Functional Level Strategies – CA Inter SM Question Bank

Functional Level Strategies – CA Inter SM Question Bank is designed strictly as per the latest syllabus and exam pattern.

Functional Level Strategies – CA Inter SM Question Bank

Question 1.
What is meant by Functional strategies? In terms of level where will you put them? Are functional strategies really important for business? (Nov 2007, 4+2+4 = 10 marks)
OR
Why functional strategies are needed for any business? (Nov 2013,3 marks)
Answer:
Meaning
A functional strategy is the short-term game plan for a key functional area within a company.

• It is the approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity.
• It deals with a relatively restricted plan that provides the objectives for a specific function, for the allocation of resources among different operations within that functional area and for facilitating coordination between them for an optimal contribution to the achievement of the business and corporate-level objectives.
• Functional strategies clarify corporate and business strategies by providing more specific details about how key functional areas to be managed in the near future.
• Functional strategy is concerned with developing and nurturing a distinctive competence to provide a company or business unit with a competitive advantage.

Level

• In terms of level, functional strategies operate below the SBU or business-level strategies.
• Within functional strategies, there are several sub-functional areas.
• Functional strategies are made within the higher-level strategies and guidelines there in that are set at higher levels of an organization.

Need
Functional Strategies are developed to fulfill the following needs:

1. All the parts of an organization implement the strategic decisions.
2. There is a basis for controlling activities In the different functional areas of a business.
3. The time functional managers spend on decision-making may be reduced as a discretionary, framework operates, within which decisions need to be taken.
4. Functional managers handle consistently similar situations occurring In different functional areas.

Question 2.
Rohit Bhargava is the Managing Director of Smooth and Simple Pvt Ltd. The company established in 2011, with 35 employees grew very fast to become an organisation with 335 employees in the year 2016. With the increase In size, Rohit started facing difficulty in managing things. Many a times he finds that personnel at the functional level are not in sync with the strategies of the top. He felt that strategies need to be segregated Into viable plans and policies that are compatible with each other and communicated down the line. Why does Rohit need to segregate the strategies into functional plans? Discuss.
Answer:
Rohit Bhargava needs to break higher-level strategies into functional strategies for implementation, These functional strategies, in form of Marketing, Finance, Human Resources, Production, Research, and Development help in achieving the organizational objective. The reasons why functional strategies are needed can be enumerated as follows:

• Functional strategies lay down clearly what is to be done at the functional level. They provide a sense of direction to the functional staff.
• They are aimed at facilitating the implementation of corporate strategies and the business strategies formulation at the business level.
• They act as basis for controlling activities In the different functional areas of business.
• They help in bringing harmony and coordination as they are formulated to achieve major strategies.
• Similar situations occurring in different functional areas are handled in a consistent manner by the functional managers.

Question 3.
State with reason which of the following statements is correct or incorrect. Marketers alone can deliver superior value to customers. (May 2011, 2 marks)
Answer:
Incorrect:
Marketers alone can’t deliver superior value to customers. It is just not a place where goods are brought and sold but are one of the determinants of the business. Organisations, Suppliers, Intermediaries, Competitors and also the market provided the superior value to the customer with the competitors. The customer gets the product at a low price with better Quality of product.

Question 4.
Write short note on the following:
Elements of Marketing Mix. (Nov 2010, May 2013, 3 marks)
OR
Answer briefly of the following:
Enlist the components of marketing mix. (May 2009, 2 marks)
Answer:
Elements of Marketing Mix:
Marketing mix forms an important part of overall competitive marketing strategy. The marketing mix is the set of controllable marketing variables that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything that the firm can do to influence the demand for its product. These are usually referred to as 4Ps – product, price, place, and promotion.

Modern Version:
The traditional concept of 4Ps is also expanded further with more Ps such as,

• People
• Physical Evidence
• Process
• Under the dynamics of market all the Ps are extremely important so as to build and sustain a competitive advantage over the rivals.

Question 5.
Write short note on the following:
Expanded Marketing Mix. (Nov 2014, 3 marks)
OR
Elucidate:
Expanded Marketing Mix (Jan 2021,5 marks)
Answer:
Expanded Marketing Mix:
Marketing mix is a systematic way of classifying the key decision areas of marketing management. It is the set of controllable marketing variables that the firm blends to produce the response it wants In the target market. The original framework of marketing mix comprises of 4ps-product, price, place, and promotion. However, the above elements of marketing mix are not exhaustive. In the recent years marketing mix has expanded to highlight certain other key decision areas.

They are:
1. People: all human actors who play a part In delivery of the market offering and thus influence the buyer’s perception, namely the terms personnel and the customer.

2. Physical Evidence: the environment in which the market offering is delivered and where the firm and customer interact.

3. Process: the actual procedures, mechanisms and flow of activities by which the product/service is delivered.

Question 6.
Write short note on the following:
Publicity and Sales Promotion. (May 2015, 3 marks)
Answer:
Publicity:

• Publicity is also a non-personal form of promotion similar to advertising.
• However, no payments are made to the media as In case of advertising.
• Basis tools for publicity are press releases, press conferences, reports, stories and internet releases.
• These releases must be of Interest to the public.

Sales Promotion:

• Sales Promotion is an omnibus term that includes all activities that are undertaken to promote the business but are not specifically included under personal selling, advertising or publicity.
• Activities like discounts, contests, money refunds, installments, kiosks, exhibitions, and fairs constitute sales promotion.
• All these are meant to give a boost to the sales.

