main product. In the case of Microsoft-like software, the platform is Windows and derivatives are a new office suite; for CDMA-like platforms, derivative innovations are various features available to service providers; for a major satellite system, the derivative innovations are various launching options or capabilities offered to users. Variation Innovation: A variation innovation is a tertiary-level innovation that requires less time to develop and is a slight variation of the next-level products or services based on a derivative innovation. For example, variation innovations in cell phones are various color covers, ring tones, camera feature and additional software-based optional features. In the case of Microsoft software, variation innovations are applications developed and based on the Microsoft platform and derivative innovations. Typically, the variation innovation occurs close to the customer and may be the candidate for reaching the ultimate in speed of innovation or innovation on demand in real-time. Interactions Among Thought-Based Types of Innovation: Various types of innovations are achieved by differing degrees of speeds of thought, which consists of knowledge, play and imagination. A fundamental innovation may require a more meditative process to think of theories, concepts or solutions without significant physical experimentation. In fundamental innovation, knowledge and imagination are key components. For example, Einsteins work was completed in his mind rather than in a laboratory typically conducting "thought experiments." A platform innovation involves relatively less knowledge and imagination, but rather more play or experimentation. A variation innovation requires more play than does a fundamental innovation. Fundamental innovations can take a much longer time than do the other innovation types; as a result, more variation innovations will result than will

fundamental innovations. Conclusion: By understanding the types of innovation, an organization can decide its domain of innovation and develop an innovation strategy suitable to produce solutions within the designated type of innovation. The company then can look into the resources that will facilitate particular types of innovation. For example, to develop a fundamental innovation the leadership must understand the process will take a long time, dedicated resources, and overall more endurance, persistence and patience. On the other hand, variation innovation requires more experimentation and/or play, and can be completed in a shorter time. Company leaders must first decide the planned scope of innovation activities in order for the corporation to appropriate necessary resources to facilitate the innovations to come.

Begin a Systematic Innovation Practice - Step Two Strategize for Innovation - An organization must look for opportunities for innovation by understanding the types of innovation and recognizing its domain expertise. Common questions asked by a company are why to innovate and what to innovate. Consider an R&D division employees try to innovate to further their careers, expand their horizons, publish papers or file for patents. As a result, many researchers are engaged in exploration in multiple directions with few aligned to their companys domain expertise and strategy of sustaining profitable growth. There are many ways to turn this situation around. The organizations marketing department should explore new product or service opportunities based on the customer feedback, supply chain interaction, and related industries. Operations staff should look for internal opportunities for innovation to improve efficiency, and productivity through process innovations. Business strategists must look into competitive benchmarking and explore opportunities for business model innovations. Knowing the scope of a companys products or services shows the myriad of opportunities for product, process and business model innovation. One must assess scope of the innovation based on the fundamental (creative idea that leads to a revolution in thinking), platform , derivative (secondary or product or surface derived from a platform innovation) and variation (tertiary-level innovation that requires less time to develop and is a slight variation of the next-level products or services based on a derivative innovation) breakdowns. Scout for Innovation: A business must be fully aware of its surrounding environment and its own ecosystem in order to identify opportunities for innovation by not only completing competitive benchmarking, but also looking for customer pain, inconveniences, conflicting situations in design, and implicit or explicit demand for new capabilities. Making use of a companys existing product or services, by making them more convenient, less costly and more fun are simple beginnings for creating innovation opportunities.

Innovation is sometimes thought of as glamorous looking for the "next big thing." but innovation breaks down into determining what the next big thing is, what it takes to produce it and how to make it a success. in order to expand into future products, a company must first learn the historical trends and evolutions of similar products. Performing regression analysis, accelerating the evolving trend and expanding the horizon can help identify new opportunities for breakthrough innovation. Besides extending and exploring, enlisting established networks can create potential for new innovation. Analyzing opportunities to innovate helps a business further recognize, prioritize and maximize return on investment. This also helps to define innovation targets in terms of performance, value, price, cost, resources and time.

