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Scooters India was established by the Government of India in 1972 as a public sector enterprise, by importing old plant and machinery from an automobile company in Italy, which had closed down its scooters manufacturing activity a few years back. The company was employing over 3200 persons, about 85% of which constituted the labor force. SIL's performance right from the beginning was poor and was deteriorating at a faster rate during the later part of eighties. Indeed during the year 1989-90, the company had made a net loss of Rs. 404 million on sales of Rs. 103 millions and had accumulated loss of Rs 2125 millions. In 1987 the government had explored the possibility of selling the company to a leading automobile giant in private sector, but the talks failed, as the latter was reluctant to accept the total labor force, which was thought to be far in excess of the requirements of meager production. In 8 years period, by 1998, the company had touched a sale of Rs. 1279 million, earning a net profit of Rs. 119 million and shattering several myths while achieving this performance level.
Strategies are the means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint venture.
Strategy formulation includes developing a vision and mission, identifying an organization's external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.
General strategic options which are available to Scoter India Ltd.
Globalization, regionalization and market convergence - Due to the effects of liberalization, national markets are increasingly globalized. This gives Scoter India Ltd. a chance to expand to new markets, but also increases the threat of new entrants or increased competition in traditional local markets where leader is Scoter India Ltd.
Increasingly diversified consumer aggregate patterns of behavior - Consumers are no longer accepting standardized products, but want products that satisfy their individual requirements. For that reason the Scoter India Ltd. should customize their automobile as requirement of customer. Target groups thus have to be downsized by companies so customers will be attracted by the products offered.
Accelerated modification and diversification of the product portfolio - The Scoter India Ltd. have to shorten product lifecycles in order to react to the expectations of individualize and fast changing consumer demands with innovative products. In the past, an average product lifecycle in the automotive industry was eight years; today, lifecycles are much shorter, or at least the product's design is often modified after just two or three years on the market.
Pervasion of automobiles with digital technology - In 2002, digital technology in cars already averaged 22 percent of the total value of a car, with a forecasted increase to 35 percent of the total value in 2010. The integration of hardware and software into automobiles represents the predominant accelerator of increased functionality coupled with increasing complexity.
Increased pressure for innovation and flexibility in development and manufacturing - Development departments are not just overburdened by the complexity of digital technology, but also by the shortening of product lifecycles. Another aspect is the increasing number of parallel development projects since companies develop more and more niche models for special target groups. This certainly requires the use of new development techniques such as virtual reality.
Stakeholder A firm's stakeholders are the individuals, groups, or other organizations that are affected by and also affect the firm's decisions and actions. Depending on the specific firm, stakeholders may include governmental agencies such as the Securities and Exchange Commission, social activist groups such as Greenpeace, self-regulatory organizations such as the National Association of Securities Dealers, employees, shareholders, suppliers, distributors, the media and even the community in which the firm is located among many others.
The various stakeholders in the firm are:
Management. Managers are promised a good income if they can develop the organization and make it profitable. They often work 50 to 60 hours a week, giving up a lot of their family life. Certainly the organization has an obligation to its managers to provide them financial security and give them meaningful work assignments.
Government. Government is promised to provide a good secure working and business environment by excursing legislation taxation, low unemployment, truthful reporting etc.
Creditors. The creditors are who invest in the project for a certain percent of interest. They are very important, because if they are not interest to invest the project may not be run.
Employees. The employees produce and sell the products and services to the external customers. Essentially, employees are selling a big part of their lives and must receive equitable pay.
Customers. The customers provide the money that allows an organization to meet its obligations to the first three stakeholders. An organization must have satisfied customers to meet those obligations.
Suppliers. I can't think of any organization that can exist without good suppliers. Organizations must work with their suppliers and pay them a fair price for their products and services.
Which stakeholder is most important?
For the SIL, it boils down to three most important stakeholders: the customer, Suppliers and the creditors.
For an organization the creditors who actually finance the project are very important because the organization is formed using their money give them a fair return on their investment. The best way to do that is to have very satisfied customers. If SIL can't take good care of SIL's creditors, then SIL is either selling the wrong product or SIL is approaching the wrong customers.