Question 7.
What are the objectives that must be kept in mind while designing a pricing strategy of a new product? (May 2016, 4 marks)
Answer:
The following are three objectives that must be kept In mind while designing a pricing strategy for e new product.

1. Making the product acceptable to the customers.
2. Producing a reasonable margin over cost.
3. Achieving a market that helps in developing market share.

Question 8.
Distinguish between the following:
Advertising and Publicity. (Nov 2016, 3 marks)
Answer:
Difference between Advertising and Publicity
Advertising is a non-personal, highly flexible, and dynamic promotional method. The media for advertisings are several such as pamphlets, radio, television and Internet. Choice of appropriate media is Important for effectiveness of the message. The media may be local, regional or national.

Publicity is the communication of a product, brand or business by placing information about It in the media without paying for the time or media space directly. Thus, it is way of reaching customers with negligible cost.

Question 9.
Explain the marketing mix in the context of modem marketing. (Nov 2018, 5 marks)
Answer:
Modern Marketing Mix:
Typically, all organizations use a combination of 4 Ps in some form or the other. However, the above elements of marketing mix are not exhaustive. It is pertinent to discuss a few more elements that may form part of an organizational marketing mix strategy. They have got more currency in recent years. Growth of Services has its own share for the inclusion of newer
elements in marketing.

A few Ps included later are as follows:
1. People
All human actors who play a part in delivery of the market offering and thus Influence the buyer’s perception, namely the firm’s personnel and the customer.

2. Process
The actual procedures, mechanisms and flow of activities by which the product/service is delivered.

3. Physical Evidence
The environment in which the market offering is delivered and where the firm and customer Interact.

Question 10.
ABC Ltd. is a beverage manufacturing company. It chiefly manufactures soft drinks. The products are priced on the lower side which has made the company a leader in the business. Currently, it is holding 35 percent market share. The R & D of company developed a formula for manufacturing sugar-free beverages. On successful trial and approval by the competent
authorities, company was granted to manufacture sugar-free beverages.

This company is the pioneer to launch sugar-free beverages Which are sold at a relatively higher price. This new product has been accepted widely by a class of customers. These products have proved profitable for the company. Identify the strategy employed by the company ABC Ltd., and mention what measures could be adopted by the company to achieve the employed strategy. (Nov 2020, 5 marks)

Question 11.
What are the objectives that must be kept in mind while designing a pricing strategy of a new product?
Answer:
For a new product pricing strategies for entering a market needs to be designed. In pricing a really new product at least three objectives must be kept in mind.
(i) Making the product acceptable to the customers.
(ii) Producing a reasonable margin over cost.
(iii) Achieving a market that helps in developing market share.

For a new product, an organization may either choose to skim or penetrate the market. In skimming prices are set at a very high level. The product is directed to those buyeršwho are relatively price Insensitive but sensitive to the novelty of the new product. For example, call rates of mobile telephony were set very high initially. Even the Incoming calls were charged. Since the Initial off take of the product is low, high price, in a way, helps in rationing of supply in favour of those who can afford it.

In penetration pring firm keeps a temptingly low price for a new product which itself is selling point. A very large number of the potential customers may be able to afford and willing to try the product.

Question 12.
State with reason which of the following statement is correct/incorrect:
Tale shopping is an instance of direct marketing. (Nov 2007, 2 marks)
Answer:
Correct:
Direct marketing is the process of marketing through various media which interact directly with the customers and customers also make a direct response. In tele-shopping customers make a direct response. Thus, it is an instance of direct marketing.

Question 13.
Explain the meaning of the following concepts:
Relationship Marketing (May 2011, 1 mark)
Answer:
Relationship Marketing: It is the process of creating, maintaining, and enhancing strong, value-laden relationships with customers an other stakeholders. For example. British Airways offers special lounges with showers at 199 airports for frequent flyers. Thus, providing special benefits to select customers to strengthen bonds goes a long way in building relationships.

Question 14.
Explain the meaning of the following concepts:
(ii) Service Marketing (Nov 2011, 1 mark)
(iv) Enlightened Marketing (Nov 2011, 1 mark)
(vi) Person MarketIng (Nov 2011, 1 mark)
Answer:
(ii) Service Marketing
Is applying the concepts, toots, and techniques, of marketing to services. Service is any activity or benefit that one party can offer to another that is essentially intangible and non-perishing. These may be from business to consumer and from business to business.

(iv) Enlightened Marketing
helps a company to support the best long-run performance of the marketing system. It is based on five principles customer-oriented marketing, innovative marketing, value marketing, sense-of-mission marketing, and societal marketing.

(vi) Person Marketing
consists of activities undertaken to create, maintain or change attitudes or behavior towards particular people. For example, politicians, sports stars, film stars, and professionals market themselves to get votes or promote their careers and Income.

Question 15.
Explain the meaning of following concepts:
(ii) Differential Marketing (May 2012, 1 mark)
(iii) De-marketing (May 2012,1 mark)
Answer:
(ii) Differential Marketing: A market coverage strategy In which a firm decides to target several market segments and designs separate offers for each.
(iii) De-Marketing: De-marketing Is a marketing strategy to reduce demand of the product temporarily or permanently. The objective however is not to completely destroy the demand, but only to reduce or shift this happens when there is overtull demand.