Strategize for Innovation: Prior to developing an innovation strategy, a company first must develop a baseline performance level. Innovation diagnostics will identify areas of strengths and weakness to incorporate in the strategic planning. For a corporation to institutionalize innovation to sustain profitable growth, a corporate commitment must be made to achieve continual growth in terms of revenue, profit margin, job opportunities and employee development. The main drivers for successful, strategic innovation are profitable growth, intellectual involvement of employees, a creative and fun culture, and a visionary leadership. Strategic planning must address the following issues in relation to an innovation practice: Leadership o Value proposition o Resources Measures o Identification of key players responsible for the initiative Methodologies o Organization structure o Roadmap (with toll gates) Culture of creativity and risk taking Excellence in idea management Incentives and controls Rapid commercialization Sustaining innovation on demand An innovation initiative should be launched with incremental milestones after the planning and preparation is complete. A companys innovation plan can follow the target, explore, develop, optimize, and commercialize (TEDOC) phases described below: (T)arget A clear need for innovation based on opportunity analysis

(E)xplore Research, benchmark and analyze the opportunity, and gain expertise knowledge in the domain (D)evelop Alternative innovative breakthrough solutions to maximize innovative components (O)ptimize The final solution for minimal diversion in operations and delivery (C)ommercialize Rapid access to the marketplace and customers to ensure premium margins and above market return on investment

Conclusion: Institutionalizing innovation must establish processes for innovation on demand and innovation driving demand for growth. Continually scouting opportunities for innovation and scheduled demand-driven innovation provides a competitive edge to a business and facilitates profitable growth. Begin a Systematic Innovation Practice: Step Three The Art of Innovation is a well-known phenomenon that many people know and practice. Some do more than others, some practice personally while the others do at work, and some do it without knowing that they are being innovative. Similarly, corporate leadership practices innovation inadvertently or consciously. Just like walking, jogging, and running or racing utilize different faculties, level of energy and intellect; it is the acceleration of innovation that need be mastered in global competitive environment. With an understanding of the types of, and strategic planning aspects of, innovation, the next step for a companys leadership is committing to innovation for its value proposition. The challenge is clearly laying out the value proposition why should a company commit to innovation, what should be the return on innovation and how does innovation affect employees? Reasons for Innovation: The corporate objective of making money can not suffice for a companys meeting its obligations to its stakeholders. Making money by cutting costs hurts employees, making more money through mergers and acquisitions is not necessarily a long-term strategy, and growing business while creating more jobs without making money does not appear to be a viable approach. The commitment to innovation must be driven by sustaining profitable growth and creating jobs. Eventually, business and society do complement each other. Without societal contributions business is a non-value entity in the community; without creating value through businesses a community will not develop. Innovation to sustain profitable growth requires new products and services to expand opportunities to serve customers innovative approaches to reduce costs and strive for perfection makes the growth rewarding. New products or solutions can be an activity primarily assigned to dedicated resources with participation from other employees; however, cost reduction and perfection require the intellectual

involvement of all employees. A companys leadership must commit to innovation at the product and the process level, embedding innovative thinking in everything that occurs in the company. Committing to creating jobs drives a business growth. Producing more value to grow profitable revenue is a better approach than making money selling an idea or building a widget by exploiting cheap resources. Creating jobs also requires the leadership to think beyond making numbers. Otherwise, people become head counts that are easily chopped, thus limiting innovation. Organizational Alignment for Innovation: Once reasons are understood, responsibilities must be assigned to accelerate innovation both in the process and product areas, innovating new product concepts and innovating new process capabilities. The organizational alignment must address the following aspects explicitly:

Revenue growth through innovations New product innovations Process innovations Idea management Creativity culture

A typical organization includes a chief operating officer (COO), chief financial officer (CFO) and chief executive officer (CEO), where the COOs role is to make money, the CFOs is to count the profit and the CEOs role is not clearly defined. When Lou Gerstner took over IBMs sinking ship in 1993, he strengthened key customer relationships, besides leading restructuring the company. CEOs normally create revenue growth opportunities. The most common approach for dramatic growth is realized through mergers and acquisitions (M&A). Today, corporations realize that M&A must be supported with strong organic growth through innovative products and services. A path for organic growth must be established that is missing in most organizations. Many organizations hold on to an old innovation strategy too long. The path to organic growth begins with listening to sales staff, distributors, customers, users and suppliers, observing market trends and engaging employee ideas for identifying new opportunities. Nurturing creativity, enlisting employee ideas, exploring new opportunities and developing new products becomes the way of doing business. Innovative thinking becomes an explicit expectation of every employee. Establishing Key Measures of Innovation: Innovation Measures vary from company to company. The underlying intent should be to establish a minimal set of measures that inspire innovation, monitor innovation activities and maintain accountability for results. Knowing measures alone does not affect activities, it is the effective use of measures by leadership that will accelerate innovation. At the operation level, measures could be recognition, incentives, ideas per employee and revenue growth. However, revenue growth alone without profit can

discourage innovation; revenue growth must be profitable as well. Measures like profitable growth and return on investment in innovation can also be good measures. The returns can be calculated as profitable growth over the investment dollars in research and development, and innovation-related activities. Protecting Intellectual Property Businesses need to focus on protecting useful intellectual property. Fundamental innovations that are more scientific in nature may not be protected, while platform and derivative innovations that have significant economic ramifications must be protected. Variation innovations have a limited life and may not be worth protecting. Establish clear criteria for what to protect, what to hide and what to use without protection.

