Take This Quiz & Predict Your Score in the coming CA CS or CMA Exam!
  • How important it is for you to pass the exam in this attempt?
  • What percentage of course you have finished well so far roughly?
  • How many hours you study in a day?
  • How many times you have revised the topics you have finished
  • Have you taken online or pen drive or live class from a renowned faculty?
  • What percentage of the classes you have watched?
  • Have you attempted mock tests or practice tests yet?
  • Are you planning to attempt mock tests conducted by external bodies- ICAI, ICSI, ICMAI or other institute?
  • How many tests you have taken?
  • Did you manage to finish the test papers on time?
  • Are you strictly following study material provided by the exam conducting authority such as ICAI/ICSI/ICMAI/Other Body?
  • How is your health in general?
  • How is your food habit?
  • Any interest in yoga or exercise or play sports regularly?
  • Planning to sleep well nights before the exams?
  • Planning to have light food and water before exams?



Business Policy and Strategic Management:

Ques 1. Define Strategy? Explain the steps involved in formulating the corporate strategy?

Ans. A strategy must ensure the correct fit/match between a strategy and environment.

  • Definitions:-
  • Strategy” is a long term plan for executing ideas into actions. Strategy is required for short term, medium term, as well. It is rightly said by Joel Ross and Michael Kami, ‘’Without Strategy, an organization is like a ship without a rudder”
  • Strategy” refers to analytical thinking, perfect future planning& commitment of resources to the actions. Strategy is trigger to target dream. It opens the door of all possibilities and take company ahead of time.
  • Strategy” is a guiding force or driving force of vision, mission and objective of company. Now strategy is an answer for hostile and dynamic business environment.
  • Strategy” is a blue point of an organization’s desire, image, direction and destination. A Company must know what it does, how it does and for whom it does.
  • Formulating Corporate Strategy:-
  • Forming the vision
  • Knowing the mission.
  • Setting the objective
  • Crafting the goal
  • Initiating Corrective adjustment

Solved Scanner CA IPCC Group-II Paper-7 Information Technology & Strategic Management

Ques 2. What does Strategy ensure? What is the origin of Strategy?

Ans. Strategy ensure the win in the battlefield, the origin of thw words Strategy comes from the following words:-

  • Army
  • War
  • Environment
  • Vision
  • Vision Shared
  • Shared Vision
  • Mission
  • Objective
  • Goal
  • Purpose
  • Value

Ques 3. What are the features? Characteristics of Strategy?  (LION DIAL)

Ans. Following are features of the strategy:-

  • Long Term:- Strategy is needed in the long term as well in the short term and medium term
  • Integration:- Strategy requires integration of all resources at a time. All resources are
  • Man
  • Money
  • Machine
  • Material
  • Motivation
  • Orientation:- There are seven steps
  • Pattern
  • Priority
  • Sequence
  • Combination
  • Tuning
  • Means
  • Approach
  • Negating the adversity of competitive and complex business environment Setting.
  • Dynamic and Flexible to achieve vision, mission, objective and goal.
  • Intertwining of element “SWOT”
  • Achieving the vision, mission, objective and goal.

Levels of management:- Corporate level, Business level , Functional level


Ques 4. Explain SWOT?

Ans. SWOT contains:-

  • Strength
  • Weakness
  • Opportunity
  • Threat
  • Strength: Strength refers to inherent capability of an organization which it can use to gain strategic advantage over its competitor.
  • Weakness: Weakness refers to inherent limitations or constraint of organization which creates strategic advantage to it.
  • Opportunity: An opportunity is a favorable condition in the organization’s environment which enables to strengthen its situation.
  • Threat: A threat is an unfavorable condition in the organization’s environment which causes risk or damage to the organization’s position.


Ques 5. Explain the framework of Strategic Management?

Ans. Framework refers to structured plan or support of a project or plan. It refers to knitting of all frames collectively step by step. The steps are as follows:-

  • Stage 1:- Where are we now? (Beginning)
  •  Situation analysis
  • Market position analysis
  •  Corporate Analysis
  • SWOT Analysis.


  • Stage 2:- Where do we want to be (End)
  • Vision
  •  Mission
  • Setting
  • Objective
  •  Goal Setting.
  • Stage 3:- How do we get there? (Means)
  •  Organization deals with various strategic alterative.
  • Stage 4:- Which way is the best? (Evaluation) ü Best suitable alternatives with SWOT analysis.
  • Stage 5:- How we can ensure arrival? (Control) ü Implementation and control stage.



