STRATEGIC MANAGEMENT ALLIANCES AND INTERNATIONAL TRADE - ICSI

606 Pages·2012·4.02 MB·English

PROFESSIONAL PROGRAMME
STUDY MATERIAL
STRATEGIC
MANAGEMENT
ALLIANCES AND
INTERNATIONAL
TRADE

MODULE III - PAPER 5

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PROFESSIONAL PROGRAMME
STRATEGIC MANAGEMENT, ALLIANCES AND
INTERNATIONAL TRADE
Strategy is a broad concept that covers a multitude of different issues,
concepts and methods. Strategy requires a significant amount of work to
understand and even the experts often find themselves searching for new
ways to research and think about the topic. For managers and leaders,
strategy is at the centre of the effort to create value for customers to respond
to competitive challenges and to build strong organizations. All this leads to
make optimum utilization of organization’s material and human resources in
order to achieve better financial performance, improved qualitative decisions,
employee motivation, minimum resistance to change, etc. by using various
theories, models and management techniques. An organization always
operates in the environment of risk and uncertainty which is the result of
operation of multiple forces i.e. economic, technological, legal, political, social
and global. Strategic management helps the organization to develop set of
decisions and actions resulting in formulation and implementation of strategies
designed to achieve the objectives of an organization in a given frame work.
The establishment of World Trade Organisation ushered in a new era of
global economic co-operation reflecting the widespread desire to operate in a
fairer and more open multilateral trading system. The overriding purpose of
World Trade Organisation is to help trade flow as freely as possible as long as
there is no undesirable side effect. It serves as a forum for trade negotiations
and for dispute settlement between the parties. The WTO agreement
recognizes the need to secure for developing countries, particularly the least
developed, a growth in the share of international trade commensurate with the
needs of their economic development. In the wake of WTO, the International
trade has also become a vital component of development strategy, which can
be used as an effective instrument of economic growth.
In the light of above discussion, this study material has been prepared to
provide sufficient exposure in strategic management, international trade,
particularly in the context of World Trade Organisation. Added emphasis has
been laid on strategic alliances, foreign collaborations and joint ventures
abroad, to enable the candidates to discharge efficient services and to tackle
practical situations.
The entire paper has been discussed in sixteen study lessons, divided into
three parts i.e., Part A - Strategic Management, Part B, Strategic Alliances and
Part C International Trade. Every effort has been made to give a
comprehensive coverage of all the topics relevant to the subject. In fact, this
being a management oriented paper; students need to have good blend of
theoretical knowledge and practice to attain the requisite proficiency and
confidence. Various changes made up to August 2011 have been included in
the study material. However, it may so happen that some developments might
have taken place during the course of time. Therefore, in order to supplement
the information/contents given in the study material, students are advised to
(iv)
refer to the Suggested Readings mentioned in the study material, Student
Company Secretary, Business Dailies and corporate journals.
In the event of any doubt, students may write to the Directorate of
Academics and Professional Development of the Institute for clarification.
Although due care has been taken in publishing this study material yet the
possibility of errors, omissions and/or discrepancies cannot be ruled out. This
publication is released with an understanding that the Institute shall not be
responsible for any errors, omissions and/or discrepancies or any action taken in
that behalf.
Should there be any discrepancy, error or omission noted in the study
material, the Institute shall be obliged if the same is brought to its notice for
issuance of the corrigendum in the Student Company Secretary bulletin.
(v)
PROFESSIONAL PROGRAMME
SYLLABUS
FOR
STRATEGIC MANAGEMENT, ALLIANCES AND
INTERNATIONAL TRADE
Level of Knowledge: Working Knowledge.
Objectives: To develop the basic understanding of the students about the concepts,
techniques and processes relating to strategic management, alliances as well as
International Trade and treaties including World Trade Organisation.
Detailed contents:
PART A : STRATEGIC MANAGEMENT (40 MARKS)
1. Nature and Scope of Strategic Management
Concept; role, functions and processes of strategic management in globally,
competitive and knowledge-based environment.
2. Environmental Scanning and Internal Appraisal Analysis
(a) Identification of external variables - economic, technological, legal, political,
socio-cultural and, global; industry appraisal analysis and forecasting;
synthesis of external factors;