Educating Employees in Innovation Every person is born creative. People do innovate for themselves, so they are not totally ignorant of the innovation process. People have not thought hard enough, however, to formulate their process of innovation or creative thinking. Innovation has been sporadic and rare. In order to keep up with the growing demand for innovative solutions and services, employees need to learn a framework of innovation that allows them to utilize their intellectual and material resources to develop innovative solutions when needed, rather then randomly developing an innovative solution. Employees need to accelerate innovation using a holistic process that is easy to apply and good enough to produce significantly innovative solutions that can generate economic value directly or indirectly. Organizations must establish a training program in innovation for executives and employees. Employees directly involved in design and development must master innovation skills and achieve certain competency levels. Employees involved in innovative improvement must also understand the framework, corporate expectations and use of available resources. Two important aspects of training in innovation are creating awareness to continually identifying opportunities for innovation and inspiring employees for creating usable innovative solutions quickly. Conclusion: Committing to innovation implies understanding the causative relationship between innovation activities and results, aligning and allowing human resources to innovation activities, establishing key drivers and having a system to protecting intellectual property. Cultivating innovation means creating awareness of innovative thinking through training and education, and nurturing intellectual engagement and innovation through support and resources. Begin a Systematic Innovation Practice - Step Four:

In the first three steps for developing a systematic innovation strategy, a company prepares to innovate disruptively by creating the environment in which to institutionalize innovation, having its leaders instill a culture that believes in the significance of innovation. Leadership is accountable for the organizations profitable growth. Successful businesses grow through in-house innovations; the challenge is deciding what to innovate. Companies must learn to identify opportunities for dramatic growth through disruptive innovations. Identify Disruptive Innovation Opportunities According to Clayton Christensen, in his book Innovators Solution, the disruptive innovation must have predictably higher chance of success. An organization cannot afford to invest resources in a project for disruptive innovation that has a high probability of not being successful. An organization cannot wait for business downturns to trigger an innovation as successful organizations continuously innovate products or solutions. Investing in innovative new products while the organization is doing well is necessary to perpetuate profitable growth. Innovation Leadership Identifying opportunities for innovation or new products is hard thing to do. There are businesses in which faster, better and bigger products were designed but never sold. One of the critical acts of leadership is to appoint an innovation leader responsible to lead a team of innovative new products, such as the role Steve Jobs unofficially holds at Apple. A planned approach is to appoint a leader who is interested in innovation, promotes employee creativity, understands new product processes, knows the significance of profitable growth, challenges employees to do their best, enjoys competition and takes pride in success. An innovation leader provides the necessary resources and aligns the organization for growth through innovation. The innovation leader treats the task of developing new innovative products as projects and institutionalizes innovation through actions promoting employees intellectual engagement. Identifying Opportunities for Innovation The innovation team works on identifying new opportunities through learning customer behaviors and circumstances, extensions of the current behaviors and expansions of their needs. Studying customer behaviors in a multi-dimensional perspective helps better identify customer pain points, complaints, chronic problems, indecisions, insecurities, stagnations, inconveniences or discomforts. Additionally, competitive benchmarking, SWOT (strengths, weaknesses, opportunities, threats) analyses, and trends in marketplaces, industry performances and adjacent markets or industries can also generate ideas for innovative products. Generating lots of ideas sounds easy; however, generating innovative ideas require thinking without constraints. Many times good ideas are shot down by pre-imposed constraints. It is necessary to separate the definition of requirements from developing solutions, and not allowing the solution to dictate requirements. Once the ideas are generated they can be filtered, analyzed and prioritized for salability of the product to meet the

revenue growth requirement. Avoiding Innovation Failures Studies have shown that ideas are dime a dozen there is no shortage of ideas. Breakthrough products come from the distribution of the quality of ideas. The likelihood of identifying that product in advance is small. A culture of continual innovation, therefore, must be created in which a classification of ideas is based on many industry specific factors. The most important aspect of making innovative products is to avoid Failures caused by three factors: An inability to introduce the innovation to potential users (i.e., the marketing plan), Poor optimization of design for reproducibility and An insufficient value proposition to change behaviors due to lack of sufficient innovation.

