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Master of Business Administration - MBA Semester III

MB0051– Legal Aspects of Business


Assignment Set- 1

Q. 1. Describe the three strategy levels in detail.

Ans:

Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:


"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation
through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil
stakeholder expectations".

In other words, strategy is about:

• Where is the business trying to get to in the long-term (direction)


• Which markets should a business compete in and what kind of activities are involved in such markets? (markets;
scope)
• How can the business perform better than the competition in those markets? (advantage)?
• What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be
able to compete? (resources)?
• What external, environmental factors affect the businesses' ability to compete? (environment)?
• What are the values and expectations of those who have power in and around the business? (stakeholders)

Strategy at Different Levels of a Business

Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to
individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations.
This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making
throughout the business. Corporate strategy is often stated explicitly in a "mission statement". It consists of the kinds of
initiatives the company uses to establish business positions in different industries, the approaches corporate executives
pursue to boost the combined performance of the set of businesses the company has diversified into, and the means of
capturing cross-business synergies and turning them into competitive advantage. Senior corporate executives normally
have lead responsibility for devising corporate strategy and for choosing among whatever recommended actions bubble up
from the organization below.

Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns
strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting
or creating new opportunities etc. Business strategy concerns the actions and the approaches crafted to produce
successful performance in one specific line of business. The key focus here is crafting responses to changing market
circumstances and initiating actions to strengthen market position, build competitive advantage, and develop strong
competitive capabilities. Orchestrating the development of business-level strategy is the responsibility of the manager in
charge of the business.

Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-
unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.
Operating strategies concerns the relatively narrow strategic initiatives and approaches for managing key operating units
(plants, distribution centers, geographic units) and for specific operating activities with strategic significance (advertising
campaigns, the management of specific brands, supply chain-related activities, and Website sales and operations).
Operating strategies add further detail and completeness to functional-area strategies and to the overall business
strategy. Lead responsibility for operating strategies is usually delegated to frontline managers, subject to review and
approval by higher-ranking managers.

Q. 2. A) Describe the various roles undertaken by a Project Manager.

Ans:

The project manager plays a very significant role in the initial planning, finalizing project requirements, and resource
allocation. He has to carry out all the major aspects of the project by being in touch with the client or the entity that
needs the project deliverables. A project manager has to assess what the client demands, what all resources he has, what
has to be added to the resources, and how the project work is to be carried out.

Along with primary plans and strategies, he also has to come up with backup plans, owing to risk management. A project
manager has to actively participate in the decision making process, after consulting other members of the project. While
making major decisions, he has to keep in mind the policies and regulations of the company. One of the main tasks in the
project manager job description is to carry out human resource management of his team.

He has to realize the potential and skills of every team member and allocate them work in a proper manner. Be it a
project in any field, a project manager always ensures that the deliverables are of the best quality. He has to pay heed to
any complications and issues that may arise in the smooth running of the project. If needed, this project management
professional should give presentations to the clients regarding the schedule, progress, and quality of the project.
If you are thinking about the role of project manager in software development, he has to evaluate the day-to-day outputs
that would serve as steps in the project execution. He is required to set up the project hierarchy and provide motivation
to those in authority to get the work done collectively.

The primary role of project manager in agile methodology is to see that the deliverables are well completed within the
given time frame, without adding up on the costs. There are many other project manager responsibilities, which may
depend on the specifications of the project.

Generally, the project manager is responsible for the overall accomplishment of the project, and accountable for ensuring
objectives of the project's assignment. One foremost responsibility of the project manager is; the very project itself.

The person who takes this ultimate responsibility and guarantees for the desired result to be achieved on time, and within
budget is the Project Manager. And his job is to coordinate a project from initiation to completion; using maximum
utilization of project management tools, techniques, experience, creativity, and management skills, to reach the
predetermined objectives.

In a project as a Role his "Leadership quality" and as a Skill his "Management excellence" is accredited. The role a project
manager performs is in many ways similar to those performed by other operation managers; however there are some
important differences; as Project managers have a wide range of backgrounds and experience levels and are often
"generalists" differentiating themselves from an operational type role to one whom specialized in the respective areas of
management. In addition, project managers play specific roles to facilitate the project team rather than supervising them.