Question 16.
Explain the meaning of the following concepts:
Synchro-marketing (Nov 2012, 1 mark)
Answer:
Synchro marketing: When the demand for the product is Irregular due to season etc. causing idle capacity or over-worked capacities, synchro marketing can be used to find ways to alter the same pattern of demand through flexible pricing, promotion, and other incentives.

Question 17.
Distinguish between the following:
Social Marketing and Service Marketing (May 2014, 3 marks)
OR
Define the term ‘Marketing’. Distinguish between social marketing and service marketing. (May 2018, 5 marks)
Answer:
Marketing is the study and management of exchange relationships. It is the activity set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large. It is all about satisfying needs and wants through an exchange process.

Social Marketing: It refers to the design, implementation and control of programs seeking to increase the acceptabilities of social ideas, cause or practice among a target group. For instance, the publicity campaign for prohibition of smelling In Delhi explained the places where one can and can’t smoke in Delhi.

Service Marketing: It is applying the concepts, tools, and techniques, of marketing to services. Services is any activities on benefit that one party can offer to another that is essentially intangible arid does not result in the banking, savings. retai’ing, educational or utilities.

Question 18.
State with reason which of the following statements is correct or incorrect.
Demarketing strategies may aim to reduce demand temporarily or permanently. (May 2015, 2 marks)
Answer:
Correct:
Remarketing is a marketing strategy to reduce demand temporarily or permanently. The aim is not to destroy demand, but only to reduce or shift it. This happens when the demand is too much to handle.

Question 19.
Write short note on the following:
Augmented Marketing (May 2017, 3 marks)
OR
Define Augmented Marketing. Give two examples. (Nov 2018, 2 marks)
Answer:
Augmented Marketing:
Augmented marketing refers to deliberate and accelerated efforts to get better marketing returns through additional means. It includes provision of additional customer services and benefits built around the care and actual products that relate to introduction of hi-tech services like movies on demand, online computer repair services, secretarial services, etc. Such
innovative offerings provide a set of benefits that promise to elevate customer service to unprecedented levels. For e.g., Movies on demand, online computer repair services, secretarial services etc.

Question 20.
Evaluating the worth of a business Is central to strategy implementation. In the light of this statement, explain the methods that can be used for determining the worth of a business. (May 2011, 4 marks)
OR
What do you mean by financial strategy of an organization? How the worth of a business Is evaluated? (May 2013, 3 marks)
OR
Give various methods for evaluating the worth of a business. (Nov 2017, 3 marks)
OR
Discuss the various approaches for evaluating the worth of a business. (Nov 2019, 5 marks)
Answer:

Question 21.
Successful implementation of any project needs additional funds. What are the different sources of raising funds and their impact on the financial strategy which you as a Financial Manager will consider? (Nov 2011, 3 marks)
Answer:
Successful strategy implementation often requires additional capital. Besides net profit from operations and the sale of assets, two basic sources of capital for an organization are debt and equity. Determining an appropriate mix of debt and equity in a firm’s capital structure can be vital to successful strategy implementation. Theoretically, an enterprise should have
enough debt in its capital structure to boost its return on investment, but too much debt In the capital structure of an organization can endanger stockholders’ return and jeopardize company survival.

The Major Factors Regarding in this have to be made by Strategists are:

• Selecting right capital structure;
• Procurement of capital and working capital borrowings;
• Reserves and surplus as sources of funds; and
• Relationship wdh lenders, banks and financial institutions.

Question 22.
Determining an appropriate mix of debt and equity in a firm’s capital structure can be vital to successful strategy implementation. Discuss. (May 2015, 3 marks)
Answer:
Successful Strategy implementation often requires additional capital. Besides net profit from operations and the sale of assets, two basic sources of capital for an organization are debt and equity. Determining an appropriate mix of debt and equity in a firm’s capital structure can be vital to successful strategy implementation. Theoretically, an enterprise should have
enough debt in its capital structure to boost its return on investment, but too much debt in the capital structure of an organization can endanger stockholders’ return and jeopardize company survival.

• Being a financial manager to determine an appropriate mix of debt and equity in a firm’s capital structure can be vital to successful strategy implementation.
• Fixed debt obligations generally must be met, regardless of circumstances.
• This does not mean that stock issuances are always better than debt for raising capital.
• If ordinary stock is Issued to finance strategy implementation, ownership and control of the enterprise are diluted.
• This can be a serious concern in today’s business environment of hostile takeovers, mergers, and acquisitions.
• The Major factors regarding which strategies have to be made by a financial manager are capital structure, procurement of capital and working capital borrowings, reserves arid surplus as sources of funds, and relationship with lenders, banks, and financial institutions.

Strategies related to the sources of funds are important since they determine how financial resources will be made available for the implementation of strategies.

Question 23.
State with reason which of the following statements is correct or incorrect:
Production strategy implements, supports, and drives higher strategies. (May 2010, 2 marks)
Answer:
Correct:
In order to get, effective Implementation of higher-level strategies, strategists need to provide direction to functional managers, including production, regarding the plans and policies to be adopted. Production strategy provides a path for transmitting Corporate and business level strategy to the production systems and makes it operational, It may relate to production planning, operational system, control and research & development.

Question 24.
Explain the meaning of following concepts:
Production System (May 2012, 1 mark)
Answer
Production System:
A system which helps transformation of input into output through processing with the help of factors of production like land, labour, capital & entrepreneur.

