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Tuesday, July 16, 2013


GE’s Strategic Business Planning Grid

General Electric (or McKinsey) matrix uses market attractiveness as not merely the growth rate of sales of the product, but as a compound variable dependent on different factors influencing the future profitability of the business sector. These different factors are either subjectively judged or objectively computed on the basis of certain weightages, to arrive at the Industry Attractiveness Index. The Index is thus based on a thorough environmental assessment influencing the sector profitability. 

Factors determining Industry Attractiveness:

Sl. No

Factors Determining Industry Attractiveness:  

Typical Weightage


Size of market



Rate of growth of sales and cyclic nature of business           



Nature of competition including vulnerability to foreign competition



Susceptibility to technological obsolescence and new products



Entry conditions and social factors






Monday, July 15, 2013


BCG’s Growth-Share Matrix

BCG’s Portfolio Analysis is based on the premise that majority of the companies carry out multiple business activities in a number of different product-market segments. Together these different businesses form the Business Portfolio which can be characterised by two parameters: 

  1. Company’s relative market share for the business, representing the firms competitive positions; and
  2. The overall growth rate of that business. 

The BCG model proposes that for each business activity within the corporate portfolio, a separate strategy must be developed depending on its location in a two by-two portfolio matrix of high and low segments on each of the above mentioned axes.  

Relative Market Share is stressed on the assumption that the relative competitive position of the company would determine the rate at which the business generates cash. An organization with a higher relative share of the market compared to its competitors will have higher profit margins and therefore higher cash flows. 


Sunday, July 14, 2013



Portfolio analysis is an analysis of the corporation as a portfolio of different business with the objective of managing it for returns on its resources. The business may be in the forms of organizational units, such as different subsidiaries or divisions of a parent company or Strategic Business Units (SBUs). 

Thus, portfolio analysis looks at the corporate investments in different products or industries under the common corporate jurisdiction. The corporate manager analyses the future implications of their present resource allocations and continuously evaluates which operations or products to expand or add, and which ones to be curtailed or disposed off, so that the overall portfolio balance is maintained or improved. The focus is on the present as well as the future.

The activities of a company and its effectiveness in the market place also depends on what the other competing companies are doing. Therefore, the portfolio analysis takes into consideration such aspects as the company’s competitive strengths, resource allocation pattern and the industry characteristics.

Portfolio analysis is primarily concerned with the balancing of the company’s investments in different products or industries and is useful for highly diversified multi-product companies operating in a limited market. The different subsidiaries or strategic business units have to be balanced with respect to the three basic aspects of running the business: 

  1. Net Cash Flow
  2. State of Development
  3. Risk 

Portfolio analysis is one of the methods to assist managers in evaluating the strategy. Let us now discuss different types of Business Portfolio Analyses.

Display Matrices  

The purpose of analysis is to optimally allocate resources for the best total return, with focus on the corporate strategies. Many different approaches involving different display matrices have evolved over the years, with the common objective of successful diversification. Some of the common display matrices are: 

  1. Strategic Planning Institute’s Matrix
  2. Arthur D. Little Company’s Matrix
  3. Hofer’s Product/Market Evolution Matrix



Saturday, July 13, 2013


Strategy evaluation is the last stage of the strategic management process and comes after strategy formulation and implementation as shown below :
STRATEGY           –– STRATEGY                 –– STRATEGY
An organization can have one of the best formulated and implemented strategies but if the evaluation of these are not done, they become obsolete over a period of time. Therefore, it becomes important to have an effective evaluation system so as to help the organization to achieve its objectives.  
The evaluation process involves the control mechanism, which helps in taking corrective actions. we are going to discuss the qualitative aspects and the portfolio analysis so as to develop a complete understanding of evaluation and control.


Monday, July 8, 2013



With the completion of the strategy implementation the organization looks forward to achieving the desired goals and objectives. It is necessary, however, to introduce the process of strategy evaluation and control in the early stages of implementation to see whether the strategy is successful or not and to carry out mid-course corrections wherever necessary. There are several reasons why a strategy may not lead to desired results. The external environment may not actually follow a trend as was expected at the time of planning the strategy. The internal changes within the organization such as the organizational systems consisting of structure, policies and procedures may not reflect harmony with the strategy. After a while, the top management of even middle level managers may find it difficult to exercise a substantial degree of control over operating systems. The unexpected moves of the competitors might create major gaps in the strategy. Thus the list of such factors will require a continuous evaluation and control of strategy. 