Role of the Project Manager: As a role, project managers must satisfy these sets of needs:

Task Needs + Team Needs + Individual Needs

The project manager role; he should meet his "Task Needs" as follows;

• Attaining team objectives


• Planning work
• Allocating resources
• Defining tasks
• Assigning responsibility
• Controlling and monitoring quality
• Scrutinizing progress
• Checking performance

The project manager role; he should meet his "Team Needs" as follows;

• Appointing secondary leaders


• Building and upholding team sprit
• Setting standards and maintaining regulation
• Training the team
• Setting up systems to facilitate communication with the team
• Developing work methods to craft team function cohesiveness

The project manager role; he should meet his "Individual Needs" as follows;

• Developing the individual


• Balancing team needs and task needs
• Balancing team needs and individual needs
• Performance appreciation and rewards
• Helping with other team members personal problems

Overall, a project manager has responsibilities from the beginning of project initiation, planning, controlling, and
executing to both management and to the project team. A project manager must steer his project towards the bigger
picture and be responsible for the job; a project manager must be experienced, committed, dependable and flexible, as
his position remains in the nucleus of the system and success and failure centralizes on the project manager's shoulders.

Q. 2. B) List and explain in brief the qualities of a Project Manager.

Ans: Being a manager is action, not position. An effective manager is the one who leads his team from the front and
becomes a team player when needed. He understands the values of human and material resource and has the tact to use
both, in an optimum way. It isn't a degree that makes a good project manager, but his foresight, intellect and experience
that help him reach success, even in most challenging situations. A job as such demands a person to adapt to inception of
newer technologies and keep up with the changing times with innovative techniques.

Qualities of a Good Project Manager:

Observant
To be a good project manager, it is crucial to use the available resources in the best possible way. This results in early
completion of pre-determined targets, increases profitability, delivers work satisfaction, motivates your team and makes
your a successful project manager. If the intricacies of assigned project, men, material and money are observed right from
the start, it will assist a great deal in allocation of the same. Thus being observant is one must-have qualities for those
who strive to make a career as a project manager. Remember, that there is always more to any sight, than what meets
the eye. Paying close attention, quick perception and diligence towards noticing every intricate detail strengthens the
subtle power of being observant.
Visionary
A good project manager is the one who chalks out his vision for the company and plans out a project accordingly. Forward
thinking inspires action and enables creation. It is an ingredient, without which the recipe of making a winning project
would definitely fail. A project manager with a clear vision, becomes the rock steady pillar of strength of his teammates,
motivating them at every point of slowdown. Having a vision is having a guideline. Without any vision, one would be lost
and a mere wanderer in the labyrinth of corporate culture.

Communication
Communication is the ability to put forth a thought in a way that the audience understands it. Thus, effective
communication demands you to learn a different language, perfect your articulation, master your intonations, originality
of thought and careful choice of words. Without communication, a project manager cannot lead his team. Being in
constant communication with team members is one of the important jobs of a project manager. Excellent communication
skills are an integral part of being a good manager. Motivation, negotiation, persuasion, allocation and defining work
schedules are only possible with effective communication skills.

Planning
Planning is rehearsed action. It includes thinking, before you blindly plunge into a project. A good project manager
understands that one needs to plan and define the nature of work, its scope and its feasibility prior to taking up a project.
The same must be communicated to his subordinates, who would play an important part in completion of the same.

Delegation of Work
Rome wasn't built in a day and it definitely wasn't built by one man. For timely completion of work, it needs to be
delegated amongst team members. It allows smooth work flow and averts the unnecessary pressure caused by deadlines.
Delegation of work is a gesture that indicates project manager's trust on his team members. This builds a good work
rapport and goes a long way in making long lasting professional relationships.

Troubleshooting
Every day presents a new challenge that demands a unique solution. An efficient manager knows how to solve problems
for the team. He can tackle any pressurizing situation and lead the team on the paths of glory.

So, this was an answer for what makes a good project manager. Apart from this, a good project manager also needs to
have good interpersonal skills, sense of time management, a composed demeanour, compassion towards his team
members' problems and acumen to build a winning team.