These failure modes can be avoided by: Developing a commercialization plan (developed plan with the support of required resources) Planning operations for reproducibility (designed to virtually perfect the solution) and Demonstrating the extent of the innovation (researched and purposefully imagined). Establishing Innovation Projects Once the opportunities have been identified, analyzed, enhanced and sifted through success filters, potential projects must be defined for new innovative product development. To prevent project delays, a company must deploy a process for innovation that in some way includes the following five steps: target, exploration, development, optimization, and commercialization. The commercialization must be a distinct and required step as it is the divider between success and failure, an innovation or simply creativity. To some extent everyone is creative and innovative. But when asked to be "innovative," it is not easy to produce results. TEDOC represents all key aspects of the successful innovations that one must be aware of helping develop skills and competency in innovating on demand for breakthrough solutions. Target Defining an opportunity for innovation is critical. In order to develop breakthrough innovations, a business needs to know what to innovate. Determining what to innovate depends upon the need for innovation. This need can be found in complaints, nagging or chronic problems, indecisions, frustrations, technical limitations, circumstances and competitors organizational limitations. A business

should also look at the maturity of its industry, trends in supplier performance, SWOT analyses, industry performance and the available market. Once potential innovation opportunities have been identified, the innovation team must document key benefits of the solution to be innovated and determine the key measures of its success. Explore A company needs to fully, and quickly, research its opportunities to beef up its necessary competencies. The innovation team should identify and research keywords associated with the opportunity for innovation, generate new ideas, answer questions, generate new questions and generate more new ideas. These ideas then need to be combined, filtered, analyzed and prioritized. These selected ideas are analyzed as inputs to the solution to be developed and experimented with for developing solutions. Tools in this phase may include brainstorming, affinity diagrams, failure mode and effects analysis (FMEA), process thinking, etc.

Develop Innovators need to develop alternate solutions that are significantly innovative. Experience shows that following the "rule of 2" helps stretch imaginations while people experiment. According to the rule of 2, in order for a solution to be a breakthrough innovation, it must affect the performance of the desired features by dividing or multiplying by 2. In other words, if less is better halve (divide by 2) it, if more is better then double (multiply by 2) it. The expected change is expected to force a different approach to the current position. The extent of innovation depends upon the innovation teams efforts (the amount of available time committed to the desired innovation), knowledge (domain expertise), ability to play (experimentation) and overall imagination (extrapolation to achieve breakthrough innovation). In order to create a unique selling proposition and barriers or competition, a company must try to maximize innovation rather than just create a minimal innovation. Tools used in this phase include the competency necessary to create new knowledge, creativity for proposing alternative solutions, evaluation and analytical methods, and the facility to conduct experiments. Optimize Many great innovations remain marginally successful and have limited shelf life due to an inability to reproduce it effectively and economically. A great design alone does not provide a good return on innovation. The optimize phase focuses on maximizing the economic benefit of the innovation. In the current R&D-driven product development environment this is the most significant step missing for ensuring a products success. Due to a lack of optimization in the design or pre-production stage(s), manufacturing operations suffer from design constraints. Today, most designs are quickly verified for their functionality and performance, but only on a limited sample size of potential process conditions during a products life cycle. The

prototype or pilot run that looks acceptable may result in continual rework and field failures leading to a significant adverse impact on profit margins. The typical used tools in this stage are process management, optimization software programs and the facility to conduct the necessary experiments. Commercialize Many entrepreneurs and innovators fail in this phase an innovative solution exists but not enough people who would value it know about it. Without development there is no creativity, without optimization there is no profit and without commercialization there is no innovation. It is the commercialization of a creative solution that coverts creativity into innovation. Every innovator, therefore, must learn the process of commercialization and develop the knowledge necessary to create value. In the commercialization phase, an innovation team must practice strategic thinking, methods of pricing a solution, messages of value proposition, viral marketing, business planning, and making deals for licensing or selling the breakthrough solutions. Leadership expert Steven Covey says to begin a task with the end in mind. In the case of innovation, begin innovating with commercialization in mind. Often, commercializing is tougher than discovering the innovative product. The full cycle of innovation, thus, starts from the identification of the need for an innovative solution and ends with the commercialization of the innovative solution. Developing innovation on demand makes the task of commercialization easier as the innovative solution is already sold. However, improvement in the success rate of demand-driven innovation depends on the speed of the innovation. Once a company masters the process of innovation through practice and commitment, a company can innovate quickly. Conclusion Innovating disruptively requires identifying the need, expanding the horizon of thoughts, developing breakthrough solutions by applying the rule of 2, and optimizing and commercializing the solutions to ensure the innovations profitable growth. A good understanding of this process improves the speed resulting in making innovation a success with exciting rewards. Begin a Systematic Innovation Practice - Step Five Once a company has invested in deploying innovation through cultural transformation, it is important that the culture of innovation is sustained. Any company should begin its innovation journey with the end in mind; in this case, an effort to sustain innovation must be carefully planned and practiced to perpetuate the culture of accelerated introduction of new products or solutions. Return on Innovation