The evaluation of the strategy of an organization can be done qualitatively as well as quantitatively. The quantitative evaluation based on data and is possible through post facto analysis to detect whether the content of strategy is working or has worked. However, qualitative evaluation call also be done by addressing the question: Will it work? The qualitative evaluation can thus be done before activating plans of change. The qualitative evaluation and control or strategy is a real time process. The performance of strategy is monitored and corrective actions are taken. The basic aim of any organization is to achieve its goals. But to achieve the goals, the organization faces lots of hurdles. To overcome these hurdles, it is necessary for any organization to have a sound strategic control process. The word meaning of 'control' itself means 'to regulate' or 'to check'. This means that the top management needs to keep check on how well the strategy is being implemented to achieve the objectives of the organization. For example, if the business is not giving 1.esu1ts as expected, it may be necessary to increase promotional efforts, or revise the product policy, or as a last resort, the firm may pull out of a particular business.

The strategic control process is closely related to strategic planning process. Figure-1 represents the relationship between strategic planning and strategic control process. The process consists of three phases, which are as follows:  

  1. Evaluation criteria;
  2. Performance evaluation; and
  3. Feedback


Saturday, July 6, 2013



Each organization has its own way of dealing with corporate problems and do have their own organizational structure. The culture of the organization very much depends on the behaviour of the employees. If the employees have a strong commitment towards their organizations, the organization is said to have a strong culture and vice versa. For example, Infosys—one of top companies in the area of IT in India - can be said to have a strong organizational culture. This is reflected in its annual results.

It is not easy to have a strong culture in the organization. Lot of it depends on how the leaders of the organization handle their employees. Looking at this discussion, we can infer that ‘corporate culture’ is the values and beliefs accepted and practiced by all the employees of the company. To have an appropriate corporate culture, the strategy of the organization should match with it. In this section we would stress more on the role of leaders in shaping the culture of the organization and will discuss the role of leaders in handling the employees.

When it comes to handling people, the total personality of a leader comes into play. Managerial effectiveness is the management terminology for leadership. It is well to remember that this truth is applicable at all the levels of management—Junior, Middle and Senior. The ‘Katz Model’, shown in Figure-1 shows the relevant value of management skills at various levels. Although there have been some minor changes in the original design, it clearly shows that Human Relation Skill is consistently the biggest component at all the levels of management.

Figure-1 : Katz Model—Skills of an Effective Manager

A leader in any organization has to handle people in the following three directions: 

a) The first—is downwards—his/her own team which he has to build as an effective and cohesive group motivated to achieve the coals of the organization.

b) The second—is lateral, which involves winning the support and cooperation of colleagues over whom the leader has no control, but who have an important functional relationship with the group/organization headed by the leader.

c) The third-is a purposeful, constructive and harmonious relation with the higher authority under whom a leader functions-the boss.

Human nature: In order to handle people effectively it is useful for a leader to understand human nature. There are a large number of theories about it. For developing leadership potential it is useful to focus our attention on two concepts which have a lasting and practical value for learners. 

Once people are convinced that s/he is a person who knows them well and s/he truly cares about them then they would do anything for the leader. However, it requires a very major effort to know people and know them better than even their own mother, effort in terms of time, attention and genuine interest in people.

The difference between ‘indulgence’ and ‘caring’ should be clearly understood. Indulgence means excessive gratification-giving material things-money, conveniences and so on. Indulgence, by and large, spoils the recipients. Caring, on the other hand, is a matter of attitude—it is a quality based on unselfish love. Consequently, caring is a matter of heart and not related to material resources. A skill that often helps a leader to know and care for his/her people is the skill of communication.

Communication : To know people: The ability to know people is the starting point to handle them and communication skill plays an important role in this ability. These help a leader TO TELL what s/he wants done. However, some essential features of this skill relevant to knowing and handling people need discussion.