Question 25.
Write short note on the following
Production System (May 2014, 3 marks)
Answer:
Production System:
A production process consists of activities that are required in transforming an input set (human resources, raw materials, energy, money, information, etc.) to valuable outputs with the help of processors. A production system converts inputs Into outputs with the help of processor. The production system is concerned with the capacity, location, layout product or service design, work system, degree of automation, extent of vertical integration, and such factors. Strategies related to production systems are significant as they deal with vital issues affecting the capability of the organization to achieve its objectives.

Question 26.
Briefly answer the following:
Logistics Strategy (Nov 2008, 2 marks)
OR
Explain the meaning of the following concepts:
Logistics Strategy (Nov 2011, 1 mark)
Answer:
Logistics Strategy:
Logistics Strategy is the science of evaluating the most cost-effective methodology of distributing goods to market while achieving service-level objectives. It is important for companies to recognize that logistics strategy can be product-specific, customer-specific, and location-specific and that supply chains for each industry are dynamic and evolving. Logistics is not confined to tactical decisions about transportation and warehousing.

Logistics strategy is the set of guiding principles, driving forces, and ingrained attitudes that help to coordinate goals, plans and policies between partners across a given supply chain. Logistics ensures that right materials are available at the right place at the right time of the right quality and at the right cost.

Logistical activities typically include management of inbound and outbound goods, transportation warehousing, handling of material fulfillment of orders, inventory management, supply/demand planning.

Question 27.
Explain the meaning of the following concepts:
Outbound Logistics (May 2011, 1 mark)
Answer
Outbound logistics collect, store and distribute the product to customers. For tangible products, this would be warehousing, materials handling. transport, etc. in the case of services, Et may be more concerned with arrangements for bringing customers to the service it is a fixed location (e.g. sports events).

Question 28.
What do you mean by Logistic Strategy? What are the different areas to examine while developing a logistic strategy? (Nov 2013, 1 + 3 =4 marks)
OR
Discuss the areas one should examine while developing a logistics strategy. (May 2016, 3 marks)
Answer:
Logistics Strategy is the science of evaluating the most cost-effective methodology of distributing goods to market while achieving service-level objectives. It is important for companies to recognize that logistics strategy can be product-specific, customer-specific, location-specific and that supply chains for each industry are dynamic and evolving.

Logistics is not confined to tactical decisions about transportation and warehousing, Logistics strategy is the set of guiding principles, driving forces, and Ingrained attitudes that help to coordinate goals, plans, and policies between partners across a given supply chain.

Logistics ensures that night materials are available at the right place at the right time of the right quality and at the right cost. Logistical Activities typically include management of inbound and outbound goods, transportation warehousing, handling of material fulfillment of orders, inventory management, supply/demand planning.

Logistics Strategy deals with the flow of products Into and out of the manufacturing process.
Three trends are evident: centralization, outsourcing, and the use of the Internet.
To gain logistical synergies across business units, corporations began centralizing logistics in the headquarters groups.
This centralized logistics group usually contains specialists with expertise in different transportation modes such as rail or trucking. They work to aggregate shipping volumes across the entire corporation to gain better contracts with shippers.

Companies like Amoco Chemical, Georgia-Pacific, Marriott, and Union Carbide view the logistics function as an important way to differentiate themselves from the competition, to add value, and to reduce costs.

The Development of logistics strategy can be done by developing and answering the following questions:

1. Which sources of raw materials and components are available?
2. How many manufacturing locations are there?
3. What products are being made at each manufacturing location?
4. What modes of transportation should be used for various products?
5. What is the nature of distribution facilities?
6. What is the nature of materials handling equipment processed? Is it ideal?
7. What is the method of deploying inventory in the logistics network?
8. Should the business organization own the transport vehicles?

Question 29.
State with reason which of the following statements is correct or incorrect:
Logistic Management is an extension of Supply Chain Management. (Nov 2016, 2 marks)
Answer:
incorrect:
Logistic management is related to planning, implementing and controlling the storage and movement of goods and services, while supply chain management is much more than that it is a tool of business transformation and involves delivering the right product at the right time to the right interfaces such as telecom or postal system.

Question 30.
Distinguish between the following:
Inbound logistics and outbound logistics. (Nov 2017, 3 marks)
Answer:

Point	Inbound Logistics	Outbound Logistics
Meaning	In bound logistics are the activities concerned with receiving, storing and distributing the inputs to the product service.	Out bound logistics relate to collection storage and distribution of the product to customers.
Deal with	Raw material, components, partly processed puts, etc.	Finished products.
Activities	It Includes activities like materials handling, stock control, transport etc.	It includes activities such as storage/ warehousing or finished goods, order processing, scheduling deliveries, operation of Delivery vehicles, etc.

Question 31.
Explain the meaning of the following concepts:
Supply Chain Management (May 2011, 1 mark)
Answer:
Supply Chain Management (SCM) is the management of a network of interconnected business involved in the ultimate provision of product and service packages required by end customers. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).

