Itsm Papers

PAPER – 7: INFORMATION TECHNOLOGY AND STRATEGIC MANAGEMENT
SECTION – A: INFORMATION TECHNOLOGY

Question No. 1 is compulsory
Answer any five questions from the rest.
Question 1
Answer the following questions in brief:
(a) List the steps in preparing a Limited Entry Decision Table.
(b) Explain disadvantages of a Data Base Management System.
(c) What is Secret Key encryption/decryption method?
(d) List the Transaction Processing System (TPS) attributes.
(e) Explain the different types of Audit during System Development Process.
(5 x 2 = 10 Marks)
Answer
(a) The steps in preparing a Limited Entry Decision Table are as follows:
• List conditions and actions.
• Combine conditions which describe the only two possibilities of a single condition. In
other words, delete conditions which can be derived from the responses of the other
conditions.
• Make ‘Yes’ or ‘No’ (Y or N) responses and mark actions to be taken for each rule
with X.
• Combine redundant rules to simplify table.
• Check for completeness.
(b) The disadvantages of Database Management Systems (DBMS) are as follows:
• Cost: Implementing a DBMS system can be expensive and time-consuming,
especially in large enterprises. Training requirements alone can be quite costly.
• Security: Even with safeguards in place, it may be possible for some unauthorized
users to access the database. If one gets access to database, then it could be an all
or nothing proposition.
(c) Secret Key encryption/decryption method: In this method, the same key is used by both
sender and the receiver for encryption and decryption. The sender uses this key and an
encryption algorithm to encrypt data; the receiver uses the same key and the
corresponding decryption algorithm to decrypt the data. In this, the algorithm used for
decryption is the inverse of the algorithm used for encryption.
© The Institute of Chartered Accountants of India

2 INTERMEDIATE (IPC) EXAMINATION: MAY, 2018
(d) The attributes of Transaction Processing System (TPS) are as follows:

• Access Control
• Equivalence
• High Volume Rapid Processing
• Trustworthiness
(e) The different types of Audit during System Development Process are as follows:
• Concurrent Audit: Auditors are members of the system development team and
assist the team in improving the quality of systems development for the specific
system they are building and implementing.
• Post-implementation Audit: Auditors seek to help an organization learn from its
experiences in the development of a specific application system. In addition, they
might be evaluating whether the system needs to be scrapped, continued, or modified
in some way.
• General Audit: Auditors evaluate systems development controls overall. They seek
to determine whether they can reduce the extent of substantive testing needed to
form an audit opinion about management’s assertions relating to the fina ncial
statements for systems effectiveness and efficiency.
Question 2
(a) Mention various key factors to be considered in implementing Business Process
Management (BPM) in an organization. (4 Marks)
(b) What are the basic steps involved in 'Data Processing Cycle' under Processing Cycles of
an Accounts BPM? Discuss. (4 Marks)
Answer
(a) Various key factors to be considered in implementing Business Process Management
(BPM) in an organization are as follows:
• Scope: A single process, a department, the entire company;
• Goals: Process understanding, improvement, automation, re-engineering, optimization;
• Methods to be used: Six Sigma, BPM Life Cycle Method, TQM, Informal methods;
• Skills Required: Consultants, Train Employees, Formal Certification, Basic Education,
Existing Skill sets;
• Tools to be used: White-Boards, Sticky Notes, Software for Mapping, Documenting,
Software for Simulation, Comprehensive BPMS;
• Investments to Make: Training, Tools, Time; and

PAPER – 7: INFORMATION TECHNOLOGY AND STRATEGIC MANAGEMENT 3
• Sponsorship/Buy-in Needed: Executive Level, Department Level, Process Owner

Level, Employee Level.
(b) The Data Processing Cycle consists of following basic steps:
• Data Input - Involves the activities like capturing the data, implementing control
procedures, recording in journals, posting to ledgers and preparation of reports.
• Data Storage - Involves organizing the data in master file or reference file of an
automated system for easy and efficient access.
• Data Processing - Involves addition, deletion and updating of the data in the
transaction file, master file or reference file.
• Information Output - Involves generation of documents and managerial reports in
printable or electronic form for addressing queries, to control operational activities
and help the management in decision making.
Question 3
(a) What is meant by a 'server'? Explain whether it is a computer or a computer program.
Describe any two types of servers based on the nature of service they provide.
(2 + 2 = 4 Marks)
(b) Explain briefly, the following activities executed by Operating System:
(1) Performing Hardware functions
(2) User Interfaces
(3) Hardware Independence
(4) Memory Management (4 Marks)
Answer
(a) Server: From a hardware perspective, a server is a computer (hardware) or device on a
network dedicated to run one or more services (as a host), to serve the needs of the users
of other computers on a network. However, in the context of client-server architecture, a
server is a computer program running to serve the requests of other programs, the
"clients". Thus, the server performs some computational task on behalf of "clients." The
clients either run on the same computer, or they connect through the network.
On multiprocessing operating systems, a single computer executes several programs at
once. A server in this case refers to the program that is managing resources rather than
the entire computer. Thus, a server is not defined by the size of a computer system rather
the function that it provides through its program.
There are different types of servers based on the nature of service they provide. Some of
them are as follows:

• File Server: This is a computer and storage device dedicated to storing files. Any
user on the network can store files on the server.
• Print Server: This is a computer that manages one or more printers.
• Network Server: This is a computer that manages network traffic.
• Database Server: This is a computer system that processes database queries.
• Application Server: This is a program that handles all application operations
between users and an enterprise's backend business applications or databases.
• Web Server: Web Server is a computer that delivers (serves up) web pages. Every
web server has an IP address and possibly a domain name. Whenever, a URL is
entered in a browser, a request is sent to the Web server for the specified URL. The
server then fetches the home page named and sends it to our browser. Any computer
can be turned into a Web server by installing server software and connecting the
machine to Internet.
• Mail Server: Mail server moves and stores mail over corporate networks.
(b) The following activities are executed by the Operating System (OS):
(1) Performing Hardware functions: Application programs to perform tasks must obtain
input from keyboards, retrieve data from disk and display output on monitors.
Achieving all this is facilitated by operating system. Operating system acts as an
intermediary between the application program and the hardware.
(2) User Interfaces: How we interface with our system is provided by Operating system.
During DOS days, a command based User Interface (UI) i.e. text commands were
given to computer to execute any command. But nowadays, Graphic User Interface
(GUI), which uses icons and menus like in the case of Windows are used prominently.
(3) Hardware Independence: Every computer could have different specifications and
configurations of hardware. If application developer would have to rewrite code for
every configuration, s/he would be in a big trouble. The operating system provides
Application Program Interfaces (API), which can be used by application developers
to create application software, thus obviating the need to understand the inner
workings of Operating system and hardware. Thus, OS gives us hardware
independence.
(4) Memory Management: Memory Management feature of Operating System allows
controlling how memory is accessed and maximize available memory and storage.
Operating systems also provides Virtual Memory by carving an area of hard disk to
supplement the functional memory capacity of RAM. In this way, it augments memory
by creating a virtual RAM.

Question 4
(a) Explain relationship between internet, intranet and extranet with reference to business
enterprise. Discuss five rules of extranet. (4 Marks)
(b) Discuss any two advantages and two disadvantages of Peer-to-Peer network. (4 Marks)
Answer
(a) Relationship between Internet, Intranet and Extranet
Any business enterprise uses the Internet to communicate public information about itself
to members of the enterprise and to others outside the enterprise. Intranets and Extranets
are private versions of the Internet. An enterprise uses an Intranet to share information
between its members and uses Extranets to exchange information with and provide
services to their business partners (customers, suppliers, etc.).
The Five Rules of the Extranet are as follows:

 Be as flexible as the business: An extranet must be driven by the demands of the
market, not the limitations of technology. It must be extremely flexible and allow
companies to immediately deploy extranet services that best fit the business need,
be it intimate supply chain partners using a wide range of applications or mass e-
commerce extranets driven by Web-based applications.
 Deploy in Internet time: To deploy an extranet, companies shouldn't have to roll
out a new infrastructure or go through a major re-architecting of their applications. To
remain market-driven, enterprises must be able to deploy their extranet quickly, and
leverage their existing infrastructure to do so.
 Protect the interests of the data owner: Extranet services need to be deployed
in a fast and flexible way, but with the complete assurance that only the correct users
can access the right services. An extranet must ensure that what's supposed to be
private stays private.
 Serve the partner as a customer: An extranet presents a very important and
delicate balance: providing customer service to key partners in a competitive
environment with mission-critical resources at risk. Partners should never be required

to change their security policies, networks, applications, and firewalls for the good of
the extranet community.
 Drive information to the decision-maker: An extranet must provide a central
means to measure progress, performance, and popularity. Business units deploying
applications need to understand which extranet content and applications are most
successful.
(b) Following are the major advantages of Peer-to-Peer networks:
(i) Peer-to-Peer Networks are easy and simple to set up and only require a Hub or a
Switch to connect all the computers together.
(ii) It is very simple and cost effective.
(iii) If one computer fails to work, all other computers connected to it continue to work.
The major disadvantages of Peer-to-Peer networks are as below:
(i) There can be a problem in accessing files if computers are not connected properly.
(ii) It does not support connections with too many computers as the performance gets
degraded in case of high network size.
(iii) The data security is very poor in this architecture.
Question 5
(a) Write any four parameters of do's and don'ts each, that need to be considered while
developing MIS. (4 Marks)
(b) Discuss the four general functions possessed by the Access Controls related to software
and information. (4 Marks)
Answer
(a) The parameters of Do’s and Don’ts that need to be considered while developing
Management Information Systems (MIS) are as follows:
S. Parameter Do’s Don’ts
No.
1 Layman Have simpler and manageable Be ambitious.
system.
2 Bridging Develop common understanding Be unrealistic in
between consultant and the developing action plan.
organization.
3 Contribution in Involve programmer in needs’ Delay decisions on hiring
Totality assessment. application developer/s.
4 Tailor-made Customize off-the-shelf Depend heavily on the
software. consultant.

5 Interpretation Have simple software for users Invest heavily in in-house

to handle. application development.
6 Synchronization Extensively involve users in MIS Let vendors determine
development. hardware needs for LAN.
7 Application Adopt modular approach for Go for large applications.
software development.
(b) The general functions possessed by the Access Controls related to software and
information are as follows:
 Identity Management: Identity management consists of one or more processes to
verify the identity of a subject attempting to access an object, though it does not
provide 100% assurance of the subject’s identity. Rather, it provides a level of
probability of assurance that depends on the identity verification processes in place
and their general trustworthiness. The three pillars that support authorized access
still define the tools and techniques necessary to manage who gets access to what
and what they can do when they get there are Authentication, Authorization, and
Accountability.
 Authentication: Identity management and authentication are inseparable. Identity
management includes assigning and managing a subject’s identity. Authentication is
the process of verifying a subject’s identity at the point of object access.
 Authorization: Once a resource or network verifies a subject’s identity, the process
of determining what objects that subject can access, begins. Authorization identifies
what systems, network resources, etc. a subject can access. Related processes also
enforce least privilege, need-to-know, and separation of duties.
 Accountability: Each step from identity presentation through authentication and
authorization is logged. Further, the object or some external resource logs a ll activity
between the subject and object. The logs are stored for audits, sent to a log
management solution, etc. They provide insight into how well the access control
process is working: whether subjects abuse their access or not.
Question 6
(a) What are major advantages of Cloud Computing? (4 Marks)
(b) Describe different types of Input Controls under Application Control. (4 Marks)
Answer
(a) Major advantages of Cloud Computing are as follows:
• Cost Efficient: Cloud computing is probably the most cost efficient method to use,
maintain and upgrade.
• Almost Unlimited Storage: Storing information in the cloud gives us almost unlimited
storage capacity.

• Backup and Recovery: Since all the data is stored in the cloud, backing it up and
restoring the same is relatively much easier than storing the same on a physical device.
Furthermore, most cloud service providers are usually competent enough to handle
recovery of information.
• Automatic Software Integration: In the cloud, software integration is usually
something that occurs automatically. As cloud computing allows us to customize the
options with great ease, just those services and software applications that best suit the
enterprise, can only be handpicked.
• Easy Access to Information: Once we register ourselves in the cloud, we can access
the information from anywhere, where there is an Internet connection .
• Quick Deployment: Once we opt for this method of functioning, the entire system can
be fully functional in a matter of a few minutes. Of course, the amount of time taken
here will depend on the exact kind of technology that we need for our business.
(b) Different types of Input Controls that are responsible for ensuring the accuracy and
completeness of data that are input into an application system are as follows:
• Source Document Control: A well-designed source document reduces the likelihood of
data recording errors, increases the speed with which data can be recorded and
controls the work flow. Source Document Controls facilitate the data entry into a
computer system and subsequent reference checking.
• Data Coding Controls: Data Coding Controls are put in place to reduce user error
during data feeding.
• Batch Controls: These are put in place at locations where batch processing is being
used. Batch processing is where there is a time gap between occurrence and
recording of transactions, that is, transactions are not recorded at the time of
occurrence but are accumulated and a set based on number/ time is processed.
• Validation Controls: These validate the accuracy/correctness of input data. Input
Validation Controls are intended to detect errors in transaction data before the data
are processed.
Question 7
Write short notes on any four of the following:
(a) Context Diagram
(b) Tablet
(c) Store and forward characteristic of message switching
(d) Payment Gateway
(e) Certificate authority with reference to grid security (4 x 2 = 8 Marks)

Answer
(a) Context Diagram: The Context Diagram is a high-level Data Flow Diagram (DFD) that
shows the entire system as a single process and shows the interaction between the system
and external agents which act as data sources and data sinks, and gives no clues as to its
internal organization. The context-level DFD is next "exploded" to produce Level 1 DFDs
for each process that show how the system is divided into sub-systems (processes), each
of which deals with one or more of the data flows to or from an external agent, and which
together provide all the functionality of the system as a whole.
(b) Tablet: Tablet is a one piece general-purpose computer contained in a single panel that uses
a touch screen as the input device. Tablet PCs provide extreme portability, easy to use
interfaces and wide range of ways they can be used. Some features of Tablets are as follows:
• Input Method: Tablets rely solely on a touch interface on the screen for all input.
• Size: These have the size roughly of a small pad of paper with weight less than one kg.
• Battery Life: Because of the low power requirements of their hardware components,
tablets can achieve all day usage.
• Storage Capacity: Most tablets come with configurations that allow between 16 and
64 Gigabytes of storage.
• Performance: Since most tablet PCs are based on extremely low powered
processors, these are more suited for tasks like email, web browsing, playing video
or audio.
• Software: The two major tablet platforms are Android and iOS amongst plenty of
applications that are available.
• Wireless: Because tablets by design are mobile computers; most of them have
Wi-Fi, blue tooth and mobile connectivity.
(c) Store and Forward characteristic of Message Switching: In message switching, no
physical path is established between sender and receiver in advance. The end -users
communicate by sending each other a message, which contains the entire data being
delivered from the source to destination node. As a message is routed from its source to
its destination, each intermediate switch within the network stores the entire message,
providing a very reliable service. The intermediary nodes have the resp onsibility of
conveying the received message from one node to another in the network. Therefore, each
intermediary node within the network must store all messages before retransmitting them
one at a time as proper resources become available. This characteristic is often referred
to as Store-and-Forward. Electronic mail (e-mail) and voice mail are examples of
message switching systems.
(d) Payment Gateway: Payment Gateway is fundamentally a service used to process credit
card transactions when orders are accepted online from clients. In a way, it represents a
physical POS (Point-of-Sale) terminal, which is set in every retail outlet these days.

Payment gateways use a special code for acquiring sensitive information like credit card
numbers, so that information passes securely.
(e) Certificate Authority: The Certificate Authority is one of the most important aspects of
maintaining strong grid security. It is critical to ensure the highest levels of security in a
grid because the grid is designed to execute code and not just share data. Thus, viruses,
Trojan horses, and other attacks can affect the grid system. An organization may choose
to use an external Certificate Authority or operate one itself. The primary responsibilities
of a Certificate Authority are:
• Positively identifying entities requesting certificates;
• Issuing, removing, and archiving certificates;
• Protecting the Certificate Authority server;
• Maintaining a namespace of unique names for certificate owners;
• Serving signed certificates to those needing to authenticate entities; and
• Logging activity.

SECTION –B: STRATEGIC MANAGEMENT

Question 8
(a) Explain the basic goals of environmental analysis. (3 Marks)
(b) What should be the major components of a good mission statement? (3 Marks)
(c) Explain the strategic implications of each of the following types of business in a corporate
portfolio:
(a) Stars (b) Question Marks (c) Cash Cows (d) Dogs (3 Marks)
(d) What are the five competitive forces in an industry as identified by Michael Porter?
(3 Marks)
(e) 'A strategy-supportive culture promotes good strategy execution.' - Explain. (3 Marks)
Answer
(a) In general, environmental analysis has three basic goals as follows:
First, provide an understanding of current and potential changes taking place in the
environment.
Second, facilitate and foster strategic thinking in organizations. It should challenge the
current wisdom by bringing fresh viewpoints into the organization.
Third, provide useful inputs for strategic decision making. Mere collection of data is not
enough.
(b) Mission statements broadly describe an organizations’ present capabilities, customer
focus, activities, and business makeup. Following points are useful whil e writing a good
mission statement of a company:
• Good mission statement is highly personalized – unique to the organization for which
it is developed.
• *Mission statement should emphasize on giving an organization its own special
identity, business emphasis and path for development.
• *Mission statement should clearly specify that, what needs it is trying to satisfy,
customer groups it is targeting, technologies and competencies it uses and the
activities it performs.
• Technology, competencies and activities are important in defining a company’s
business because they indicate the boundaries on its operation.
• The mission should not be to make profit.

(c) In the BCG growth-share matrix portfolio of investments are represented in two
dimensional space. The vertical axis represents market growth rate and the horizontal axis
represents relative market share. The strategic implications for various business types
under BCG in the corporate portfolio are:
Stars are products or businesses that are growing rapidly and are best opportunity for
expansion. Stars may follow build strategy. They need heavy investments to maintain their
position and finance their rapid growth potential.
Cash Cows are low-growth, high market share businesses or products. They generate
cash and have low costs. They are established, successful, and need less investment to
maintain their market share. Strategic alternative advocated for cash cows is harvest.
Question Marks are low market share business in high-growth markets. Strategic option
for them is hold for which they need heavy investments. Question marks if left unattended
are capable of becoming cash traps.
Dogs are low-growth, low-share businesses and products. Relevant strategy is divest.
Dogs may generate enough cash to maintain themselves, but do not have much future.
Dogs should be minimized by means of divestment or liquidation.
(d) Five forces model of Michael Porter is a popular tool for systematically diagnosing the
significant competitive pressures in the market and assessing their strength and
importance. The model holds that the state of competition in an industry is a composite of
competitive pressures operating in five forces as follows:
1. Threat of new entrants: New entrants place a limit on prices and affect the
profitability of existing players. The new capacity and product range the new entrants
bring increases competitive pressure.
2. Bargaining power of customers: The bargaining power of the buyers influences not
only the prices that the producer can charge but also influence costs and investments
of the producer. This force will become heavier depending on the possibilities of the
buyers forming groups or cartels, particularly in case of industrial products.
3. Bargaining power of suppliers: Often suppliers can exercise considerable
bargaining power. The bargaining power of suppliers determines the cost of raw
materials and other inputs of the industry and, therefore, can affect industry
attractiveness and profitability.
4. Rivalry among current players: The impact is evident more at functional level in the
prices being charged, advertising, and pressures on costs, product and so on.
5. Threats from substitutes: Substitute products are a latent source of competition in
an industry. Substitute products offering a price advantage and/or performance
improvement to the consumer can have significant impact.
(e) Strong cultures promote good strategy execution when there’s fit and hurt execution when
there’s negligible fit. A culture grounded in values, practices, and behavioral norms that

match what is needed for good strategy execution helps energize people throughout the
organization to do their jobs in a strategy-supportive manner. A culture built around such
business principles as listening to customers, encouraging employees to take pride in their
work, and giving employees a high degree of decision-making responsibility. This is very
conducive to successful execution of a strategy of delivering superior customer service.
A work environment where the culture matches the conditions for good strategy execution
provides a system of informal rules and peer pressure regarding how to conduct business
internally and how to go about doing one’s job.
A strong strategy-supportive culture makes employees feel genuinely better about their
jobs and work environment and the merits of what the company is trying to accomplish.
Employees are stimulated to take on the challenge of realizing the organizational vision,
do their jobs competently and with enthusiasm, and collaborate with others.
Question 9
(a) State with reasons which of the following statement is correct/incorrect:
(i) "Efficiency and effectiveness mean the same in strategic management."
(ii) Telephone-marketing is an instance of direct marketing. (2 x 2 = 4 Marks)
(b) Elaborate the reasons necessary for the globalization of companies . (3 Marks)
Answer
(a) (i) Incorrect: Efficiency pertains to designing and achieving suitable input output ratios
of funds, resources, facilities and efforts whereas effectiveness is concerned with the
organization’s attainment of goals including that of desired competitive position . While
efficiency is essentially introspective, effectiveness highlights the links between the
organization and its environment. In general terms, to be effective is to do the right
things while to be efficient is to do things right.
(ii) Correct: Direct marketing is done through various advertising media that interact
directly with customer. Teleshopping is a form of direct marketing which operates
without conventional intermediaries and employs television and other IT devices for
reaching the customer. The communication between the marketer and the customer
is direct through third party interfaces such as telecom or postal systems.
(b) There are several reasons why companies go global. These are discussed as
follows:
• One reason could be the rapid shrinking of time and distance across the globe thanks
to faster communication, speedier transportation, growing financial flows and rapid
technological changes.
• It is being realised that the domestic markets are no longer adequate and rich.
Companies globalize to take advantage of opportunities available elsewhere.
• A new product may gradually get acceptance and grow locally and then globally. This

may initially be in form of exports and then later production facilities may begin in
other countries.
• Organizations may go global to take advantage of cheaper raw material and labour
costs.
• Companies often set up overseas plants to reduce high transportation costs.
• The motivation to go global in high-tech industries is slightly different. Companies in
electronics and telecommunications must spend large sums on research and
development for new products and thus may be compelled to seek ways to improve
sales volume to support high overhead expenses.
• The companies may also go global to take advantage of local taxation laws . For
example products manufactured in a country can have lower overall taxes when
compared to the products that are imported.
Question 10
What does a business process mean? Under what circumstances this process needs re-
engineering? (1 + 6 = 7 Marks)
Answer
Business processes are simply a set of activities that transform a set of inputs into a set of
outputs for another person or process. A process is a set of logically related tasks or activities
oriented towards achieving a specified outcome. It is a collection of activities which creates an
output of value to the customer and often transcends departmental or functional boundaries.
For example, selling tickets is a business process which is simple but at the same time needs
to be further divided into steps. There are other business processes such as purchasing raw
material, logistic movements of finished products, developing new products, etc.
Over a period, there can be circumstances that may warrant reengineering of these processes.
Such circumstances leading to business process reengineering can be explained as follows:
(a) Processes that might have been developed by their functional units over a period of time
and might have been result of a series of unplanned decisions will require reengineering.
There can be possibility that there has been no serious effort in past to systematically
analyse the processes and measure their effectiveness towards the organizational
efficiency.
(b) There are also possibilities that individual departments or units have aimed at optimising
their own performance disregarding the resultant effect on other areas of operation. This
may result in a sub-optimal performance for the organization as a whole. Fragmentation of
work processes makes it difficult to improve the quality of work performance and also
develops a narrow vision among the employees.
(c) The overall business processes in an organization extending over several departments
may be quite lengthy, time consuming, costly and inefficient. The unduly long processes

may also lead to chances of errors. As the small fragments of work move from person to
person and from unit to unit, delays keep on mounting and it enhances the chances of
errors. In such a situation, the emerging critical issues often remain unattended.
(d) Processes may also need change to take advantage of emerging technologies. In case the
existing work processes were developed before the IT revolution, they may require
reengineering. The organizations that have applied the technology only in a limited way to
automate their existing work methods need to reengineer.
(e) Further, for organizations on decline, changing the process or redesigning the process
may be the only viable alternative for turnaround. They must break themselves free from
their primitive and archaic work processes that drag them down.
Question 11
(a) 'TOWS Matrix has a wider scope as compared to SWOT analysis.' - Explain. (4 Marks)
(b) "To coordinate more complex organizational functions, companies should abandon the
simple structure in favour of the functional structure.' Analyse. (3 Marks)
Answer
(a) Through SWOT analysis organizations identify their strengths, weaknesses, opportunities
and threats. While conducting the SWOT Analysis managers are often not able to come to
terms with the strategic choices that the outcomes demand. Heinz Weihrich developed a
matrix called TOWS matrix by matching strengths and weaknesses of an organization with
the external opportunities and threats. The incremental benefit of the TOWS matrix lies in
systematically identifying relationships between these factors and selecting strategies on
their basis. The matrix is outlined below:
TOWS Matrix
Through TOWS matrix four distinct alternative kinds of strategic choices can be identified.