Ques 6. Explain the dynamics of competitive strategy?

Ans. Strategic thinking “involves oriented of the firm’s internal environment with the changes of external environment. The competitive strategy evolves out of Consideration of several factors that are external to the firm.





Ques 7. Strategy is partly proactive and partly reactive? Make a comment?

Ans. Yes, A actual strategy is always partly proactive and partly reactive, because it is very difficult to forecast the change of environment. In reality no company can forecast both internal and external environment exactly. Moreover, everything cannot be planned in advance, we cannot anticipate what reaction will take place at what time.

Proactive”:- Perfect planning, Set procedure.


The company will move with the perfect planning and set procedure .It will take all the opportunities to grab in planning way .Proactive part of management is deliberate game for plan the product analysis.




 Reactive: – “No care for risk and reward”, Just work has to be done at any cost.


This provides trigger to move faster. This provides extra power to take on external environment. It does not care for risk, reward, rather it focuses on the goal to be achieved.


Solved Scanner CA IPCC Group-II Paper-7 Information Technology & Strategic Management


Ques 8. What are the most fundamental areas that must be evaluated in strategic management process? (MCSTKOF Value Chain Supply Chain)

Ans. Fundamental Areas are:-

  • Market
  • Competitors
  • Customers
  • Skills
  • Knowledge
  • Technology
  • Orientation
  • Function
  • Value chain
  • Supply chain


Ques 9. Explain marketing and market. Why marketing strategy formulation is important?

Ans. ‘MARKET’ is a place where exchange of Product, Service, Idea or concept.

MARKETING’ means identify the market, customer, pursuing the product getting feedback, entering into the new market or withdrawing from existing marketing.

  • An activity performed by business organizations.
  • Today it is considered to be activities related identifying needs of customers & taking such actions to satisfy them in return of some considerations.
  • It constitutes different processes, functions, exchanges & activities that are directed towards creating value satisfying needs of individuals.
  • Marketing plays very important role in carrying out objectives of the organization.
  • Target customers stand at the center of the marketing process.

Proper marketing formulation is important because this is only department which creates and sustains exchange relationships among those who are willing and able to buy and sell products, services, satisfaction and even ideas.


Ques 10. What are the issues in marketing?? (CPT DISTRIBUTION MATURITY)

Ans. Issues in marketing are

  • Cost Structure of market
  • Price Sensitivity of market
  • Technology structure of market
  • Distributing system of market ( advertising & promotion plan)
  • Maturity of market


Ques 11. How marketing department help organization to connect with customers? (STP)

Ans. To succeed in the today’s market, companies must be customer centered.

They must win customers from competitors and give them great value, it is the straight duty of marketing department.

  •  Marketing Segmentation:– In this process , there must be special focus on total market size, actual size, potential size of market, growth of market trends and development
  • Marketing Targeting:– Choose best segments
  • Market Positioning:– The design strategies of profitably serving chosen segments Better than the competitors.


Ques 12. Who are customers and consumers?

Ans. The aim of business is to create and retain customers. Customers are the people who pay money to acquire an organization product and service. No organization can survive without customer. Consumers and customers can be different. Father can be a customer, whereas daughter can consumer. Strategist must find out :-

  • Who is customer/consumer??
  • Benefits they are looking for??
  • Trends and buying patterns



Ques 13. Who are competitors? What are type of competitor? What are the quality question to analyses competitors?

Ans. Competitors are other persons in same field/business. They fight to snatch your resources and your markets.

They are 2 type of competitors

  1. Direct competitors
  2. Indirect competitors

You can find out the competitor by answering the following question:-

  • Who are the competitors?
  • What are they up to??
  • What are their product and services??
  • What are their market share??
  • What are the financial position?
  • What gives them cost and price advantage??
  • What are their present strategy??
  • What are they likely to do next??
  • What are their objectives??
  • Who are the most aggressive and powerful competitors??
  • Who are potential competitors

Ques 14. What are the marketing techniques?