In order to be an effective project manager, he needs the following core skills;

• Leadership skill to arouse action, progress, and change.


• Contractual skills to organize subcontractors.
• Legal knowledge.
• Evaluation of alternatives and ability for decision making.
• Planning and controlling for necessary counteractive measures.
• Financial familiarity for budget risk management.
• High communication skills.
• Negotiating abilities.
• People management to motivate them towards the project goal.
• System designing and maintenance.

Q. 3. A) Describe the major types of stakeholders in a project.

Ans:

A stakeholder is someone that is involved in your project or has a vested interest in its success or failure. Knowing who
your stakeholders are is important and the process begins by developing healthy relationships. They help decide on issues
from the beginning, during planning and at execution of the project. Therefore, stakeholders should understand how the
project functions, including the project scope, milestones and goals.

There are five major types of stakeholders:

• Project manager
• Project team
• Functional management
• Sponsors
• Customers

Within the stakeholders, you have both internal and external classifications. Internal stakeholders are those directly
affected by the project, such as employees. External stakeholders are not a part of the business, such as vendors or
suppliers, but have an interest in its outcome.

Primary and Secondary Stakeholders

Primary stakeholders have a major interest in the success of a project because they are directly affected by the outcome.
Customers and end users are primary stakeholders as well as some project sponsors, project managers, and team
members.

Project sponsors are accountable for keeping the project on schedule. They should schedule regular meetings to review
timelines, addressing complications that may arise, and assuring that the project manager remains on the task. Sponsors
allocate and supply resources and finances to fund the project. The sponsor should have a clear understanding of what's
expected in accordance with the scope, schedule, and resources needed for the project. Success of a project is largely
dependent on the project sponsors leadership and support. The leadership provided by the sponsor helps identify cost
overruns and provides alternatives in order to remain on budget.
Secondary stakeholders also help to complete the project. Though their role isn't primary, they assist with administrative
processes, financial, and legalities. Communication between primary and secondary types of stakeholders will ensure that
everyone is working toward the same goal. Lack of communication can cause a breakdown within the project.

Internal and External Stakeholders

Project managers are internal stakeholders because they are directly involved in developing the project. They have
authority to manage the project by handling responsibility of work performance, organizing and planning; effectively
ensuring that all phases of the project are done accurately and efficiently.

Vendors, suppliers, and outside organizations are external stakeholders because they supply needed elements for a
project's success, they need to stay in communication at all times on goals, milestones and deliverables.

Direct and Indirect Stakeholders

Direct stakeholders are concerned with the day to day activities of a project. Team members are direct stakeholders as
their workloads are scheduled around the project each workday. Indirect stakeholders are not impacted by the project.
Those not affected are your customers and end users, because their concern is with the finished project. This would be
the quality of merchandise, price, packaging, and availability.

The management of stakeholder responsibility is very important to the success of a project. It's important to define the
various types of stakeholders, their needs or interests, and communicate them effectively.

Q. 3. B) Describe the major type of Organisational structure in Detail

Ans:

There are three main types of organizational structure: Functional structure, Divisional structure and Matrix structure.

Functional Structure:

In the functional structure, the employees are working in departments based on what they are doing i.e. we have
engineering department, maintenance department, finance department, research department, Warehouse department,
purchasing department. This structure enhances the experience of each function. For example, all the maintenance
engineers are working in the same department and thus they will exchange knowledge and support each other. This
structure saves us money because of the economies of scale. This structure makes the coordination between different
departments more difficult than other structures. It also does not allow for flexibility because of the centralization.

Divisional Structure:

Divisional structure divides, shown above, the employees based on the product/customer segment/geographical location.
For example, each division is responsible for certain product and has its own resources such as finance, marketing,
warehouse, maintenance..Etc. accordingly, this structure is a decentralized structure and thus allows for flexibility and
quick response to environmental changes. It also enhances innovation and differentiation strategies. On the other hand,
this structure results in duplication of resources because, for ex., we need to have warehouse for each division. Obviously,
it does not support the exchange of knowledge between people working in the same profession because part of them is
working in one division and the others are working in other divisions.