SO (Maxi-Maxi): SO is a position that any firm would like to achieve. The strengths can
be used to capitalize or build upon existing or emerging opportunities.
ST (Maxi-Mini): ST is a position in which a firm strives to minimize existing or emerging
threats through its strengths.
WO (Mini-Maxi): The strategies developed need to overcome organizational weaknesses
if existing or emerging opportunities are to be exploited to maximum.
WT (Mini-Mini): WT is a position that any firm will try to avoid. An organization facing
external threats and internal weaknesses may have to struggle for its survival.
(b) Simple organizational structure is most appropriate usually in those small organizations
that follow single business strategy and offer a line of products in a single geographic
market. When a small organization grows, its complexities also tend to grow which
necessitates the companies to abandon the simple organization structure which it has been
adopting hitherto and move towards structures like functional organizational structure. A
typical simple organization structure is often owner driven with small number of employees.
A Complex organization refers to organizations that have many people, processes, rules,
strategies and basic units. Hence, in such situation functional structure proves to be more
beneficial over simple structure. Functional structure groups tasks and activities by
business function, such as production, marketing, finance, research and development and
is generally headed by Chief Executive Officer or Managing Director. Besides being simple
and inexpensive, a functional structure also promotes specialization, encourages
efficiency, minimizes the need for an elaborate control system, and allows rapid decision
making. At the same time with the passage of time and overall growth much more complex
organizational structures exist in business world. However, dividing organization according
to functional lines is invariably found at some level or the other.
Question 12
(a) Explain briefly the. key areas in which the strategic planner should concentrate his mind to
achieve desired results. (4 Marks)
(b) "Strategies allow organizations to gain competitive advantage from three different bases."
Elucidate this statement. (3 Marks)
Answer
(a) A strategic manager defines the strategic intent of the organisation and take it on the path
of achieving the organisational objectives. There can be a number of areas that a strategic
manager should concentrate on to achieve desired results. They commonly establish long-
term objectives in seven areas as follows.
• Profitability.
• Productivity.
• Competitive Position.

• Employee Development.
• Employee Relations.
• Technological Leadership.
• Public Responsibility.
(b) According to Porter, strategies allow organizations to gain competitive advantage from
three different bases: cost leadership, differentiation, and focus. These bases form
different generic strategies as follows:
• Cost leadership emphasizes producing standardized products at a very low per-unit
cost for consumers who are price-sensitive. It frequently results from productivity
increases and aggressive pursuit of cost reduction throughout the development,
production, marketing, and distribution processes. It allows a firm to earn higher
profits than its competitors.
• Differentiation is a strategy aimed at producing products and services considered
unique industry wide and directed at consumers who are relatively price -insensitive.
It concerns with distinguishing a product/service from that of its competitors through
unique design features, technological leadership, unique uses of products and
attributes like quality, environmental impact and customer service.
• Focus means producing products and services that fulfill the specific needs of small
groups of consumers. It involves selecting or focusing a market or customer segment
in which to operate.
Question 13
Distinguish between the following:
(a) Publicity & sales promotion. (4 Marks)
(b) Shared vision and vision shared. (3 Marks)
Answer
(a) Publicity and Sales promotion are adopted by organizations when they are undertaking
promotion in the overall marketing mix.
Publicity is a non-personal form of promotion similar to advertising. However, no payments
are made to the media as in case of advertising. Organizations skillfully seek to promote
themselves and their product without payment. Publicity is communication of a product,
brand or business by placing information about it in the media without paying for the time
or media space directly.
Thus it is way of reaching customers with negligible cost. Basic tools for publicity are press
releases, press conferences, reports, stories, and internet releases. These releases must
be of interest to the public.

Sales promotion is an omnibus term that includes all activities that are undertaken to
promote the business but are not specifically included under personal selling, advertising
or publicity. Activities like discounts, contests, money refunds, installments, kiosks,
exhibitions and fairs constitute sales promotion. All these are meant to give a boost to the
sales. Sales promotion done periodically may help in getting a larger market share to an
organization.
(b) Individuals in organisations relate themselves with the vision of their organisations in
different manner. When the individuals are able to bring organisational vision close to their
hearts and minds they have "shared vision". Shared vision is a force that creates a sense
of commonality that permeates the organization and gives coherence to diverse activities.
However, 'vision shared' shows imposition of vision from the top management. It may
demand compliance rather than commitment. For success of organisations having shared
vision is better than vision shared.
Question 14
Write short notes on the following:
(a) Elements considered for situational analysis (4 Marks)
(b) Need for Turnaround strategy (3 Marks)
OR
Supply chain management
Answer
(a) All business organizations operate in a ''macro environment'' shaped by a number of
influences. As organizational managers scan the external environment, they must watch
for potentially important environmental forces, assess their impact and influence, and
adapt its direction and strategy as needed. Situational Analysis forms an essential part of
any business plan. A preliminary introduction as to what to take into account when
conducting a situational analysis and provide a checklist of the important factors to
consider are.
• Environmental factors: What external and internal environmental factors are there
that needs to be taken into account. This can include economic, political,
demographic or sociological factors that have a bearing on the performance.
• Opportunity and issue analysis: What are the current opportunities that are
available in the market, the main threats that business is facing and may face in the
future, the strengths that the business can rely on and any weaknesses that may
affect the business performance.
• Competitive situation: Analyze main competitors of the organization: Who are they,
what they up to are, how they compare. What are their competitive advantages?

• Distribution situation: Review the distribution situation - how are the products
moving through channels.
• Product situation: The details about current product. The details about current
product may be divided into parts such as the core product and any secondary or
supporting services or products that also make up what you sell. It is important to
observe this in terms of its different parts in order to relate this back to core client
needs.
(b) Turnaround is needed when an enterprise's performance deteriorates to a point that it
needs a radical change of direction in strategy, and possibly in structure and culture as
well. It is a highly targeted effort to return an organization to profitability and increase
positive cash flows to a sufficient level. It is used when both threats and weaknesses
adversely affect the health of an organization so much that its basic survival is difficult.
The overall goal of turnaround strategy is to return an underperforming or distressed
company to normalcy in terms of acceptable levels of profitability, solvency, liquidity and
cash flow. To achieve its objectives, turnaround strategy must reverse causes of distress,
resolve the financial crisis, achieve a rapid improvement in financial performance, regain
stakeholder support, and overcome internal constraints and unfavourable industry
characteristics.
Or
The term supply chain refers to the linkages between suppliers, manufacturers and
customers. Supply chains involve all activities like sourcing and procurement of material,
conversion, and logistics. Supply chain management is defined as the process of planning,
implementing, and controlling the supply chain operations. It is a cross-functional approach
to managing the movement of raw materials into an organization and the movement of
finished goods out of the organization toward the end-consumer who are to be satisfied as
efficiently as possible. It encompasses all movement and storage of raw materials, work -
in-process inventory, and finished goods from point-of-origin to point-of-consumption.
Organizations are finding that they must rely on the chain to successfully compete in the
global market.

PAPER – 7 : INFORMATION TECHNOLOGY AND STRATEGIC MANAGEMENT
SECTION – A : INFORMATION TECHNOLOGY
Question 1
Answer the following in brief:
(a) Risks involved in implementing Business Process Automation.
(b) Major concerns relating to Mobile Computing.
(c) Explain briefly 'Terminals' in the telecommunications network.
(d) Differentiate between Data and Information.
(e) Differentiate between On-line Processing and Real-Time Processing. (5 x 2 = 10 Marks)
Answer
(a) Risks involved in implementing Business Process Automation (BPA) are as follows:
♦ Risk to jobs: Jobs that were earlier performed manually by several employees would
post-automation would be mechanized, thereby posing a threat to jobs.
♦ False sense of security: Automating poor processes will not gain better business
practices.
(b) Major concerns relating to Mobile Computing are as follows:
• Mobile computing has its fair share of security concerns as any other technology.
• Dangers of misrepresentation - Another problem plaguing mobile computing are
credential verification.
• Power consumption: When a power outlet or portable generator is not available,
mobile computers must rely entirely on battery power.
• Potential health hazards.
(c) Terminals in the Telecommunication Network: Terminals are the starting and stopping
points in any telecommunication network environment. Any input or output device that is
used to transmit or receive data can be classified as a Terminal Component. These include
Video Terminals, Microcomputers, Telephones, Office Equipment, Telephone and
Transaction Terminals.
(d) Data: Data is a raw and unorganized fact that needs to be processed. Data in itself is
meaningless and obtained through observations and recordings. Data are used as the

50 INTERMEDIATE (IPC) EXAMINATION: NOVEMBER, 2017
input for a process that create information as an output. For example, data can be in the
form of a number or statement such as a date or a measurement.
Information: When data is processed, organized, structured or presented in a given
context so as to make it useful, it is called Information. Some examples of information
include aggregating which summarizes data by such means as taking an average value of
group of numbers.
(e) Online Processing: In this, data is processed immediately while it is entered, the user
usually only must wait a short time for a response. For example: games, word processing,
booking systems. Interactive or online processing requires a user to supply an input.
Interactive or online processing enables the user to input data and get the results of the
processing of that data immediately.
Real-Time Processing: Real Time processing is a subset of interactive or online
processing. Input is continuously, automatically acquired from sensors which are
processed immediately to respond to the input in as little time as possible. The system
doesn't need a user to control it, it works automatically. Real time processing is used in
warning systems on aircraft, alarm systems in hazardous zones, burglar alarms etc.
Question 2
(a) What an enterprise has to do to manage its information in an appropriate manner? Also,
mention any four operations that can be carried out with the help of Data Base
Management System (DBMS). (4 Marks)
(b) What is Android'? Discuss its significance. (4 Marks)
Answer
(a) Every enterprise needs to manage its information in an appropriate and desired manner.
The enterprise must do the following for this:
♦ Knowing its information needs;
♦ Acquiring that information;
♦ Organizing that information in a meaningful way;
♦ Assuring information quality; and
♦ Providing software tools so that users in the enterprise can access information they
require.
The operations that can be carried out with the help of Data Base Management System
(DBMS):
♦ Adding new files to database,

♦ Deleting existing files from database,

♦ Inserting data in existing files,
♦ Modifying data in existing files,
♦ Deleting data in existing files, and
♦ Retrieving or querying data from existing files.
(b) Android: Android is a Linux-based operating system designed primarily for touch screen
mobile devices such as smart phones and tablet computers. Android was built to enable
developers to create compelling mobile applications that take full advantage of all a
handset must offer. Android powers devices from some of the best handset and tablet
manufacturers in the world, like Samsung, HTC, Motorola, Sony, Asus and more. Android
devices come in all shapes and sizes, with vibrant high-resolution displays and cameras,
giving the flexibility to choose the one that’s just right for a user.
Significance of Android is discussed below:
• Android is an open source and the permissive licensing allows the software to be
freely modified and distributed by device manufacturers, wireless carriers and
enthusiast developers.
• Android provides access to a wide range of useful libraries and tools that can be used
to build rich applications.
Question 3
(a) What is meant by 'Centralized Computing' (CC) and 'Decentralized Computing' (DC) in a
network computing system'? In what manner the CC is considered better than the DC?
(4 Marks)
(b) What is meant by an Intrusion Detection System? Discuss its various types. (4 Marks)
Answer
(a) Centralized Computing (CC): Centralized Computing is computing done at a central
location, using terminals that are attached to a central computer. The computer itself may
control all the peripherals directly if they are physically connected to the central computer,
or they may be attached via a terminal server.
Decentralized Computing (DC): Decentralized Computing is the allocation of resources,
both hardware and software, to each individual workstation, or office location. A collection
of decentralized computers systems are components of a larger computer network, held
together by local stations of equal importance and capability. These systems can run
independently of each other.

Centralized Computing is considered better than Decentralized Computing because of the

following reasons:
• Centralized Computing offers greater security over decentralized systems because
all the processing is controlled in a central location.
• In addition, if one terminal breaks down, the user can simply go to another terminal
and log in again, and all their files will still be accessible. Depending on the system,
they may even be able to resume their session from the point they were at before, as
if nothing had happened.
(b) Intrusion Detection System (IDS): An Intrusion Detection System is a device or software
application that monitors network or system activities for malicious activities or policy
violations and produces reports to a Management Station. The goal of intrusion detection
is to monitor network assets to detect anomalous behavior and misuse.
The types of IDS are as follows:
• Network Intrusion Detection (NID): Network Intrusion Detection System is placed
on a network to analyze traffic in search of unwanted or malicious events on the wire
between hosts. Referred to as "packet-sniffers"; network intrusion detection devices
intercept packets traveling along various communication mediums and protocols,
usually TCP/IP and deals with data transmitted from host to host. NNID is a type of
NID. The advantage of NNID is its ability to defend specific hosts against packet-
based attacks in these complex environments where conventional NID is ineffective.
• Host-based Intrusion Detection (HID): Host-based Intrusion Detection systems are
designed to monitor, detect, and respond to user and system activity and attacks on
a given host. HID is concerned with what occurs on the hosts themselves. Host-based
intrusion detection is best suited to combat internal threats because of its ability to
monitor and respond to specific user actions and file accesses on the host. In other
words, HID detects insider misuse while NID detects outsider misuse.
• Hybrid Intrusion Detection: Hybrid Intrusion Detection systems offer management
of and alert notification from both network and host-based intrusion detection devices.
Hybrid solutions provide the logical complement to NID and HID - central intrusion
detection management.
Question 4
(a) Explain briefly the phases of Decision Support System. (4 Marks)
(b) What are 'Knowledge Management Systems'? Explain its types. (4 Marks)
Answer
(a) The Decision Support System (DSS) consists of four phases:
• Intelligence - Searching for conditions that call for decision.

• Design - Inventing, developing and analyzing possible alternative actions of the

solution.
• Choice - Selecting a course of action among those.
• Implementation - Adopting the selected course of action in decision situations.
(b) Knowledge Management Systems (KMS): These refer to any kind of IT system that
stores and retrieves knowledge, improves collaboration, locates knowledge sources, mines
repositories for hidden knowledge, captures and uses knowledge, or in some other way
enhances the knowledge management process. KMS treats the knowledge component of
any organization’s activities as an explicit concern reflected in strategy, policy, and practice
at all levels of the organization.
There are two broad types of knowledge—Explicit and Tacit.
♦ Explicit knowledge: Explicit knowledge is that which can be formalized easily and
therefore is easily available across the organization. Explicit knowledge is articulated,
and represented as spoken words, written material and compiled data. This type of
knowledge is codified, easy to document, transfer and reproduce. For example –
Online tutorials, Policy and procedural manuals.
♦ Tacit knowledge: Tacit knowledge, on the other hand, resides in a few often-in just
one person and hasn’t been captured by the organization or made available to others.
Tacit knowledge is unarticulated and represented as intuition, perspective, beliefs,
and values that individuals form based on their experiences. It is personal,
experimental and context-specific. It is difficult to document and communicate the
tacit knowledge. For example – hand-on skills, special know-how, employee
experiences.
Question 5
(a) What are the phases of Program development life cycle? (4 Marks)
(b) List out the application areas of Grid Computing. (4 Marks)
Answer
(a) The primary objectives of Program Development phase are to produce or acquire and to
implement high-quality programs. The Program Development Life Cycle comprises the
following major phases:
• Planning: Techniques like Work Breakdown Structures (WBS), Gantt Charts and
PERT (Program Evaluation and Review Technique) Charts can be used to monitor
progress against plan.
• Design: A systematic approach to program design, such as any of the structured
design approaches or object-oriented design is adopted.

• Coding: Programmers must choose a module implementation and integration

strategy, a coding strategy and a documentation strategy.
• Testing: Testing ensures that a developed or acquired program achieves its specified
requirements. Majorly three types of testing Unit Testing, Integration Testing and
Whole-of-Program Testing are used.
• Operation and Maintenance: Management establishes formal mechanisms to
monitor the status of operational programs so maintenance needs can be identified
on a timely basis. Three types of maintenance that can be used are Repair
maintenance, Adaptive Maintenance and Perfective Maintenance.
• Control: The purpose of the control phase during software development or
acquisition is to monitor progress against plan and to ensure software released for
production use is authentic, accurate, and complete.
(b) Application Areas of Grid Computing are as follows:
• Civil engineers collaborate to design, execute, and analyse shake table experiments.
• An insurance company mines data from partner hospitals for fraud detection.
• An application service provider offloads excess load to a compute cycle provider.
• An enterprise configures internal & external resources to support e-Business
workload.
• Large-scale science and engineering are done through the interaction of people,
heterogeneous computing resources, information systems and instruments, all of
which are geographically and organizationally dispersed.
Question 6
(a) Draw a flow chart to incorporate for the following steps:
L1 N =1
L2 PRINT N
L3 N=N x (N+1)
L4 STOP when N exceeds 100
L5 GOTO L2
Note that in step L3, 'x' denotes multiplication sign. (4 Marks)
(b) List the output for the above program. (2 Marks)
(c) List the output if the above program is modified in the step L 1 as N =0 (2 Marks)

Answer
(a) Let us define the variable first:
N: Number
The desired flowchart is as follows:
Start
N=1
Print N
N = N x (N + 1)
No
If N >100?
Yes
Stop
(b) The output for the above program is as follows:

1
2
6
42
(c) The output of the above program in case N is initialized as 0 will be -
0, 0, 0, 0, 0 …………………………… (infinite loop)
Question 7
(a) Value Chain Automation
(b) Hardware Virtualization

(c) m-commerce
(d) Principle of Least Privilege
(e) Vehicle Tracking System (4 x 2=8 Marks)
Answer
(a) Value Chain Automation: Value chain refers to separate activities which are necessary
to strengthen an organization's strategies and are linked together both inside and outside
the organization. It is defined as a chain of activities that a firm operating in a specific
industry performs to deliver a valuable product or service for the market. Value Chain
Analysis is a useful tool for working out how we can create the greatest possible value for
our customers. IT helps us identify the ways in which we create value for our customers
and then helps us think through how we can maximize this value: whether through superb
products, great services, or jobs well done.
For example: Value chain of a manufacturing organization comprises of Primary and
Supportive activities. The primary ones are inclusive of inbound logistics, operations,
outbound logistics, marketing and sales, and services. The supportive activities relate to
procurement, human resource management, technology development and infrastructure.
The six business functions of the value chain are Research and development; Design of
products, services, or processes; Production; Marketing and sales; Distribution and
Customer service.
(b) Hardware Virtualization: Hardware Virtualization refers to the creation of a virtual
machine that acts like a real computer with an operating system. Software executed on
these virtual machines is separated from the underlying hardware resources. For example,
a computer that is running Microsoft Windows may host a virtual machine that looks like a
computer with the Linux operating system; based software that can be run on the virtual
machine.
The basic idea of Hardware virtualization is to consolidate many small physical servers
into one large physical server so that the processor can be used more effectively.
(c) m-Commerce: M-commerce (mobile commerce) is the buying and selling of goods and
services through wireless handheld devices such as cellular telephone and personal digital
assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to
access the Internet without needing to find a place to plug in. It involves new technologies,
services and business models. In other words, it is about the explosion of applications and
services that are becoming accessible from Internet-enabled mobile devices.
(d) Principle of Least Privilege: This is a fundamental principle of information security, which
refers to give only those privileges to a user account, which are essential to that user's
work. Any other privileges, such as installing new software, should be blocked. The
principle applies also to a personal computer user, who usually does work in a normal user
account, and opens a privileged, password protected account (that is, a super user) only

when the situation absolutely demands it. When applied to users, the terms Least User
Access or Least-privileged User Account (LUA) are also used, referring to the concept that
all user accounts always should run with as few privileges as possible, and launch
applications with as few privileges as possible.
(e) Vehicle Tracking System: A lot of applications have been developed that allow entity to
track their goods while in transit. Few applications are high end, allowing owner of goods
to check the temperature of cold stored goods while in transit. It has features such as GPS
based location, GPRS connection based real-time online data-logging and reporting, route
accuracy on the fly while device is moving, real-time vehicle tracking, geo-fencing, SMS &
e-mail notifications, over-the-air location query support, on-board memory to store location
inputs during times when GPRS is not available or cellular coverage is absent.