Ans. Types of marketing technique are:-

  • Enlightened Marketing: A marketing philosophy holding that a company‘s marketing should support the best long-run performance of the marketing system;

Its five principles include

  • Customer-oriented marketing,
  • Innovative marketing,
  • Value marketing,
  • Sense-of-mission marketing, and
  • Societal marketing.
  • Social Marketing: It refers to the design, implementation, and control of programs seeking to increase the acceptability of a social ideas, cause, or practice among a target group. For instance, the publicity campaign for prohibition of smoking in Delhi explained the place where one can and can‘t smoke in Delhi.
  • Augmented Marketing: It is provision of additional customer services and benefits built around the care and actual products that relate to introduction of hi-tech services like movies on demand, on-line computer repair services, secretarial services, etc. Such innovative offerings provide a set of benefits that promise to elevate customer service to unprecedented levels.
  • Direct Marketing: Marketing through various advertising media that interact directly with consumers, generally calling for the consumer to make a direct response. Direct marketing includes Catalogue Selling, Mail, Telecommuting, Electronic Marketing, Shopping, and TV shopping.
  • Relationship Marketing: The process of creating, maintaining, and enhancing strong, value- laden relationships with customers and other stakeholder. For example, British Airways offers special lounges with showers at 199 airports for frequent flyers. Thus, providing special benefits to select customers to strength bonds. It will go a long way in building relationships.
  • Services Marketing: It is applying the concepts, tools, and techniques, of marketing to Services is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the, banking, savings, retailing, educational or utilities.
  • Person Marketing: People are also marketed. Person marketing consists of activities undertaken to create, maintain or change attitudes or behavior towards particular people. For example, politicians, sports stars, film stars, professional i.e., market themselves to get votes, or to promote their careers and income.
  • Organization Marketing: It consists of activities undertaken to create, maintain, or change attitudes and behavior of target audiences towards an organization. Both profit and nonprofit organizations practice organization marketing.
  • Place Marketing: Place marketing involves activities undertaken to create, maintain, or change attitudes and behavior towards particular places say, business sites marketing, tourism marketing.
  • Differential Marketing: A market-coverage strategy in which a firm decides to target several market segments and designs separate offer for each. For example. Hindustan Lever Limited has Lifebuoy, Lux and Rexona in popular segment and Liril and Pears in premium segment
  • Synchro Marketing: When the demand for the product is irregular due to season, some parts of the day, or on hour basis, causing idle capacity or over-worked capacities, synchromaketing can be used to find ways to alter the same pattern of demand through flexible pricing, promotion, and other incentives. For example woolens or coolers; or hospitals under booked on weekend or end of the week.
  • Concentrated Marketing: A market-coverage strategy in which a firm goes after a large share of one or few sub-markets.
  • Demarketing: Marketing strategies to reduce demand temporarily or permanently-the aim is not to destroy demand, but only to reduce or shift it. This happens when there is overfull demand. For example, buses are overloaded in the morning and evening, roads are busy for most of times, zoological parks are over-crowded on Saturdays, Sundays and holidays. Here demarketing can be applied to regulate demand.

Ques 15. Explain Marketing Mix?

Ans. Marketing mix is

  • The set of controllable marketing variables
  • That the firm blends to produce the response
  • It wants in the target market


These variables are often referred to as the 4P‘s or 4C‘s

Product: ―goods-and-service‖ combination the company offers to the target market.

Price: Amount of money customers have to pay to obtain the product.

Place: Company activities that make the product available to target consumers.

Promotion: Activities that communicate the merits of the product and persuade target consumers to buy it.

Product = Customer Solution.

Price = Customer Cost.

Place = Convenience.

Promotion = Communication.



  • Product/Service:-


  • What does the customer want from the product/service? What needs does it satisfy?
  • What features does it have to meet these needs?
  • Are there any features you’ve missed out?
  • Are you including costly features that the customer won’t actually use?
  • How and where will the customer use it?
  • What does it look like? How will customers experience it?
  • What size(s), color(s), and so on, should it be?
  • What is it to be called?
  • How is it branded?
  • How is it differentiated versus your competitors?
  • What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).
  • Pricing:What is the value of the product or service to the buyer?
  • Are there established price points for products or services in this area?
  • Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?
  • What discounts should be offered to trade customers, or to other specific segments of your market.
  • How will your price compare with your competitors?
  • Place:-
  • Where do buyers look for your product or service?
  • If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue?
  • How can you access the right distribution channels?
  • Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies?
  • What do you competitors do, and how can you learn from that and/or differentiate?



  • Where and when can you get across your marketing messages to your target market?
  • Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct marketing mailshot? Through PR? On the Internet?
  • When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions?
  • How do your competitors do their promotions? And how does that influence your choice of promotional activity?


Types of Promotional method:-


Advertisements: They can take different forms, e.g. on TV, in newspapers. Sales Promotion: e.g. Money off coupons.

Personal selling: Sending out sales representatives to talk directly to the consumers. Public relations: Involves making the public aware of the company, e.g. creating publicity in the media.