Question 32.
What are the requirements for the successful implementation of supply chain management system? Discuss. (Nov 2011, 3 marks)
OR
Explain the major steps which are required for the successful implementation of supply chain management in the business organization. (Nov 2013, 7 marks)
OR
What is supply chain management? Discuss major steps In Implementing supply chain management systems in a business organization. (May 2017, 7 marks)
Answer:
Successful implementation supply management systems requires a change from managing individual functions to Integrating activities into key supply chain processes. It involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. A key requirement for successfully implementing supply chain will be network of information sharing and management. The partners need to link together to share information through electronic data Interchange and take decisions it timely manner.
Implementing end successfully running supply chain management system will involve:

Question 33.
Distinguish between the following:
Logistic Management and Supply Chain Management. (Nov 2012, 4 marks)
Answer:
Supply Chain Management is a process of planning, implementing, and controlling the supply chain operations. it involves.

1. Linkages between suppliers, manufacturers, and customers.
2. Close working with suppliers, intermediaries, other service providers, and customers.
3. Sourcing and procurement of material, conversion, and logistics.

Logistics ensures that right material are available at the right place at the right time of the right quality and at the right cost. SCM is but an extension of logistic management. (SCM) is the management of a network of interconnected business involved in the ultimate provision of product and service packages required by end customers.

While logistical activities typically include management of inbound and outbound goods, transportation warehousing, handling of material fulfillment of orders, inventory management, supply/demand planning SCM is a specific tool of business transformation and Involves delivering the right product at the right time to the right place and at right price.

It reduces cost and enhances customer service. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).

Question 34.
Supply Chain Management is conceptually wackier than Logistics management. Explain. (Nov 2015, 3 marks)
Answer:

• Supply Chain Management refers to the linkages between supplier, manufacturers, and customers. It involves all activities like resourcing and procurement of material, conversion, and logistics.
• Logistics Management deals with flow of products Into and out of the manufacturing process.
• Supply Chain Management is an extension of logistic management.
• However, there is difference between this two. Logistic activities typically include management of inbound and outbound goods, transportation, warehousing, handling of material, fulfillment of orders, inventory management, supply-demand planning.
• Since supply chain management includes the logistics it is conceptually wider than logistic management.

Question 35.
What steps are to be considered for implementing the supply chain management in a business organization? Explain. (Nov 2018, 5 marks)
Answer:
Successfully implementing supply management system requires a change from managing individuals functions to Integrating activities into key supply chain processes. It Involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. A key requirement for successfully implementing supply chain will be network of information sharing and management. The partners need to link together to share information through electronic data Interchange and take decisions in timely manner.

Implementing and successfully running supply chain management system will involve:
1. Product Development:
Customers and Suppliers must work together in the product development process. Right from the start the partners will have knowledge of alL. Involving all partners will help in shortening the life cycles. Products are developed and launched In shorter time and help organizations to remain competitive.

2. Procurement:
Procurement requires careful resource planning, quality issues, identifying sources, negotiation, order placement, Inbound transportation, and storage. Organizations have to coordinate with suppliers in scheduling without interruptions. Suppliers are involved in planning the manufacturing process.

3. Manufacturing:
Flexible manufacturing processes must be in place to respond to market changes. They should be adaptive to accommodate customization and changes in the taste and preferences. Manufacturing should be done on the basis of just-in-time (JIT) and minimum lot sizes changes in the manufacturing process be mode to reduce manufacturing cycle.

4. Physical Distribution: –
Delivery of final products to customers is the last position In a marketing channel. Availability of the products at the right place at right time is important for each channel participant. Through physical distribution processes serving the customer becomes an integral part of marketing. Thus, supply chain management links a marketing channel with customers.

5. Outsourcing:
Outsourcing is not limited to the procurement of materials and components but also includes outsourcing of services that traditionally have been provided within Sri organizations. The company will be able to focus on those activities where It has competency and everything else will be outsourced.

6. Customer Services:
Organizations, through interfaces with the company’s production and distribution operations, develop customer relationships so as to satisfy them. They work with customers to determine mutually satisfying goals, establish and maintain relationships. This in turn help in producing positive feelings in the organization and the customers.

7. Performance Measurement:
There is a strong relationship between the supplier, customer, and organization. Supplier capabilities and customer relationships can be correlated with a firm performance. Performance is measured in different parameters sud, as, costs, customer service, productivity, and quality.

Question 36.
How would you argue that Research and Development Personnel are important for effective strategy implementation? (Nov 2014, 3 marks)
Answer:
Research and Development personnel can play an integral part In strategy implementation. Strategies are such as product development, market penetration, and concentric diversification require that new products be successfully developed and that old products be significantly improved. But the level of management support for R&D is often constrained by resource availability. There must be effective interactions between R&D departments and other functional departments in implementing different types of generic business strategies.

Question 37.
Discuss the guidelines for selection of Research & Development expertise by an organization (Nov 2020, 5 marks)

Question 38.
State with reason which of the following statements is correct or incorrect:
The role of human resource manager is significant in building up core competency of the firm. (Nov 2011, 2 marks)
Answer:
Correct: The human resource manager has a significant role to play in developing core competency of the firm. A core competence is a unique strength of an organization which may not be shared by others. Core competencies can be generated and maintained only through the effective management of human resources and their skills.

Question 39.
Explain the strategic role of Human Resources Management in the following areas:
(i) Facilitation of Change
(ii) Building Core Competency
(iii) Development of Work Ethics and Culture. (Nov 2011, 3 x 1 = 3 marks)
Answer:
Facilitation of Change
The Human resource are more concerned with substance rather than form, accomplishments rather than activities, and practice rather than theory. The human resource management will have to devote more time to promote changes than to maintain the status quo.