Question 8
(a) Explain the need of environmental scanning for a business organization. (3 Marks)
(b) What are the three elements of a strategic vision? (3 Marks)
(c) State the reasons in which a company thinks for going to divestment strategy. (3 Marks)
(d) Give various methods for evaluating the worth of a business. (3 Marks)
(e) Discuss with example the relevance of experience curve in strategic management. (3 Marks)
Answer
(a) Organisations function within a dynamic environment. They scan environment to determine
developments and forecast influencing factors. Through the process, organizations monitor
their relevant environment to identify opportunities and threats affecting their business for
the purpose of taking strategic decisions. Scanning helps the managers to decide the
future path of the organization. It is required to identify the threats and opportunities
existing in the environment.
(b) A strategic vision steers an organization in a particular direction, charts a strategic path for
it to follow in preparing for the future, and moulds organizational identity. The three
elements of a strategic vision are:
i. Coming up with a mission statement that defines what business the company is
presently in and conveys the essence of “Who we are and where we are now?”
ii. Using the mission statement as basis for deciding on a long-term course making
choices about “Where we are going?”
iii. Communicating the strategic vision in clear, exciting terms that arouse organization
wide commitment.
(c) Divestment strategy involves the sale or liquidation of a portion of business, or a major
division, profit centre or SBU. Divestment is usually a part of rehabilitation or restructuring
plan.
A divestment strategy may be adopted due to various reasons:
i. When a turnaround has been attempted but has proved to be unsuccessful.
ii. A business that had been acquired proves to be a mismatch and cannot be integrated
within the company.
iii. Persistent negative cash flows from a particular business create financial problems
for the whole company.

iv. Severity of competition and the inability of a firm to cope with it.
v. Technological upgradation is required if the business is to survive but where it is not
possible for the firm to invest in it.
vi. A better alternative may be available for investment.
(d) Various methods for determining a worth of a business can be grouped into three main
approaches which are as follows:
(i) Net worth or stockholders’ equity: Net worth is the total assets minus total outside
liabilities of an organisation.
(ii) Future benefits to owners through net profits: These benefits are considered to
be much greater than the amount of profits. A conservative rule of thumb is to
establish a business’s worth as five times the annual profit.
(iii) Market-determined business worth: This, in turn, involves three methods. First, the
firm’s worth may be based on the selling price of a similar company. The second
approach is called the price-earnings ratio method whereby the market price of the
firm’s equity shares is divided by the annual earnings per share and multiplied by the
firm’s average net income for the preceding years. The third approach can be called
the outstanding shares method whereby one has to simply multiply the number of
shares outstanding by the market price per share and add a premium.
(e) Experience curve is similar to learning curve which explains the efficiency gained by
workers through repetitive productive work. Experience curve is based on the commonly
observed phenomenon that unit costs decline as a firm accumulates experience in terms
of a cumulative volume of production. Experience curve results from a variety of factors
such as learning effects, economies of scale, product redesign and technological
improvements in production.
The concept of experience curve is relevant for a number of areas in strategic
management. For instance, experience curve is considered a barrier for new firms
contemplating entry in an industry. It is also used to build market share and discourage
competition.
Question 9
(a) State with reasons which of the following statement is correct or incorrect:
(i) Expansion strategy is a highly versatile strategy.
(ii) Forward and backward integration forms part of horizontally integrated diversification.
(2 x 2 = 4 Marks)
(b) The Government as a segment of environment may be regarded both as an aid and as an
impediment to business. Discuss. (3 Marks)

Answer
(a) (i) Correct: Expansion is a promising and popular strategy that tends to be equated with
dynamism, vigor, promise and success. It is often characterised by significant
reformulation of goals and directions, major initiatives and moves involving
investments, exploration and onslaught into new products, new technology and new
markets, innovative decisions and action programmes and so on. Expansion includes
diversifying, acquiring and merging businesses.
(ii) Incorrect: Forward and backward integration forms part of vertically integrated
diversification and not horizontally integrated diversification. In vertically integrated
diversification, firms opt to engage in businesses that are vertically related to the
existing business of the firm and remains vertically within the same process.
(b) Governments enact laws, regulations and formulate policies for overall benefit of business
and society. Government as a segment creates business environment that aims at growth.
While some of the actions of the Government may not be considered positive by some of
the selected businesses, they are invariably for overall good of society and nation. For
example, stringent environmental laws directed to reduce pollution may increase costs for
some businesses but are necessary for general wellbeing. Accordingly, actions of the
government are not to be seen as impediments but rather as aid.
Question 10
What do you understand by Total Quality Management (TQM)? TQM is quite different from
Traditional Management Practices. Justify. (7 Marks)
Answer
TQM or Total Quality Management is a people-focused management system that aims at
continual increase in customer satisfaction at continually lower real cost. There is a sustained
management commitment to quality and everyone in the organisation and the supply chain is
responsible for preventing rather than detecting defects.
TQM is a total system approach (not a separate area or program) and an integral part of high-
level strategy. It works horizontally across functions and departments, involves all employees,
top to bottom, and extends backward and forward to include the supply chain and the customer
chain. TQM stresses learning and adaptation to continual change as keys to organizational
success.
Total Quality Management is different from traditional management practices, requiring changes
in organisational processes, beliefs and attitudes, and behaviours. ‘Traditional management’
means the way things are usually done in most organisations in the absence of a TQM focus.
Some of the key differences are as follows:
i. Strategic Planning and Management: Quality planning and strategic business planning
is indistinguishable in TQM. Customer satisfaction, defect rates and process cycle times
receive very high attention on TQM which is not the case in traditional management.

ii. Changing Relationships with customers and suppliers: Distinguishable, innovation is

essential to meet and exceed customers’ needs. In TQM quality is defined as product and
services. Traditional management places customers outside of the enterprises and within
the domain of marketing and sales.
iii. Organizational Structure: TQM is also distinguishable as it views enterprise as a system
of interdependent processes. Every process contains sub-processes and is also contained
within a higher process.
iv. Organizational Change: In TQM the environment in which the enterprise interacts is
considered to be changing constantly. Management's job, therefore, is to provide the
leadership for continual improvement and innovation in processes and systems, products,
and services.
v. Teamwork: In TQM, individuals cooperate in team structure such as quality circles,
steering committees, and self-directed work teams. Departments work together toward
system optimization through cross-functional teamwork.
vi. Motivation and Job Design: TQM managers provide leadership and motivation rather
than overt intervention in the processes of their subordinates who are viewed as process
managers rather than functional specialists.
Question 11
(a) Discuss the broad areas in which Functional Strategies of a business organization is
carried out. (4 Marks)
(b) The strategic management process encompasses three phases. Explain. (3 Marks)
Answer
(a) Once higher level corporate and business strategies are developed, management need to
formulate and implement strategies for each functional area. Functional strategies provide
details to business strategy & governs as to how key activities of the business are to be
managed. Functional area strategy include marketing, financial, production and human
resource management are based on the functional capabilities of an organisation.
i. Marketing: Marketing is considered to be activities related to identifying the needs of
customers and taking such actions to satisfy them in return of some consideration.
ii. Finance: Financial strategies are related to several finance and accounting concepts
considered to be central to strategy implementation.
iii. Production: The strategy for production is related to the production system,
operational planning and control, and research and development.
iv. Logistics: Logistics integrates the flow of supplies into, through and out of an
organization to achieve a level of service to ensure availability of right materials at
right place, at right time in right quality and at right cost.

v. Research and Development: R&D strategy is designed to match external

opportunities to internal strengths to achieve organisational objectives.
vi. Human Resource Development: Human resource strategy is designed to develop
employees, provide them suitable opportunities and proper working conditions so as
to ensure their optimal contribution.
(b) The strategic management process is dynamic and continuous. The different stages are
highly intertwined and are to be performed continuously, many a times in an overlapping
manner. The three phases of strategic management process are as follows:
i. Strategy Formulation: It contains activities directed towards selection of strategies
to follow. For the purpose organisations need to conduct internal and external
analysis, develop vision, mission and objective, generate alternative strategies and
make strategy choices.
ii. Strategy Implementation: Strategy implementation is the managerial exercise of
putting chosen strategies into action, i.e., making them work. It involves allocation of
resources to new courses of action, adapting organization structure to handle new
activities, training personnel as well as creating systems.
iii. Strategy Evaluation: Strategic evaluation involves measuring and evaluating
performance. The goals achieved are compared with the desired goals to identify
deviations and make necessary adjustments in strategies or in the efforts being put
to achieve those strategies.
Question 12
(a) Assume that you are a manager making a business plan. Provide a checklist of the
important factors to be considered for conducting an analysis to make such plan.
(4 Marks)
(b) Explain 'Mission' briefly. Discuss major elements of an effective corporate mission
statement. (3 Marks)
Answer
(a) Checklist of important factors to consider for situational analysis to create strategic plans
are.
i. Environmental factors: Consider external and internal environmental factors such
as economic, political, sociological, suppliers, customers, etc.
ii. Opportunity and issue analysis: Identify current opportunities, main threats, the
strengths of the business and any weaknesses that may affect the business
performance.
iii. Competitive situation: Analyze main competitors of the organisation and their
competitive advantages?

iv. Distribution situation: Review the distribution situation - how are the products
moving through channels.
v. Product situation: The details about current products. The details about current
product may be divided into parts such as the core product and any secondary or
supporting services or products.
(b) Mission statement is an answer to the question “Who we are and what we do” and hence
has to focus on the organisation’s present capabilities, focus activities and business
makeup. An organisation’s mission states what customers it serves, what need it satisfies,
and what type of product it offers. It is an expression of the growth ambition of the
organisation.
Mission should contain elements of long-term strategy as well as desired outcomes. They
should contain basic values and the philosophy of the organizations that is perceived by
the senior managers who write them. A good mission statement should be of precise, clear,
feasible, distinctive and motivating. It should indicate major components of strategy.
Question 13
(a) Operational Control and Management Control. (4 Marks)
(b) Inbound logistics and outbound logistics. (3 Marks)
Answer
(a) The basic purpose of management control is the achievement of enterprise goals – short
range and long range – in a most effective and efficient manner. On the other hand, the
thrust of operational control is on individual tasks or transactions. Operational control
require systematic evaluation of performance predetermined standards.
The major differences between management control and operational control are as follows:
Attribute Management control Operational control
1. Basic question “Are we moving in the right “How are we performing”?
direction”?
2. Aim Proactive, continuous Proper allocation and use of
questioning of the basic organisational resources
direction of strategy,
3. Main concern Steering the organisation’s Day to day functioning
future direction.
4. Focus External environment Internal environment
5. Time horizon Long term Short term
6. Exercise of control By top management Mainly by executive or
through middle and lower middle level management

level support. on the direction of top

management.
7. Main techniques. Environmental scanning, Budgets, schedules,
information gathering, standards.
questioning and review.
(b) Inbound logistics are the activities concerned with receiving, storing and distributing the
inputs to the product/service. This includes materials handling, stock control, transport etc.
On the other hand, Outbound logistics collect, store and distribute the product to
customers. For tangible products this would be warehousing, materials handling, transport,
etc. In the case of services, it may be more concerned with arrangements for bringing
customers to the service if it is a fixed location (e.g. sports events).
Question 14
Write a Short note on the following:
(a) Family Managed Enterprises Challenges & issues. (4 Marks)
(b) The Balanced Scorecard approach. (3 Marks)
OR
Value Chain Analysis (3 Marks)
Answer
(a) A very large number of business enterprises are family-managed enterprises in India.
These are of all sizes – big, medium and small. Being owned and managed by a family of
kith and kin such businesses should ideally have good cooperation. However, they often
face a number of challenges and issues. These are given below:
i. Key decisions are made by members of the family. These decisions may not be in
interest of minority owners. The family interest influence the managerial decisions
and activities of the enterprise.
ii. Personal conflicts in the family matters tend to distort their behaviour in managing the
enterprise and thereby damage its functioning.
iii. Succession is often a tricky and conflicting issue.
(b) Balanced scorecard approach: Measuring company performance requires setting both
financial and strategic objectives and tracking their achievement. Unless a company is in
deep financial difficulty, such that its very survival is threatened, company managers are
well advised to put more emphasis on achieving strategic objectives than on achieving
financial objectives whenever a trade-off has to be made. The surest path to sustained
future profitability quarter after quarter and year after year is to relentlessly pursue strategic
outcomes that strengthen a company’s business position and, ideally, give it a growing

competitive advantage over rivals. What ultimately enables a company to deliver better
financial results from operations is the achievement of strategic objectives that improve its
competitiveness and market strength.
OR
Value chain analysis: Value chain analysis was originally introduced as an accounting
analysis to shed light on the 'value added' of separate steps in complex manufacturing
processes, in order to determine where cost improvements could be made and/or value
creation improved. It is an analytical tool used to identify and isolate the various economic
value adding activities, namely primary activities involving consumable resources refers to
inbound logistic, operation (production process), outbound logistics, marketing and sales
and services; and support activities consisting of usable resources such as firm’s
infrastructure, human resource management, technology development and procurement.
Value chain offers an excellent means by which managers can find the strengths and
weaknesses of each activity vis-a-vis its competitors. Therefore, competitive advantages
are created and sustained only when the firm is able to perform the critical functions either
at lower cost or better than competitors.

PAPER – 7: INFORMATION TECHNOLOGY AND STRATEGIC MANAGEMENT
SECTION – A: INFORMATION TECHNOLOGY
Question 1
(a) Write any two principles of Business Process Management
(b) What kind of awareness is required by an auditor for auditing in an IT environment?
(c) What are the advantages of Fiber-optic transmission?
(d) How does DSS (Decision Support System) help its users?
(e) What are the components of a Computerised Information Processing cycle?
(5 x 2 = 10 Marks)
Answer
(a) The Principles of Business Process Management are as follows:
 Business processes are organizational assets that are central to creating value for
customers. Core processes and processes that generate the most value to customers
should be carefully managed;
 By measuring, monitoring, controlling, and analyzing business processes, a company
can deliver consistent value to customers;
 As the basis for process improvement - business processes should be continuously
improved; and
 Information technology is an essential enabler for BPM.
(b) The kind of awareness required by an Auditor for auditing in an IT environmen t is to:
 know the Methodology of Audit so to ensure that the standards, proper usage of
common procedures and techniques in the performance of audits is adhered to.
 understand the steps and techniques necessary to plan, perform and complete the
Audit.
(c) Fiber-optic transmission, which uses pulses of a laser-generated light, offer significant
advantages in terms of:
 Reduced size and installation effort;
 Greater communication capacity;
 Faster transmission speeds; and

 Freedom from electrical interference.

(d) A Decision Support System (DSS) helps users to:
 engender data models and “what if” scenarios;
 manipulate data directly;
 premeditated to make non-routine decisions; and
 slot in data from external sources.
(e) The components of a computerized information processing cycle include:
 Input: Entering data into the computer;
 Processing: Performing operations on the data;
 Storage: Saving data, programs, or output for future use; and
 Output: Presenting the results.
Input Process Output
Storage
Question 2
A company is selling three types of products, namely, A, B and C to two different types of customers
viz, dealers and retailers. To promote the sales, the company is offering the following discounts:
(i) 10% discount is allowed on Product A, irrespective of the category of customers and the
value of order.
(ii) On product B, 8% discount is allowed to retailers and 12% discount to dealers, irrespective
of the value of order.
(iii) On product C, 15% discount is allowed to retailers irrespective of the value of order and
20% discount to dealers if the value of order is minimum of ` 10,000.
Draw a flowchart to calculate the discount for the above policy. (8 Marks)
Answer
Let us define the variables first:
 PROD_TYPE: Product Type
 CUST_TYPE: Customer Type
 VAL_ORDER: Value of Order
 DISC: Discount
The desired flowchart is as follows:

48
Start
–
DISC = 0
Read PROD_TYPE, CUST_TYPE, VAL_ORDER
Yes DISC = 0.10 *VAL_ORDER

If PROD_TYPE =’A’?
No
Yes Yes

If PROD_TYPE = ’B’? If CUST_TYPE = ‘DEALER’? DISC = 0.12 * VAL_ORDER
No No
DISC = 0.08 * VAL_ORDER
If CUST_TYPE = ‘RETAILER?
Yes
DISC = 0.15 * VAL_ORDER
No
If VAL_ORDER >=10,000? DISC = 0.20 * VAL_ORDER

Yes
INTERMEDIATE (IPC) EXAMINATION: MAY, 2017
No Print DISC
DISC = 0.0
Stop
Question 3
(a) Explain the different types of feasibility study done in the System Investigation phase of
System Development Life Cycle (SDLC). (4 Marks)
(b) Explain any four advantages of using a Data Base Management System (DBMS). (4 Marks)
Answer
(a) Different types of Feasibility Study done in the System Investigation Phase of System
Development Life Cycle (SDLC) are as follows:
 Technical feasibility: Does the technology exist to implement the proposed system
or is it a practical proposition?
 Economic feasibility: Is proposed system cost-effective; if benefits do not outweigh
costs, it is not worth going ahead?
 Legal feasibility: Is there any conflict between the proposed system and legal
requirements?
 Operational feasibility: Are the current work practices and procedures adequate to
support the new system?
 Schedule feasibility: How long will the system take to develop, or can it be done in
a desired time-frame?
(b) Major advantages of Data Base Management System (DBMS) are as follows:
 Permitting data sharing: One of the principle advantages of a DBMS is that the
same information can be made available to different users.
 Minimizing Data Redundancy: In a DBMS, duplication of information or redundancy
is, if not eliminated, carefully controlled or reduced which significantly reduce the cost
of storing information on hard drives and other storage devices.
 Integrity can be maintained: Data integrity is maintained by having accurate,
consistent, and up-to-date data. Updates and changes to the data only must be made
in one place in DBMS ensuring integrity.
 Program and file consistency: Using a DBMS, file formats and programs are
standardized. This makes the data files easier to maintain because the same rules
and guidelines apply across all types of data.
 User-friendly: DBMS makes the data access and manipulation easier for the user.
DBMS also reduce the reliance of users on computer experts to meet their data
needs.
 Improved security: DBMS allows multiple users to access the same data resources
which could lead to risk to an enterprise if not controlled. Security constraints can be
defined and Rules can be built to give access to sensitive data. With passwords,

database management systems can be used to restrict data access to only those who
should see it.
 Achieving program/data independence: In a DBMS, data does not reside in
applications but data bases program and data are independent of each other.
 Faster application development: In the case of deployment of DBMS, application
development becomes fast. The data is already therein databases, application
developer must think of only the logic required to retrieve the data in the way a user
needs.
Question 4
(a) What are the characteristics of Local Area Networks? (4 Marks)
(b) What are the facts responsible for occurrence of vulnerabilities in the software? (4 Marks)
Answer
(a) Some of the characteristics of Local Area Network (LAN) include the following:
 The Local Area Networks (LAN) are telecommunications networks that connect
information-processing devices within a limited physical area. These networks cover
areas such as Offices, Classrooms, Buildings, Manufacturing plant etc.
 LANs use a variety of telecommunications media, such as ordinary telephone wiring,
coaxial cable, or wireless radio systems to interconnect microcomputer workstations and
computer peripherals.
 To communicate over the network, a PC usually has a circuit board called a Network
Interface Card.
 Most LANs use a powerful microcomputer with a large disk capacity as a file server or
network server that contains a network operating system (e.g., Novell NetWare) that
controls telecommunications and the use of network resources.
 LANs allow end users in a workgroup to communicate electronically; share hardware,
software, and data resources; and pool their efforts when working on group projects.
 LANs provide security for programs and data can be achieved using servers that are
locked through both software and by physical means.
(b) The following facts are responsible for occurrence of vulnerabilities in the software:
 Software Bugs - Software bugs are so common that users have developed
techniques to work around the consequences, and bugs that make saving work
necessary every half an hour or crash the computer every so often are a normal part
of computing. For example - buffer overflow, failure to handle exceptional conditions,
access validation error, input validation errors are some of the common software
flaws.

 Timing Windows - This problem may occur when a temporary file is exploited by an
intruder to gain access to the file, overwrite important data, and use the file as a
gateway for advancing further into the system.
 Insecure default configurations - Insecure default configurations occur when
vendors use known default passwords to make it as easy as possible for consumers
to set up new systems. Unfortunately, most intruders know these passwords and
access systems effortlessly.
 Trusting Untrustworthy information - This is usually a problem that affects routers,
or those computers that connect one network to another. When routers are not
programmed to verify that they are receiving information from a unique host, bogus
routers can gain access to systems and do damage.
 End users - Generally, users of computer systems are not professionals and are not
always security conscious. For example, when the number of passwords of a user
increases, user may start writing them down, in the worst case to places from where
they are easy to find. In addition to this negligence towards security procedures, users
do human errors, for example, save confidential files to places where they are not
properly protected.
Question 5
(a) Explain the different types of Information Systems. (4 Marks)
(b) Explain the pre-requisites of ACID Test for any Transaction Processing System. (4 Marks)
Answer
(a) Different types of Information Systems are as follows:
 Strategic-Level Systems: These systems serve strategic managers to track and
deal with strategic issues and assisting in long-range planning that affects the entirety
of the organization. A principle area is tracking changes in the external conditions
(market sector, employment levels, share prices, etc.) and matching these with the
internal conditions of the organization. For example, Executive Information System
(EIS).
 Management-Level Systems: These systems are used by Middle Managers who are
responsible for carrying out the goals set by Top Management. These systems are
used for the monitoring, controlling, decision-making, and administrative activities of
middle management. Tracking current progress in accord with plans is another major
function of systems at this level. For example, Management Information System (MIS)
and Decision Support Systems (DSS).
 Knowledge-Level Systems: These systems support discovery, processing and
storage of knowledge and are used by data workers who are selected, recruited and
trained in a special manner than the non-knowledge workers. These systems further

control the flow of paper work and enable group working. For example, Knowledge
Management System (KMS) and Office Automation System (OAS).
 Operational-Level Systems: These systems support Operational Managers or
supervisors tracking elementary activities that include tracking customer orders,
invoice tracking, etc. Operational-level systems ensure that business procedures are
followed. For example, Transaction Processing System (TPS).
(b) The Pre-requisites of ACID TEST for any Transaction Processing System (TPS) are as
follows:
 Atomicity: This means that a transaction is either completed in full or not at all. TPS
systems ensure that transactions take place in their entirety. For example, if funds
are transferred from one account to another, this only counts a bona -fide transaction
if both the deposit and withdrawal take place. If one account is debited and the other
is not credited, it does not qualify as a transaction.
 Consistency: TPS systems exist within a set of operating rules or integrity
constraints. If an integrity constraint states that all transactions in a database must
have a positive value, any transaction with a negative value would be refused.
 Isolation: Transactions must appear to take place in seclusion. For example, when
a fund transfer is made between two accounts the debiting of one and the crediting
of another must appear to take place simultaneously. The funds cannot be credited
to an account before they are debited from another.
 Durability: Once transactions are completed they cannot be undone. To ensure that
this is the case even if the TPS suffers failure, a log will be created to document all
completed transactions.
Question 6
(a) Explain any four characteristics of cloud computing. (4 Marks)
(b) What are the generic reasons for going for Business Process Automation? (4 Marks)
Answer
(a) Some of the key characteristics of Cloud Computing are as follows:
 Elasticity and Scalability: Cloud computing gives us the ability to expand and
reduce resources as per the specific service requirement. For example, we may need
many server resources for the duration of a specific task. We can then release these
server resources after we complete our task.
 Pay-per-Use: We pay for cloud services only when we use them, either for the short
term (for example, for CPU time) or for a longer duration (for example, for cloud-
based storage or vault services).

 On-demand: Because we invoke cloud services only when we need them, they are
not permanent parts of the IT infrastructure. With cloud services, there is no need to
have dedicated resources waiting to be used, as is the case with internal services.
 Resiliency: The resiliency of a cloud service offering can completely isolate the
failure of server and storage resources from cloud users. Work is migrated to a
different physical resource in the cloud with or without user awareness and
intervention.
 Multi Tenancy: Public cloud service providers often can host the cloud services for
multiple users within the same infrastructure. Server and storage isolation may be
physical or virtual depending upon the specific user requirements.
 Workload Movement: This characteristic is related to resiliency and cost
considerations. Cloud-computing providers can migrate workloads across servers
both inside the data center and across data centers (even in a different geographic
area). This migration might be necessitated by cost or efficiency considerations. A
third reason could be regulatory considerations for certain types of workloads.
(b) Some generic reasons of going for Business Process Automation (BPA) include the
following:
 Reducing the Impact of Human Error: BPA removes human participation in the
process, which is the source of many errors; thus, reducing the impact of human error.
 Transforming Data into Information: BPA can, apart from collecting and storing data
also analyze data and make it available in a form that is useful for decision-making.
 Improving performance and process effectiveness: In many cases, tasks that
must be done manually are the bottleneck in the process. Automating those manual
tasks speeds up the effective throughput of the application.
 Making users more efficient and effective: People can focus their energies on the
tasks they do best, allowing the computers to handle those that machines are best
suited for.
 Making the business more responsive: Enterprises can easily automate new
applications and processes as they are introduced that provide greater control over
business and IT processes.
 Improving Collaboration and Information Sharing: Business processes designed
through a collaborative interface mean Information Technology can integrate its
processes with the business-side logic that drives day-to-day operations.
 Cost Saving: Automation leads to saving in time and labor costs through higher
efficiency and better management of the people involved;
 To remain competitive: To provide the level of products and services as offered by
competition.

 Fast service to customers: Automation shortens cycle times in the execution of

processes through improved and refined business workflows and helps enterprises
to serve their customers faster and better.
Question 7
Write short notes on any four:
(a) Business Process Re-engineering
(b) Read Only Memory
(c) Hyper Text Transfer Protocol Secure (HTTPS)
(d) Artificial Intelligence
(e) Network Virtualization (4 x 2 = 8 Marks)
Answer
(a) Business Process Reengineering: Business Process Reengineering (BPR) is defined as
the fundamental rethinking and radical redesign of processes to achieve dramatic
improvement, in critical, contemporary measures of performance such as cost, quality,
service and speed. BPR aims at major transformation of the business processes to achieve
dramatic improvement. Here, the business objectives of the enterprise (e.g., profits,
customer-satisfaction through optimal cost, quality, deliveries, etc.) are achieved by
“transformation” of the business processes which may, or may not, require the use of
Information Technology (IT). BPR is the main method by which organizations become more
efficient and modern. It transforms an organization in ways that directly affect its
performance.
(b) Read Only Memory (ROM)
 This is non-volatile in nature (contents remain even in absence of power).
 Usually, these are used to store small amount of information for quick reference by
CPU.
 Information can be read not modified.
 Generally used by manufacturers to store data and programs like translators that is
used repeatedly.
(c) HyperText Transfer Protocol Secure (HTTPS): HyperText Transfer Protocol Secure is a
communications protocol for secure communication over a computer network, with
especially wide deployment on the Internet. The security of HTTPS uses long term public
and secret keys to exchange a short-term session key to encrypt the data flow between
client and server.
(d) Artificial Intelligence: Artificial Intelligence (AI) is the vicinity of computer science
focusing on creating machines that can fit into place on behaviors that humans regard as
intelligent. It is a research field that studies how to comprehend the intelligent human

behaviors on a computer. The decisive objective of AI is to make a computer that can

discover, sketch, and crack problems in parallel. The subject of artificial intelligence spans
a wide horizon dealing with various kinds of knowledge representation schemes, different
techniques of intelligent search, various methods for resolving uncertainty of data and
knowledge, different schemes for automated machine learning and many others. Expert
systems, Pattern Recognition, Natural language processing, and many others are some of
the various purposes on which AI may be applied.
(e) Network Virtualization: Network virtualization is a method of combining the available
resources in a network by splitting up the available bandwidth into channels, each of which
is independent from the others, and each of which can be assigned (or reassigned) to a
server or device in real time. This allows a large physical network to be provisioned into
multiple smaller logical networks and conversely allows multiple physical LANs to be
combined into a larger logical network. This behaviour allows administrators to improve
network traffic control, enterprise and security. Network virtualization involves platform
virtualization, often combined with resource virtualization. Network virtualization is
intended to optimize network speed, reliability, flexibility, scalability, and secur ity.