Ques 16. Explain Expanded Marketing Mix?

Ans. Expanded Marketing Mix: The new marketing mix (particularly for services) includes

  1. People: All human actors who play a part in delivery of the market offering and thus influence the buyer‘s perception, namely the firm‘s personnel and the customer.
  1. Physical evidence: The environment in which the market offering is delivered and where the firm and customer interact.
  1. Process: The actual procedures, mechanisms and flow of activities by which the product / service is delivered.

Ques 17. What are the function of organizations?

Ans. The function of the organization are:-

  • Market Research
  • Production
  • Finance
  •  Logistics
  • Accounts Human Resource

Ques 18. Explain Value Chain?

Ans:- As per Michael Porter, value of product is the value of the chain of activities, Final Value of the product is equal to value added at each activities, Here value does not represent cost.

A diamond cutter can be used as an example of value chain. The cutting activity may be of low cost but it add much value of the end product, since a rough diamond is significantly less value than the cut diamond

Value chain analysis has been widely used as a means of describing the activities around an organization and relating them into the assessment of the competitive strength of the organization

Michael Porter divided companies’ activities into 2 sets

  • Support activities
  • Infrastructure
  • Human resource management
  • Technology Development
  • Procurement
  • Primary Activities
  • Inbound logistics
  • Operations
  • Outbound logistics
  • Marketing and sales
  • Services



Ques 19. What do you mean by supply chain?

Ans. Supply chain includes the decision about the product to be produced and requiring old resources for transporting it , storing it , sending into plant, converting into finished goods , storing in finished goods department, sending. It to the distributor or stock list, ensuring proper sell to the consumer and seeking feedback




Ques 20. How supply chain Management System is Implemented? (PMDOCSM)

Ans. The term supply chain refers to linkages between suppliers, manufacturers and customers. Supply chain involve all activities like sourcing and procurement of material Conversion and logistics. Implementing and Successful running supply chain management system will involve:-

  • Product Development
  • Procurement
  • Manufacturing
  • Physical Distribution
  • Outsourcing
  • Customer Service
  • Performance Measurement
  1. Product development: – Customers and suppliers together in product development process
  2. Procurement- it requires careful resource planning, quality issues, identifying sources, negotiations, order placement, transport and storage
  3. Manufacturing:-Flexible manufacturing process will respond to market changes. They should adapt to the customization and changes in taste and preferences
  4. Physical Distribution: – Delivery of the final products to the final customer is the last position in the marketing channel. Supply chain management links marketing channel with customers
  5. Outsourcing:-Outsourcing is not limited to materials and components but is also extended to services, by doing this the company will be able to focus on those activities which is of high value to the organization
  6. Customer service:- Organization through interface with the company production and distribution operation develop customer relationship so as to satisfy them.
  7. Performance Measurement:- There is a strong relationship between the supplier customer and organization

Solved Scanner CA IPCC Group-II Paper-7 Information Technology & Strategic Management


Ques 21. Explain Logistic strategy?

Ans. Logistic refer to all the activities through in throughout from procuring process to carrying inward, storing, sending to the plan, converting into final product and selling it to the distributor.

It includes each and every facilities being used in process. This ensures right material in right quantity at right places with right facility so that supply chain does not break


Ques 22. How can effective logistic strategy help the company? OR

What is the benefit of logistic system?? (COST)

Ans. Effective logistic system help the company to save cost.

  • Cost Saving
  • Customer Satisfaction
  • Competitive Advantage
  • Outperform Competitor
  • Stability in Inventory
  • Time Delivery

The saving can also reveal the profits of the company


Ques 23. What are the different problems will be solved by effective logistic strategy?

Ans. For a business organization, effective logistic strategy will involve raising and finding solution to the following problems:-

  • Availability of raw material
  • Location of plant
  • Identification of plant with product
  • Mode of Transportation Choice
  • Distribution facility
  • Material& Inventory handling process
  • Acquisition, permanent asset lease out


Ques 24. What are the areas to examine while developing a logistic strategy? (CTO UNIFORM INFORMATION)

Ans.   There are different areas that should be examined for each company that should be considered and should include

  • Competitors: Review the procedures adopted by the competitors. It is also to be judged whether adopting the procedures followed by the competitors will be overall beneficial to the organization. This will also help in identifying the areas that may be avoided.
  • Transportation: Does the current transportation strategies help service levels required by the organization?
  • Outsourcing: Areas of outsourcing of logistics functions are to be identified. The effect of partnership with external service providers on the desired service level of organization is also to be examined.
  • Information: The information regarding logistics should be timely and accurate. If the data is inaccurate then the decisions that are made will be incorrect. With the newer technologies, it is possible to maintain information on movement of fleets and materials on real time basis.
  • Uniformity: The objectives of the logistics should be in line with overall objectives and strategies of the organization. They should aid in the accomplishment of major strategies of the business organization.