Most studies show that it has been difficult to establish a correlation between innovation and corporate performance. Even worse, surveys of CEOs have found an adverse relationship between investment in innovation and corporate performance. Such existing situations and executive perceptions may be a contributing factor for the confusion concerning the topic of innovation, and for a lack of commitment to systematic innovation. The best way to sustain innovation is to ensure there is return on innovation. Innovation Intent Many companies consider growth in revenue as return on innovation; many times growth in revenue, however, does not translate into more money for the organization so there is no return on innovation. Though the revenue growth will somewhat reflect the role of a companys innovation, it does not say anything about the effectiveness of innovation. To ensure return on innovation, profit growth must also be ensured. Innovative products not only provide more opportunities for revenue growth, they also enable better margins on sales.

Innovation can have multiple dimensions of impact on corporate performance and can be analyzed by the following categories: Most innovative: revenue growth Best innovative: profitable growth due to innovation Managed innovation: a causative relationship exists between the innovation and the resulting outcome Return on innovation: the financial return on investment in innovation In order for a company to sustain innovation, it must regularly introduce new products and services with significant innovation components, and emphasize the commercialization of its innovations in order to maximize its return on innovation. As the table above shows, even a look at five companies shows that return on innovation (measured in dollars) is far from being maximized. It highlights the need for institutionalizing innovation, and improving efficiency and effectiveness of the innovation process. Linking Innovation to Corporate Strategy Deploying innovation with a clear mandate for expected outcomes will yield random results. In many organizations, research and development and innovation become the end rather than the means to achieve business objectives. Innovation must create value, excitement and return on investment through leadership, planning and execution for innovation. Corporations have objectives to be profitable on a quarter by quarter basis. The challenge in managing profit by quarter leads to decisions for a quarter that require mostly actions and little thinking. This leads to no room for innovation, while taking actions to cut costs. Such an approach is counterproductive to creating a culture of innovation. Organizations prioritize research and development projects for their importance to provide returns in the short-term. This strategy will haunt these

organizations in the long-term. Organizations must apportion resources for long-term research for fundamental and platform innovations, and for short-term development for derivative and variation innovations. Large organizations that sacrificed longer term technological research and development in favor of shorter term design innovations step into sudden crashing moments. Intel and Motorola are good examples of perennially successful companies in economic trouble due to a lack of fundamental innovations for developing new platform products. Intel needs fundamental innovations in process and manufacturing, while Motorola could benefit from breakthrough innovations in communication technologies. Linking the corporate strategy to profitable growth will lead to planning for innovation at all levels. Successful companies continually look at their innovations from annual to ten- or twenty-year outlooks in order to perpetuate the culture of innovation. Maintaining profitable growth through innovation will bring purpose to innovation activities.

Accelerate Innovation In the technology age information has become a commodity, with intelligence a competitive advantage. The ability to continually mine information to extract unique intelligence and create new knowledge must become routine activities. Continual analysis and interpretations of market, process, product and business information can be used to identify new areas of revenue growth and innovation. Corporate leadership must develop plans to introduce innovative products, services or solutions to generate achieve margins and revenue growth. Expectations for introducing new products, solutions and services create a schedule for efficient and predictable innovation requiring a process that works for the organization consisting of inspiring leadership, creativity culture, idea management, engineering skills, optimization tools, operations capability, marketing resources and economic mindset. Every organization is an innovative organization to a varying extent. The challenge, however, is to innovate better and faster. Accelerating innovation requires formalizing and optimizing the innovation process by understanding its components, committing resources to the various types of innovations, and driving the success of the innovation process. The leadership must not question whether innovation works, but instead challenge the organization for more innovation. Continual Renewal of Innovative Practices and Behaviors The innovation focus must not become only a chief executive officer-level initiative. The culture of innovation requires the establishment of a compelling vision, clear direction and credible challenge for employees to be engaged and collaborate. The leadership must set the tone for positive behaviors in the organization for success that celebrates every employees strength rather than look for poor performing employees in the organization. Innovative organizations must aim to enable every employee to excel rather than create a bureaucracy to identify excellent people that could stifle

their creativity. It is the responsibility of the corporate leadership to promote intellectual participation of employees by sincerely listening to employee ideas and rewarding value creation. Setting periodic challenges for employees to overcome, recognizing creativity and rewarding economic success through innovation will drive employee-driven innovative practices. Most successful organizations also define their corporate values relative to their leadership and employee engagement. The values define decision making and prioritization on a daily basis. These values must incorporate intellectual involvement of employees for creating value for the organization, partners and society. The culture of innovation flourishes where thinking without constraints, execution within resources and celebration with success are practiced. Innovation is an investment that should and must pay dividends if led and managed with care.