Question 8
(a) A Manager faces different problems while trying to understand the environment. Discuss.
(3 Marks)
(b) Mention three key characteristics that separate Six Sigma from other Quality Programs.
(3 Marks)
(c) Davis and Lawrence have proposed three distinct phases to develop matrix structure.
Explain. (3 Marks)
(d) Briefly discuss the framework of strategic management. (3 Marks)
(e) Discuss the characteristics of business environment. (3 Marks)
Answer
(a) In trying to understand the environment, managers face different problems as follows:
 Diversity: The environment contains many different influences and the difficulty is in
making sense of this diversity in a way which can contribute to strategic decision -
making. Listing all conceivable environmental influences may be possible, but it may
not be of much use.
 Uncertainty: It is difficult to understand the future external influences on an
organisation. The pace of technological change and the speed of global
communications may also increase the pace of change.
 Complexity: Managers like other individuals may tend to simplify complexity by
focusing on those aspects of the environment, which may confirm to their prior views.
One of the tasks of the strategic manager is to find ways & means to break out of
oversimplification or bias in the understanding of their environment, while still
achieving a useful and usable level of analysis.
(b) Three key characteristic that separate Six Sigma from other quality programs are as
follows:
1. Customer focused. While moving towards Six Sigma it is almost an obsession to
keep external customer needs in plain sight, driving the improvement effort.
2. Higher return on investment. Six Sigma can help in improving the returns. An
organization wants to avoid any defects leading to increased cost and reduced
customer satisfaction. Six sigma brings customer loyalty and save more money by
delivering near perfect products and services.

3. Changes how management operates. Six Sigma is much more than improvement
project. Senior executives and leaders throughout the business learn the tools and
concepts of Six Sigma: new approaches to thinking, planning, and executing to
achieve results. Six Sigma is about putting into practice the notions of working
smarter, not harder.
(c) For development of matrix structure; Davis and Lawrence have proposed three distinct
phases:
 Cross-functional task forces: Temporary cross-functional task forces are initially
used when a new product line is being introduced. A project manager is in charge as
the key horizontal link.
 Product/brand management: If the cross-functional task forces become more
permanent, the project manager becomes a product or brand manager and a second
phase begins. In this arrangement, function is still the primary organizational
structure, but product or brand managers act as the integrators of semi-permanent
products or brands.
 Mature matrix: The third and final phase of matrix development involves a true dual-
authority structure. Both the functional and product structures are permanent. All
employees are connected to both a vertical functional superior and a horizontal
product manager.
(d) The basic framework of strategic process can be described in a five stages sequence:
 Stage one - Where are we now? (beginning): Initially, the firm must find out its relative
market position, corporate image, its strength and weakness and also environmental
threats and opportunities.
 Stage two - Where we want to be? (ends): This is a process of goal setting for the
organization after it has finalised its vision and mission.
 Stage three - How might we get there? (means): Here the organization deals with the
various strategic alternatives it has.
 Stage four - Which way is best? (evaluation): Out of all the alternatives generated in
the earlier stage the organization selects the best suitable alternative.
 Stage five - How can we ensure arrival? (control): This is an implementation and
control stage of a suitable strategy. Here again the organization continuously does
situational analysis and repeats the stages again.
(e) Business environment exhibits many characteristics as follows:
 Environment is complex: The environment consists of a number of factors, events,
conditions and influences arising from different sources and is complex because it is
somewhat easier to understand in parts but difficult to grasp in totality.

 Environment is dynamic: The environment is constantly changing in nature. Due to

the many and varied influences operating; there is dynamism in the environment
causing it to continuously change its shape and character.
 Environment is multi-faceted: What shape and character an environment assumes
depends on the perception of the observer. A particular change in the environment,
or a new development, may be viewed differently by different observers, i.e., as an
opportunity for one company and a threat for another.
 Environment has a far reaching impact: The growth and profitability of an
organization depends critically on the environment in which it exists. And thus any
environmental change has an impact on the organization in several different ways.
Question 9
(i) A corporate culture is always is identical in all organizations.
(ii) Strategic management is a bundle of tricks and magic.
(b) Give various reasons to justify that a division structure is costly. (2 x 2 = 4 Marks)
Answer
(a) (i) Incorrect: Every company has its own organizational culture. Each has its own
business philosophy and principles, its own ways of approaching to the problems and
making decisions, its own work climate, work ethics, etc. Therefore, corporate culture
need not be identical in all organisations. Every organisation over a period of time
inherits and percolates down its own specific work ethos and approaches.
(ii) Incorrect: No, Strategic management is not a bundle of tricks and magic. It is much
more serious affair. It involves systematic and analytical thinking and action. Although,
the success or failure of a strategy is dependent on several extraneous factors, it cannot
be stated that a strategy is a trick or magic. Formation of strategy requires careful
planning and requires strong conceptual, analytical, and visionary skills.
(b) A divisional structure is costly for several reasons which are as follows:
 First, each division requires functional specialists who must be paid.
 Second, there exists some duplication of staff services, facilities, and personnel; for
instance, functional specialists are also needed centrally (at headquarters) to
coordinate divisional activities.
 Third, managers must be well qualified because the divisional design forces
delegation of authority better-qualified individuals requires higher salaries. A
divisional structure can also be costly because it requires an elaborate, headquarters -
driven control system.

 Finally, certain regions, products, or customers may sometimes receive special

treatment, and it may be difficult to maintain consistent, company wide practices.
Question 10
What is supply chain management? Discuss major steps in implementing supply chain
management systems in a business organization. (7 Marks)
Answer
Supply chain management defined as the process of planning, implementing, and controlling
the supply chain operations. It is a cross-functional approach to managing the movement of raw
materials into an organization and the movement of finished goods out of the organization
toward the end-consumer who are to be satisfied as efficiently as possible. It refers to the
linkages between suppliers, manufacturers and customers. 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.
Implementing and successfully running supply chain management system will involve:
1. Product development: Customers and suppliers must work together in the product
development process. Products are developed and launched in shorter time and help
organizations to remain competitive.
2. Procurement: Procurement requires careful resource planning, quality issues, identifying
sources, negotiation, order placement, inbound transportation and storage.
3. Manufacturing: Flexible manufacturing processes must be in place to respond to market
changes. They should be adaptive to accommodate customization and changes in the taste
and preferences.
4. Physical distribution: Delivery of final products to customers is the last position in a
marketing channel. Availability of the products at the right place at right time is important
for each channel participant.
5. Outsourcing: Outsourcing is not limited to the procurement of materials and components,
but also includes outsourcing of services that traditionally have been provided within an
organization.
6. Customer services: Organizations through interfaces with the company's production and
distribution operations develop customer relationships so as to satisfy them.
7. Performance measurement: There is a strong relationship between the supplier,
customer and organisation. Supplier capabilities and customer relationships can be
correlated with a firm performance. Performance is measured in different parameters such
as costs, customer service, productivity and quality.
Question 11
(a) In the light of BCG Growth Share Matrix, state the situation under which the following
strategic options are suitable:
(i) Build

(ii) Hold
(iii) Harvest
(iv) Divest
(b) How Ansoff’s Product Market Growth Matrix is a useful tool for business organization s?
(3 Marks)
Answer
(a) In the BCG growth-share matrix portfolio of investments are represented in two
dimensional space. The vertical axis represents market growth rate and the horizontal axis
represents relative market share. Using the matrix, organizations can identify four different
types of products or SBU as stars, question marks, cash cows and dogs. In the light of
BCG Growth Matrix, the four strategies that can be pursued are:
(i) Build: Here the objective is to increase market share, even by forgoing short -term
earnings in favour of building a strong future with large market share. It is done by
increasing investment. For example, investments can be made to push question
marks into stars.
(ii) Hold: Here the objective is to preserve market share. It can be in situation where the
organization is not in position to invest or has other commitments.
(iii) Harvest: A relevant situation can be when the product or SBU is in position of being
Cash Cow. Here the objective is to increase short-term cash flow regardless of long-
term effect.
(iv) Divest: Divest is relevant in case of Dog quadrant. Here the objective is to sell or
liquidate the business because resources can be better used elsewhere.
(b) The Ansoff’s product market growth matrix (proposed by Igor Ansoff) is a useful tool that
helps businesses decide their product and market growth strategy. With the use of this
matrix a business can get a fair idea about how its growth depends upon it markets in new
or existing products in both new and existing markets.
Companies should always be looking to the future. Businesses that use the Ansoff matrix
can determine the best strategy. The matrix can help them to decide how to do this by
demonstrating their options clearly, breaking them down into four strategies, viz., Market
Penetration, Market Development, Product Development, Diversification. Determining
which of these is best for their business will depend on a number of variables including
available resources, infrastructure, market position, location and budget.
Question 12
(a) Michael Porter has suggested three generic strategies. Explain them with examples.
(4 Marks)
(b) What are the strategic responses of an organization to its environment? Explain. (4 Marks)

Answer
(a) The basic purpose of following a generic strategy is to gain competitive advantage so as
to ensure long-time survival and growth. According to Porter, strategies allow organizations
to gain competitive advantage from three different bases: cost leadership, differentiation,
and focus. These bases form different generic strategies as follows:
 Cost leadership emphasizes producing standardized products at a very low per-unit
cost for consumers who are price-sensitive. It frequently results from productivity
increases and aggressive pursuit of cost reduction throughout the development,
production, marketing, and distribution processes. It allows a firm to earn higher
profits than its competitors. For example, car manufacturers Maruti and Hyundai work
on reducing their costs to sell their cars in popular segment at attractive prices.
 Differentiation is a strategy aimed at producing products and services considered
unique industry wide and directed at consumers who are relatively price -insensitive.
attributes like quality, environmental impact and customer service. For example,
Apple brings out mobile phone with distinct features.
 Focus means producing products and services that fulfil the specific needs of small
groups of consumers. It involves selecting or focusing a market or customer segment
in which to operate. For example, Nestle KitKat targeting on teenagers and young
adults or Johnson and Johnson having host of products such as cream, shampoo,
brushes for infants and young babies.
(b) A business organization and its many environments have in numerous interrelationship. It
is difficult to determine exactly what the business organisation should do in response to a
particular situation in the environment. Strategically, the business organisations should
make efforts to exploit the opportunities and avoid the threats.
In this context, following are the possible strategic responses of an organisation to its
business environment:
(i) Least resistance: Some organisations just manage to survive by way of coping with
their changing external environments. They are simple goal-maintaining units. They
are very passive in their behaviour and are solely guided by the signals of the external
environment. They are not ambitious but are content with taking simple paths of least
resistance in their goal-seeking and resource transforming behaviour.
(ii) Proceed with caution: At the next level, are the organisations that take an intelligent
interest to adapt with the changing external environment. They seek to monitor the
changes in that environment, analyse their impact on their own goals and activities
and translate their assessment in terms of specific strategies for survival, stability and
strength. This is a sophisticated strategy than to wait for changes to occur and then
take corrective-adaptive action.

(iii) Dynamic response: At a still higher sophisticated level, are those organisations that
regard the external environmental forces as partially manageable and controllable by
their actions. Their feedback systems are highly dynamic and powerful. They not
merely recognise and ward off threats; they convert threats into opportunities. They
are highly conscious and confident of their own strengths and the weaknesses of their
external environmental ‘adversaries’. They generate a contingent set of alternative
courses of action to be picked up in tune with the changing environment.
Question 13
(a) Vision and Mission (4 Marks)
(b) Co-generic Merger and Conglomerate Merger (3 Marks)
Answer
(a) A Mission statement tells you the fundamental purpose of the organization. It concentrates
on the present. It defines the customer and the critical processes. It informs you of the
desired level of performance. On the other hand, a Vision statement outlines what the
organization wants to be. It concentrates on the future. It is a source of inspiration. It
provides clear decision-making criteria.
A mission statement can resemble a vision statement in a few companies, but that can be
a grave mistake. It can confuse people. Following are the major differences between vision
and mission:
VISION MISSION
It describes a future identity. It serves as an ongoing and time-
independent guide.
It can galvanize the people to achieve defined It provides a path to realize the vision
objectives, even if they are stretch objectives, in line with its values.
provided the vision is specific, measurable,
achievable, relevant and time bound.
It is more specific in terms of both the future It defines the purpose or broader goal
state and the time frame. Vision describes for being in existence or in the
what will be achieved if the organization is business and can remain the same
successful. for decades.
(b) Co-generic merger: In Co-generic merger two or more merging organizations are
associated in some way or the other related to the production processes, business markets,
or basic required technologies. Such merger includes the extension of the product line or
acquiring components that are required in the daily operations. It offers great opportunities
to businesses to diversify around a common set of resources and strategic requirements. For
example, organization in the white goods categories such as refrigerators can diversify by
merging with another organization having business in kitchen appliances.

Conglomerate merger: Conglomerate merger is the combination of organizations that are

unrelated to each other. There are no linkages with respect to customer groups, custo mer
functions and technologies being used. There are no important common factors between
the organizations in production, marketing, research and development and technology. In
practice, however, there is some degree of overlap in one or more of these fact ors.
Question 14
(a) Strategic Group Mapping (4 Marks)
(b) Augmented Marketing (3 Marks)
Or
Internet Technology (3 Marks)
Answer
(a) Strategic group mapping is a technique for displaying the different markets or competitive
positions that rival firms occupy in the industry. A strategic group is a cluster of firms in an
industry with similar competitive approaches and market positions. An industry contains only
one strategic group when all sellers pursue essentially identical strategies and have
comparable market positions. It involves plotting firms on a two-variable map using pairs of
differentiating characteristics such as price/quality range; geographic coverage and so on.
(b) Augmented marketing refers to deliberate and accelerated efforts to get better marketing
returns through additional means. It includes 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, online computer repair services, secretarial services, etc.
Such innovative offerings provide a set of benefits that promise to elevate customer service
to unprecedented levels.
OR (Alternative /choice)
The Internet is an integrated network of banks of servers and high-speed computers, digital
switches and routers, telecommunication equipment’s and lines, and individual computers.
The backbone of the internet consists of telecommunication lines crisscrossing countries,
continents, and the world that allow computers to transfer data in digital form at very high
speed.
Internet has made significant changes in the way businesses are being conducted.
Communications has become faster, with many interlinkages promoting globalization.
While markets have expanded, the competition has also increased manifolds. E-commerce
is a recent area which has developed on account of internet technology.

Question 1
(a) State two Features of Infrastructure as a Service (IaaS) model of Cloud Computing.
(b) List any four features of computerized networking in an organization.
(c) Name any four key sub-modules of HRMS module of ERP.
(d) Present two differences between Switch and Bridge Telecommunication Network
(e) List the four phases of evolution in the Hierarchy of Database modeling.
(5 x 2 = 10 Marks)
Answer
(a) Some of the common features of Infrastructure as a Service (IaaS) model of Cloud
Computing are as follows:
 It is the foundation of cloud services that provides clients with access to server,
hardware, storage, bandwidth and other fundamental computing resources, without
investment
 It provides access to shared resources on need basis, without revealing details like
location and hardware to clients.
 The service is typically paid for on a usage basis. The service may also include
dynamic scaling so that if the customer needs more resources than expected, s/he
can get them on the fly (probably to a given limit) i.e. short notice.
(b) With growth of business, organizations need good communication between employees to
maintain consistency and efficiency. It is being achieved by sharing information such as
common files, databases and business application software via telecommunication
network and computers.
Followings features are commonly seen due to computerized networking in an
organization-
(i) File Sharing: It provides for sharing and grouping of data files via network.
(ii) User Interface: In computerized networking, network computers and other thin
clients provide a browser based user interface for processing small application
programs called applets.

(iii) Hardware Resource Sharing: It provides sharing of computer hardware resources

such as hard disk, printers etc. by multiple users simultaneously that save cost of
installing and maintaining multiple resources.
(iv) System and Application Software: Networks can provide for/include Application
Servers for multiuser operating systems, web server software and application
software applets.
(v) Remote Access: Network allows users to remotely access the data and
information. from organizations’ network via internet in cost effective manner.
(vi) Database and Database Management Systems: This includes database servers
for internet/intranet web databases, operational databases and database
management software. Network facilitates simultaneous access to shared
databases to multiple users at the same time by ensuring the integrity of database.
(vii) Fault Tolerance: Computerized networking allows for primary and secondary line of
data and programs backups to help defense against accidental data losses against
faults or failures. Additional measures can also be taken by adding un-interruptible
power supply to handle power failures.
(viii) Internet Access and Security – It provides access to the internet for transfer of
document and access world wide web by maintaining security through firewall in the
organization’s network.
(c) Some of the key sub-modules of Human Resource Management Systems (HRMS) are as
follows:
 Workforce Management;
 Time and Attendance Management;
 Payroll Management;
 Training Management;
 Compensation Management;
 Recruitment Management;
 Personnel Management;
 Organizational Management;
 Employee Self Service (ESS); and
 Analytics.
(d) Differences between Switch and Bridge are as follows:
Switch Bridge
Switch is a communications processor that Bridge is a communications processor
makes connections between that connects numerous Local Area

telecommunications circuits in a network Networks (LANs). It magnifies the data

so that a telecommunications message transmission signal while passing data
can reach its intended destination. from one LAN to another.
A switch can’t be used to interconnect two A bridge is required to interconnect two
or more local area networks. or more local area networks.
A switch provides interconnection by In a bridge interconnections are
hardware. provided via software.
A switch offers dozens of ports (hundreds) A bridge typically offers very few (2-16)
for interconnection. ports for interconnections.
A switch is generally cheaper i.e. lower A bridge is generally costlier i.e. higher
cost than bridge. cost as compared to switch.
(e) The hierarchy of Database modeling evolves in phases as under:
 Database: This is a collection of Files.
 File: This is a collection of Records.
 Record: This is a collection of Fields.
 Field: This is a collection of Characters.
 Characters: These are a collection of Bits.
Question 2
(a) Describe any four output Controls that have to be enforced both in a batch-processing
environment as well as in an online environment.
(b) State and describe any two commercial applications of Artificial Intelligence.
(4 x 2 = 8 Marks)
Answer
(a) The Output controls that must be enforced both in a batch-processing environment as
well as in an online environment are as follows:
 Storage and Logging of Sensitive and Critical Forms: Pre-printed stationery
should be stored securely to prevent unauthorized destruction or removal and
usage. Only authorized persons should be allowed access to stationery supplies
such as security forms, negotiable instruments etc.
 Logging of Output Program Executions: When programs, used for output of data,
are executed, they should be logged and monitored.
 Controls over Printing: It should be ensured that unauthorized disclosure of
information printed is prevented.

 Report Distribution and Collection Controls: Distribution of reports should be

made in a secure way to avoid unauthorized disclosure of data. A log should be
maintained as to what reports were generated and to whom it was distributed.
 Retention Controls: Retention controls consider the duration for which outputs
should be retained before being destroyed. Consideration should be given to the
type of medium on which the output is stored.
 Existence/Recovery Controls: These controls are needed to recover output in the
event that it is lost or destroyed. If the output is written to a spool of files or report
files and has been kept, then recovery is easy and straight-forward.
(b) Some of the commercial applications of Artificial Intelligence (AI) are as follows: ions of AI
 Decision Support: Intelligent work environment that will help you capture the “why”
as well as the “what” of engineered design and decision making. Intelligent human–
computer interface (HCI) systems that can understand spoken language and
gestures, and facilitate problem solving by supporting organization wide
collaborations to solve problems. Situation assessment and resource allocation
software for uses that range from airlines and airports to logistics centers.
 Information Retrieval: AI-based Intranet and Internet systems that distill tidal
waves of information into simple presentations. Natural language technology to
retrieve any sort of online information, from text to pictures, videos, maps, and
audio clips, in response to English questions. Database mining for marketing trend
analysis, financial forecasting, and maintenance cost reduction, and more.
 Virtual Reality: X-ray–like vision enabled by enhanced-reality visualization that
allows brain surgeons to “see through” intervening tissue to operate, monitor, and
evaluate disease progression. Automated animation interfaces that allow users to
interact with virtual objects via touch (e.g., medical students can “feel” what it’s like
to stitch severed aortas).
 Robotics: Machine-vision inspections systems for gauging, guiding, identifying, and
inspecting products and providing competitive advantage in manufacturing. Cutting-
edge robotics systems, from micro-robots and hands and legs.
Question 3
(a) Describe how the Business Community is benefitted by adopting Information Technology
based CRM process.
(b) What is mobile computing? Discuss its components in brief. (4 x 2 = 8 Marks)
Answer
(a) CRM can be considered as an amalgamation of people, process and systems rather than
just IT application. Business Community is benefitted by adopting Information Technology
based Customer Relationship Management (CRM) process in following ways:

 CRM applications smoothen the process to capture, consolidate, analyze, and

business enterprise-wide dissemination of data from existing and potential
customers.
 CRM allows businesses to develop long-term relationships with established and
new customers while helping modernize corporate performance. CRM incorporates
commercial and client-specific strategies via employee training, marketing planning,
relationship building and advertising.
 CRM establishes the benefits of generating customer loyalty, raising a market
intelligence enterprise, and an integrated relationship. Preserving existing
customers and providing enhanced services to accomplish the loyalty is expressed
as CRM.
 CRM helps to form business strategy to handle business challenges like, declining
revenue, cut-off in the profit margin, costs occurred due to lost customers etc.
 CRM provides a single integrated enterprise view of the customer thus providing
proficiency to the business enterprises to recognize all the services/products the
customer had fetched from the organization and thus being able to recognize the
buying behavior/pattern of the customer.
(b) Mobile Computing: Mobile Computing, is the use of portable computing devices (such
as laptop and handheld computers) in conjunction with mobile communications
technologies to enable users to access the Internet and data on their home or work
computers from anywhere in the world. It is enabled by use of mobile devices such as
PDA, laptops, mobile phones, MP3 players, digital cameras, tablet PC and Palmtops on a
wireless network.
Mobile computing involves Mobile Communication, Mobile Hardware and Mobile
Software; which are described as under:
 Mobile Communication: Mobile Communication refers to the infrastructure put in
place to ensure seamless and reliable communication. These would include
devices, Protocols, Services, Bandwidth and Portals necessary to facilitate and
support the stated services. The data format is also defined at this stage. It
incorporates all aspects of wireless communication.
 Mobile Hardware: Mobile Hardware includes mobile devices or device components
that receive or access the service of mobility. They would range from Portable
laptops, Smart phones, Tablet PC’s to Personal Digital Assistants capable of both
way communication i.e. transmit as well receive capabilities.
 Mobile Software: Mobile Software is the actual program that runs on the mobile
hardware. It deals with the characteristics and requirements of mobile applications.
This is the engine/operating system of that mobile device and an essential
component