Matrix Structure:

Matrix structure combines both structures. For example, we can have a functional structure and then assign a manager for
each product. Some employees will have two managers: Functional Manager and Product Manager. This type of structure
tries to get the benefits of functional structure and also of divisional structure; however, it is not easy to implement
because of the dual authority. This structure is very useful for multinational companies.

Q.4. List and describe in brief the various qualities of the project management process.

Ans:

Project Management provides an integrated framework for project organization, planning and control which is designed to:

• ensure the timely and cost-effective production of all the end-products,


• maintain acceptable standards of quality,
• achieve for the enterprise the benefit for which the investment in the project has been made

The Project Manager Process is the person or persons that are used to produce the framework of a project or job. This
process entails the project organization, planning of the project, and who is designated to each part of the project. The
Project Manager Processor is also responsible for ensuring that the project will be handled in a timely and in cost effective
way. The job also entails making sure that the quality of the project is held to high standards for both sides. There are
many stages the Project Manager Process must follow before the project even gets started.
• Project Management Kick Off Meeting – announce project
• Project Management Objective – what the project entails and what the finished project should be
• Project Management Scheduling of time and budgeting of entire project –scheduling of stages needed and how
much funding will be used for each part of the project
• Project Management Organization – who will be doing what part of the project – who will make up sub groups,
teams, and what training is needed to complete the project
• Project Management Control – the control factors needed for the project
• Project Management Business Case – cost and risk factors
• Project Stage Assessment – prepare, follow up, compare, compile and review total project
The project manager’s role is a very important and can either receive a finished project that is suitable to both sides or
could main the whole project fall apart.

Q.5. Write a short note on the following

A. SWOT Analysis as a Strategic planning tool.

Ans:

Identifying Strengths, Weaknesses, Opportunities and Threats can help management determine the best course of action
when building a Strategic Plan. Companies working on a strategic plan for the next year or future years often use a
framework referred to as a SWOT Analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

Management can use this structure to identify the abilities within or challenges facing the company from outside. Although
the components of each item will vary from company to company and from industry to industry, the framework is helpful
in almost any business endeavour.

Strengths and Weaknesses in SWOT Analysis: The four components of SWOT Analysis can be looked at in any order, but
often Strengths and Weaknesses are looked at first (and not only because it makes a great sounding acronym.). Strengths
and Weaknesses are considered internal factors for review, meaning they are independent of outside factors. No matter
what is going on in the competitive environment, the internal operations of a company can be strong or weak.

Some examples of strengths and weaknesses:


• Management competence
• Employee skills and abilities
• The financial condition of the company
• Current state of the company buildings, equipment or inventory
For example, if the company has long term, experienced management, this could be listed as strength, unless the industry
is evolving and the company needs new ideas to thrive. If business’s primary manufacturing facility is outdated, and there
are no funds to update, these two weaknesses work together against the survival of the company.

Opportunities and Threats in SWOT Analysis


Opportunities and Threats refer to the outside factors and situations facing the company. Some examples of these are:

•A competitor entering or leaving the market


•New government regulation
•Wage rates increasing or decreasing in the industry
•Supplier disruptions
Depending on the situation, outside factors may stress the company, or provide an opening to take market share or
increase profits.
An Example of a Strategic Plan from a SWOT Analysis:
ABC Company gets together every year for a retreat to plan the next year’s strategy. This year, the company hired a young
VP Marketing to implement a brand new product to replace its tired widget which has been declining in sales. The lower
revenue resulted in a loss and a downgrade in the company’s bond rating. The government is considering an extra tax on
widgets, but management believes the tax will hurt competitors more than ABC.

From this, the company created this simple SWOT Analysis:


• Strengths – New Product, Committed Leadership, New VP
• Weaknesses – Tired old product, untested VP
• Opportunities – Widget tax impact on competitors
• Threats – Widget tax, increased cost of borrowing due to lowered credit rating
The Strategic Plan is only the beginning. Management needs to assign responsibility to each tactic that is generated from
the plan, as well as a financial budget.

B. Write a short note on: Net Present Value (NPV) as a Project selection criterion.

Ans:

Central part of the project selection process is evaluation and prioritization of identified projects. Net Present Value
(NPV) is one of the methods available.