The term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between Invention, an idea made manifest, and innovation, ideas applied successfully. In many fields, something new must be substantially different to be innovative, not an insignificant change, e.g., in the arts, economics, business and government policy. In economics the change must increase value, customer value, or producer value. The goal of innovation is positive change, to make someone or something better. Innovation leading to increased productivity is the fundamental source of increasing wealth in an economy. A convenient definition of innovation from an organizational perspective is "Innovation is generally understood as the successful introduction of a new thing or method. Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services. Innovation typically involves Creativity, but is not identical to it: innovation involves acting on the creative ideas to make some specific and tangible difference in the domain in which the innovation occurs. "All innovation begins with creative ideas. We define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second". For innovation to occur, something more than the generation of a creative idea or insight is required: the insight must be put into action to make a genuine difference, resulting for example in new or altered business processes within the organization, or changes in the products and services provided. Innovation = Creativity * Risk Taking Creativity is defined as the tendency to generate or recognize ideas, alternatives, or

possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others. Three reasons why people are motivated to be creative: Need for novel, varied, and complex stimulation Need to communicate ideas and values Need to solve problems In order to be creative, you need to be able to view things in new ways or from a different perspective. Among other things, you need to be able to generate new possibilities or new alternatives. Tests of creativity measure not only the number of alternatives that people can generate but the uniqueness of those alternatives. the ability to generate alternatives or to see things uniquely does not occur by change; it is linked to other, more fundamental qualities of thinking, such as flexibility, tolerance of ambiguity or unpredictability, and the enjoyment of things heretofore unknown.

Q5. Discuss business importance of CSR with special emphasis on quality of management. Corporate Social Responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and the environment in all aspects of their operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. 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 broader and longer than their own immediate, shortterm profits. Critics argue that CSR distracts from the fundamental economic role of businesses, others argue that it is nothing more than superficial window-dressing, still others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Business benefits The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones, found a correlation between social/environmental performance and financial performance. However, businesses may not be looking at short-run financial returns when developing their CSR strategy. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include

charitable efforts and volunteering. CSR may be based within the human resources, business development or public relations departments of an organization, or may be given a separate unit reporting to the CEO or in some cases directly to the board. Some companies may implement CSR-type values without a clearly defined team or program. The business case for CSR within a company will likely rest on one or more of these arguments: Human resources A CSR program can be seen as an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help to improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.

Risk management Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These events can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks. Brand differentiation In crowded marketplaces, companies strive for a unique selling proposition which can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group and The Body Shop are built on ethical values. Business service organizations can benefit too from building a reputation for integrity and best practice. License to operate Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity or the environment seriously, and so avoid intervention. This also applies to firms seeking to justify eye-catching profits and high levels of boardroom pay. Those operating away from their home country can make sure they stay welcome by being good corporate citizens with respect to labour standards and impacts on the environment. Critical analysis

CSR is entwined in the strategic planning process of many multinational organizations. The reasons or drive behind social responsibility towards human and environmental responsibility whether driven by ulterior motives, enlightened selfinterest, or interests beyond the enterprise, is subject to much debate and criticism. Some critics argue that corporations are fundamentally entities responsible for generating a product and/or service to gain profits to satisfy shareholders and others argue that there is no place for social responsibility as a business function. These critics point to the rule of corporate law that prohibits a corporation's directors from any activity that would reduce profits. Other critics argue that the practice cherry-picks the good activities a company is involved with and ignores the others, thus 'greenwashing' their image as a socially or environmentally responsible company. Still other critics argue that it inhibits free markets or seeks to pre-empt the role of governments in controlling the socially or environmentally damaging effects of corporations' pursuit of self-interest.

Philanthropy centric view of Corporate Social Responsibility (CSR) as part of their contribution to the society, some organizations have been practicing programs such as: Better pay for local workers in the under-developed countries. Avoiding under-age employees. Support for local community sports. Offer of free sports gears for talents. Sports events sponsorship. Supporting the construction of sports grounds. Cheaper brands for selected countries Local water supply Community developments like sports etc Local school sports support Scholarships for talent

Q6. Write short notes on a) Scope of Ethics b) Knowledge Creation c) Product Life Cycle 6a) Scope of Ethics Below are the ethical principles in a business organization. Principle 1. The responsibilities of businesses: beyond shareholders toward stakeholders.