Question 4
(a) Briefly describe the four stages of processing Credit Card transactions.
(b) Explain the Concept of Virtualization. Enumerate any 2 major applications of
virtualization. (4 x 2 = 8 Marks)
Answer
(a) The stages that are followed for processing of Credit Card Transactions:
Stage 1: Authorization – This is the first step in processing a credit card. After a
merchant swipes the card, the data is submitted to merchant’s bank, called an acquirer,
to request authorization for the sale. The acquirer then routes the request to the card-
issuing bank, where it is authorized or denied, and the merchant can process the sale.
Stage 2: Batching – This is the second step in processing a credit card. At the end of a
day, the merchant reviews all the day’s sales to ensure they were authorized and signed
by the cardholder. It then transmits all the sales at once, called a batch, to the acquirer to
receive payment.
Stage 3: Clearing – This is the third step in processing a credit card. After the acquirer
receives the batch, it sends it through the card network, where each sale is routed to the
appropriate issuing bank. The issuing bank then subtracts its interchange fees, which are
shared with the card network, and transfers the remaining amount through the network
back to the acquirer.
Stage 4: Funding –This is the fourth and final step in processing a credit card. After
receiving payment from the issuer, minus interchange fees, the acquirer subtracts its
discount fee and sends the remainder to the merchant. The merchant is now paid for the
transaction, and the cardholder is billed.
(b) Virtualization: In computing, Virtualization means to create a virtual version of a device
or resource, such as a server, storage device, network or even an operating system
where the framework divides the resource into one or more execution environments.
Virtualization refers to technologies designed to provide a layer of abstraction between
computer hardware systems and the software running on them. The core concept of
Virtualization lies in Partitioning, which divides a single physical server into multiple
logical servers. Once the physical server is divided, each logical server can run an
operating system and applications independently.
Major applications of the concepts of the virtualization are as follows:
 Server Consolidation: Virtual machines are used to consolidate many physical
servers into fewer servers, which in turn host virtual machines. Each physical server
is reflected as a virtual machine "guest" residing on a virtual machine host system.
This is also known as “Physical-to-Virtual” or 'P2V' transformation.
 Disaster Recovery: Virtual machines can be used as "hot standby" environments
for physical production servers, i.e. changes "backup-and-restore" philosophy, by

providing backup images that can "boot" into live virtual machines, capable of taking
over workload for a production server experiencing an outage.
 Testing and Training: Virtualization can give root access to a virtual machine. This
can be useful in kernel development and operating system courses.
 Portable Applications: Portable applications are needed when running an
application from a removable drive, without installing it on the system's main disk
drive. Virtualization can be used to encapsulate the application with a redirection
layer that stores temporary files, windows registry entries and other state
information in the application's installation directory and not within the system's
permanent file system.
 Portable Workspaces: Recent technologies have used virtualization to create
portable workspaces on devices like iPods and USB memory sticks.
Question 5
Draw a Flowchart for the following process:
Leebay is a new e-commerce web site that is setting up business in India. Leebay and their partner
bank Paxis have come up with a joint promotion plan for which the following offers are proposed
Customers can either log in through a mobile app or directly from the website:
(1) If the payment mode chosen is ‘Paxis Credit’, then a 20% discount is given to the user.
(2) If the payment mode chosen is ‘Paxis Debit’, then a 10% discount is given to the user.
(3) If other payment modes are used, then no discount is given.
Also, to promote the downloads of its new smartphone app, the company has decided to give
the following offer:
(1) If the purchase mode is 'Mobile App', then no surcharge is levied on the user.
(2) If any other purchase mode is used, then additional 5 surcharge is levied on the user.
This surcharge is applied on the bill after all necessary discounts have been applied.
With bill amount, payment mode and purchase mode as inputs, draw a flowchart for the
billing procedure for Leebay. (1 x 8 = 8 Marks)
Answer
Variables need be defined implying following:
PU_MODE : Purchase Mode BILL_AMT : Initial Bill Amount
TOT_BILL_AMT : Bill Amount after Discount SCHG : Surcharge
FIN_BILL_AMT : Final Bill Amount after Surcharge DISC : Discount
PMT_MODE : Payment Mode

Start
TOT_BILL_AMT = 0, FIN_BILL_AMT = 0
Read BILL_AMT, PMT_MODE, PU_MODE
Yes
If PU_MODE = Mobile App? SCHG = 0.00
No
SCHG = 0.05
Yes DISC = 0.20

If PMT_MODE = ‘Paxis Credit’?
No
Yes
DISC = 0.10
If PMT_MODE = ‘Paxis Debit’?
No
DISC = 0.0
TOT_BILL_AMT = BILL_AMT – (DISC * BILL_AMT)
FIN_BILL_AMT = TOT_BILL_AMT + (SCHG * TOT_BILL_AMT)
Print/Display DISC, SCHG, FIN_BILL_AMT
Stop

Question 6
(a) What is a Data Flow Diagram. Explain the four major components of a Data Flow
Diagram.
(b) Describe the Wireless technologies that have evolved and widely used in modern day
computerized environment. (4 x 2 = 8 Marks)
Answer
(a) Data Flow Diagram (DFD) is a graphical representation of the flow of data through an
information system. A DFD illustrates technical or business processes with the help of
the external data stored, the data flowing from a process to another, and the results.
DFDs may be partitioned into levels that represent increasing information flow and
functional detail. Therefore, the DFD provides a mechanism for functional modeling as
well as information flow modeling.
The four major DFD components are as follows:
(i) Entity: An entity is the source or destination of data. Entities either provide data to
the system (referred to as a source) or receive data from it (referred to as a sink).
Entities are often represented as rectangles. Entities are also referred to as agents,
terminators, or source/sink.
(ii) Process: The process is the manipulation or work that transforms data, performing
computations, making decisions (logic flow), or directing data flows based on
business rules. In other words, a process receives input and generates some
output. Processes can be drawn as circles or a segmented rectangle on a DFD, and
include a process name and process number.
(iii) Data Store: A data store is where a process stores data between processes for
later retrieval by that same process or another one. Files and tables are considered
data stores. Data stores are usually drawn as a rectangle without right side or
sometimes parallel lines with storage name.
(iv) Data Flow: Data flow is the movement of data between the entity, the process and
the data store. Data flow portrays the interface between the components of the
DFD. Data flow is represented by an arrow, where the arrow is annotated with the
data name.
(b) Common wireless technologies being used in business environments-
(i) Bluetooth:
 Bluetooth is a wireless technology standard for exchanging data over short
distances up to 50 meters (164 feet) from fixed and mobile devices.
 It creates personal Area Networks (PANs) with high levels of security.
 Bluetooth is like a very low-power, short-range radio signal.

 It can transmit data across multiple platforms without restriction on file size.
One can send pictures, videos, business cards and files of any size. Both data
and voice can be transferred.
 Devices that utilize Bluetooth technology include Keyboards and mice;
Printers; Cell phones and headsets; PDAs (Personal Digital Assistants);
Desktop and laptop computers; Digital cameras, and Remotes: replacing IR
(infrared).
(ii) Wi-Fi:
 Wi-Fi is a popular wireless networking technology that uses radio waves to
provide wireless high-speed Internet and network connections.
 Wi-Fi networks have limited range up to 32 meters (120 ft.)
 Wi-Fi can be less secured than wired connections because an intruder does
not need a physical connection.
 It is based on IEEE 802.11 standard and the wi-fi name trademark is owned by
Wi-Fi Alliance.
 It is being used by small as well as large and corporate business organizations
to connect people and share business related information and data.
Question 7
Write Short notes on any four:
(a) Packet Switching.
(b) Object Oriented Data Base Model
(c) Memory Management
(d) Fat/Thick Client
(e) Data Mining (4 x 2 = 8 Marks)
Answer
(a) Packet Switching: Main points about packet switching are as under –
 It is one of the common switching technique that involves sophisticated means of
maximizing transmission capacity of networks.
 Packet switching refers to protocols in which messages are broken up into small
transmission units called packets, before they are sent/transmitted individually
across the net.
 It is easier for intermediate networking devices to store and forward smaller size
packets and they do not take much resources either on carrier path or switches’
internal memory.

 The packets may even follow different routes to the destination. Since there is no
fixed path, different packets can follow different path thus they may reach
destination out of order.
(b) Object Oriented Data Base Model: Main points about Object Oriented Data Base
Models are as under:
 It is based on the concept that the world can be modelled in terms of objects and
their interactions.
 Objects are entities conveying some meaning and possess certain attributes that
characterize them and may interact with each other.
 An Object-oriented database provides a mechanism to store complex data such as
images, audio and video, etc.
 In object-oriented database, the data is modelled and created as objects.
 An Object-Oriented Database Management System (OODBMS) helps programmer
make objects created in a programming language behave as a database object.
 An object-oriented database management system is a relational database designed
to manage these independent programs, using the data produced to quickly
respond to requests for information by a larger application.
(c) Memory Management: Main points about Memory Management are as under
 It is carried-out/feature and or one of functions of an operating system.
 It concerns/controls how memory is accessed, allotted and it attempts to maximize
availability of memory and storage.
 Operating Systems provides Virtual memory by carving an area over hard disk to
supplement the functional memory capacity of RAM. In this way, it augments
memory by creating a virtual RAM.
 Memory management makes use of fixed sizes pages (paging system) in
conjunction with a page allotment strategy such as Last In First Out (LIFO), First In
First Out (FIFO), Least Recently Used (LRU) etc.
(d) Fat / Thick Client: Main points about Fat/Thick Client are as under -
 A fat client or thick client is a client that performs bulk of any data processing
operations itself, and does not necessarily rely on the server.
 Thick clients do not rely on a central processing server because the processing is
done locally on the user system, and the server is accessed primarily for storage
purposes.
 Thick clients often are not well-suited for public environments.

 To maintain a thick client, IT needs to maintain all systems for software deployment
and upgrades, rather than just maintaining the applications on the server. For
example – Personal Computer.
(e) Data Mining: Main points about data mining are as under –
 It is one of the business intelligence tool that involves using statistical, artificial
intelligence, and related techniques to mine through large volumes of data and
providing knowledge without users even having to ask specific questions.
 The objective is to provide interesting and useful information to users by design
even without their querying.
 Data Mining involves data analysis for discovering useful patterns that are hidden in
large volume of diverse data. For Example: Market segmentation - identify common
characteristics of customers who buy same products.
 OLAP (Online Analytical Processing) is a multi-dimensional analytical tool typically
used in data mining, that gathers and process vast amounts of information into
useful packets.

Question 8
(a) State three characteristics that are specific to a global company. (3 Marks)
(b) You are asked to draft a mission statement of a company. What is a mission statement?
Give any two characteristics of a good mission statement. (3 Marks)
(c) Give any three special features or characteristics of the e-commerce environment.
(3 Marks)
(d) What is expansion strategy? State and discuss briefly (in few lines each) the two types of
expansion strategies followed by firms. (3 Marks)
(e) Discuss any three differences between strategy formulation and strategy implementation.
(3 Marks)
Answer
(a) In simple economic terms, globalization refers to the process of integration of world into
one huge market minimizing the importance of national boundaries. A global company
has three attributes:

(i) It is a conglomerate of multiple units located in different parts of the globe but all
linked with common ownership.
(ii) Multiple units draw a common pool of resources such as money, credit, patents,
trade name, etc.
(iii) The units respond to common strategy.
(b) Mission statements broadly describe an organizations present capabilities, customer
focus, activities, and business makeup.
Following points are useful while writing mission of a company:
 Good mission statements are highly personalized – unique to the organization for
which they are developed.
 One of the roles of a mission statement is to give the organization its own special
identity, business emphasis and path for development.
 A company’s business is defined by what needs it is trying to satisfy, customer
groups it is targeting, technologies and competencies it uses and the activities it
performs.
 Technology, competencies and activities are important in defining a company’s
business because they indicate the boundaries on its operation.
(c) The impact of the internet and the rapidly emerging e-commerce environment is
substantial and widespread. Characteristics of e-commerce environment changing
competitive scenario are as under:
(i) The internet makes it feasible for companies everywhere to compete in global
markets.
(ii) There are new e-Commerce strategic initiatives of existing rivals and new entrants
in the form of e-commerce rivals.
(iii) Entry barriers into the e-commerce world are relatively low.
(iv) Increased bargaining power of customers to compare the products, prices and other
terms and conditions of rival vendors.
(v) Possibility for business organizations to locate the best suppliers across the world
to gain cost advantage.
(vi) Internet and PC technologies are advancing rapidly, often in uncertain and
unexpected directions.
(vii) Faster diffusion of new technology and new idea across the world.
(viii) The e-commerce environment demands that companies move swiftly.
(ix) E-commerce technology opens up a host of opportunities for reconfiguring industry
and company value chains.

(x) The Internet can be an economical means of delivering customer service.

(xi) The needed e-commerce resource in short supply is human talent in the form of
both technological expertise and managerial know-how.
(xii) The capital for funding potentially profitable e-commerce businesses is readily
available.
(d) Expansion strategy is implemented by redefining the business by adding the scope of
business substantially increasing the efforts of the current business. Expansion also
includes diversifying, acquiring and merging businesses. Here, the firm seeks significant
growth-maybe within the current businesses; maybe by entering new business that are
related to existing businesses; or by entering new businesses that are unrelated to
existing businesses.
Expansion through diversification: Diversification is defined as entry into new products
or product lines, new services or new markets, involving substantially different skills,
technology and knowledge. Diversification endeavours can be related or unrelated to
existing businesses of the firm.
Expansion through acquisitions and mergers: Acquisition or merger with an existing
concern is an instant means of achieving the expansion. When one organization takes
over the other organization and controls all its business operations, it is known as
acquisition. In the process of acquisition, one financially strong organization overpowers
the weaker one. In a merger, two organizations combine to increase their strength and
financial gains along with breaking the trade barriers.
(e) Although closely linked, strategy implementation is fundamentally different from strategy
formulation in the following ways:
Strategy Formulation Strategy Implementation
- It involves the design and choice - It is the process of putting the
of appropriate organisational various strategies into action.
strategies.
- It is positioning forces before the - It is managing forces during the
action. action.
- It focuses on effectiveness. - It focuses on efficiency.
- It is primarily an intellectual - It is primarily an operational process.
process.
- It requires good intuitive and - It requires special motivation and
analytical skills. leadership skills.
- It requires coordination among a - It requires coordination among many
few individuals. individuals.

Question 9
(a) State with reasons which of the following statements is correct or incorrect:
(i) Strategic vision and mission statements are not needed in small business houses.
(2 Marks)
(ii) Logistic Management is an extension of Supply Chain Management. (2 Marks)
(b) Describe the various competitive positions and its assessment criteria as per ADL Matrix.
(3 Marks)
Answer
(a) (i) Incorrect: Every organization whether it is large or small requires strategic vision
and mission statements. Organisations irrespective of their size face similar
business environment and have to work through competition. Small organizations
have to plan strategies for their survival in the market where large organizations are
also present.
(ii) Incorrect: Supply chain management is an extension of logistic management.
Logistic management is related to planning, implementing and controlling the
storage & movement of goods & services while supply chain management is much
more than that. It is a tool of business transformation and involve delivering the right
product at the right time to the right place and at the right price.
(b) According to the ADL Matrix, the competitive position of a firm is based on an
assessment of the following criteria:
 Dominant: This is a comparatively rare position and in many cases is attributable
either to a monopoly or a strong and protected technological leadership.
 Strong: By virtue of this position, the firm has a considerable degree of freedom
over its choice of strategies and is often able to act without its market position being
unduly threatened by its competitors.
 Favourable: This position, which generally comes about when the industry is
fragmented and no one competitor stand out clearly, results in the market leaders a
reasonable degree of freedom.
 Tenable: Although the firms within this category are able to perform satisfactorily
and can justify staying in the industry, they are generally vulnerable in the face of
increased competition from stronger and more proactive companies in the market.
 Weak: The performance of firms in this category is generally unsatisfactory
although the opportunities for improvement do exist.
Question 10
What is strategic control? Explain the types of strategic controls. (7 Marks)

Answer
Strategic Control is the process of evaluating strategy as it is formulated and implemented. It is
directed towards identifying problems, changes in premise and making necessary adjustments.
Strategic control focuses on the dual questions of whether: (1) the strategy is being implemented
as planned; and (2) the results produced by the strategy are those intended.
Types of Strategic Control: There are four types of strategic control as follows:
 Premise control: A strategy is formed on the basis of certain assumptions or premises
about the organizational environment. Premise control is a tool for systematic and
continuous monitoring of the environment to verify the validity and accuracy of the
premises on which the strategy has been built. It primarily involves monitoring two types
of factors:
(i) Environmental factors such as economic, technological, social and regulatory.
(ii) Industry factors such as competitors, suppliers, substitutes.
 Strategic surveillance: Contrary to the premise control, the strategic surveillance is
unfocussed. It involves general monitoring of various sources of information to uncover
unanticipated information having a bearing on the organizational strategy. It involves
casual environmental browsing. Reading financial and other newspapers, business
magazines, meetings, conferences, discussions at clubs or parties and so on can help in
strategic surveillance.
 Special alert control: At times unexpected events may force organizations to reconsider
their strategy. Sudden changes in government, natural calamities, terrorist attacks,
unexpected merger/acquisition by competitors, industrial disasters and other such events
may trigger an immediate and intense review of strategy. Organizations to cope up with
these eventualities, form crisis management teams to handle the situation.
 Implementation control: Managers implement strategy by converting major plans into
concrete, sequential actions that form incremental steps. Implementation control is
directed towards assessing the need for changes in the overall strategy in light of
unfolding events and results associated with incremental steps and actions.
Strategic implementation control is not a replacement to operational control. Strategic
implementation control, unlike operational controls continuously monitors the basic
direction of the strategy. The two forms of implementation control are:
(i) Monitoring strategic thrusts: Monitoring strategic thrusts help managers to
determine whether the overall strategy is progressing as desired or whether there is
need for readjustments.
(ii) Milestone Reviews: All key activities necessary to implement strategy are
segregated in terms of time, events or major resource allocation. It normally
involves a complete reassessment of the strategy.

Strategic Surveillance
Premise Control
Special Alert Control
Implementation Control
Strategy Formulation
Strategy Implementation
Time 1 Time 2 Time 3
These four strategic controls steer the organisation and its different sub-systems to
the right track. They help the organisation to negotiate through the turbulent and
complex environment.
Question 11
(a) What is micro and macro environment in the context of an organization's business
environment? List two elements of each type of environment and discuss each briefly in
one line on what it is. (4 Marks)
(b) List and discuss briefly the four stages of maturity of any one competitive position in ADL
matrix. (3 Marks)
Answer
(a) Micro-environment is related to small area or immediate periphery of an organization. It
influences an organization regularly and directly. It consist suppliers, consumers,
marketing intermediaries, competitors, organization, market, etc.
Macro-environment has broader dimensions. It consist demographic, economic,
Government, legal, political, cultural, technological, global environment, etc.
Elements of micro environment
 Consumers: Customers are the people who pay money to acquire an
organization's products. A consumer occupies the central position in the marketing
environment.
 Competitors: A study of the competitive scenario is essential for the marketer,
particularly threats from competition.

 Organization: An organization has several non-specific elements that may affect its
activities.
 Market: The market is to be studied in terms of its actual and potential size, its
growth prospect and also its attractiveness.
 Suppliers: The suppliers provide raw materials, equipment, services and so on.
Suppliers with their own bargaining power affect the cost structure of the industry.
 Market Intermediaries: Intermediaries exert a considerable influence on the
business organizations.
Elements of Macro Environment
 Demographic Environment: The demographic factors such as general age profile,
sex ratio, income, education, growth rate affect the business with different
magnitude.
 Economic Environment: The economic environment refers to the nature and
direction of the economy in which a company competes or may compete and
include general economic factors in the region and the nation, conditions in
resource markets which influence the supply of inputs to the enterprise, their costs,
quality, availability and reliability of supplies.
 Political-Legal Environment: There are three important elements in political-legal
environment: Government, Legal and Political.
 Socio-Cultural Environment: Socio-cultural environment consist of factors related
to human relationships and the impact of social attitudes and cultural values which
have bearing on the business of the organization.
 Technological Environment: Technological innovations are strategic advantage if
businesses are able to adopt them for their benefit, otherwise they can be threat.
 Global Environment: Globalization means two things: (a) the company commits
itself heavily with several manufacturing locations around the world and offers
products in several diversified industries, and (b) it also means ability to compete in
domestic markets with foreign competitors.
(b) The ADL matrix is a portfolio analysis method that is based on product life cycle. The
approach forms a two-dimensional matrix based on stage of industry maturity and the
firms competitive position, environmental assessment and business strength
assessment. There are five competitive positions: dominant, strong, favourable, tenable
and weak. For each competitive position, strategic options are given according to the
stage of industry maturity.

Stage of industry maturity

Competitive
Embryonic Growth Mature Ageing
position
Fast grow Defend
position Defend
Attend cost position
Fast grow leadership Attend cost
leadership Renew
Dominant Build barriers Renew
Renew Focus
Act offensively Defend
position Fast grow Consider
withdrawal
Act offensively Act offensively
Lower cost
Differentiate
Focus Find niche
Differentiate Lower cost
Strong Differentiate Hold niche
Fast grow Attack small
Grow with Harvest
firms
industry
Focus
Differentiate
Harvest
Differentiate Focus Find niche
Hold niche Harvest
Favourable Focus Differentiate
Turnaround Turnaround
Fast grow Defend
Grow with
industry
Hit smaller
firms
Hold niche
Turnaround
Grow with Turnaround
Focus Divest
Tenable industry Hold niche
Grow with Retrench
Focus Retrench
industry
Withdraw
Find niche Turnaround
Catch-up Retrench Withdraw
Weak Withdraw
Grow with Niche or Divest
industry withdraw

Question 12
(a) “Human resources are now viewed as a source of competitive advantage.” Discuss the
four activities when performed properly can increase the competency of workforce.
(4 Marks)
(b) Identify any six social environmental factors that affect the demand for a company’s
product. (3 Marks)
Answer
(a) The human resource management function has been accepted as a strategic partner in
the formulation of organization’s strategies and in the implementation of such strategies
through human resource planning, employment, training, appraisal and rewarding of
personnel. The following activities when performed properly can increase the
competency of work force.
1. Recruitment and selection: The workforce will be more competent if a firm can
successfully identify, attract, and select the most competent applicants.
2. Training: The workforce will be more competent if employees are well trained to
perform their jobs properly.
3. Appraisal of performance: The performance appraisal is to identify any
performance deficiencies experienced by employees due to lack of competence.
Such deficiencies, once identified, can often be solved through counselling,
coaching or training.
4. Compensation: A firm can usually increase the competency of its workforce by
offering pay and benefit packages that are more attractive than those of their
competitors. This practice enables organizations to attract and retain the most
capable people.
(b) Socio-cultural environment consists of factors related to human relationships and the
impact of social attitudes and cultural values which have bearing on the business of the
organization. Social environmental factors that affect the demand for a company’s
product are as follows:
 Lifestyle trends
 Demographics
 Consumer attitudes and opinions
 Brand, company, technology image
 Consumer buying patterns
 Ethnic/religious factors
 Media views and perception

Question 13
(a) DMAIC and DMADV methodology of six sigma. (4 Marks)
(b) Advertising and Publicity. (3 Marks)
Answer
(a) For implementing six sigma, there are two separate key methodologies for existing and
new processes. They are known as DMAIC and DMADV.
DMAIC is an acronym for five different steps used in six sigma - Define, Measure,
Analyze Improve, and Control. DMAIC methodology is directed towards improvement of
existing product, process or service.
 Define: To begin with six sigma experts define the process improvement goals that
are consistent with the strategy of the organization and customer demands.
 Measure: Six sigma experts collect process data by mapping and measuring
relevant processes that can facilitate future comparison.
 Analyze: Verify cause-and-effect relationship between the factors in the processes.
 Improve: On the basis of the analysis experts make a detailed plan to improve.
 Control: Initial trial or pilots are run to establish process capability and transition to
production. Afterwards continuously measure the process to ensure that variances
are identified and corrected.
DMADV is an acronym for Define, Measure, Analyze, Design, and Verify. DMADV is
a strategy for designing new products, processes and services.
 Define: As in case of DMAIC six sigma experts have to formally define goals of the
design activity that are consistent with strategy and the demands of the customer.
 Measure: Next identify the factors that are critical to quality (CTQs). Measure
factors such as product capabilities and production process capability.
 Analyze: Develop and design alternatives. Create high-level design and evaluate to
select the best design.
 Design: Develop details of design and optimise it. Verify designs may require using
techniques such as simulations.
 Verify: Verify designs through simulations or pilot runs. Verified and implemented
processes are handed over to the process owners.
However, in spite of different orientation in two methodologies, conceptually there is
overlapping between the DMAIC and DMADV as both are essentially having similar
objectives.

(b) Difference between Advertising and Publicity

Basis Advertising Publicity
Meaning Advertising is a non-personal, highly Publicity is communication of a
flexible and dynamic promotional product, brand or business by
method. It is a paid form of placing information about it in
communicating the message. the media without paying for
the time or media space
directly.
Methods The media for advertising are several Basic tools for publicity are
such as brochures, newspapers, press releases, press
magazines, display boards, radio, conferences, reports, stories,
television and internet. Choice of blogs and internet releases.
appropriate media is important for These releases must be of
effectiveness of the message. The interest to the public. Thus, it is
media may be local, regional, national way of reaching customers with
or international. The type of the negligible cost.
message, copy, and illustration are a
matter of choice and creativity.
Advertising may be directed towards
consumers, middlemen or opinion
leaders.
Question 14
(a) SWOT analysis. (4 Marks)
(b) “Strategic decisions are different in nature than all other decisions.” In the light of this
statement, explain any three major dimensions of strategic decisions. (3 Marks)
OR
Reasons to adopt Turnaround Strategies. (3 Marks)
Answer
(a) SWOT analysis is a tool used by organizations for evolving strategic options for the
future. The term SWOT refers to the analysis of strengths, weaknesses, opportunities
and threats facing a company. Strengths and weaknesses are identified in the internal
environment, whereas opportunities and threats are in the external environment.
 Strength: Strength is an inherent capability of the organization which it can use to
gain strategic advantage over its competitor.
 Weakness: A weakness is an inherent limitation or constraint of the organisation
which creates strategic disadvantage to it.