Ques 25. Is logistic management same as supply chain management?

Ans Supply chain management is an extension of logistic management. The term supply chain refers to the linkages between suppliers, manufacturer and customers. Supply chains involve all activities like sourcing and procurement of material, conversion, and logistics. Planning and control of supply chains are important components of its management. However, there is a difference between the two. Logistical activities typically include management of inbound and outbound goods, transportation, warehousing, and handling of material, fulfillment of orders, inventory management, and supply/demand planning.

Supply chain management includes more aspects apart from the logistics function. It is a tool of business transformation and involves delivering the right product at the right time to the right place and at the right price. It reduces costs of organizations and enhances customer service.


Ques 26. How is financial strategy formulated?

Ans. The financial strategies of an organization are related to several finance/accounting concepts considered to be central to strategy implementation.

Some examples of decisions that may require finance/accounting policies are:

  • Cash Flow Management/Cash Management
  • Capital Structure Decisions
  • Financing Decisions
  • Capital Budgeting Decisions
  • Receivable Management – Credit Period, Credit Limit




Ques 27. What are the different approaches for determining a business worth? (NPO)

Ans. Approaches are:-

  • Net Asset Method
  • Price Earning Method
  • Outstanding number of share Method
  • The first approach is evaluating the net worth or stock holders’ equity
  • The second approach is to measure the value of the firm grows that the worth of any business should be based largely on future benefits its owner may derive through net profits
  • The third approach allowing the market to determine the net worth involving three methods:-

On the base of firm’s worth on the selling price of similar company

The second is the price earnings ratio

The third method is the outstanding share method.

First Method: Share Capital + Reserves/Surplus – Goodwill + Under Valued Assets – Overvalued Assets

Second Method: 5×Current Annual Profit

Third Method:

  • First Approach: Base the firm’s worth on the selling price of a similar
  • Second approach(price-earnings ratio method): MPS
  • Third Approach: No. of Shares × MPS

Ques 28. What are the steps involved in production strategy process?

Ans. The production system is concerned with the capacity, location, layout, product or service design, work systems, degree of automation, extent of vertical integration etc. Production strategy process:-

  1. The strategy of production is related to production system, operational planning and control and research and development.
  2. Strategy implementation takes into account vital

issues such as capacity , location ,layout of product, , work system , degree of automation , extent of vertical integration which have to be studied at the production system stage

  1. Strategy relating to operation such a material supply, inventory , cost, quality management, maintenance of plant and equipment are done at the operational planning and control , the aim is to see how efficiently how the resources are utilized and in what manner day to day objectives can be managed in the light of long term objectives,
  2. Research and development is an integral part of production process, which will provide a great impetus in the production process, as it will help in developing new products and improving old product in a way that will allow strategic implementation.

So, it is clear that there are three steps are involved in production strategy process.

  • Production system
  • Production/operations planning and control
  • Research and development


Ques 29. What are the signals that indicate that there is need for turnaround organization? (TURND)

Ans. The signs of turnover:-

  • Total negative cash flows
  • Turnover of employees
  • Unprofitable
  • Uncompetitive products /services
  • Revamp needed
  • Negative Profit
  • Decline Market Share
  • Declining physical facilities
  • Declining morale of employees


Ques 30. Explain Policy?

Ans. Policy is a plan or course of actions designs to influence and determine decision action and other matters. Policy explain and describe standards that users should normally follow.

Policies are generally adopted by Board or senior governance body within an organization where procedures and protocols would be developed by senior executive officers.

Policies can assist in both objective and subjective decision making.

E.g. of policy are accounting policy, HR policy in an organization.



Ques 31. Explain operational planning of production process?

Ans. Operational planning of production process concentrates on aggregate production planning:

It refers to management of 5Ms.

Managing man, money, machine, material, and motivation.

In the process of material management, we have to follow following steps.

  • Material procurement
  • Material handling
  • Material costing
  • Material issuing
  • Managing working capital
  • Managing finished goods.