(ii) Building Core
The human resource manager has a great Competency role to play In developing core competency by the firm. A core competence is a unique strength of an organization which may not be shared by others in the form marketing and technical capacity. Development of As changing work ethic requires increasing work ethics and emphasis on individuals, jobs will have to be Culture redesigned to provide challenge. Flexible starting and quitting times for employees may be necessary. Focus will shift from extrinsic to intrinsic motivation.

A vibrant work culture will have to be developed in the organizations to create an atmosphere of trust among people and to encourage creative ideas by the people. Far-reaching changes with the help of technical knowledge will be required for this purpose.

Question 40.
Explain any three prominent areas where Human Resource Manager can play a strategic role. (Nov 2012, May 2019, 35 marks)
OR
State the factors of human resource that influence on employees’ competence. (May 2014, 3 marks)
OR
Explain any three prominent areas where Human Resource Manager can play a strategic role. (Nov 2015, 3 marks)
OR
“Human resources are now viewed as a source of competitive advantage. Discuss the four activities when performed property can increase the competency of workforce. (Nov 2016, 4 marks)
Answer:
Recruitment and Selection
The workforce will be more competent if a firm can successfully identify, attract, and select the most competent applicants.

Training
The workforce will be more competent if employees are well-trained to perform their jobs properly.

Appraisal of Performance
The performance appraisal is to identify any performance deficiencies experienced by employees due to lack of competence which can be solved through counseling, coaching or training.

Compensation
A firm can usually increase the competency at its workforce by offering pay and benefit packages that are more attractive than those of their competitors.

Question 41.
State the factors of human resources that have a strong influence on employee competence. ( Nov 2020, 5 marks)

Question 42.
Read the following case and answer the questions given at the end:
Sahni Auto Industries is a manufacturer and exporter of Auto parts with an annual turnover of Rupees one thousand crores. It employs about 2,000 persons in its factory in Punjab and its other offices in India and abroad.

The Personnel Administration and Human Resources Department of the company is headed by Mr. Amit Kapoor-the Chief Personnel Manager. Mr. Amit Kapoor, an Automobile Engineer joined the company 5 years ago as Product Development Manager. After a successful stint of 4 years as Product Development Manager, he was transferred to Personnel
Administration and Human Resources Department as the Chief Personnel Manager as a part of Career development plan. Mr. Vikas, MBA in Human Resources from a renowned Business school, joined the company as Personnel Manager only months back. He reports to Mr. Amit Kapoor the Chief Personnel Manager. He handles all routine personnel and
industrial relations matters.

One day, during informal discussion with Mr. Amit Kapoor, Mr. Vikas suggested him of linking Human Resources Management with Company’s strategic goals and objectives to further improve business performance and also to develop Organisational culture that fosters more innovative ideas. He also advocated creating abundant ‘Social Capital’ on the ground that people tend to be more productive in an environment which has trust and goodwill embedded In it rather than which is highly hierarchical and formal.

Mr. Amit Kapoor disagreed with Mr. Vikas and told him that the role of Human Resources Department was only peripheral to the business and all his suggestions about its strategic role were beyond the purview of Personnel Administration and Human Resources Department. After this, Mr. Vikas started having number of arguments with Mr. Amit Kapoor in several issues relating to personnel and industrial relations since he felt that a person with a degree in Human Resources Management was in a far better position to run Personnel Administration and Human Resources Department.

Mr. Amit Kapoor – the Chief Personnel Manager had often shown his displeasure on Mr. Vikas’s argumentative tendency and had made it known to the General Manager. The General Manager called Mr. Amit Kapoor In his office to inform him that he has been elected for an overseas assignment. He further told him to find a suitable person as his successor; he even suggested Mr. Vikas as a possible candidate. Mr. Amit Kapoor, however, selected Mr. Bairam, who was working as Training Manager in a Multinational Company for the last 5 years.

Mr. Vikas, soon started having arguments with Mr. Balram also over number of issues relating to industrial relations since he felt that he had no experience in handling industrial relations matters. Mr. Balram now realised that Mr. Vikas was trying to make things difficult for him. After a series of meetings with the General Manager, Mr. Bairam eventually succeeded in convincing him to transfer Mr. Vikas to an office outside Punjab.

On learning about his impending transfer, Mr. Vikas wrote a letter to the General Manager joining details of various instances, when Mr. Balram had shown his Incompetence in handling problematic situations. When asked for explanation by the General Manager.

Mr. Bairam had refuted almost all the allegations. The General Manager accepted his explanation and informed Mr. Vikas that most of his allegations against Mr. Balram were unwarranted and baseless. He further advised him to avoid confrontation with Mr. Balram.

Mr. Vikas then wrote a letter to the Chairman repeating all the allegations against Mr. Balram. On investigation, the Chairman found most of the allegations true. He then called all the three – the General Manager, the Chief Personnel Manager, and the Personnel Manager in his office and implored them to forget the past and henceforth to work in coordination with each other In an environment of Trust and Goodwill.
Questions:
(a) Identify and discuss the major issues raised In the case. (Nov 2008, 6 marks)
(b) Comment on the recruitment of the two Chief Personnel Managers. (Nov 2008,4 marks)
(c) Would you justify Mr. Vikas’s argumentative tendency with the Chief Personnel Managers? Give reasons for your answer. (Nov 2008, 4 marks)
(d) Do you agree with suggestion offered by Mr. Vikas to link Human Resources Management with the company’s strategic goals? If yes, suggest prominent areas where Human Resources Department can play role in this regard. (Nov 2008,6 marks)
Answer:
(a) The Major Issues Raised In the case are:
(i) Lack of Corporate Functioning: Sahnl Auto Industries is a multinational company with and annual turnovers of ‘₹ 1000 crores and 2000 persons in a factory which needs a human resources strategy formulation.