 Opportunity: An opportunity is a favourable condition in the external environment

which enables it to strengthen its position.
 Threat: An unfavourable condition in the external environment which causes a risk
for, or damage to the organisation’s position.
(b) Decision-making is a managerial process and a function of choosing a particular course
of action out of several alternative courses for the purpose of accomplishment of the
organizational goals. Strategic decisions are different in nature than all other decisions
which are taken at various levels of the organization during their day-to-day working. The
major dimensions of strategic decisions are given below:
1. Strategic issues require top-management decisions. Strategic issues involve
thinking in totality of the organizations and there is lot of risk involved.
2. Strategic issues involve the allocation of large amounts of company resources -
financial, technical, human etc.
3. Strategic issues are likely to have a significant impact on the long-term prosperity of
the firm.
4. Strategic issues are future oriented.
5. Strategic issues usually have major multifunctional or multi-business consequences.
6. Strategic issues necessitate consideration of factors in the firm’s external
environment.
(Alternative /choice)
Reasons to adopt Turnaround Strategies:
1. Turnaround is needed when an enterprise's performance deteriorates to a point that
it needs a radical change of direction in strategy, and possibly in structure and
culture as well.
2. It is a highly targeted effort to return an organization to profitability and increase
positive cash flows to a sufficient level.
3. It is used when both threats and weaknesses adversely affect the health of an
organization so much that its basic survival is difficult.
4. The overall goal of turnaround strategy is to return an underperforming or distressed
company to normalcy in terms of acceptable levels of profitability, solvency, liquidity
and cash flow.
5. To achieve its objectives, turnaround strategy must reverse causes of distress,
resolve the financial crisis, achieve a rapid improvement in financial performance,
regain stakeholder support, and overcome internal constraints and unfavourable
industry characteristics.

Question 1
Answer the following questions in brief:
(a) Advantages of using E-R Diagram.
(b) Name of any four devices that utilize Bluetooth technology.
(c) What do you understand by “Transmission mode”? Name three types of transmission
modes.
(d) Explain the four components of Executive Information System (EIS).
(e) Explain Cryptographic Controls. (5 x 2 = 10 Marks)
Answer
(a) Advantages of using Entity-Relationship (E-R) Diagram are as follows:
• ER Modeling is simple, graphical and easily understandable. It is represented in
business users’ language and it can be understood by non-technical specialist.
• Intuitive and helps in Physical Database creation/design.
• Can be generalized and specialized based on needs.
• Gives a higher level description of the system.
(b) Some of the devices that utilize Bluetooth technology are as follows:
♦ Keyboards and mice,
♦ Printers,
♦ Cell phones and headsets,
♦ PDAs (Personal Digital Assistants),
♦ Desktop and laptop computers,
♦ Digital cameras, and
♦ Remotes: replacing IR (infrared)/Remote Control.
(c) Transmission Mode: In telecommunication, the Transmission Mode is used to define
the direction of signal flow between two linked devices.
There are three types of transmission modes characterized according to the direction of
the exchanges: Simplex, Half-Duplex and Duplex.

(d) The four components of Executive Information Systems (EIS) are as follows:
• Hardware: This includes Input data-entry devices, CPU, Data Storage files and
Output Devices.
• Software: This includes Text base software, Database, and Graphic types such as
time series charts, scatter diagrams, maps, motion graphics, sequence charts, and
comparison-oriented graphs (i.e., bar charts), Model base.
• User Interface: This includes hardware (physical) and software (logical)
components by which people (users) interact with a machine. Several types of
interfaces can be available to the Executive Information System structure, such as
scheduled reports, questions/answers, menu driven, command language, natural
language, and input/output.
• Telecommunication: This involves transmitting data from one place to another in a
reliable networked system.
(e) Cryptographic Controls: These controls are exercised in the boundary subsystem and
are designed to protect the privacy of data and to prevent unauthorized modifications of
data. Cryptography achieves this goal by scrambling data into codes (cryptograms) so
that it is meaningless to anyone who does not possess the authentication to access the
respective system resource or file. Examples are encryption, digital signature etc.
Question 2
(a) Describe any four reasons why documentation is important to Information Systems.
(b) Discuss the types of Data Flow Diagrams (DFDs). Also briefly mention the major
components of DFD. (2 x 4 = 8 Marks)
Answer
(a) Some of the reasons why documentation is important to Information Systems are as
follows:
• Depicting how the system works: In computerized systems, the processing is
electronic and invisible. Therefore documentation is required to help employees
understand how a system works, assist accountants in designing controls for it,
demonstrates to managers that it will meet their information needs, and assists
auditors in understanding the systems that they test and evaluate.
• Training users: Documentation also includes user guides, manuals, and similar
operating instructions that help people learn how an Information System operates.
These documentation aids help train users to operate Information systems
hardware and software, solve operational problems, and perform their jobs better.
• Designing new systems: Documentation helps system designers develop new
systems in much the same way that blueprints help architects design building, Well-
written documentation and related graphical systems-design methodologies play

key roles in reducing system failures and decreasing the time spent correcting
emergency errors.
• Controlling system development and maintenance costs: Personal computer
applications typically employ prewritten, off-the-shelf software that is relatively
reliable and inexpensive. Good documentation helps system designers develop
object-oriented software, which is software that contains modular, reusable code
that further avoid writing duplicate programs and facilitate changes when programs
must be modified later.
• Standardizing communications with others: Documentation aids such as E-R
Diagrams, System Flowcharts, and Data Flow Diagrams are more standardized
tools, and they are more likely to be interpreted the same way by all parties viewing
them. Thus, documentation tools are important because they help describe an
existing or proposed system in a common language and help users communicate
with one another about these systems.
• Auditing Information Systems: Documentation helps depict audit trails. For
example- when investigation in an Accounting Information system, the auditors
typically focus on internal controls. In such circumstances, documentation helps
auditors determine the strengths and weaknesses of a system’s controls and
therefore the scope and complexity of the audit.
• Documenting business processes: Understanding business processes can lead
to better systems and better decision. Documentation helps managers better
understand how their businesses operate what controls are involved or missing from
critical organizational activities, and how to improve core business activities.
(b) The types of Data Flow Diagrams (DFDs) are as follows:
• Logical Data Flow Diagram: A Logical DFD focuses on the business and how the
business operates. It describes the business events that take place and the data
required and produced by each event. The logical model reflects the business.
• Physical Data Flow Diagram: A Physical DFD shows how the system will be
implemented. The physical model depicts the system.
• Context Diagram: The Context Diagram is a high-level DFD that shows the entire
system as a single process and shows the interaction between the system and
external agents which act as data sources and sinks, and gives no clues as to its
internal organization.
The major components of DFD are described as follows:
(i) Entity: An entity is the source or destination of data. The entities either provide
data to the system (Source) or receive data from it (Sink).

(ii) Process: The process is the manipulation or work that transforms data, performing
computations, making decisions (logic flow), or directing data flows based on
business rules.
(iii) Data Store: A data store is where a process stores data between processes for
later retrieval by that same process or another one.
(iv) Data Flow: Data flow is the movement of data between the entity, the process and
the data store.
Question 3
(a) Write any 8 Information Systems Control procedures covering the access safeguards
over computer programs.
(b) Define the term ‘Cloud Computing Architecture’. Explain the two parts of Cloud
Computing Architecture. (2 x 4 = 8 Marks)
Answer
(a) Information Systems Control procedures covering the access safeguards over computer
programs are as follows:
• Strategy and direction;
• General Organization and Management;
• Access to IT resources, including data and programs;
• System development methodologies and change control;
• Operation procedures;
• System Programming and technical support functions;
• Quality Assurance Procedures;
• Physical Access Controls;
• Business Continuity Planning(BCP) and Disaster Recovery Planning (DRP);
• Network and Communication;
• Database Administration; and
• Protective and detective mechanisms against internal and external attacks.
(b) Cloud Computing Architecture refers to the components and subcomponents that
typically consist of a Front End platform (fat client, thin client, mobile device), Back End
platforms (servers, storage), a cloud based delivery, and a network (Internet, Intranet,
Intercloud). Combined, these components make up Cloud Computing Architecture.
Cloud architecture typically involves multiple cloud components communicating with each
other over a tight or loose coupling of cloud resources, services, middleware, and
software components.

A cloud computing architecture consists of two parts - Front End and a Back End that
connect to each other through a network, usually the Internet.
• Front End: The front end is the side the computer user or client sees. The Front
End of the cloud computing system comprises of the client’s devices (or it may be a
computer network) and some applications that are needed for accessing the cloud
computing system. All the cloud computing systems do not give the same interface
to users.
• Back End: Back End refers to some physical peripherals and is the “cloud” section
of the system. In cloud computing, the back end is cloud itself which may
encompass various computer machines, data storage systems and servers. Groups
of these clouds make a whole cloud computing system.
Question 4
(a) What are the characteristics of Star Network? Write any two advantages and two
disadvantages of Star Network.
(b) What is the basic objective for providing network security? Explain the major functions
and services performed by the Physical Layer (Layer 1) of OSI Model of Network
Architecture. (2 x 4 = 8 Marks)
Answer
(a) The characteristics of Star network are as follows:
• The star network, a popular network configuration, involves a central unit that has a
number of terminals tied into it. In other words, it ties end user computers to a
central computer.
• The central unit in the star network acts as the traffic controller among all the other
computers tied to it. The central computer is usually a mainframe (host), which acts
as the file server.
• A star network is well suited to companies with one large data processing facility
shared by a number of smaller departments. Many star networks take the form of
hierarchical networks with a centralized approach.
Advantages of the Star network include the following:
• Several users can use the central unit at the same time.
• It is easy to add new nodes and remove existing nodes.
• A node failure does not bring down the entire network.
• It is easier to diagnose network problems through a central hub.
Disadvantages of the Star network are as follows:
• The whole network is affected if the main unit “goes down,” and all communications
stop.

• In the star network, other computers are heavily dependent on the central host
computer. If it fails, there is no backup processing and communications capability
and the local computers will be cut off from the corporate headquarters and from
each other.
• Cost of cabling the central system and the points of the star network together are
very high.
(b) The basic objective for providing network security is two-fold –
• To safeguard assets, and
• To ensure and maintain the data integrity. The boundary subsystem is an interface
between the potential users of a system and the system itself. Controls in the
boundary subsystem have the following purposes:
• To establish the system, resources that the users desire to employ; and
• To restrict the actions undertaken by the users who obtain the system resources to
an authorized set.
The major functions and services performed by the Physical Layer (Layer 1) of OSI
Model of Network Architecture are as follows:
• Establishment and termination of a connection to a communications medium.
• Participation in the process whereby the communication resources are effectively
shared among multiple users. For example – contention, resolution and flow control.
• Modulation or conversion between the representation of digital data in user
equipment and the corresponding signals transmitted over a communications
channel. These are signals operating over the physical cabling (such as copper and
optical fiber) or over a radio link.
Question 5
(a) What do you mean by ‘Frame Based Expert System’? Also explain the various
components of Executive Information System (EIS).
(b) Explain the ‘Dashboards’ and ‘Scorecards’ as tools of Business Intelligence.
(2 x 4 = 8 Marks)
Answer
(a) Frame Based Expert System: These systems organize all the information (data,
description, rules etc.) about a topic into logical units called Frames, which are similar to
linked records in data files. Rules are then established about how to assemble or inter-
relate the frames to meet the user’s needs.
The components of an Executive Information System (EIS) are as follows:

• Hardware: This includes Input data-entry devices, CPU, Data Storage files and
Output Devices.
• Software: This includes Text base software, Database, and Graphic types such as
time series charts, scatter diagrams, maps, motion graphics, sequence charts, and
comparison-oriented graphs (i.e., bar charts), Model base.
• User Interface: This includes hardware (physical) and software (logical)
components by which people (users) interact with a machine. Several types of
interfaces can be available to the Executive Information System structure, such as
scheduled reports, questions/answers, menu driven, command language, natural
language, and input/output.
• Telecommunication: This involves transmitting data from one place to another in a
reliable networked system.
(b) Dashboards: This involves using the information gathered from the data warehouse and
making it available to users as snapshots of many different things with the objective of
getting response to the query: “Tell me a lot of things, but without too much effort”.
Dashboards are flexible tools that can be bent into as many different shapes as per user
requirements. It includes a collection of graphs, reports, and KPIs (Key Performance
Indicators) that can help monitor such business activities as progress on a specific
initiative.
Scorecards: This involves providing a visual representation of the enterprise strategy by
taking critical metrics and mapping them to strategic goals throughout the enterprise.
Scorecards offer a rich, visual gauge to display the performance of specific initiatives,
business units, or the enterprise as a whole and the individual goals in the context of
larger enterprise strategy. Scorecards distil information into a small number of metrics
and targets and provide users with an at‐a‐glance perspective of information. A
scorecard has a graphical list of specific, attainable strategic milestones, combined with
metrics that serve as benchmarks. Specific measures on how well the company has
actually performed specified activities are linked in the scorecard with graphical display
highlighting the status of each goal.
Question 6
(a) Describe the Information Systems Management Controls usually performed by Top
Management.
(b) Discuss the constraints that need to be taken into consideration while developing a
secured Grid Architecture. (2 x 4 = 8 Marks)
Answer
(a) Top Management and Information Systems Management Controls: Top management
must ensure that information systems function is well managed. It is responsible primarily
for long – run policy decisions on how Information Systems will be used in the

organization. Information Systems management has overall responsibility for the

planning and control of all information system activities.
It also provides advice to top management in relation to long-run policy decision making
and translates long-run policies into short-run goals and objectives. The senior managers
who take responsibility for Information System function in an organization face many
challenges. The major functions that a top/senior manager must perform are as follows:
• Planning – determining the goals of the information systems function and the
means of achieving these goals;
• Organizing – gathering, allocating, and coordinating the resources needed to
accomplish the goals;
• Leading – motivating, guiding, and communicating with personnel; and
• Controlling – comparing actual performance with planned performance as a basis
for taking any corrective actions that are needed.
Top management must prepare two types of information systems plans for the
information systems function: a Strategic Plan and an Operational Plan. The Strategic
Plan is the long-run plan covering, say, the next three to five years of operations
whereas the Operational Plan is the short-plan covering, say, next one to three years of
operations.
(b) To develop a secured Grid architecture, following constraints are needed to be taken into
consideration:
• Single Sign-on: A user should authenticate once and they should be able to
acquire resources, use them, and release them and to communicate internally
without any further authentication.
• Protection of Credentials: User passwords, private keys etc. should be protected.
• Interoperability with local security solutions: Access to local resources should
have local security policy at a local level. Despite of modifying every local resource
there is an inter-domain security server for providing security to local resource.
• Exportability: The code should be exportable i.e. they cannot use a large amount
of encryption at a time. There should be a minimum communication at a time.
• Support for secure group communication: In a communication there are number
of processes which coordinate their activities. This coordination must be secure and
for this there is no such security policy.
• Support for multiple implementations: There should be a security policy which
should provide security to multiple sources based on public and private key
cryptography.

Question 7
(a) Six Sigma
(b) I-Pod
(c) Secure Socket Layer (SSL)
(d) Nucleus FinnOne
(e) Storage Virtualisation (2 x 4 = 8 Marks)
Answer
(a) Six Sigma: Six Sigma is a set of strategies, techniques, and tools for process
improvement. It seeks to improve the quality of process outputs by identifying and
removing the causes of defects and minimizing variability in manufacturing and business
processes. Each Six Sigma project carried out within an organization follows a defined
sequence of steps and has quantified value targets, for example: reduce process cycle
time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.
It follows a life-cycle having phases: Define, Measure, Analyze, Improve and Control
(or DMAIC).
(b) iPod: The iPod is a line of portable media players designed and marketed by Apple Inc.
There are four current versions of the iPod: the ultra-compact iPod Shuffle, the compact
iPod Nano, the touch screen iPod Touch, and the hard drive-based iPod Classic. Like
other digital music players, iPods can serve as external data storage devices. Storage
capacity varies by model, ranging from 2 GB for the iPod Shuffle to 160 GB for the iPod
Classic.
(c) Secure Socket Layer (SSL): It is a protocol that provides a secure channel between two
machines operating over the Internet or an internal network. In today’s Internet focused
world, the SSL protocol is typically used when a web browser needs to securely connect
to a web server over the inherently insecure Internet. In practice, SSL is used to secure
online credit card transactions, system logins and any sensitive information exchanged
online, to secure webmail and applications like Outlook Web Access, Exchange and
Office Communications Server, to secure the connection between an email client such as
Microsoft Outlook and an email server such as Microsoft Exchange, to secure intranet
based traffic such as internal networks, file sharing, extranets, and database connections
etc.
(d) Nucleus FinnOne: The Nucleus FinnOne is a banking suite, made and marketed by
India-based Company Nucleus software, and comes with a wide variety of integrated
applications that cover different aspects of global web banking. These applications
support banks and financial solution companies in dealing with assets, liabilities, core
financial accounting and customer service. The solution is wholly focused on banking and
financial services spanning across solutions in the areas of Retail and Corporate

Banking, Cash Management, Relationship Banking, Financial CRM, Credit Risk &
Appraisal, Enterprise Application Integration (EAI), Internet Banking, Data warehousing
and Analytics.
(e) Storage Virtualization: Storage virtualization is the apparent pooling of data from
multiple storage devices, even different types of storage devices, into what appears to be
a single device that is managed from a central console. Storage virtualization helps the
storage administrator perform the tasks of backup, archiving, and recovery more easily -
and in less time - by disguising the actual complexity of a Storage Area Network (SAN).
Administrators can implement virtualization with software applications or by using
hardware and software hybrid appliances. The servers connected to the storage system
aren’t aware of where the data really is. Storage virtualization is sometimes described as
“abstracting the logical storage from the physical storage”.

SECTION – B : STRATEGIC MANAGEMENT

Question 8
(a) Discuss the areas one should examine while developing a logistics strategy. (3 Marks)
(b) “TQM espouses a philosophy of continuous improvement in all areas of an organization”.
Justify the statement. (3 Marks)
(c) How a firm will be benefitted by using ideas of Strategic Business Unit (SBU)? (3 Marks)
(d) ‘Objectives’ and ‘Goals’ provide meaning and sense of direction to organizational
endeavour. Explain. (3 Marks)
(e) “A Manager working on a strategic decision has to balance socio-cultural opportunities,
influences and constraints”. Discuss. (3 Marks)
Answer
(a) Logistics management is a process which integrates the flow of supplies into, through
and out of an organization to achieve a level of service. It helps in efficient flow of
required material. While formulating effective logistics strategy following areas may be
considered:
♦ Sources of raw materials and components. Timely availability of quality materials.
♦ Different manufacturing locations and the products being manufactured at each
location.
♦ Nature of distribution facilities. Mode of transportation and whether it is owned or
outsourced
♦ Method for deploying inventory in the logistics network.
♦ Obsolescence, Safety stock, reorder level, etc.
(b) TQM is a total system approach and an integral part of high level strategy .It works
horizontally across functions and departments, involves all employees, top to bottom,
and extends backward and forward to include the supply chain and the customer chain.
TQM stresses learning and adaptation to continual change as keys to organizational
success.
TQM espouses a philosophy of continuous improvement in all areas of an organization.
This philosophy ties in closely with the quality measurement and universal quality
responsibility concepts. Quality measurement is needed in order to focus improvement
efforts appropriately.

Continuous improvement is part of the management of all systems and processes.

Achieving the highest levels of performance requires a well-defined and well-executed
approach to continuous improvement and learning.
(c) As the number, size, and diversity of divisions in an organization increase, controlling
and evaluating divisional operations become increasingly difficult for strategists. The
span of control becomes too large at top levels of the firm and creates difficulty in
management. These difficulties can be overcome by using the ideas of SBU.
1. In multidivisional organizations, an SBU structure can greatly facilitate strategy
implementation efforts.
2. The SBU structure helps in managing very large business organisations.
3. SBUs help to overcome the limitations of managers to process complex strategic
information, problems related to isolation of functional area managers, and
increasing diversification.
4. Creating separate strategic structures help in better planning, faster and focussed
decisions, improved control and proper execution of strategy.
(d) Business organization translates their vision and mission into objectives. 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 to objectives to short term perspective.
All organizations have objectives. The pursuit of objectives is an unending process such
that organizations sustain themselves. They provide meaning and sense of direction to
organizational endeavour. Organizational structure and activities are designed and
resources are allocated around the objectives to facilitate their achievement. They also
act as benchmarks for guiding organizational activity and for evaluating how the
organization is performing.
(e) A manager working on a strategic decision has to balance opportunities, influences and
constraints. These opportunities emanate from various sources including the socio-
cultural elements of environment. Socio-cultural factors consist of factors such as
traditions, values and beliefs, literacy and education, the ethical standards, stratification,
conflict, cohesiveness and so forth. These factors are also evolving in the sense that
there are changes in the preferences, value systems, education level and so on.
Managers must segregate the factors that have a bearing on the organisation and
consider them while taking strategic decisions. Some of these factors can be managed to
an extent, however, there will be several others that are beyond the control of a
manager.
Question 9
(i) BCG Growth Share Matrix is popularly used for resource allocation.

(ii) E-commerce technology close up the opportunities for reconfiguring industry and
company value chains. (2 x 2 = 4 Marks)
(b) Elaborate the reasons necessary for the globalization of companies. (3 Marks)
Answer
(a) (i) Correct: BCG Growth share matrix also known for its cow and dog metaphors is
popularly used for resource allocation in a diversified company. Primarily, it
categorises organisations/products on the basis of two factors consisting of the
growth opportunities and the market share enjoyed.
(ii) Incorrect: The impact of e-commerce technology on industry and company value
chains is profound, paving the way for fundamental changes in the ways business is
conducted both internally, and with suppliers and customers. Using the network to
link the customers and the suppliers enables just-in-time delivery, reducing
inventory costs and allowing production to match demand.
(b) There are several reasons for the globalization of companies. These are as follows:
1. Shrinking of Time and Distance owing to faster communication, speedier
transportation, growing financial flows and rapid technological changes.
2. Domestic Markets are no longer adequate and rich.
3. High Transportation Cost: Companies often set up overseas plants to reduce high
transportation costs. The higher the ratio of the unit cost to the selling price per unit,
the more significant the transportation factor becomes.
Reasons may also vary by industry. For example, The motivation to go global in high-
tech industries is slightly different. Companies in electronics and telecommunications
must spend large sums on research and development for new products and thus may be
compelled to seek ways to improve sales volume to support high overhead expenses.
Question 10
Describe the concept of corporate culture. Elaborate the problems that business houses are facing
while changing their culture to remain adaptive with the globally changing scenario. (7 Marks)
Answer
The phenomenon which often distinguishes good organizations from bad ones could be
summed up as ‘corporate culture’. Corporate culture refers to a company’s values, beliefs,
business principles, traditions, and ways of operating and internal work environment. Every
corporation has a culture that exerts powerful influences on the behaviour of managers.
Culture affects not only the way managers behave within an organization but also the
decisions they make about the organization’s relationships with its environment and its
strategy.