Ques 32. Explain the meaning of Research and development/ Process of Research and development? (DIAMTS)

Ans. Research Development refers to:-

  • Developing new product
  • Improve old product significantly
  • Adopt the local market and taste
  • Mass production at lower cost
  • Technology for raw material
  • Sound technology for competitive business

Research development can play an integral part in the overall company strategic implementation. Strategies such as product development. Market penetration and concentric diversification require new products successfully to be developed and old products significantly improved.


Ques 33. What are the issues in research and development? (RAMRAM)

Ans. The issues in research and development are:-

  • Robotic process v/s manual type process
  • Amount to spend large scale or small scale
  • Managing R &D in-house or outsource
  • Managing within house data or market data
  • Researchers in-house or private sector research
  • Actual existing resource utilization
  • Making the company leader or a follower in R & D.




Ques 34. Explain Management?

Ans. The term management can be used in two major contents:-

  1. When management is used as a ‘’noun’’ it refers to ‘C’ level of the company.
  1. When management is used as a ‘’verb’’ it refers to ‘orientation’ of the company.

Management:- According to Peter drucker “ Management is a function , discipline , a task to be done and manager practice this discipline carry out the functions and these tasks.

Management is an influence process to make things happen, to gain command over phenomena, to induce and direct events and people in a particular manner. Influence is backed by power, competence, knowledge and resources. Managers formulate their goals, values and strategies, to cope with, to adapt and to adjust themselves with the behavior and changes of the environment

Policy:-Policy is a plan or course of actions designs to influence and determine decision action and other matters


Ques35. What do you mean by strategic management?

Ans. The term Strategic Management refers to managerial process of:-

  • Forming strategic vision
  • Knowing the mission
  • Setting Objective
  • Crafting goals
  • Initiating corrective adjustments


Ques 36. What are the importance of Strategic Management?

Ans. Strategic Management is the most important action, plan of management. “The principle of survival is the fittest”. Here fittest does not mean the largest and strongest rather who can adopt the change successfully, Any creature who cannot adopt change, cannot survive however strongest it is.

Benefits of Strategic Management:-

  • It makes the company more proactive
  • It will help make long term, medium term and short term plan
  • It will help in the integration of resources
  • It helps in orientation
  • Negating the adversity of competitive and complex business environment
  • It helps organization to be more dynamic and flexible to achieve destination
  • It helps in intertwining the element of SWOT
  • It helps in achieving the vision mission and goal objective
  • It creates proper level of management.

Ques37. Explain the vision of corporation?

Ans. V-Vision is the roadmap of company

I-Intention of top management, which company they want to make

S– Setting objective

I-Intertwining of SWOT

O– Orientation

N-New approach


Ques 38. What are 3 primary element in the strategic vision? (MNC)

Ans. The 3 primary elements in the strategic vision:-

  • Mission related
  • Long term path
  • Communication

Three primary elements visions are the following:-

  1. Forming of mission statement of the company that talks about the business of the company presently is in? And who are we and what are we now? It talks what we are doing. How we are doing? And whom are we doing
  2. With the help of mission statement, we can define the long term path by selecting the best alternatives from different choices.
  3. The most important element is vision setting to communicate all and every person of the organization.




Ques 39. What are the important purposes of strategic vision?

Ans. The important purposes of strategic vision are:-

  • Accountability
  • Clarity in duration that company wants to go through
  • Competitive environment creation
  • Change of any
  • Resource utilization.


Ques40. What is the meaning or character of mission statement?

Ans. Mission for what, how and for whom

  • Map of vision
  • Intention of top management, which kind of company they want to make
  • Set objective
  • Setting guiding force, and driving force
  • Interwork of SWOT
  • Orientation
  • New approach
  • Future orientated
  • Optimum utilization of resources
  • Reason to exist
  • What, how and for whom


Ques 41. What are the guidelines for writing mission statement? (PROFIT)

Ans. The guidelines for formulation of mission statement are:-

Profit is not the only motive behind business

Presents evaluation

Reason to exist


Future oriented

Indicator of SWOT utilization


Solved Scanner CA IPCC Group-II Paper-7 Information Technology & Strategic Management


Ques 42. What is mission? What are the two ideas absolutely central to strategic planning?

Ans There are two ideas absolutely central to strategic planning:

  • Why organization should have mission? 
  • What is our mission? And what business are we in?
  • Why organization should have mission?
  1. To ensure long term success, with short term and medium term.
  2. To ensure integration of all resources and bringing unanimity of purpose within the organization
  3. To ensure orientation set up.
  4. To negate the adversity of complex and competitive business environment setting.
  5. To be dynamic and flexible enough to understand who is all in with the company vision and who is not aligned with activities.
  6. To make proper evaluation of SWOT analysis and distributing task based on factual interpretation.
  7. To make sure that corporate vision is achieved in stipulated time.
  8. To ensure that proper level of management is maintained and work is done accordingly.
  • What is our mission? And what business are we in?