(b) Internal scanning of the firm;
(c) Tools and techniques of strategic management – SWOT analysis,
situational analysis; Gap analysis, impact analysis, value chain analysis;
business process re-engineering.
3. Planning and Formulation
Formulation of corporate vision, mission, goals and objectives; developing
strategic alternatives, evaluations of alternatives, selection of best alternative;
strategic planning vis-à-vis tactical planning; Strategic models for optimal
decision–making.
4. Implementation and Control
Strategy implementation; developing programs, budgets and procedures;
strategic control; managing strategic changes.
5. Review
Performance evaluation - criteria and challenges
6. Risk Management
Meaning, objectives and significance; types of risks; measuring the trade off
between risk and return; control and management of business risks.
7. Management Information Systems
Concept, elements and structure; approaches of MIS development; pre-
requisites of an effective MIS, Enterprise Resource Planning (ERP).
(vi)
8. Internal Control Systems
Meaning, definition, objectives, classification, scope and limitation of internal
control; steps and techniques of internal control systems.
PART B : STRATEGIC ALLIANCES (20 MARKS)
9. Nature and Scope
Meaning, types and stages; integrating alliances into corporate strategy; cross
cultural alliances; implementation and management of strategic alliances.
10. Foreign Collaborations and Joint Ventures
Industrial Policy; Foreign Investment Policy; kinds and negotiation of
collaboration and joint ventures, drafting of agreement, restrictive clauses; Indian
joint ventures abroad – Indian experiences.
PART C : INTERNATIONAL TRADE (40 MARKS)
11. International Trade and Treaties
Concept and Theories of International Trade, Institutionalisation of international
trade, establishment of World Trade Organisation; Economic Blocks and Trade
Agreements such as ASEAN, EU, SAPTA, NAFTA etc.; India’s Free Trade,
Economic Cooperation and Partnership Agreements.
12. Anti-dumping, Subsidies and Countervailing Duties
WTO agreements on anti-dumping; safeguard measures; subsidies &
countervailing duties; Regulatory Framework and procedure in India.
13. Settlement of Disputes under WTO
Rules, regulations and procedures relating to settlement of disputes under WTO.
(vii)
LIST OF RECOMMENDED BOOKS
STRATEGIC MANAGEMENT, ALLIANCES AND INTERNATIONAL TRADE
Readings:
1. L.M. Prasad : Strategic Management; Sultan Chand & Sons,
23, Daryaganj, New Delhi – 110 002.
2. P.K. Ghosh : Strategic Planning and Management; Sultan
Chand & Sons, 23, Daryaganj, New
Delhi-110 002.
3. C N Sontakki : Strategic Management; Kalyani Publishers, 23,
Daryaganj, New Delhi – 110 002
4. C.B. Gupta : Corporate Planning and Policy; Sultan Chand
& Sons, 23, Daryaganj, New Delhi – 110 002.
5. Gordon B. Davis & : Management Information Systems, Conceptual
Margrethe H. Olson Foundations, Structure and Development,
MacGraw Hill Education (India) Ltd., B-4,
Sector 63, Gautam Budh Nagar, Noida-
201301.
6. A.V. Vedpuriswar : Enterprise Risk Management, Vision Books
Pvt. Ltd., Lajpat Nagar-III, New Delhi-24.
7. Kamal Gupta : Contemporary Auditing; MacGraw Hill
Education (India) Ltd., B-4, Sector 63, Gautam
Budh Nagar, Noida-201301.
8. Vipin Gupta, Kamala : Business Policy and Strategic Management,
Gollakata, R Srinivasan Concepts & Applications; Prentice Hall of India
Pvt. Ltd., New Delhi – 110 001.
9. M.B Rao & : WTO and International Trade; Vikas Publishing
Manjula Guru House Pvt. Ltd., A-22, Sector-4, Noida-201 301.
10. Sheela Rai : Anti-Dumping Measures under GATT/ WTO;
Eastern Book Company, 34, Lalbagh,
Lucknow- 226 001.
11. D.C. Singhania : Foreign Collaboration and Investment in India;
Universal Law Publishing Co. Pvt. Ltd., New
Delhi.
12. M.G. Basvraja : World Trade Organisation; Serial Publication
Khyberpas Market, Civil Market, Delhi – 54.
13. Dr. Raj Agarwal : Joint Venture—Law and Management; Bharti
Publishing House, New Delhi.
14. Reference on WTO : ICSI Publication.
& GATS
(viii)
References:
1. Barney, Hesterly : Strategic Management and Competitive
Advantage Concepts; Prentice Hall of India
Pvt. Ltd., New Delhi – 110001.
2. Thomas L. Wheelan : Strategic Management and Business Policy—
& J. David Hunger Addison-Wesley
3. Arthur Sharplin : Strategic Management International Students
Editions, McGraw-Hill Education (I) Ltd.
4. Robert A. Pitts, David : Strategic Management—Building and
Sustaining Competitive Advantage-Thomson
South-Western (Indian Print)
5. Harrington Niehous : Risk Management & Insurance; McGraw-Hill
Education (I) Ltd.
6. Manohar L Gulati : Strategic Planning and Management; Amexcel
Publications Pvt. Ltd., Naraina Phase-I, New
Delhi-28.
7. Munesh Kumar : Business Information Systems; Vikas
Publishing House Pvt. Ltd., A-22, Sector-4,
Noida – 201 301.
8. R.K. Gupta : Safeguards Countervailing and Anti-Dumping
Measures, Academy of Business Study, Ansari
Road, New Delhi – 110 002.
9. David Faulker : Strategic Alliances/International Business: A
Strategic Management Approach; McGraw-Hill
Education.
(ix)
CONTENTS