Changing a company's culture to align it with strategy is among the toughest management
tasks-easier to talk about than do. Changing culture and making it to remain adaptive with the
globally changing scenario is very difficult because of the heavy anchor of deeply held values
and habits. It takes concerted management action over a sustained period of time to replace
an unhealthy culture with a healthy culture or to root out certain unwanted cultural obstacles
and instil ones that are more strategy-supportive.
The following needs to be done to change the culture for making it to remain adaptive with
globally changing scenario:
1. To diagnose which facets of the present culture are strategy supportive and which are
not.
2. Managers have to talk openly and forthrightly to all concerned about those aspects of the
culture that have to be changed.
3. Talk has to be followed swiftly by visible, aggressive actions to modify the culture-actions
that everyone will understand are intended to establish a new culture more in tune with
the strategy.
4. The culture-changing actions include revising policies and procedures in ways that will
help drive cultural change, altering incentive compensation (to reward the desired cultural
behaviour), praising and recognizing people who display the new cultural traits, recruiting
and hiring new managers and employees who have the desired cultural values and can
serve as role models for the desired cultural behaviour, replacing key executives who are
strongly associated with the old culture, and taking every opportunity to communicate to
employees the basis for cultural change and its benefits to all concerned.
Question 11
(a) What are the objectives that must be kept in mind while designing a pricing strategy of a
new product? (4 Marks)
(b) Analyse the role of Enterprise Resource Planning (ERP) in strategic implementation.
(3 Marks)
Answer
(a) For a new product pricing strategies for entering a market needs to be designed. In
pricing a really new product at least three objectives must be kept in mind.
i. Making the product acceptable to the customers.
ii. Producing a reasonable margin over cost.
iii. Achieving a market that helps in developing market share.
For a new product an organization may either choose to skim or penetrate the market. In
skimming prices are set at a very high level. The product is directed to those buyers who
are relatively price insensitive but sensitive to the novelty of the new product. For

example call rates of mobile telephony were set very high initially. Even the incoming
calls were charged. Since the initial off take of the product is low, high price, in a way,
helps in rationing of supply in favour of those who can afford it.
In penetration pricing firm keeps a temptingly low price for a new product which itself is
selling point. A very large number of the potential customers may be able to afford and
willing to try the product.
(b) ERP stand for enterprise resource planning which is an IT based system linking isolated
information centers across the organisation into an integrated enterprise wide structured
functional and activity bases. ERP is successor to MRP systems (material requirements
and manufacturing resource planning systems). ERP is used for strengthening the
procurement and management of input factors.
Modern ERP systems deliver end-to-end capabilities to support the entire performance
management of an organisation. It helps in consolidated financial reporting, financial
management, planning, budgeting, and performance management and so on.
Question 12
(a) Explain briefly following areas on which the strategic planners concentrate to achieve the
long term prosperity:
(i) Profitability
(ii) Competitive position
(iii) Employee development
(iv) Public responsibility (1 x 4 = 4 Marks)
(b) Discuss General Electric model of analyzing current business portfolio. (3 Marks)
Answer
(a) Following are the areas on which the strategic planners concentrate to achieve the long
term prosperity:
(i) Profitability: The ability of an organization to operate in the long run depends on
achieving an adequate level of profits. These profits usually expressed in terms of
earnings per share or return on equity.
(ii) Competitive position: The method of knowing the organization’s success is based
on the relative dominance of an organization in the market place. Organizations
commonly establish an objective in terms of competitive position, using total sales
or market place as measures of their competitive position.
(iii) Employee development: Providing employee value education and training leads to
increased compensation and job security. Providing such opportunities often
increases productivity and decreases turnover.

(iv) Public responsibility: Managers recognize their responsibilities towards their

customers and to society at large. Many organizations work not only to develop
reputations for fairly priced products and services but also to establish themselves
as responsible corporate citizens.
(b) To analyse business portfolio the General Electric Company used a model which is also
known as Business Planning Matrix, GE Nine-Cell Matrix and GE Electric Model. The
strategic planning approach in this model has been inspired from traffic control lights.
The lights that are used at crossings to manage traffic are: green for go, amber or yellow
for caution, and red for stop. This model uses two factors while taking strategic
decisions: Business Strength and Market Attractiveness. The vertical axis indicates
market attractiveness and the horizontal axis shows the business strength in the industry.
Business Strength
Strong Average Weak
High
Attractiveness
Market
Medium
Low
Figure: The GE Portfolio Matrix
Zone Strategic Signals

Green Invest/Expand
Yellow Select/Earn
Red Harvest/Divest
If a product falls in the green section, the business is at advantageous position. To reap
the benefits, the strategic decision can be to expand, to invest and grow. If a product is in
the amber or yellow zone, it needs caution and managerial discretion is called for making
the strategic choices. If a product is in the red zone, it will eventually lead to losses that
would make things difficult for organisations. In such cases, the appropriate strategy
should be retrenchment, divestment or liquidation.
Question 13
(a) ‘Concentric diversification’ and ‘Conglomerate diversification’. (4 Marks)
(b) ‘Market development’ and ‘Product development’. (3 Marks)

Answer
(a) Concentric and conglomerate diversification are different forms of diversification with the
following key differences:
1. Concentric diversification occurs when a firm adds related products or markets. On
the other hand conglomerate diversification occurs when a firm diversifies into areas
that are unrelated to its current line of business.
2. In concentric diversification, the new business is linked to the existing businesses
through process, technology or marketing. In conglomerate diversification, no such
linkages exist; the new business/product is disjointed from the existing
businesses/products.
3. The most common reasons for pursuing a concentric diversification are that
opportunities in a firm’s existing line of business are available. However, common
reasons for pursuing a conglomerate growth strategy is that opportunities in a firm's
current line of business are limited or opportunities outside are highly lucrative.
(b) Market Development and product development are two different growth strategies. The
following are the differences between these two:
Market Development Product Development
1. Market development refers to a 1. Product development refers to a
growth strategy where the business growth strategy where business
seeks to sell its existing products into aims to introduce new products
new markets. It is a strategy for into existing markets. It is a
company growth by identifying and strategy for company growth by
developing new markets for current offering modified or new products
company products. to current markets.
2. Market development strategy may be 2. Product development strategy
achieved through new geographical may require the development of
markets, new product dimensions or new competencies and requires
packaging, new distribution channels the business to develop modified
or different pricing policies to attract products which can appeal to
different customers or create new existing markets.
market segments.
Question 14
(a) ‘Kieretsus’, a cooperative network of business in Japan. (4 Marks)
(b) Concept of driving forces.
OR
Strategy is partly proactive and partly reactive. (3 Marks)

Answer
(a) The benefits of cooperation are also seen in Japan, where large cooperative networks of
businesses are known as kieretsus. These are formed in order to enhance the abilities of
individual member businesses to compete in their respective industries. A kieretsu is a
loosely-coupled group of companies, usually in related industries. Kieretsu members are
peers and may own significant amounts of each other's stock and have many board
members in common.
Kieretsus are different from conglomerates (common in western countries and also found
in India) wherein all members are lineated through ownership pattern. A kieretsu also
differs from a consortium or an association, as the primary purpose of a kieretsu is not to
share information or agree industry standards, but to share purchasing, distribution or
any other functions. In Kieretsu members remain independent companies in their own
right: the only strategy they have in common is to prefer to do business with other
kieretsu members, both when buying and when selling.
(b) Driving Forces: Industry conditions change because there are external forces that are
driving industry participants to modify their actions. Industry and competitive conditions
change because forces are in motion that creates incentives or pressures for changes.
The most dominant forces are called driving forces because they have the biggest
influence on what kinds of changes will take place in the industry's structure and
competitive environment. Analyzing driving forces has two steps: identifying what the
driving forces are and assessing the impact they will have on the industry. Many events
can affect an industry powerfully enough to qualify as driving forces. Some are unique
and specific to a particular industry situation, but many drivers of change fall into general
category affecting different industries simultaneously.
OR (Alternative / choice)
It is true that strategies are partly proactive and partly reactive. In proactive strategy,
organizations will analyze possible environmental scenarios and create strategic framework
after proper planning and set procedures and work on these strategies in a predetermined
manner. However, in reality no company can forecast both internal and external environment
exactly. Everything cannot be planned in advance. It is not possible to anticipate moves of
rival firms, consumer behaviour, evolving technologies and so on.
There can be significant deviations between what was visualized and what actually happens.
Strategies need to be attuned or modified in the light of possible environmental changes.
There can be significant or major strategic changes when the environment demands. Reactive
strategy is triggered by the changes in the environment and provides ways and means to cope
with the negative factors or take advantage of emerging opportunities.

Question 1
Answer the following in brief.
(a) Mention the challenges in implementing ‘Business Process Automation’.
(b) Distinguish between ‘Cache Memory’ and ‘Virtual Memory’.
(c) In what way a Switch is different from a Router in the computer networks?
(d) What are the key aspects to be considered in implementing e-commerce?
(e) Define ‘On-line processing’ and ‘Real-time processing’. (5 x 2 = 10 Marks)
Answer
(a) Some of the challenges in implementing Business Process Automation (BPA) are as follows:
♦ The number of interfaces with the customers is growing (e.g. phone, fax, email,
sms, PDA, etc.);
♦ The product, service and price options have increased the complexity of the
business;
♦ Most organizations have a whole suite of ‘build and buy’ systems and applications,
often each with its own data format; and
♦ Budgets are being cut.
(b) Cache Memory: Cache memory in CPU is used to bridge the huge speed difference
between Registers and Primary Memory. Cache memory is a smaller, faster memory,
which stores copies of the data from the most frequently used main memory locations so
that Processor/Registers can access it more rapidly than main memory.
Virtual Memory: Virtual memory combines computer’s Random Access Memory (RAM)
with temporary space on the hard disk. When RAM runs low, virtual memory moves data
from RAM to an allocated space on the hard disk to help RAM.
(c) Switch: Switch is a communications processor that makes connections between
telecommunications circuits in a network so that a telecommunications message can
reach its intended destination.
Router: Router is a communications processor that interconnects networks based on
different rules or protocols, so that a telecommunications message can be routed to its
destination.

(d) The key aspects to be considered in implementing e-commerce are as follows:

♦ Involvement of stakeholders, key trading partners, and external auditors to obtain
insight into the design and deployment of e-commerce solution;
♦ Implementing appropriate policies, standards and guidelines;
♦ Performing cost benefit analysis and risk assessment to ensure value delivery;
♦ Implementing the right level of security across all layers and processes;
♦ Establishing and implementing the right level of baseline (best practice) controls;
♦ Integration of e-Commerce with the business process and the physical delivery
channels;
♦ Providing adequate user training; and
♦ Performing post implementation review to ensure controls are working as
envisaged.
(e) Online Processing: In this, data is processed immediately while it is entered, the user
usually only has to wait a short time for a response. (Example: games, word processing,
booking systems). Interactive or online processing requires a user to supply an input.
Interactive or online processing enables the user to input data and get the results of the
processing of that data immediately.
Real-time Processing: Real time processing is a subset of interactive or online
processing. Input is continuously, automatically acquired from sensors which are
processed immediately in order to respond to the input in as little time as possible. The
system doesn't need a user to control it. Real time processing is used in warning systems
on aircraft, alarm systems in hazardous zones, burglar alarms etc.
Question 2
An E-commerce site has the following cash back offers.
(i) If the purchase mode is via website, an initial discount of 10% is given on the bill amount.
(ii) If the purchase mode is via phone app. An initial discount of 20% is given on the bill
amount.
(iii) If done via any other purchase mode, the customer is not eligible for any discount.
Every purchase eligible to discount is given 10 reward points.
(a) If the reward points are between 100 and 200 points, the customer is eligible for a further
30% discount on the bill amount after initial discount.
(b) If the reward points exceed 200 points, the customer is eligible for a further 40% discount
on the bill amount after initial discount.
Taking purchase mode, bill amount and number of purchases as input draw a flowchart to
calculate and display the total reward points and total bill amount payable by the customer
after all the discount calculation. (8 Marks)

Answer
(a) Let us define the variables first:
PM: Purchase Mode BA: Bill Amount TBA: Total Bill Amount
NOP: Number of Purchases TRP: Total Reward Points IN_DISC: Initial Discount
ET_DISC: Extra Discount on purchases eligible to Initial Discount
N: Counter (to track the number of purchases)
Start
TRP = 0, TBA = 0, BA = 0
Read PM, BA, NOP
Yes
If PM = Website? IN_DISC = 0.10
No
Yes
If PM = Phone App? IN_DISC = 0.20
No
TRP = NOP * 10
IN_DISC = 0
BA = BA – (BA*IN_DISC)
Yes
ET_DISC = 0.30 If 100 <= TRP <= 200 ?
No
Yes
ET_DISC = 0.40 If TRP > 200 ?
No
TBA = BA – (BA*ET_DISC) TBA = BA
Print TRP, TBA Stop

Question 3
(a) Mention briefly the different types of application software.
(b) What are the major advantages and disadvantages of DBMS? (2 x 4 = 8 Marks)
Answer
(a) The different types of application software are as under:
♦ Application Suite: Has multiple applications bundled together. Related functions,
features and user interfaces interact with each other. E.g. MS Office 2010 which
has MS Word, MS Excel, MS Access, etc.
♦ Enterprise Software: Addresses an enterprise’s needs and data flow in a huge
distributed environment. E.g. ERP Applications like SAP.
♦ Enterprise Infrastructure Software: Provides capabilities required to support
enterprise software systems. E.g. email servers, Security software.
♦ Information Worker Software: Addresses individual needs required to manage
and create information for individual projects within departments. E.g.
Spreadsheets, CAAT (Computer Assisted Audit Tools) etc.
♦ Content Access Software: Used to access contents and addresses a desire for
published digital content and entertainment. E.g. Media Players, Adobe Digital etc.
♦ Educational Software: Holds contents adopted for use by students. E.g.
Examination Test CDs.
♦ Media Development Software: Addresses individual needs to generate and print
electronic media for others to consume. E.g. Desktop Publishing, Video Editing etc.
(b) Major advantages of Database Management Systems (DBMS) are given as follows:
♦ Permitting data sharing: One of the principle advantages of a DBMS is that the
same information can be made available to different users.
♦ Minimizing Data Redundancy: In a DBMS duplication of information or
redundancy is, if not eliminated, carefully controlled or reduced i.e. there is no need
to repeat the same data over and over again. Minimizing redundancy can therefore
significantly reduce the cost of storing information on hard drives and other storage
devices.
♦ Integrity can be maintained: Data integrity is maintained by having accurate,
consistent, and up-to-date data. Updates and changes to the data only have to be
made in one place in DBMS ensuring Integrity. The chances of making a mistake
increase if the same data needs to be changed at several different places than
making the change in one place.
♦ Program and file consistency: Using a DBMS, file formats and programs are
standardized. This makes the data files easier to maintain because the same rules

and guidelines apply across all types of data. The level of consistency across files
and programs also makes it easier to manage data when multiple programmers are
involved.
♦ User-friendly: DBMS makes the data access and manipulation easier for the user.
DBMS also reduce the reliance of users on computer experts to meet their data
needs.
♦ Improved security: DBMSs allow multiple users to access the same data
resources which could lead to risk to an enterprise if not controlled. Security
constraints can be defined i.e. Rules can be built to give access to sensitive data.
Some sources of information should be protected or secured and only viewed by
select individuals. Through the use of passwords, database management systems
can be used to restrict data access to only those who should see it.
♦ Achieving program/data independence: In a DBMS data does not reside in
applications but data bases program & data are independent of each other.
♦ Faster application development: In the case of deployment of DBMS, application
development becomes fast. The data is already therein databases, application
developer has to think of only the logic required to retrieve the data in the way a
user needs.
Major disadvantages of DBMS are as under:
♦ Cost: Implementing a DBMS system can be expensive and time-consuming,
especially in large enterprises. Training requirements alone can be quite costly.
♦ Security: Even with safeguards in place, it may be possible for some unauthorized
users to access the database. If one gets access to database then it could be an all
or nothing proposition.
Question 4
(a) Mention the two categories of encryption/decryption methods. What are two basic
approaches to encryption?
(b) Mention briefly the prominent characteristics of a ‘Client Server’ architecture.
(2 x 4 = 8 Marks)
Answer
(a) The two categories of encryption/decryption methods are: the Secret Key Method and
the Public Key Method.
♦ Secret Key Method: In Secret key encryption/decryption method, the same key is
used by both sender and the receiver. The sender uses this key and an encryption
algorithm to encrypt data; the receiver uses the same key and the corresponding
decryption algorithm to decrypt the data.

♦ Public Key Method: In Public key encryption, there are two keys: a private key
which is kept by the receiver and the public key which is announced to the public.
The two basic approaches to Encryption are as follows:
♦ Hardware Encryption: Hardware encryption devices are available at a reasonable
cost, and can support high- speed traffic. If the Internet is being used to exchange
information among branch offices or development collaborators, for instance, use of
such devices can ensure that all traffic between these offices is secure.
♦ Software encryption: Software encryption is typically employed in conjunction with
specific applications. Certain electronic mail packages, for example, provide
encryption and decryption for message security.
(b) Some of the prominent characteristics of Client-Server (C/S) architecture are as follows:
• Service: C/S provides a clean separation of function based on the idea of service.
The server process is a provider of services and the client is a consumer of
services.
• Shared Resources: A server can service many clients at the same time and
regulate their access to the shared resources.
• Transparency of Location: C/S software usually masks the location of the server
from the clients by redirecting the service calls when needed.
• Mix-and-Match: The ideal C/S software is independent of hardware or Operating
System software platforms.
• Scalability: In a C/S environment, client workstations can either be added or
removed and also the server load can be distributed across multiple servers.
• Integrity: The server code and server data is centrally managed, which results in
cheaper maintenance and the guarding of shared data integrity. At the same time,
the clients remain personal and independent.
Question 5
(a) What is meant by a ‘Decision Support System’? Give a brief description of its
components.
(b) Discuss key components of an ‘Expert System’. (2 x 4 = 8 Marks)
Answer
(a) A Decision Support System (DSS) is a computer-based information system that
supports business or organizational decision-making activities. DSSs serve the
management, operations, and planning levels of an organization (usually mid and higher
management) and help to make decisions, which may be rapidly changing and not easily
specified in advance. DSS can be either fully computerized, human or a combination of
both. In other words, a properly designed DSS may be defined as an interactive

software-based system intended to help decision makers compile useful information from
raw data, documents, personal knowledge, and/or business models to identify and solve
problems and make decisions.
DSS has four basic components:
• The user: The user is usually a manager with an unstructured or semi-structured
problem to solve and may be at management - level of an organization.
• One or more databases: Databases contain both routine and non-routine data
from both internal and external sources.
• Planning languages: These can either be general-purpose or special-purpose
allowing users to perform routine tasks and specific tasks respectively.
• Model Base: It is the brain of the DSS as it performs data manipulations and
computations with the data provided to it by the user and the database.
(b) The key components of an Expert System are as under:
• Knowledge Base: A knowledge base is the computer equivalent of all the
knowledge and insight that an expert or group of experts develop through years of
experience in their field. This includes the data, knowledge, relationships, rules of
thumb (heuristics), and decision trees used by experts to solve a particular problem.
The knowledge base of expert systems encloses both realistic and heuristic
knowledge.
• Inference Engine: This program contains the logic and reasoning mechanisms that
simulate the expert logic process and deliver advice. It uses data obtained from
both the knowledge base and the user to make associations and inferences, form its
conclusions, and recommend a course of action.
• User Interface: This program allows the user to design, create, update, use and
communicate with the expert system.
• Explanation facility: This facility provides the user with an explanation of the logic
the ES used to arrive at its conclusion.
• Database of Facts: This holds the user's input about the current problem. The user
may begin by entering as much as they know about the problem or the inference
engine may prompt for details or ask whether certain conditions exist. Gradually a
database of facts is built up which the inference engine will use to come to a
decision. The quality and quantity of data gained from the user will influence the
reliability of the decision.
Question 6
(a) Discuss any four advantages of Cloud Computing.
(b) What is meant by ‘controls’ in BPA? What are their major objectives? (2 x 4 = 8 Marks)

Answer
(a) Mentioned below are some of the advantages of Cloud Computing:
• Cost Efficient: Cloud computing is probably the most cost efficient method to use,
maintain and upgrade.
• Almost Unlimited Storage: Storing information in the cloud gives us almost
unlimited storage capacity.
• Backup and Recovery: Since all the data is stored in the cloud, backing it up and
restoring the same is relatively much easier than storing the same on a physical
device. Furthermore, most cloud service providers are usually competent enough to
handle recovery of information.
• Automatic Software Integration: In the cloud, software integration is usually
something that occurs automatically. Not only that, cloud computing allows us to
customize the options with great ease. Hence, we can handpick just those services
and software applications that we think will best suit the particular enterprise.
• Easy Access to Information: Once we register ourselves in the cloud, we can
access the information from anywhere, where there is an Internet connection.
• Quick Deployment: Once we opt for this method of functioning, the entire system
can be fully functional in a matter of a few minutes. Of course, the amount of time
taken here will depend on the exact kind of technology that we need for our
business.
(b) Controls are defined as policies, procedures, practices and organization structure that
are designed to provide reasonable assurance that business objectives are achieved and
undesired events are prevented or detected and corrected.
Major control objectives are given as follows:
♦ Authorization: This ensures that all transactions are approved by responsible
personnel in accordance with their specific or general authority before the
transaction is recorded.
♦ Completeness: This ensures that no valid transactions have been omitted from the
accounting records.
♦ Accuracy: This ensures that all valid transactions are accurate, consistent with the
originating transaction data, and information is recorded in a timely manner.
♦ Validity: This ensures that all recorded transactions fairly represent the economic
events that actually occurred, are lawful in nature, and have been executed in
accordance with management's general authorization.

♦ Physical Safeguards and Security: This ensures that access to physical assets
and information systems are controlled and properly restricted to authorized
personnel.
♦ Error Handling: This ensures that errors detected at any stage of processing
receive prompt corrective action and are reported to the appropriate level of
management.
♦ Segregation of Duties: This ensures that duties are assigned to individuals in a
manner that ensures that no one individual can control both the recording function
and the procedures relative to processing a transaction.
Question 7
(a) Firewall
(b) Entity-Relationship Diagram
(c) WhatsApp Messenger
(d) MS Office Applications
(e) Core Banking System (4 x 2 = 8 Marks)
Answer
(a) Firewall: Firewall is a device that forms a barrier between a secure and an open
environment when the latter environment is usually considered hostile, for example, the
Internet. It acts as a system or combination of systems that enforces a boundary between
more than one networks. Access controls are common form of controls encountered in
the boundary subsystem by restricting the use of system resources to authorized users,
limiting the actions authorized users can take with these resources and ensuring that the
users obtain only authentic system resources.
(b) Entity-Relationship Diagram: An Entity-Relationship (ER) diagram is a data modeling
technique that creates a graphical representation of the entities, and the relationships
between entities, within an information system. ER diagrams repeatedly bring into play
symbols to symbolize three dissimilar types of information. Boxes are commonly used to
represent entities. Diamonds are normally used to represent relationships. A relationship
is an association that exists between two entities.
(c) WhatsApp Messenger: It is a cross-platform mobile messaging application which allows
us to exchange messages without having to pay for SMS. It is available for iPhone,
BlackBerry, Android, Windows phone, Nokia and these phones can message each other.
Because WhatsApp Messenger uses the same internet data plan that we use for e-mail
and web browsing, there is no cost to message and stay in touch with friends.
(d) MS Office Applications: These are various office automation systems made available
by Microsoft Corporation which include MS Word, MS Excel, MS PowerPoint, MS

Access, etc. Each of these software help to achieve automation of various tasks in the
office. It has features such as customized ribbon, backstage view, built-in graphics
toolset, enhanced security, excel spark lines, pivot for Excel, PowerPoint broadcast,
Power Point compression, paste, preview and outlook conversation view.
(e) Core Banking System (CBS): Most banks use core banking applications to sustain their
operations where CORE stands for "Centralized Online Real-time Environment". Core
Banking System may be defined as the set of basic software components that manage
the services provided by a bank to its customers through its branches (branch network).
The various elements of core banking include Making and servicing loans; Opening new
accounts; Processing cash deposits and withdrawals; Processing payments and
cheques; Calculating interest; Customer Relationship Management (CRM) activities;
Managing customer accounts; Establishing criteria for minimum balances, interest rates,
number of withdrawals allowed and so on; Establishing interest rates; and Maintaining
records for all the bank’s transactions. Examples of major core banking products include
Infosys’ Finacle, Nucleus FinnOne etc.

