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BBA 3rd Year Corporate Strategy Short Questions Answer

BBA 3rd Year Corporate Strategy Short Questions Answer

0.7. What do you mean by benchmarking?

Ans. Benchmarking: Benchmarking is a course of action used by organisation to measure business practice, evaluate internal process and identify area of improvement in order to determine who is the best in the industry and who sets the standards for its customers. The main objective of benchmarking is to understand and evaluate the current positions of a business in relation to ‘best practice.

The term benchmarking was first used by cobblers to measure people’s feet for shoes. They would place someone’s foot on a ‘bench’ and mark it out to make the pattern for shoes. Benchmarking is mostly used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in metric of performance that is then compared to others.

Benchmarking involves management indentifying the best firms in their industry, or any other industry where similar processes exist and comparing the results and processes of those studied (the ‘targets’) to one’s own results and processes to learn how well the targets perform and more importantly, how they do it. Most business processes are common throughout industries. For example, NASA has the same basic human resources requirements for hiring and developing employees as does American express. British telecom has the same customer satisfaction survey process as Brooklyn Union Gas. These processes are all common and can be benchmarked very effectively.

Q.8. Explain the various principles of TQM.

Ans.                            Principles of TQM

1. Be Customers Focused: Whatever you do for quality improvement, remember that only customers determine the level of quality, whatever you do to foster quality improvement, trained employees, integrate quality into processes management, only customers determine whether your efforts were worthwhile.

2. Employee Involvement: This principle says that organisation must allow its employees to make decision on activities controlled by them. This not only takes the burden off the supervisor, but it also motivates these internal suppliers to do better work.

3. Integrated System: This can be achieved by ensuring that all employees are aware and understand the business mission and vision. This helps employees to work in unity and intimacy.

4. Continual Improvement: This principle of TQM says about continuous improvement by using analytical and creative thinking. Certainly competition is improving, so it is very necessary to | strive to keep ahead of the game.

5. Communication: Communication strategy is one of the principles used to communicate and educate employee. Managers must inform staff about every activity and progress, staff must know what is going on.

Q.9. What is six sigma?

Ans. Six Sigma: Six sigma (stands for six standard deviations), is a statistical technique used by organisations to improve the business process performance and to maintain consistent quality by decreasing deviation. The concept of six sigma was first introduced by Bill Smith at Motorola in 1980s. This technique was first used in the manufacturing department of Motorola in order to improve the process that is used to develop millions of parts. According to Motorola, this mythology has saved the company over 17 billion dollars from its inception to 2006.

The main objective of using six sigma technique is to provide reliable services, deliver high performance, eliminate defects and improve efficiency. Nowadays, the six sigma technique is being used in many organisational areas such as supply chain management, support services (call centres, customers services), product design, project management. Let us a take an example of car assembling process. You are required to assemble particular percentage of cars within eight hours of time duration and if you assemble only 30.9% of cars it means you are at sigma level 1. Similarly, if you assemble 69% of cars it means you are at sigma level 2. If you assemble 93%, means you are at sigma level 3 and so on. To reach at level 6 you must assemble 99.9997% of cars.

Q.10. What do you mean by strategy formulation?

Ans. Strategy Formulation: It is the process by which an organisation chooses the most appropriate courses of action to achieve its defined goals. This process is essential to an organisation’s success, because it provides a framework for the actions that will lead to the anticipated results. Strategic plans should be communicated to all employees so that they are aware of the organisation’s objectives, mission and purpose. Strategy formulation forces an organisation to carefully look at the changing environment and to be prepared for the possible changes that may occur. A strategic plan also enables an organisation to evaluate its resources, allocate budgets and determine the most effective plan for maximising return on investment.

A company that has not taken the time to develop a strategic plan will not be able to provide its employees with direction or focus. Rather than being proactive in the face of business conditions, an organisation that does not have a set strategy will find that it is being reactive while the organisation will be addressing unanticipated pressures as they arise and the organisation will be at a competitive disadvantage.

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