Principle 2. The economic and social impact of business: toward innovation, justice, and world community Principle 3. Business behavior: beyond the letter of law toward a spirit of trust. Principle 4. Respect for rules Principle 5. Support for multilateral trade Principle 6. Respect for the environment Principle 7. Avoidance of illicit operations Principle 8. Customers Principle 9. Employees Principle 10. Owners / Investors Principle 11. Suppliers Principle 12. Competitors

The importance of the ''ethics'' comes in when we make decisions in the areas covered by the 12 principles.

Ethics is two things. First, ethics refers to well based standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. Such standards are adequate standards of ethics because they are supported by consistent and well founded reasons. Secondly, ethics refers to the study and development of one's ethical standards. As mentioned above, feelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one's standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs and our moral conduct, and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based. A Framework for Thinking Ethically in decision making: This information is designed as an introduction to thinking ethically. We all have an image of our better selves-of how we are when we act ethically or are "at our best." We probably also have an image of what an ethical community, an ethical business, an ethical government, or an ethical society should be. Ethics really has to do with all these levels-acting ethically as individuals, creating ethical organizations and governments, and making our society as a whole ethical in the way it treats everyone.

Ethics refers to standards of behavior that tell us how human beings ought to act in the many situations in which they find themselves-as friends, parents, children, citizens, businesspeople, teachers, professionals, and so on. Ethics is not the same as feelings. Feelings provide important information for our ethical choices. Some people have highly developed habits that make them feel bad when they do something wrong, but many people feel good even though they are doing something wrong. And often our feelings will tell us it is uncomfortable to do the right thing if it is hard. Ethics is not religion. Many people are not religious, but ethics applies to everyone. Most religions do advocate high ethical standards but sometimes do not address all the types of problems we face. Ethics is not following the law. A good system of law does incorporate many ethical standards, but law can deviate from what is ethical. Law can become ethically corrupt, as some totalitarian regimes have made it. Law can be a function of power alone and designed to serve the interests of narrow groups. Law may have a difficult time designing or enforcing standards in some important areas, and may be slow to address new problems. Ethics is not following culturally accepted norms. Some cultures are quite ethical, but others become corrupt -or blind to certain ethical concerns (as the United States was to slavery before the Civil War). "When in Rome, do as the Romans do" is not a satisfactory ethical standard. Ethics is not science. Social and natural science can provide important data to help us make better ethical choices. But science alone does not tell us what we ought to do. Science may provide an explanation for what humans are like. But ethics provides reasons for how humans ought to act. And just because something is scientifically or technologically possible, it may not be ethical to do it. There are two fundamental problems in identifying the ethical standards we are to follow: On what do we base our ethical standards? How do those standards get applied to specific situations we face? If our ethics are not based on feelings, religion, law, accepted social practice, or science, what are they based on? Many philosophers and ethicists have helped us answer this critical question. They have suggested at least five different sources of ethical standards we should use. Five Sources of Ethical Standards: The Utilitarian Approach - Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, produces the greatest balance of good over harm. The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affectedcustomers, employees, shareholders, the community, and the environment. Ethical warfare balances the good achieved in ending terrorism with the harm done to all parties through death, injuries, and destruction. The utilitarian approach deals with

consequences; it tries both to increase the good done and to reduce the harm done. The Rights Approach - Other philosophers and ethicists suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. On the basis of such dignity, they have a right to be treated as ends and not merely as means to other ends. The list of moral rights -including the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so on-is widely debated; some now argue that non-humans have rights, too. Also, it is often said that rights imply duties-in particular, the duty to respect others' rights. The Fairness or Justice Approach - Aristotle and other Greek philosophers have contributed the idea that all equals should be treated equally. Today we use this idea to say that ethical actions treat all human beings equally-or if unequally, then fairly based on some standard that is defensible. We pay people more based on their harder work or the greater amount that they contribute to an organization, and say that is fair. But there is a debate over CEO salaries that are hundreds of times larger than the pay of others; many ask whether the huge disparity is based on a defensible standard or whether it is the result of an imbalance of power and hence is unfair. The Common Good Approach - The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. This approach suggests that the interlocking relationships of society are the basis of ethical reasoning and that respect and compassion for all others-especially the vulnerable-are requirements of such reasoning. This approach also calls attention to the common conditions that are important to the welfare of everyone. This may be a system of laws, effective police and fire departments, health care, a public educational system, or even public recreational areas. The Virtue Approach - A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind of person will I become if I do this?" or "Is this action consistent with my acting at my best?" In the organization, I am referring to, we put the approaches together in making ethical business decisions. Each of the approaches helps us determine what standards of behavior can be considered ethical. There are still problems to be solved, however. The first problem is that we may not agree on the content of some of these specific approaches. We may not all agree to the same set of human and civil rights. We may not agree on what constitutes the common good. We may not even agree on what is a good and what is harmful. The second problem is that the different approaches may not all answer the question "What is ethical?" in the same way. Nonetheless, each approach gives us important