Most of the strained and fractured relations can be traced to the mutual breakdown of communications between individuals in a family, group, community, countries and even among the community of nations. One starts seeing only the uglier side of others and it leads to alienation. The ability to communicate, on the other hand, puts human relations on an even keel by removing misperceptions and misunderstandings. The ability has two sides:

The skill of expression; and

The skill of listening.

The Skill of Expression 

The skill of expression does not merely mean gift of the gab or cleverness with words. For a leader the skill of expression is a vehicle to generate trust. Verbal expression counts for only 30 per cent in this skill, the balance 70 per cent is the body language—expression in the eyes, conviction in the tone, the sincerity in the posture, and generally, the vibrations that a person conveys. Body language communicates the total personality of a leader, and its effectiveness depends, entirely on the strength and balance of the “Universal Inner Structure of Effective Leaders”. In genuine expression there can be no pretension. Spontaneity, straightforwardness and sincerity are far more effective than sheer command over the language.

The Skill of Listening 

The skill of listening means understanding and knowing the other person. It has been found that this part of communication skill is even more important, but, unfortunately less prevalent. Listen with ears and observe body language with eyes. Even nature has a design in the listen talk ratio. It gives two ears to a person, but only one mouth.

Listening has three ingredients. The first, of course, is the physical process of hearing what the other person is saying; this involves attention. Comprehending what the person is saying is the second ingredient, and demands undivided attention. Looking out of the window, or attending to routine papers while listening are signs of inattentiveness. Remembering what you listen is the third ingredient of this skill and, naturally, comes about only if a leader hears and comprehends what is said. The ability to listen attentively and with sympathy in which a leader shows signs of warmth, makes the other person feel that s/he is an individual and not merely a faceless part of the machine. It helps generate trust in the team. Above all, ‘listening to the body language with eyes’ gives a leader an opportunity to really know his people and their characteristics. 

Experience shows that effective communication means: 

50 per cent listening;
25 per cent speaking;
15 per cent reading;
10 per cent writing.

The operative part of Leadership capability lies in the ability to handle people in a manner that they give their best for a cause, organization and the task in hand. This capability depends on the strength and balance of TO BE in a leader—his/her Universal Inner Structure of Effective Leadership. Reinforcing this structure is within the reach of anyone who applies himself to this exciting endeavour with SINCERITY and WILL POWER till transformation takes place. Even while one is making an effort to improve the source of leadership a few practical hints to handle people will be of value to anyone who desires to be more effective. 

Handling people working for a leader 

Self-control : No team captain can hope to control and inspire his/her team unless s/he learns to control and discipline himself. This is a difficult task, but without it there is little chance for a man to become a successful leader. It requires a certain amount of philosophical outlook and frugality which is often associated with aristocrats and saints. Self-control does not only add to the leadership potential, it also is a source of great happiness. 

Success and Failure : It is a basic trait of human nature that an individual ascribes successes of an organization to the part played by him/her, and blames failures on the system. On the other hand, a good leader gives credit to his/her men for successes and takes responsibility for failures. This approach binds men together in a collective effort to work for the organization. 

Setting Targets : It is useful to let individuals themselves set targets for work. In this event not only are they likely to meet these targets, but even surpass them. 

Correcting Mistakes : A leader has often to correct the people who falter, show traces of weakness or fail. It is better to say “This is not what is expected of a person of your calibre and ability” rather than words to the effect “what else one could expect from a clot like you”. The first approach enhances a man’s self-respect even in failure. The second approach makes him your enemy. 

We and not you : A good leader always projects himself/herself as a part of the team and invariably talks in terms of “We” and not “You”. 

Accessibility : It is a leader’s responsibility to ensure that s/he is accessible. S/he should institutionalise the time and place for meeting the members of his team. Tragedies and illnesses are a frequent occurrence in human life. A good leader makes it a point to find time for seeing men who are afflicted to who have difficult problems to tackle. Visiting them, in case they are hospitalised, should also be a matter of priority time allocation. You win lasting commitment from people thus handled. 

Anger : A good leader does not lose his/her temper. However, righteous anger is very different from uncontrolled rage and should not be suppressed. However, special care should be taken to uphold the honour and dignity of an individual in the presence of his colleagues and family members. 