The internal-customer chain that supports this looks something like the following: The employees' primary customer is management because management pays the employees to do their jobs. Management's primary customer is the board of directors because the board gives management its assignments. The board of directors' primary customers is the investors because they provide the money to develop the organization and, as such, they are the true owners of the organization.
The suppliers are another important stake shoulder, because if the supplier not supplies the raw material on time the SIL will not deliver the product on time. Then the customer will become dissatisfy. Another matter is, the quality of product is depends upon the suppliers raw materials.
Stakeholders effect on organization's strategy and contribution
Internal stakeholders include managers and employees and are those that are situated within the company and affect the 'day-to-day' running of the organization.Â Connected stakeholders cover groups such as shareholders, suppliers and customers, and are parties which invest or have dealings with the firm. The third group, External stakeholders, is those not directly linked to the organization but who can be influenced or influence activities of the firm through various means. External stakeholders include the Government, neighbors, pressure groups, local councils and the surrounding community.
As well as stakeholders, organizations and the people involved with them are expected to adhere to written and unwritten ethical boundaries. The degree to which these are adhered depends upon as varied a mixture as government enforced action to simply the moral fiber of a manager or employee. On occasions only the 'eye of the beholder' can truly acknowledge whether the moral considerations were taken on board when making a decision. This makes gauging an organizations ethical stance very difficult as the image they portray to the public may not match the internal reality.Â
Vision statements answer the question: "What do we want to become?"
Mission statements are "enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm's operations in product and market terms." It addresses the basic question that faces all strategists: "What is our business?" It should include the values and priorities of an organization.
Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Objectives state direction, aid in evaluation, create synergy, reveal priorities, focus coordination, and provide a basis for effective planning, organizing, motivating and controlling activities. Objectives should be challenging, measurable, consistent, reasonable, and clear.
A vision statement should answer the basic question, "What do we want to become?" A clear vision provides the foundation for developing a comprehensive mission statement. Many organizations have both a vision and a mission statement, but the vision statement should be established first and foremost. The vision statement should be short, preferably one sentence, and as many managers as possible should have input into developing the statement.
Drucker says asking the question, "What is our business?" is synonymous with asking the question, "What is our mission?" An enduring statement of purpose that distinguishes one organization from other similar enterprises, the mission statement is a declaration of an organization's "reason for being." Sometimes called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, a statement of business principles, or a statement "defining our business," a mission statement reveals what an organization wants to be and whom it wants to serve.
Vision of Scoter India Ltd.:
"Year after year, Scoter India Ltd. will be regarded as the best and most sought after Automobile provider in India."
Effectiveness of Vision Statement: The effective vision statement should answer some certain questions. If the vision statement can successfully answer the questions, then we can tell that the vision statement is effective. The questions are as below
A vision statement should answer the basic question, "What do we want to become?" From the vision statement of Scoter India Ltd., found that the company would like to become the most demandable automobile producer.
The vision statement should be short, preferably one sentence, and as many managers as possible should have input into developing the statement. For the Scoter India Ltd., the vision statement is perfect in one sentence and has all the massage is information about the Scoter India Ltd.
Mission Statement of Scoter India Ltd.:
"In order to realize our Vision, our Mission must be to exceed the expectations of our customers, whom we define as customer, partners, and fellow employees. We will accomplish this by committing to our shared values and by achieving the highest levels of customer demand satisfaction, with extraordinary emphasis on the creation of value. In this way we will ensure that our profit, quality and growth goals are met."
Effectiveness of Mission Statement: A mission statement should consist some answer of questions.
An enduring statement of purpose that distinguishes one organization from other similar enterprises, the mission statement is a declaration of an organization's "reason for being." Here the mission statement of Scoter India Ltd. Is perfectly explaining the reason for being. The SIL want to be a market leader by satisfying the customers' demands.
Sometimes called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, a statement of business principles, or a statement "defining our business," a mission statement reveals what an organization wants to be and whom it wants to serve. The SIL's mission statement perfectly indicates that it will serve to the Indian's market and their business is the automobile production and distribution.
Because the goal is at a high-level, it may take more than one objective to achieve. It may take many objectives over a long period of time to achieve the goal.