information with which to determine what is ethical in a particular circumstance. And much more often than not, the different approaches do lead to similar answers. The organization I am referring to is: A large manufacturer/ marketer of safety products The products are used as [personal protection safety] [ industrial safety] The products are distributed through the distributors as well as sold directly The products are sold to various industries like mining / fireservices / defence / as well as to various manufacturing companies. The company employs about 235 people. The company has the following functional departments o Marketing o Manufacturing o Sales o Finance/ administration o Human resource o Customer service o Distribution o Warehousing/ transportation o TQM Making Decisions - Making good ethical decisions requires a trained sensitivity to ethical issues and a practiced method for exploring the ethical aspects of a decision and weighing the considerations that should impact our choice of a course of action. Having a method for ethical decision making is absolutely essential. When practiced regularly, the method becomes so familiar that we work through it automatically without consulting the specific steps. The more novel and difficult the ethical choice we face, the more we need to rely on discussion and dialogue with others about the dilemma. Only by careful exploration of the problem, aided by the insights and different perspectives of others, can we make good ethical choices in such situations. We have found the following framework for ethical decision making a useful method for exploring ethical dilemmas and identifying ethical courses of action. Recognize an Ethical Issue o Is there something wrong personally, interpersonally, or socially? Could the conflict, the situation, or the decision be damaging to people or to the community? o Does the issue go beyond legal or institutional concerns? What does it do to people, who have dignity, rights, and hopes for a better life together? Get the Facts o What are the relevant facts of the case? What facts are unknown? o What individuals and groups have an important stake in the outcome? Do some have a greater stake because they have a special need or because we have special obligations to them?

o What are the options for acting? Have all the relevant persons and groups been consulted? If you showed your list of options to someone you respect, what would that person say? Evaluate Alternative Actions From Various Ethical Perspectives o Which option will produce the most good and do the least harm? Utilitarian Approach: The ethical action is the one that will produce the greatest balance of benefits over harms. o Even if not everyone gets all they want, will everyone's rights and dignity still be respected? Rights Approach: The ethical action is the one that most dutifully respects the rights of all affected. o Which option is fair to all stakeholders? Fairness or Justice Approach: The ethical action is the one that treats people equally, or if unequally, that treats people proportionately and fairly. o Which option would help all participate more fully in the life we share as a family, community, society? Common Good Approach: The ethical action is the one that contributes most to the achievement of a quality common life together. o Would you want to become the sort of person who acts this way (e.g., a person of courage or compassion)? Virtue Approach: The ethical action is the one that embodies the habits and values of humans at their best. Make a Decision and Test It o 11. Considering all these perspectives, which of the options is the right or best thing to do? o If you told someone you respect why you chose this option, what would that person say? If you had to explain your decision on television, would you be comfortable doing so? Act, Then Reflect on the Decision Later o Implement your decision. How did it turn out for all concerned? If you had it to do over again, what would you do differently?

6b) Knowledge Creation Knowledge update can mean creating new knowledge based on ongoing experience in a specific domain and then using the new knowledge in combination with the existing knowledge to come up with updated knowledge for knowledge sharing. Knowledge can be created through teamwork. A team can commit to perform a job over a specific period of time. A job can be regarded as a series of specific tasks carried out in a specific order. When the job is completed, then the team compares the experience it had initially (while starting the job) to the outcome (successful/disappointing). This comparison translates experience into knowledge. While performing the same job in future, the team can take corrective steps and/or modify the actions based on the new knowledge they have acquired. Over time, experience usually leads to expertise where one team (or individual) can be known for handling a complex problem very well. This knowledge can be transferred to

others in a reusable format. There exists factors that encourage (or retard) knowledge transfer. Personality is one factor in case of knowledge sharing. For example, extrovert people usually posses self-confidence, feel secure, and tend to share experiences more readily than the introvert, self-centered, and securityconscious people. People with positive attitudes, who usually trust others and who work in environments conductive to knowledge sharing tends to be better in sharing knowledge. Vocational reinforcers are the key to knowledge sharing. People whose vocational needs are sufficiently met by job reinforcers are usually found to be more likely to favour knowledge sharing than the people who are deprived of one or more reinforcers. Model of Knowledge Creation & Transformation: The two main types of human knowledge are Tacit knowledge and explicit knowledge The key to knowledge creation lies in t