Recognition : Good and effective leaders have used the human urge for recognition with telling effect to foster interpersonal bonds with their people and to motivate them. They have scrupulously used the principle of ‘praise in public and reprimand in private’ to create an organizational culture in which people work ‘much beyond call of duty’ to maintain excellence in their organization. The real basis of making individuals feel like heroes is, of course, genuine care and unselfish love by the leader for his people. 

In the ultimate analysis, handling people is a matter of attitude. It is expecting the utmost from them while caring for them completely. It is possible only if a leader can create an atmosphere in which there is free communication. Tolerating shirkers and parasites in the name of “being human” does a great deal of damage. Fortunately, such people are few and far between, and must be dealt with strictly.


Tuesday, July 2, 2013



The statement that a ‘good leader varies his/her style between authoritarian to participative (autocratic to democratic, if you like) depending on the task, the changing situation s/he encounters and changing group that s/he has to lead’ sums up rather briefly, the way an effective leader has to function. However, no effective leader ever consciously adopts a style—it comes, and indeed it must come, naturally from within. Style invariably is the reflection of the substance. It is the expression of the man and the strength and balance of his “Universal Inner Structure of Effective Leaders”. Rusi Modi while discussing leadership repeatedly emphasises “above all be yourself”.

Conceptually the changes in style which spread between the two extremes is well depicted in the model evolved by R. Tannenbaum and W. Smidt shown in Figure-1. It should be seen only as an illustration depicting the range of options available.

Figure 1 : Leadership Styles


In practical terms any change in style is merely an intuitive variation in the mix of personal example, persuasion and compulsion. Personal example is the most potent factor in the technique to inspire people to do what they are expected to do. If a leader can work 12 to 14 hours a day then the message gets across. Personal example in punctuality, integrity, honesty, frugality, courage, persistence, initiative unselfish love of people, or whatever is infectious with the Indian people. They try and live up to the standards of a leader. TO DO YOURSELF what you expect your people to do is the secret of leading people.

There are people and there are times when persuasion is necessary to motivate people to do what has to be done. When they understand the circumstances, people do rise to the occasion and go through the most irksome tasks. The long-term persuasion lies in the organizational culture (esprit de corps) in which people take pride in doing anything to uphold the honour and good name of the organization.

Compulsion by the way of punishing the few indolent, lazy or resentful individuals who do not perform their share of work is also necessary to maintain discipline. Also, to let people know unambiguously that the leader is fair and just, but not tolerant of the incompetent, the crooked and mischievous. There is an innate tendency among Indians to kill or retard an organization with kindness. Inability to take appropriate action is rationalised by arguments like pressures from the top, fear of litigation, trade union agitation and so on. To a degree it is also due to a lack of moral courage.

Leadership in Indian Context 

More and more organizations in the country are reflecting the diversity of Indian people. Executives and workers in organizations often hail from different parts of the country, speak different languages, have different customs and traditions, profess different religions and have different ethnic origin. For a leader to be able to handle such groups of people, s/he must be able to rise above his/her own narrow regional, religious, linguistic and ethnic origin, and project, by convictions and actions, a true all-India personality to be able to command, respect and loyalty of his team. There are two essential requirements for succeeding in this goal.  

First, a leader should have a good grasp and pride in the long history and cultural ethos of India. Second, a leader should have rudimentary knowledge of all religions of India and s/he should genuinely respect all faiths.

Attributes of successful leader – Here are some attributes of successful leaders. 

  1. Ambition
  2. Willingness to work hard
  3. Enthusiasm
  4. Enterprise
  5. Capacity to speak lucidly
  6. Astuteness
  7. Single-mindedness
  8. Ability to ‘stick to it’
  9. Willing to take risks
  10. Capacity for lucid writing
  11. Leadership
  12. Imagination
  13. Ability to take decisions
  14. Ability to spot opportunities
  15. Ability to administer efficiently
  16. Analytical ability
  17. Willingness to work long hours
  18. Ability to meet unpleasant situation
  19. Curiosity
  20. Understanding of others
  21. Open-mindedness
  22. Skill with numbers
  23. Ability to adopt quickly to change
  24. Capacity for abstract thought
  25. Integrity 

Developing appropriate leadership is one of the most important elements in the implementation of a strategy. This is important because leaders are key organic elements who help an organization cope with changes. Appropriate leadership is necessary, though not a sufficient condition, for mobilising people, and for developing effective structure and systems for the success of strategy. Failure of leadership may lead to difficulties in achieving goal congruence, communication breakdown, ambiguity with regard to roles of sub-units, and difficulty in obtaining commitment to a plan, e.g., staff conflicts and lack of strategic thinking. Leadership is the key factor for developing and maintaining the right culture and climate. 