(ii) Right person at the right job: Mr. Amit Kapoor Is an automobile engineer that means he is a technical person and hence was appointed as a Product Development Manager but later on he was transferred to Personnel Administration and Human Resource Department which is not his area.

A similar issue is also seen in the case of recruitment of Mr. Bairam as a head of Personnel Administration and Human Resource Department though he was a Training Manager in MNC for last 5 years.

(iii) Grapevine: li is seen in the case that during an informal communication between Mr. Amit Kapoor and Mr. Vikas, disagreements cropped in which led to a number of agreements relating to personal and industrial relations.

(iv) Seniority Vs. Merit: In the given case, seniority of Mr. Amit Kapoor has been taken as the only criteria for appointing him as the Chief Personnel Manager. However, Mr. Vikas who is M.B.A. in human resource from a renowned business school was appointed as the Personnel Manager.

(v) Lack of Company’s Corporate Strategy: A company’s strategic goals should always be linked and integrated with all the functions of the organization. But in the case of Sahni Auto Industries human. resource was not linked and was viewed only as a peripheral function of the organization.

(vi) Lack of Strategic Organisational Response: When Mr. Vikas wrote a letter to the General Manager regarding various instances in which Mr. Bairam had shown his incompetence in handling problematic situations, the General Manager did not looked into the matter deeply and informed Mr. Vikas that most of his allegations against Mr. Bairam were unwarranted and baseless. However, on the same since, when investigation was done, the chairman found most of the allegations true.

(b) Recruitment of the two Chief Personnel Managers (CPM):
CPM – I: The first CPM MR. Amit Kapoor was prima fade automobile engineer who was promoted as a CPM of human resource department due to his successful stint of 4 years as a product development managers.

However, while doing so It was some where overlooked that the basic unique selling point (USP) of Mr. Kapoor was engineering and not managing. This was the reason that he disagreed with the suggestion of Mr. Amit Kapoor regarding linking of human resources with company’s strategic goals.

Mr. Amit Kapoor was also of the notion that all suggestions about strategic roles are beyond the purview of personnel administration and HRA.

CPM – II: The second CPM was selected by Mr. Amit Kapoor as his success or who was working as a training manager in a multinational company for the last 5 years named MR. Balram. Here again the choice for a perfect and professionally qualified CPM was not up to the mark and hence again there were differences of opinion between Mr. Vikas who is an MBA in human resources and Mr. Balram who has been working as a training manager.

(c) The working style of a professional is altogether different as compared to a traditional experienced person hence Mr. Vikas being an MBA is having strategic style of working. The strategic responsibilities of human resource manager includes developing a staffing plan for effectively implementing strategies regarding corporate goals and visions.

Mr. Vikas has a strong academic background from a renowned business school. Hence his working style is of integrating all organisational elements including human resources with the company’s strategic goals.

Mr. Vikas is arguing with all the chief personnel managers because the style of working of managers is different as compared to Mr. Vikas’s style of working as he is a master In human resource and knows what a well-designed strategic- management system is all about. He knows that there should be a linking between human resource management and company’s strategic goals which both the chief personnel managers are not ready to understand.

This is the core reason for Mr. Vikas’s argumentative tendency which Is upto an extent justified but however, I would advise Mr. Vikas to find a midway as regards such arguments and find a path and method to make both the managers understand the importance of his views and thoughts.

(d) The job of human resource manager is changing rapidly strategic responsibilities of the human resource managers include assessing the staffing needs and develop a staffing plan for effectively implementing strategies. There should be a clear link between human resource and company’s strategic goals. Linking company and personal benefit is a major new strategic responsibility of human resources managing. The need to match individual aptitudes with strategy Implementation tasks should be considered for the success of the organization.

Hence, I agree with the suggestions offered by Mr. Vikas to link human resource management with the company strategic goals. The prominent areas where human resources department can play role in this regards are:
(i) Providing Purposeful Direction: The human resource management must be able to lead people and the organization towards the desired direction Involving people right from the beginning. The most important tasks of a professional management is to ensure that the object of an organization has been internalized by each individual working In the organization.

Goals of an organization states the very purpose and justification of its existence. The management have to ensure that the objects of an organization becomes the object of each person working In the organization and the objectives are set to fulfill the same. Objectives are specific aims which must be in the line with the goal of the organization and the all actions of each person must be consistent with the objectives defined.

(ii) Creating Competitive Atmosphere: Present’s globalized market :
maintaining a competitive gain is the object of any organization. There are two important ways of business can achieve competitive advantages over the others. The first is cost leadership which means the firm aims to become a low-cost leader in the industry. The second competitive strategy is differentiation under which the firm seeks to be unique in the industry in terms of dimensions that are highly valued by the customers. Putting strategies into effect carries a heavy premium on having a highly committed and competent workforce.

(iii) Facilitation of Change: The Human resource will be more concerned with substance rather than form, accomplishments rather than activities, and practice rather than theory. The personnel function will be responsible for furthering the organization not just maintaining it. Human resource management will have to devote more time to promote changes than to maintain the status quo.