The well-known management experts, Peter Drucker and Theodore Levitt were among the first to agitate this issue through their writings. They emphasised that as the first step in the business planning endeavour every business firm must clarify the corporate mission and define accurately the business the firm is engaged in. They also explained that towards facilitating this task, the firm should raise and answer certain basic questions concerning its business, such as:

  1. What is my mission? What is my purpose? What do I want to become? What business I am in? What brings me to this particular business?
  1. What is my market? In what business would we like to be in, in the future? What market share I will like to have for my business in what stipulated time frame?
  1. Who is my customer? Do I know them? Do I know their expectation from me? Whom do we intend to serve?
  1. Who is my competitors? What growth I want against them?
  1. What skill I have and what skill I need to develop for developing my business?
  1. What technological benefit I need to gain?
  1. What knowledge is required to know? Do I understand my business correctly and define it accurately in its broadest connotation?
  1. What are other functional needs how much resources I have to execute idea into action?
  1. What should be my value chain?
  1. What will by my supply chain?


Ques 43. What do you mean by objectives and goal?

Ans. Objectives are an organization’s performance targets of each function. It has— the results and outcomes it wants to achieve. Business organizations translate their vision and mission into objectives. As such the term objectives are synonymous with goals, however, we will make an attempt to distinguish the two.

Objectives are organizations‘

  • Performance targets –
  • The results and outcomes it wants to achieve.
  • They function as yardstick for tracking an organizations performance and progress.

Objectives are open-ended attributes that denote the future states or outcomes.

Goals are close-ended attributes which are precise and expressed in specific terms.

Thus, the goals are more specific and translate the objectives to short term perspective.

However, this distinction is not made by several theorists on the subject. Accordingly, we will also use the term interchangeably.




Ques 44. What are the characteristics of objective? (OBJECTIVE)

Ans. The characteristic of objective:-

  • Objective is open ended:-Objective should define the organization
  • Optimum use of resources: – Facilitates toward the achievement of mission and
  • Benchmark:-They should provide standards for performance appraisal
  • Joiner of resources:-Different of objective must join each other
  • Extracted from vision and mission statement:-Objectives must be measurable
  • Clarity:-Objectives must be easily understandable
  • Time Bound:-Should be related to a time frame
  • Indicator of SWOT utilization:- should provide basis for strategic decision making
  • Value:-Objective should be set with constraint.
  • Expression of long term plan:-Objectives should be challenging.


Ques 45. What are the different level of managements? Differentiate between them?

Ans. There are three level of management:-

  • Corporate Level: CEO, other senior executives, board of directors, and corporate staff
  • Business Level: Divisional managers and staff
  • Functional Level: Functional managers


No.CharacteristicLevel of Strategy
2.MeasurabilityJudgmentsUsually Quantifiable
4.Relation to PresentInnovativeMixedSupplementary
5.RiskWide RangeModerateLow
6.Profit PotentialLargeMediumSmall
8.Time HorizonLong RangeMedium RangeShort Range
10.Co-op reqd.ConsiderableModerateLittle



Ques 46. What re the dimensions/factors involved in strategic decision-making? What are the steps in strategic making decision?

Ans. Decision making is a managerial process and function of choosing a particular course of action out of various alternative for the purpose of accomplishment of goals.

Strategic Decision are different in nature than all other decisions which are taken at various levels of the organization during day-to-day working of the organizations. The major dimensions of strategic decisions are given below:

  • Strategic decision making involves the thinking of top management at all stages
  • Strategic decision making may require the involvement of huge financial investment into new area of business as well manpower skills
  • The results of Strategic implementation are seen over a long period of time
  • Strategic issues involve predicting future environmental conditions and how to orient for the Strategic issues usually have major multifunctional or multi-business consequences changed conditions.

Following are the steps involved in strategic decision making:

  1. Problem identification.
  1. Alternative course of action.
  1. Selection of a particular course of action out of several alternatives developed.
  1. Implementation of selected action plan and put that idea into action in the designed manner.
  1. Continuous evaluation of implemented





Ques 47. Critically examine the Strategic Management Model?