Study Lesson No. Contents

PART A
STRATEGIC MANAGEMENT
I. Nature and Scope of Strategic Management
II. Environmental Scanning and Internal Appraisal Analysis
III. Planning and Formulation
IV. Implementation and Control
V. Performance Evaluation
VI. Risk Management
VII. Management Information System
VIII. Internal Control Systems
PART B
STRATEGIC ALLIANCES
IX. Nature and Scope of Strategic Alliances
X. Foreign Collaborations and Joint Ventures
PART C
INTERNATIONAL TRADE
XI. International Trade and Treaties
XII. World Trade Organisation (WTO)
XIII. WTO – Ministerial Conferences
XIV. Anti-dumping Duties
XV. Subsidies and Countervailing Duties
XVI. Settlement of Disputes under World Trade Organisation
(xi)
PROFESSIONAL PROGRAMME
STRATEGIC MANAGEMENT, ALLIANCES AND
INTERNATIONAL TRADE
C O N T E N T S
PART A
STRATEGIC MANAGEMENT
STUDY I
NATURE AND SCOPE OF STRATEGIC MANAGEMENT
Page
Learning Objectives … 1
Concepts of Strategy … 1
Levels of Strategy … 3
Deliberations of Strategy … 5
Strategic Management … 7
Evolution of Strategic Management … 9
Nature of Strategic Decisions and Strategic Thinking … 11
Role of Strategic Management … 12
Functions of Strategic Management … 14
Benefits of Strategic Management … 14
Limitations of Strategic Management … 16
Strategic Management Process … 17
Strategic Management in Global Business Scenario … 21
Risks in Global Business … 23
Reasons for Doing Business Globally … 24
Issues in Global Business … 25
Strategic Management and Technology … 26
Strategic Management in Knowledge Based Environment … 28
Elements of Knowledge Management … 29
Importance of Knowledge Management … 30
Implementation of Knowledge Management Programme … 31
Innovation and Knowledge Strategy … 33
Lesson Round-Up … 34
SELF-TEST QUESTIONS … 35

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