(iv) Diversion of Workforce: In the modem organization management of diverse workforce is a great challenge. Workforce diversity can be observed in terms of male and female workers, young and old workers, educated and uneducated workers, and unskilled and professional employees. etc. Moreover, many organizations also have people of different castes, religions, and nationalities, The workforce In future will comprise more of educated and self-conscious workers. They will ask for higher degree of participation and avenues for fulfillment. Money will no longer be the sole motivating force for majority of the workers. Non-financial incentives will also play an important role in motivating the workforce.

(v) Empowerment of Human Resource: Empowerment means authorizing every number of a society of organization to take of his/her own destiny realizing his/her full potential. It involves giving more power to those who, at present, have little control what they do and little ability to influence the decisions being made around them.

(vi) Building Core Competency: The human resource manager has a great role to play in developing core competency by the firm. A core competence is a unique strength of an organization which may not be shared by others. This may be in the form of human resources, or marketing. capability, or technological capability. If the business is organized on the basis of core competency, it Is likely to generate competitive advantage.

Because of this reason, many organization have restructured their businesses by divesting those businesses which do not match core competence. Organization of business around core competence implies leveraging the limited resources of a firm. It needs creative, courageous, and dynamic leadership having faith In organization’s human resources.

Multiple Choice Questions

Question 1.
Marketing is an activity performed by ……………………. .
(a) all manufacturing units
(b) all service organisation
(c) all supply organisation
(d) all business organisation.
Answer:
(d) all business organisation.

Question 2.
In present-day marketing process is the process of …………………… .
(a) Analysing market opportunities
(b) Selecting target customers, developing the marketing mix
(c) Managing the marketing effort
(d) All of the above
Answer:
(d) All of the above

Question 3.
Value Delivery Network encompasses
(a) Companys chain 0f Activity
(b) Customers
(c) Suppliers
(d) All of the above
Answer:
(d) All of the above

Question 4.
Marketing mix decision is based on “APs’ concept, which means:
(a) Product. Price, Place, and Product Quality
(b) Product, Price, Place, and Promotion
(c) Product Price, Product Quality Product Quantity
(d) Product, Price, Place of origin, and Place of sales.
Answer:
(b) Product, Price, Place, and Promotion

Question 5.
In marketing mix decision term 4PSK are used from a marketer angle while term 4Cs is used from a …………………. angle.
(a) Customers
(b) Producers
(c) Consumption
(d) Customers Preference
Answer:
(a) Customers

Question 6.
Marketing has various components except ……………………….. .
(a) Planning
(b) Procedure
(c) Implementation
(d) Control
Answer:
(b) Procedure

Question 7.
Financial Strategy does not include:
(a) Developing projected financial statements
(b) Management of funds and evaluating the worth of a business
(c) Strategies related to operations, planning and control are concerned with aggregate future planning
(d) Acquiring needed capital of fund.
Answer:
(c) Strategies related to operations, planning and control are concerned with aggregate future planning

Question 8.
Some examples of decisions that may required financial and accounting policies, except:
(a) To Lease or buy fixed assets
(b) Whether to be a price leader or a price follower
(c) To determine an appropriate dividend payout ratio
(d) To extend the time of accounts receivable.
Answer:
(b) Whether to be a price leader or a price follower

Question 9.
Logistics can help a business except
(a) Cost Saving
(b) Reduced Inventory
(c) Synchro – Marketing
(d) Competitive advantage
Answer:
(c) Synchro – Marketing

Question 10.
Operations strategy Is related to the products on system including …………………. .
(a) Operational Planning
(b) Control Management
(c) Logistics Management
(d) All of the above.
Answer:
(d) All of the above.

Question 11.
The term ………………… , ……………….. refers to the linkages between suppliers, manufacturers and customers.
(a) Product cycle
(b) Production chain
(c) Supply chain
(d) Logistic supply
Answer:
(c) Supply chain

12. Process of planning, implementing, and controlling the supply chain operation is known as ………………… .
(a) Logistic Supply
(b) Logistic Management
(c) Production Chain Management
(d) Supply chain management
Answer:
(d) Supply chain management

Question 13.
Logistic Management is an extension of supply chain management statement is
(a) True
(b) False
(c) Partially True
(d) None
Answer:
(b) False

Question 14.
Research and development policies can enhance strategy implementation except:
(a) Emphasize product or process improvement
(b) Improvement of delivery time
(c) Develop robotics or manual type process
(d) Be ledgers or foflower In R&D.
Answer:
(b) Improvement of delivery time

Question 15.
Conflicts between marketing, finance, R & D, and Information systems departments can be minimized with …………………… .
(a) Clear policies and objectives
(b) Clear policies and procedures
(c) Clear understanding
(d) Clear procedure and Implementation.
Answer:
(a) Clear policies and objectives

Question 16.
Under Human Resource Management, the strategist tries to achieve a ……………………. for his organisation.
(a) Cost Saving
(b) Reduce cost of Human Resources
(c) Customer Satisfaction
(d) Competitive advantage
Answer:
(d) Competitive advantage

Question 17.
In which area HAM function was been recognized as a strategic partner?
(a) Building core competency
(b) Formulating and implementation of organisational strategies.
(c) Implementation of different types of strategies
(d) None of the above
Answer:
(b) Formulating and implementation of organisational strategies.