Generally, non-measurable: If you can measure the achievement of your goal, it is probably at too low a level and is probably more of an objective.
If your goal is not achievable through any combination of objectives, it is probably written at too high a level. It may instead be a vision statement, which is a higher level statement showing direction and aspiration, but which may never actually be achieved.
Objectives are concrete statements describing what the project is trying to achieve. The objective should be written at a lower level, so that it can be evaluated at the conclusion of a goal to see whether it was achieved or not. Goal statements are designed to be vague. Objectives should not be vague. A well-worded objective will be Specific, Measurable, Attainable/Achievable, Realistic and Time-bound (SMART).
Note that the objective is much more concrete and specific than the goal statement.
The objective is measurable in terms cost, speed, quantity and / or quality.
We must assume that the objective is achievable and realistic.
The objective is time-bound, and should be completed by a specific date.
Organizational culture is a set of shared values, the unwritten rules which are often taken for granted, that guide the employees towards acceptable and rewarding behavior. Basically, organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors. Members of an organization soon come to sense the particular culture of an organization. Culture is one of those terms that are difficult to express distinctly, but everyone knows it when they sense it.
Scoter India Ltd's organizational culture: Scoter India Ltd. is a fairly good company, with revenues of a very excellent but a long way from what they are now. At the time, it had the largest market share by far with over 80% of the automobile market. Although long forgotten history by most people, at that time Scoter India Ltd. spent a large amount of time and money investing to develop the new models of automobiles.
Organizational Ethical Value:
Organizational values define the core concepts or beliefs that underpin acceptable behavior by employees. They indicate those aspects of work considered to be of prime importance to the functioning of the organization. Values are grouped into clusters of value types defined on the McCann Window on Work Values. This Profile shows which of these value types are of most importance to the nominated organization, according to the respondent groups.
Scoter India Ltd.'s Ethical Values:
Scoter India Ltd's code of ethics is a written expression of its ethical norms and values. The ethics codes demonstrate the Scoter India Ltd.'s interest in business ethics and communicate core beliefs to employees. Formal codes of ethics lead to more positive perceptions of the ethical values of the Scoter India Ltd. and also contribute to higher levels of ethical conduct among employees
Core competencies are those capabilities that are critical to a business achieving competitive advantage. A core competency is fundamental knowledge, ability, or expertise in a specific subject area or skill set. The starting point for analyzing core competencies is recognizing that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required undertaking them. So the goal is for management to focus attention on competencies that really affect competitive advantage.
Core competencies for Scoter India Ltd. The Scoter India Ltd.'s core competencies have a great value to company success. The SIL is the local Indian company so the management clearly knows the demands of the local customers. This is a great competitive advantage for SIL. Other advantage that may accept as a competitive advantage. The company can import the raw materials without any tax and this is great competencies for SIL. These competitive will greatly help the SIL to achieve the success.
Critical success factors determine the success of an application for the organization. Critical success factors can be product oriented (e.g. higher product quality, innovative design), development process oriented (e.g. more efficient and effective development process), standards oriented (e.g. product complies to standards), societal goals (e.g. product can be used by people with special needs).
Critical success factors for Scoter India Ltd. Critical success factors of Scoter India Ltd. is product oriented societal goals. Though the Scoter India Ltd is a local company, so their societal goal is the critical success point. All the employees of SIL's are recruits from the local area and the local people become benefited. Another matter the location's infracturers developments become speedy for the factory of Scoter India Ltd.
Scoter India Ltd. amended its strategy
Yes, The Scoter India Ltd. can adapt with the changes in the current business and economics climates. The Business and the Economics climates always changeable and the organization need to coop-up with the change. So the Scoter India Ltd. also coop-up with the change. And the way of Adapting to Change is given below
The strategic management process of Scoter India Ltd. is always and continually monitoring internal and external events and trends so that timely changes can be made as needed for the betterment. The rate and magnitude of changes that affect Scoter India Ltd. is increasing dramatically.
The need to adapt to change leads Scoter India Ltd. to key strategic-management questions, such as, "What kind of business should be become?" Are we in the right field?" Should we reshape our business?" What new competitors are entering our industry?" By answering al the questions the Scoter India Ltd. adapt its strategy as the needed.