  1. Develop and mission statements: We have to identify existing vision, mission and objectives, even if it is not consciously designed, written and communicated. Change in any of the components will bring change in all the components or in the major component.
  1. Establish long-term objectives: The companies always focus on objectives in the form of outcome.
  1. Generate, evaluate and select strategies: Evaluate all possible courses of action.
  1. Implement strategic management issue: Select and implement with proper analysis of SWOT.
  1. Implement strategies: Implement strategies on functional level, i.e., Marketing, Finance, Accounting, R&D and MIS issues.
  1. Measure and evaluate performance: Quantify the target and goal. Conclusion

Conclusion: – The Strategic Management Model is very formal, in a large and well established organization. It decides responsibility, authorities, duties and approaches to a particular problem. Smaller businesses are less formal. If business uses Strategic Management process very positively with cost reduction and minimizing the gap in executing order, then success is bound to come. We know that, in reality, management models are not as clear and neat as it is seen. It is not a catwalk on fashion showroom. Therefore, many companies conduct seminars annually and semi-annually for vision, mission, objectives, evaluation of strategy, implementation of strategy, control the strategy and, finally, measuring the output.




Ques 48. What do you mean by organizational structure?

Ans. Organizational structure refers to shape, size and flow of management information system. It is obvious that when the size of organization changes, then structure of organization will also change. It changes basically because of two reason

  1. Structure dictates how objectives and policies would be establish.
  1. Structure dictates how resource will be allotted.

‘’STRUCTURE’’ which follows ‘’STRATEGY’’

‘’STRATEGY’’ does not follow ‘’STRUCTURE’’


Ques 49. What are the different types of organizational structures?

Ans. Different organizations structure themselves in different ways, fi example, consumer goods companies tend to emulate the division structure by product term of the organization. Types of organizational structure:-

  1. Functional Structure
  1. Divisional Structure
  1. Structure by Strategic Business Unit
  1. Structure by Matrix


Ques 50. Explain functional structure?

Ans. The classical organization structure where the employees are grouped hierarchically, managed through clear lines of authority and report ultimately to one person.



  • Simplest
  • Least expensive
  • Activities by business function
  • Specialization of labour
  • Encourages efficiency


  • Accountability to top
  • Minimum career opportunities
  • Low employee morale
  • Line/Staff conflict
  • Poor delegation of authority
  • Inadequate planning for product and planning

Conclusion: Most of the large companies have abandoned this structure. It can produce result if there is a match between strategy and structure.




Ques 51. What do you understand by Divisional Structure? Explain critically.

Ans. Divisional Structure is composed of operating divisions where each division is represented as separate business. This is very common type of structure for large manpower based organization used in banks etc. This type of structure is called M-Form structure.


  • Each division represents the distinct business.
  • Each division has its own functional hierarchy.
  • Each divisional manager is responsible for its day to day businesses
  • The company can monitor the performance of individual business
  • Simplified control.
  • Benchmarking among the divisions.
  • Accountability is clear.
  • Manager can visualize result.
  • Employees can see and feel their contribution.
  • There can be local control for local body.


  • This structure is costly.
  • We need specialized and skilled labour.
  • Performance and facilities for different regions can be different.


Ques 52. What are the stages of Retrenchment?

Ans. There are Five Stages:-

Stage 1:-Awareness of Sickness

  • Company can cut capital and revenue expenditure.
  • Delaying administrative block replacement related work
  • Delaying replacement of worn out machinery
  • Stop Advertisement
  • Stop research and development activities
  • Reducing executive perquisite work
  • Reducing employee welfare subsidies

Stage 2:-Sickness

  • Lowering inventory control
  • Lowering manufacturing level
  • Lowering manpower
  • Reducing the cost of plant maintenance
  • Stoppage of dividend to stakeholder

Stage 3:-Serious Sickness

  • Withdraw some brand
  • Withdraw some slow moving product
  • Close down some offices and branch
  • Abolition of some executive post

Stage 4:-On Dialysis

  • Company can resort to sale of manufacturing facilities
  • It can sell some individual product line
  • It can retire from the major market
  • It can offer for takeover by another strong enterprise.


Solved Scanner CA IPCC Group-II Paper-7 Information Technology & Strategic Management

At CAKART you will get everything that you need to be successful in your CA CS CMA exam – India’s best faculty video classes (online or in pen drive) most popular books of best authors (ebooks hard copies) best scanners and all exam related information and notifications.Visit  and chat with our counsellors any time. We are happy to help you make successful in your exams.


Leave a comment

Your email address will not be published. Required fields are marked *