Figure -2 : Dimensions of Leadership Styles 

There are several aspects of leadership styles and skills, some of them are more appropriate to the context/content of a strategy, while others are desirable attributes in general for the success of an organization. Leadership styles are manifested through the orientations, Khandwalla has identified five orientations (dimensions of style) namely, the risk taking (willingness to make high risk, high return decisions), optimisation (degree of commitment to the use of planning, and management science techniques in decision making by technically qualified people vis-a-vis seat-or-the pant decisions), flexibility (degree of looseness and flexibility in organization structuring), participation (of those other than the ones holding key positions) and coercion (use of fear and domination) (see Figure-2).

For superior performance on key organization goals he proposes that if : 

  1. the orientation of top management is risk taking, then it should be at least moderately organic and coercive in proportion to internal resistance to change.
  2. the orientation is risk aversive, then it should be moderately mechanistic and non-coercive.
  3. the orientation is of highly optimisation type, then it should be strongly participative.
  4. the orientation is highly seat-or-the-pant and non-technocratic, then it should be at least moderately risk taking and non-participative. 

Different leadership styles have “good fit” with different environments. Since the strategy determines the product/market scope, and also the environment in which the organization is going to operate in future, it has a bearing on leadership style. Khandwalla has further categorised leadership styles into seven types to relate them to environment, each reflecting different mix of the five orientations, as shown in the table -1.

Table 1: Seven Styles of Top Management

Like leadership, there are several dimensions of environment also, namely, the degree of turbulence/volatility (high degree of changeability/unpredictability), hostility (hostile environment are highly risky and overwhelming), heterogeneity (diversity of markets/consumers), restrictiveness (economic, social, legal and political constraints) and the degree of technological sophistication. The leadership styles which are more appropriate to different types of environment are shown in Table 1.

Table 2: Environment-Style Fit

It should be noted that while the above discussion gives a good idea of orientations and the styles of leadership to respond effectively to the environmental demands, it does not cover the leadership skills required for “revitalisation” or “transformation” of the “organization”. The above discussion gives the attributes of a manager who is a “transactional” leader, and not a “transformational” leader. The task of a “transformation” or “revitalisation” leader is to take the organization to a dominant position. This involves managing change or transition. It has three distinctive phases. 

  1. Recognising the need for revitalisation
  2. Creating a new vision
  3. Institutionalising change. 

The leadership task in the first phase requires the ability to sense the need for change (often there is a low threshold to catch trigger events in the environment). The second phase requires communication skills to create a vision for future that excites people to move, and also the interpersonal skills and creativity to mobilise commitment of at least at critical mass in the organization. To perform the task in the third phase of the transformation process the leader should have the ability to understand and manage powerful conflicting forces in people. The negative emotions and threats to power and authority have to be transformed into positive emotions and reconciliation. New ways of working, new styles, new culture, and new norms have to be developed. The shock of change has to be reduced.

The challenges of leadership in implementation are grave as leadership is the most scarce resource. Organizations cope with it in several ways, by changing the current leadership and by developing appropriate leadership styles. The change of current leadership may not be easy to achieve even though it might be inevitable for effecting “transformation” in the situation. The existing leadership might have been cast in a particular mold which may be inappropriate to the demands of the organization. The “casting” effect can be overcome if changes are introduced gradually in the leadership styles and skills, to avoid accumulated lags or mismatches between existing leadership styles/skills and company’s changed requirements. This would require a blueprint to indicate the kinds of styles and skills, and the number of persons of different styles and skills required in future, current talent available and a plan of recruitment and grooming. The task of human resources development is thus very closely related and determined by strategy of the organization.

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