Major functional areas
Even in the smallest business a number of key tasks, or functions, must be done regularly. Stock must be bought, bills must be paid, customers must be served and customer enquiries must be answered. In a small firm all these jobs may be done by one or two people. In a large organization, people specialize in different tasks. The Scoter India Ltd., for example, have buyers to purchase the products, accounts staff to pay the bills, checkout staff to serve customers and customer service staff to answer queries.
The purposes of functional areas
The main purpose of functional areas is to ensure that all important business activities are carried out efficiently. This is essential if the business is to achieve its aims and objectives. In addition, specific areas will be responsibility for supporting specific types of aims and objectives, for example:
Sales and marketing will be involved in achieving targets linked to developing new markets or increasing sales
Human resources will be involved in arranging staff training activities and supporting the continuous professional development of all staff
Finance will be expected to monitor and support aims and objectives linked to keeping costs low to improve profitability
Production will be set targets relating to quality or meeting planned production schedules.
Functional areas in business
In a large organization, there is easier to identify separate functional areas because people work together in departments. Each department carries out the tasks that relate to its particular area. The main functional areas in any big organization like Scoter India Ltd. are shown in the below diagram
Administration is a support function required by all businesses and this does not mean just doing keyboarding or filing. Senior administrators carry out a wide range of tasks, from monitoring budgets to interviewing new staff for their departments.
The customer service
All businesses must look after customers or clients who have an enquiry, concern or complaint. Today, customer expectations are high. When people contact a business they expect a prompt, polite and knowledgeable response. Unless they get a high level of service they are likely to take their business elsewhere in the future.
Distribution means ensuring that goods are delivered to the right place on time and in the right condition. Some companies deliver the goods / products direct to the customer. Other businesses, including hold stocks in giant regional warehouses, for delivery to stores around the area. Other businesses, like the Scoter India Ltd. have to move more difficult loads or hazardous materials, such as cars or Automobiles.
Most entrepreneurs consider this is the most important function in the business. This is because all businesses need a regular stream of income to pay the bills. Finance staff record all the money earned and spent so that the senior managers always know how much profit or loss is being made by each product or each part of the business and how much money is currently held by the business.
The human resources (HR)
The human resources of a business are its employees. Wise organizations look after their staff on the basis that if they are well trained and committed to the aims of the business, the organization is more likely to be successful.
Today, even the smallest businesses need someone who understands ICT and what to do if something goes wrong. This is vital, because the number of crucial business tasks now carried out on computer and the importance of the data stored in the system mean that any system failure can be catastrophic.
Marketing is all about identifying and meeting customer needs. Many businesses consider this so important that they are said to be marketing led. In this case, everyone in the organization is trained to put the customer first from the production worker, who has to produce high quality goods, to the accounts clerk, who must respond to a customer enquiry promptly and accurately.
Sales are a crucial function for all businesses. It is pointless having superb products or services if no one buys them. For that reason, most businesses have sales targets as part of their aims and objectives. Meeting these is the responsibility of the sales staff or sales team.
Production refers to the manufacture or assembly of goods. Production staff must ensure that goods are produced on time and are of the right quality. Quality requirements can vary considerably.
The research and development (R & D)
This function is concerned with new product developments as well as improvements to existing products or product lines. In many industries, it also involves product design as well.
Most important Functional areas within the Scoter India Ltd.:
There are many tasks for Scoter India Ltd. needs to do if it is going to succeed. Each of these tasks is very important to a function of India Scoter Ltd. The following is a brief introduction to three of these functions:
Human Resources - ensures the business has the best staff for the job and that they are able to work effectively in a safe environment;
Finance - will keep a record of all money coming in and going out of the business. They have responsibility for securing finances for future expansion and paying staff and suppliers;
Marketing - will try and maximize the level of sales by carrying out market research and promoting the goods or service through a motivated sales team;
Three major functional areas and developed a competitive advantage
The three major functional areas in Scoter India Ltd. has been developed to provide it with a competitive advantage are explain as below_
The human resources (HR)
The human resources of Scoter India Ltd. are its employees. Scoter India Ltd. look after their staff because if they are well trained and committed to the aims of the business, then it become more successful.