The Net Present Value (NPV) of a project is defined as the difference between present value of cash inflow (revenue, PV
in) and present value of cash outflow (cost, PV out) of that project over the project life cycle time. Here is the formula to
calculate the present value (PV) for given future value (FV), interest rate (r), and number of accounting periods (n):

PV = FV / (1 + r)n

Project Selection, Example 1:


Investment project "Blue": development of a new version of product "Blue Dolphin". The cost for development is
$100,000.-- this year. Next year, we will be able to sell the first batch for $70,000.--, in two years the second batch for
$50,000.--. Given an interest rate of 10%, what is the net present value of that project?
Project Selection, Example 2:
Investment project "Red": development of a new version of product "Red Shark". The cost for development is $150,000.--
this year. Next year, we will be able to sell the first batch for $90,000.--, in two years the second batch for $85,000.--.
Given an interest rate of 10%, what is the net present value of that project?

If we would have to choose between project "Blue" and project "Red" we would choose the one with the higher NPV, i.e.
project "Blue".

Q. 6. Describe in brief the Human resource management process in a project.

Ans:

The Human resource management includes the processes required to coordinate the human resources on a project. Such
processes include those needed to plan, obtain, orient, assign, and release staff over the life of the project.

Functions:
1. Development of Human resource plan
2. Acquiring staff
3. Measuring the Performance of staff
4. Release of staff at the end

1. Development of Human resource plan:


A “human resource category” (for example, consultant, programmer, etc.) is a way of classifying skills that is
useful in matching resource requirements to particular people when developing the human resource plan for a project.
The Human resource plan contains for each human resource category, information such as:
• The number of staff required.
• Costing information and assumptions.
• When the staff are needed and for how long.
• Any special skills required over and above those that people in the category would normally be expected
to have, as well as the required level of proficiency and the relative importance of these skills.
• Training requirements needed specifically for the project, for example in a new technology.
• Office and materiel requirements
• Plans for team-building activities.(Motivation management)
2. Acquiring staff:
This function includes processes to:
• Identify potential sources (external/department in the organization) of project staff.
• Define skill and activity descriptions that can be used by recruiters and resource
• managers to obtain staff from appropriate sourcing organizations.
• Select staff for the project.
Finding the:
• right people,
• with appropriate skills,
• available when needed,
• for the right duration,
• within planned costs
can be a daunting and time-consuming challenge. Staff acquisition processes are performed throughout the
project, not just at project initiation. New phases of the project may require that additional staff or staff with
different skills be found. Depending on the number of staff needed and their projected availability, the use of
multiple sources may be required.
3. Measuring the Performance of staff:
This includes processes to:
• Set objectives for the team.
• Assess the performance of the team members.
• Enhance the individual and team performance.
The individuals in the project team and the project team as a whole have objectives that are broader and longer
term than the day to day execution of the assigned tasks. It is the responsibility of project management to ensure
that a balance is achieved between the often conflicting interests of the task, the individual, and the team. The
project manager and the functional managers must cooperate if an acceptable balance is to be achieved. Set
performance expectations and measurements. The purpose of this process is to develop a set of objectives for the
project team and then to assist the team members and their functional managers in setting individual objectives.

Objectives may cover items such as:


• Client satisfaction
• Quality
• Achievement of milestones
• Productivity and efficiency
• Teamwork
Ensure that the objectives measurable and that some of them are planned to be achieved during the course of the
project. Discuss the team objectives and the individual Commitments with the functional managers concerned.
Each individual should have a set of objectives that , when achieved, will make a balanced contribution to both to
the project objectives and to his/her functional manager’s objectives.
4. Release of staff at the end:
This includes processes to debrief and release the staff from the project. The prime purpose of the processes is to
ensure that: The members of the project team can move to their next assignments in an orderly way. When an
individual leaves in mid-project, there is little or no impact on the project costs or time scales.

The purpose of this process is to plan the release of members of the project team who are coming towards the end
of their assignments. It is usual for staff to leave the project throughout its course and not just at the end.

The project manager has a final meeting with the team member to ensure that the work is complete, any hand
over has been carried out and the office and materiel allocated to the individual has been returned.

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