SIL's HR is responsible for recruiting new employees and ensuring that each vacancy is filled by the best person for the job. This is important because the recruitment process is expensive and time-consuming. If SIL hair the wrong person, then it can be costly and cause problems both for the individual and the firm.
Through the above functions the Scoter India Ltd. make completive advantage. The constitutive advantage functions are as below
Advertising job vacancies as soon as possible for Scoter India Ltd.
Notifying staff of promotion opportunities for Scoter India Ltd.
Receiving and recording all job applications, arranging interviews and notifying candidates of the result
Sending a contract of employment and other essential information to new staff
Arranging staff training and encouraging continuous professional development
Monitoring the working conditions of staff for Scoter India Ltd.
Checking health and safety and keeping accident records
Recording sick leave and reasons for absence
The marketing & Sales
Marketing is all about identifying and meeting customer needs for Scoter India Ltd. for Scoter India Ltd. considers this so important that they are said to be marketing led. In this case, everyone in the organization is trained to put the customer first from the production worker, who has to produce high quality goods, to the accounts clerk, who must respond to a customer enquiry promptly and accurately.
Through the above functions the Scoter India Ltd. make completive advantage. The constitutive advantage functions are as below
Carrying out market research to obtain feedback on potential and existing
Analyzing market research responses and advising senior managers of the results and implications
Promoting products and services through a variety of advertising and promotional methods
Obtaining and updating a profile of existing customers to target advertising and promotions appropriately
Producing and distributing publicity materials, such as catalogues or brochures
Designing, updating and promoting the company website products and/or services
Scoter India Ltd. considers this is the most important function for them. This is because Scoter India Ltd. needs a regular stream of income to pay the bills. Finance staff record all the money earned and spent so that the senior managers of Scoter India Ltd. always know how much profit or loss is being made by each product.
Through the above functions the Scoter India Ltd. make completive advantage. The constitutive advantage functions are as below
Producing invoices, checking payments are received and chasing up overdue payments of Scoter India Ltd.
Recording money received
Checking and paying invoices received of Scoter India Ltd.
Preparing the payroll and paying staff salaries of employees of Scoter India Ltd.
Monitoring departmental budgets to check managers are not overspending
Issuing regular budget reports to all departmental managers
Producing cash flow forecasts and regular financial reports for senior managers
Advising senior managers on sources of finance for capital expenditure.
Producing the statutory accounts each year for Scoter India Ltd.
The significance of strategy evaluation:
The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by managers, groups, departments etc, through control of performance. Strategic Evaluation is significant because of various factors such as - developing inputs for new strategic planning, the urge for feedback, appraisal and reward, development of the strategic management process, judging the validity of strategic choice etc.
The process of Strategy Evaluation consists of following steps-
Fixing benchmark of performance - While fixing the benchmark, strategists encounter questions such as - what benchmarks to set, how to set them and how to express them. In order to determine the benchmark performance to be set, it is essential to discover the special requirements for performing the main task.
Measurement of performance - The standard performance is a bench mark with which the actual performance is to be compared. The reporting and communication system help in measuring the performance. If appropriate means are available for measuring the performance and if the standards are set in the right manner, strategy evaluation becomes easier.
Analyzing Variance - While measuring the actual performance and comparing it with standard performance there may be variances which must be analyzed. The strategists must mention the degree of tolerance limits between which the variance between actual and standard performance may be accepted.
Taking Corrective Action - Once the deviation in performance is identified, it is essential to plan for a corrective action. If the performance is consistently less than the desired performance, the strategists must carry a detailed analysis of the factors responsible for such performance. If the strategists discover that the organizational potential does not match with the performance requirements, then the standards must be lowered.
Important to continually monitor
Important to continually monitor the implementation of a new strategy is given as below_
The need for feedback
Appraisal and reward
Check on the validity of strategic choice
Congruence between decisions and intended strategy
Successful culmination of the strategic management process
Creating inputs for new strategic planning
Ability to coordinate the tasks performed