SECTION –B
Question 8
(a) The environment has many different influences, but it is very difficult for the managers to
make sense of these influences. Why? (3 Marks)
(b) Key Success Factors (KSFs) are the rules that shape whether a company will be
financially and competitively successful? Do you agree with this statement? How to
identify an industry’s key success factors? (3 Marks)
(c) “A company should focus on external perspective to define its mission”. Support this
statement with reasons. (3 Marks)
(d) A Bakery starts producing pastries and other similar products. What type of
diversification strategy is being following by it and why? (3 Marks)
(e) Explain any three prominent areas where Human Resource Manager can play a strategic
role. (3 Marks)
Answer
(a) The environment consists of several micro and macro factors that influence business
enterprises. Some of these factors may directly impact business, while others may have
insignificant or far-fetched influence. In spite of best of resources and capabilities it may
not be possible for managers to make sense of all these influences due to limitations of
human mind at one end and diversity, uncertainly and complexity of the environment on
the other hand. These can be explained as follows:
Diversity: On account of diversity listing of all conceivable environmental influences may
not be possible.
Uncertainty: It is difficult to predict and understand future external influences on an
organization.
Complexity: Managers, like other individuals, may tend to simplify complexity by
focusing on aspects of the environment that may confirm their prior views or are
historically important.
(b) An industry’s key success factors (KSFs) are those things or strategic elements that
affect industry members’ ability to prosper in a market place. For a business organization
within an industry, it may include, cost structure, technology, distribution system and so
on. It is correct to state that the KSFs help to shape whether a company will be
financially and competitively successful.
The answers to the following three questions help identify an industry's key success
factors:
♦ On what basis do customers choose between the competing brands of sellers?
What product attributes are crucial?

♦ What resources and competitive capabilities does a seller need to have to be

competitively successful?
♦ What does it take for sellers to achieve a sustainable competitive advantage?
(c) A business organization is a part of overall structure of society and functions within wide
external environmental factors. It draws its resources from its external environment,
processes them and provides output in the form of goods and services. Therefore, it is
correct to say that a business enterprise should focus on external perspective to define
its mission although enterprise’s internal situation cannot be delinked while doing so.
Bringing an external perspective justifies the very existence of company. The mission
statement is a message designed to be inclusive of the expectations of all stakeholders
for the performance of an enterprise / company over the long run. Some of the questions
addressed by mission statement are: Why is the firm in business? What are the
economic goals? What is the operating philosophy in terms of quality, firm’s image and
self-concept? What are the core competencies and competitive advantages? What
customers do and can a company serve? How does enterprise / company view its
responsibilities to stockholders, employees, communities, environment, social issues or
competitors?
(d) A bakery normally is a small organization that produces and sells flour-based food baked
in an oven. Typically, a bakery produces breads, cakes, cookies, pastries, pies, etc. A
bakery that is hitherto not into producing pastries starts producing them and other similar
products is following concentric diversification which is basically related diversification.
In this form of diversification, the new business is linked to the existing businesses
through existing systems such as processes, technology or marketing. The new product
is a spin-off from the existing facilities and products/processes. There are benefits of
synergy with the current operations. The most common reasons for pursuing a concentric
diversification are that opportunities in existing line of business are available.
(e) Prominent areas where the Human Resource Manager can play strategic role are as
follows:
1. Providing purposeful direction: The human resource manager leads people and
the organization towards the desired direction involving people. He can ensure
harmony between organisational objectives and individual objectives.
2. Creating competitive atmosphere: In the present business environment,
maintaining competitive position or gains is an important objective of any business.
Having a highly committed and competent workforce is very important for getting a
competitively advantageous position.
3. Facilitation of change: The human resource manager will be more concerned
about furthering the organization not just maintaining it. He can devote more time to
promote acceptance of change rather than maintaining the status quo.

4. Diversion of workforce: In a modern organization, management of diverse

workforce is a great challenge. Workforce diversity can be observed in terms of
male and female, young and old, educated and uneducated, unskilled and
professional employee and so on. Motivation, maintaining morale and commitment
are some of the key tasks that a HR manager can perform.
5. Empowerment of human resources: Empowerment involves giving more power to
those who, at present, have little control on what they do and little ability to
influence the decisions being made around them.
6. Building core competency: The human resource manager has an important role to
play in developing core competency of the firm. A core competence is a unique
strength of an organization which may not be shared by others. Organization of
business around core competence implies leveraging the limited resources of a firm.
7. Development of works ethics and culture: A vibrant work culture will have to be
developed in the organizations to create an atmosphere of trust among people and
to encourage creative ideas by the people.
Question 9
(i) Business Process Reengineering (BPR) means partial modification or marginal
improvement in the existing work processes.
(ii) Portfolio analysis helps the strategists in identifying and evaluating various
businesses of a company. (2 x 2 = 4 Marks)
(b) “Supply Chain Management is conceptually wider than Logistic Management”. Explain.
(3 Marks)
Answer
(a) (i) Incorrect: Business Process Reengineering does not mean any partial modification
or marginal improvement in the existing work processes. On the other hand, it is an
approach to unusual enhancement in operating effectiveness through the
redesigning of critical business processes and supporting business systems. It is
revolutionary redesign of key business processes. It involves forgetting how work
has been done so far and deciding how best it can be done now.
(ii) Correct: A business portfolio is a collection of businesses and products that make
up the organisation. Portfolio analysis is a tool by which management identifies and
evaluates its various businesses. In portfolio analysis top management views its
product lines and business units as a series of investments from which it expects
returns. The best business portfolio is the one that best fits its strengths and
weaknesses to the opportunities and threats in the environment. Through portfolio

analysis, organisations are able to compare its various businesses and categorize
them in various strata according to their prospect.
(b) Supply chain management is an extension of logistic management. However, there are
differences between the two. Logistical activities typically include management of
inbound and outbound goods, transportation, warehousing, handling of material,
fulfillment of orders, inventory management, supply/demand planning. On the other hand,
logistic management can be termed as one of its part that is related to planning,
implementing, and controlling the movement and storage of goods, services and related
information between the point of origin and the point of consumption.
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.
Question 10
What is Benchmarking? Explain the various steps in Benchmarking process. (7 Marks)
Answer
Benchmarking is an approach of setting goals and measuring productivity of firms based on
best industry practices or against the products, services and practices of its competitors or
other acknowledged leaders in the industry. It developed out of need to have information
against which performance can be measured. Benchmarking helps businesses in improving
performance by learning from the best practices and the processes by which they are
achieved. Thus, benchmarking is a process of continuous improvement in search for
competitive advantage. Firms can use benchmarking practices to achieve improvements in
diverse range of management functions like product development, customer services, human
resources management, etc.
The various steps in Benchmarking Process are as under:
(i) Identifying the need for benchmarking: This step will define the objectives of the
benchmarking exercise. It will also involve selecting the type of benchmarking.
Organizations identify realistic opportunities for improvements.
(ii) Clearly understanding existing decisions processes: The step will involve compiling
information and data on performance.
(iii) Identify best processes: Within the selected framework best processes are identified.
These may be within the same organization or external to them.
(iv) Comparison of own process and performance with that of others: Benchmarking
process also involves comparison of performance of the organization with performance of
other organization. Any deviation between the two is analysed to make further
improvements.

(v) Prepare a report and implement the steps necessary to close the performance gap:
A report on benchmarking initiatives containing recommendations is prepared. Such a
report also contains the action plans for implementation.
(vi) Evaluation: Business organizations evaluate the results of the benchmarking process in
terms of improvements vis-à-vis objectives and other criteria set for the purpose. They
also periodically evaluates and reset the benchmarks in the light of changes in the
conditions that impact the performance.
Question 11
(a) Identify with reasons the type of growth strategies followed in the following cases:
(i) A leading producer of confectionery products advertising the new uses of its product
‘Chokoo Mix’ aggressively.
(ii) A company in publishing industry deciding to revise college text books.
(iii) A renowned company in textile industry starting to manufacture PFY and PSF,
critical raw materials for textiles.
(iv) A business giant in auto manufacturing enters into edible oils, hotels, financial
services and dairy businesses. (4 Marks)
(b) ‘To coordinate more complex organizational functions, companies should abandon the
simple structure in favour of the functional structure’ Discuss. (3 Marks)
Answer
(a) (i) The organisation has adopted market penetration strategy (intensification) through
advertising the new uses of its product ‘çhokoo mix’ aggressively. Here the
organisation seeks significant growth – within the current business by selling
existing products in the existing markets without changing the product in a major
way.
(ii) The company has adopted product development strategy (intensification) by
deciding to revise college text books. The company is already in publishing industry
and must be having appropriate competencies in dealer network and acceptance
amongst the student community. Revising the college text books (new product)
would enable it to expand in the college text books segment (existing market).
(iii) The company has adopted backward integration strategy (vertically integrated
diversification) by starting to manufacture PFY and PSF, critical raw materials for
textiles. This strategy, apart from overall growth of the organisation, ensures
uninterrupted supply of critical raw materials for the present business of the firm. It
will also enable the organization to retain the margins in dealing with the raw
materials which otherwise would have gone to its suppliers.
(iv) The business giant in auto manufacturing has adopted conglomerate diversification
strategy by entering into edible oils, hotels, financial services and dairy businesses.

In conglomerate diversification a business enters into new businesses that may

have little or no linkages with existing business. The organisation has mammoth
growth ambition.
(b) Simple organizational structure is most appropriate usually in those small organisations
that follow single business strategy and offer a line of products in a single geographic
market. When a small organisation grows, its complexities also tend to grow which
necessitates the companies to abandon the simple organisation structure which it has
been adopting hitherto and move towards structures like functional organisational
structure. A typical simple organization structure is often owner driven with small number
of employees.
Functional structure groups tasks and activities by business function, such as production,
marketing, finance, research and development and is generally headed by Chief
Executive Officer or Managing Director. Besides being simple and inexpensive, a
functional structure also promotes specialization, encourages efficiency, minimizes the
need for an elaborate control system, and allows rapid decision making. At the same time
with the passage of time and overall growth much more complex organisational
structures exist in business world. However, dividing organization according to functional
lines is invariably found at some level or the other.
Question 12
(a) Can a business succeed in the long run by focusing only on profit as its primary
objective? What are other objectives of a business? (4 Marks)
(b) ‘Organizations sustain superior performance over a long period of time, inspite of the
rapid changes taking place continually in its competitive environment if they implement
strategic management successfully.’ Discuss. (3 Marks)
Answer
(a) Business enterprises pursue multiple objectives rather than a single objective, however it
is generally asserted that private enterprises are primarily motivated by the objective of
profit. All other objectives are facilitative objectives and are meant to be subservient to
the profit motive. However, profits cannot remain primary objective in long run. Although
some profits are necessary, organizations need to pursue other objectives such as
survival, stability, growth and like. These objectives also change with the changes in the
environment. Organisations monitor the changes in the environment, analyse their impact
on their own goals and activities and translate their assessment in terms of specific
strategies. In general, all organizations aim for optimum utilization of resources and
economy in operational costs. Some of the other important objectives of a business are
as follows:
♦ Survival: Survival is a basic, implicit objective of most organizations. While survival
is an obvious objective, it gains more value and prominence during the initial stage
of the establishment of the enterprise and during general economic adversity. The

ability to survive is a function of the nature of ownership, nature of business

competence of management, general and industry conditions, financial strength of
the enterprise and so on.
♦ Stability: Another important objective of business enterprises is stability. It is a
cautious, conservative objective that is often employed when things are not very
conducive. It is a strategy of least resistance in a hostile external environment.
♦ Growth: This is a promising and popular objective which is equated with dynamism,
vigor, promise and success. Enterprise growth may take one or more of the forms
like increase in assets, manufacturing facilities, increase in sales volume and so on.
Growth may take the enterprise along relatively unknown and risky paths, full of
promises and pitfalls.
♦ Efficiency: Business enterprises seek efficiency in rationally choosing appropriate
means to achieve their goals. In a sense, efficiency is an economic version of the
technical objective of productivity – designing and achieving suitable input output
ratios of funds, resources, facilities and efforts. Efficiency is a very useful
operational objective.
(b) Business organizations function within dynamic environment. The environment may vary
from being conducive to hostile. Whatever be the conditions, implementation of strategic
management is very important for the survival and growth of business organizations.
Strategy implementation helps in improving the competence with which it is executed and
helps organizations to sustain superior performance in following manner:
• Strategic management helps organizations to be more proactive rather than reactive
in dealing with its future.
• It provides better guidance to entire organization on the crucial point – what it is
trying to do.
• It facilitates to prepare the organization to face the future. Organizations are able to
identify the available opportunities and identify ways and means as how to reach
them.
• It serves as a corporate defense mechanism against mistakes and pitfalls.
• Over a period of time strategic management helps organization to evolve certain
core competencies and competitive advantages.
Question 13
(a) Transformational Leadership Style and Transactional Leadership Style. (4 Marks)
(b) Micro and Macro Environment. (3 Marks)

Answer
(a) Difference between transformational and transactional leadership
1. Transformational leadership style uses charisma and enthusiasm to inspire people
to exert them for the good of organization. Transactional leadership style uses the
authority of its offices to exchange rewards such as pay, status, etc.
2. Transformational leadership style may be appropriate in turbulent environment, in
industries at the very start or end of their cycles, poorly performing organisations,
when there is a need to inspire a company to embrace major changes.
Transactional leadership style can be appropriate in settled environment, in growing
or mature industries and in organisations that are performing well.
3. Transformational leaders inspire employees by offering the excitement, vision,
intellectual stimulation and personal satisfaction. Transactional leaders prefer a
more formalized approach to motivation, setting clear goals with explicit rewards or
penalties for achievement and non-achievement. Transactional leaders focus mainly
to build on existing culture and enhance current practices.
(b) The business environment consists of both the macro environment and the micro
environment. Following are the differences between the two:
• The micro environment refers to the forces that are very close to the company and affect
its ability to do routine functions. Macro environment refers to all forces that are part of
the larger periphery and distantly affect organization and micro environment.
• Micro environment includes the company itself, its suppliers, marketing
intermediaries, customer markets and competitors. Whereas macro environment
includes demography, economy, natural forces, technology, politics, legal and
socio-cultural.
• The elements of micro environment are specific to the said business or firm and
affects it’s working on short term basis. The elements of macro environment are
general environment and affect the working of all the firms in an industry.
• Firm / organization has little control over the elements of macro environment.
Whereas the elements of micro environment are within the organization / business /
firm and can be controlled by it.
Question 14
(a) Strategic Decision-making (4 Marks)
(b) Implementation Control (3 Marks)
OR
Situational Analysis (3 Marks)

Answer
(a) Decision making is a managerial process and function of choosing a particular course of
action out of several alternative courses for the purpose of accomplishment of the
organizational goals. Decisions are routine, tactical or strategic in nature. Strategic
decisions are different from other decisions that are taken at various levels of the
organization during day-to-day working of the organizations. They have long term
implications, steer organisation to its future path and have organisation wide implications
and so on. These decisions are taken considering different internal and external factors.
They are also taken with partial or no definite knowledge of different factors affecting the
decision situation. Compared to routine decisions the major dimensions of strategic
decisions are given below:
♦ Strategic issues require top-management decisions: Strategic issues involve
thinking in totality of the organizations and also there is lot of risk involved. Hence,
problems calling for strategic decisions require to be considered by top
management.
♦ Strategic issues involve the allocation of large amounts of company resources: It
may require huge financial investment to venture into a new area of business or the
organization may require huge number of manpower with new set of skills in them.
♦ Strategic issues are likely to have a significant impact on the long term prosperity of
the firm: Generally the results of strategic implementation are seen on a long term
basis and not immediately.
♦ Strategic issues are future oriented: Strategic thinking involves predicting the future
environmental conditions and how to orient for the changed conditions.
♦ Strategic issues usually have major multifunctional or multi-business consequences:
As they involve organization in totality they affect different sections of the
organization with varying degree.
♦ Strategic issues necessitate consideration of factors in the firm’s external
environment: Strategic focus in organization involves orienting its internal
environment to the changes of external environment.
(b) Implementation control: Managers implement strategy by converting major plans into
concrete, sequential actions that form incremental steps. Implementation control is
directed towards assessing the need for changes in the overall strategy in light of
unfolding events and results associated with incremental steps and actions.
Strategic implementation control is not a replacement to operational control. Strategic
implementation control, unlike operational controls continuously monitors the basic
direction of the strategy. The two basis forms of implementation control are:

(i) Monitoring strategic thrusts: Monitoring strategic thrusts help managers to

determine whether the overall strategy is progressing as desired or whether there is
need for readjustments.
(ii) Milestone Reviews. All key activities necessary to implement strategy are
segregated in terms of time, events or major resource allocation. It normally
involves a complete reassessment of the strategy. It also assesses the need to
continue or refocus the direction of an organization.
OR (Alternative/choice)
All business organisations operate in a ''macro environment'' shaped by influences emanating
from the economy at large, population demographics, societal values and lifestyles,
governmental legislation and regulation, technological factors and so on. As organisational
managers scan the external environment, they must watch for potentially important
environmental forces, assess their impact and influence, and adapt its direction and strategy
as needed. Situational Analysis forms an essential part of any business plan. A preliminary
introduction as to what to take into account when conducting a situational analysis and provide
a checklist of the important factors to consider are.
• Environmental factors: What external and internal environmental factors are there that
needs to be taken into account. This can include economic, political, demographic or
sociological factors that have a bearing on the performance.
• Opportunity and issue analysis: What are the current opportunities that are available in
the market, the main threats that business is facing and may face in the future, the
strengths that the business can rely on and any weaknesses that may affect the business
performance.
• Competitive situation: Analyze main competitors of the organisation: Who are they,
what they up to are, how they compare. What are their competitive advantages?
• Distribution situation: Review the distribution situation - how are the products moving
through channels.
• Product situation: The details about current product. The details about current product
may be divided into parts such as the core product and any secondary or supporting
services or products that also make up what you sell. It is important to observe this in
terms of its different parts in order to relate this back to core client needs.

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Question 1
Answer all the following questions in brief:
(a) What are the key benefits of Business Process Automation (BPA)?
(b) How extranets are used by Business Organization?
(c) Name the various phases of System Development Life Cycle (SDLC) in the logically
correct order.
(d) Briefly explain three tiers in three tier architecture.
(e) What are the components of the Computerized Information processing Cycle?
(2 x 5 = 10 Marks)
Answer
(a) The key benefits of Business Process Automation are as follows:
 Saving on costs: Automation leads to saving in time and labor costs through
higher efficiency and better management of the people involved.
 Staying ahead in competition: Today, in order to survive, businesses need to
adopt automation.
 Fast service to customers: Automation shortens cycle times in the execution of
processes through improved and refined business workflows and help
enterprises to serve their customers faster and better.
 Reducing the impact of human error: BPA removes human participation in the
process, which is the source of many errors.
 Transforming data into information: BPA can, apart from collecting and
storing data also analyze data and make it available in a form that is useful for
decision -making.
 Improving performance and process effectiveness: In many cases, tasks that
must be done manually are the bottlenecks in the process. Automating those
manual tasks speeds up the effective throughput of the application.
 Making users more efficient and effective: People can focus their energies on
the tasks they do best, allowing the computers to handle those that machines are
best suited for.

 Making the business more responsive: Enterprises can easily automate new
applications and processes as they are introduced that provide greater control over
business and IT processes.
 Improving collaboration and information sharing: Business processes designed
through a collaborative mean IT can integrate its processes with the business -side
logic that drives day-to-day operations.
(b) The Extranets can be used by business organizations in some of the fol lowing ways:
 Share product catalogs exclusively with wholesalers or those “in the trades”.
 Collaborate with other companies on joint development efforts.
 Jointly develop and use training programs with other companies.
 Provide or access services provided by one company to a group of other
companies; and
 Share news of common interest exclusively with partner companies.
 Establish direct private network links between themselves, or create private secure
internet links between them called virtual private networks.
 Use the unsecured internet as the extranet link between its intranet and consumers
and others, but rely on encryption of sensitive data and its own firewall systems to
adequate security.
(c) The various phases of System Development Life Cycle (SDLC) are as follows:
 Phase 1: System Investigation
 Phase 2: System Analysis
 Phase 3: System Designing
 Phase 4: System Implementation
 Phase 5: System Maintenance and Review
(d) The three tiers in Three-tier architecture are as follows:
 Presentation Tier: This tier occupies the top level, communicates with other tiers
and displays information related to services available on a website.
 Application Tier: Also called the Middle tier, Logic tier, Business Logic or Logic
tier; this tier controls application functionality by performing detailed processing.
 Database Tier: This tier houses the database servers where information is
stored and retrieved. Data in this tier is kept independent of application servers or
business logic.

(e) The components of a Computerized Information Processing Cycle include the following:
 Input: Entering data into the computer;
 Processing: Performing operations on the data;
 Storage: Saving data, programs, or output for future use; and
 Output: Presenting the results.
Question 2
ABC Limited is a software development company, which appointed 50 software engineers in
August’ 2014 at a monthly salary of ` 30,000. All these engineers shall be entitled for an
increment in their monthly salary after six months. The increment on present monthly salary
shall be based on their performance to be evaluated on a 100 marks scale as per detains
given below:
- Performance Marks < 70, then increment shall be 10% of present salary.
- 70 ≤ Performance marks < 80, then increment shall be 20% of present salary.
- Performance marks ≥ 80, then increment shall be 30% of present salary.
Draw a Flow-Chart to enable to print the details like name of the engineer, performance
marks, monthly increment amount and revised monthly salary for each of these 50 engineers.
(8 Marks)
Answer
(a) Let us define the variables first:
PM: Performance Marks,
RESAL: Revised Monthly Salary,
INCAMT: Increment Amount,
NAME: Name of Engineer,
N: Pointer to track number of Engineers,
INCREMENT = 0.

Start
CAWL
Set N = 0, INCREMENT = 0
A
Read NAME, PM
N=N+1
Yes INCREMENT = 0.10

PM < 70
No
Yes INCREMENT = 0.20
PM < 80?
No
INCREMENT = 0.30
INCAMT= 30000* INCREMENT
RESAL = 30000 + INCAMT
Print NAME, PM,

INCAMT, RESAL
Yes
N < 50 A
No
Stop
Question 3
(a) Describe the following service models of cloud computing.
(i) Network as a Service (NaaS)
(ii) Platform as a Service (PaaS) (4 Marks)
(b) What is Server? Briefly explain any four types of servers based on the nature of service
they provide. (4 Marks)

Answer
(a) (i) Network as a Service (NaaS): It is a category of cloud services in Cloud
Computing where the capability provided to the cloud service user is to use
network/transport connecting services. NaaS involves optimization of resource
allocation by considering network and computing resources as a whole. Some of
the examples are Virtual Private Network, Mobile Network Virtualization etc.
(ii) Platform as a Service (PaaS): It provides clients with access to the basic
operating software and optional services to develop and use software applications
(e.g. database access and payment service) without the need to buy and manage
the underlying computing infrastructure. For example, Google App Engine.
(b) Server: A server is a computer program running to serve the requests of other programs,
the "clients". Servers are often dedicated, meaning that they perform no other tasks
besides their server tasks. The clients either run on the same computer, or they
connect through the network.
Some of the different types of servers based on the nature of service they provide
are as follows:
 File server: This is a computer and storage device dedicated to storing files. Any
user on the network can store files on the server.
 Print server: This is a computer that manages one or more printers.
 Network server: This is a computer that manages network traffic.
 Database server: This is a computer system that processes database queries.
 Application Server: This is a program that handles all application operations
between users and an enterprise's backend business applications or databases.
 Web Servers: Web server has an IP address and possibly a domain name,
and is the computer that delivers (serves up) web pages.
 Mail Server: Mail servers move and store mail over corporate networks.
Question 4
(a) Which network topology can be used in case of Military Installations with a very small
number of nodes and why it should be used? List advantages and disadvantages of such
network topology. (4 Marks)
(b) What is Accounting Information System (AIS)? Briefly describe the key components of
AIS. (4 Marks)
Answer
(a) In case of Military installations with a very small number of nodes, Mesh Network
topology should be used.

In fully interconnected Mesh topology, each node is connected by a dedicated point

to point link to every node and thus the reliability is very high which is of prime
importance in any military installations. Even if one node fails, Mesh topology
provides h igh degree of redundancy with each node connected to remaining nodes.
Advantages of mesh network are as follows:
 Mesh network topology yields the greatest amount of redundancy in the event that
if one of the nodes fails, the network traffic can be redirected to another node.
 Network problems are easier to diagnose.
Disadvantage of mesh network are as follows:
 Mesh networks are not very common because of its high cost of installation and
maintenance.
 More cabling is required than any other configuration.
(b) Accounting Information System: An Accounting Information System (AIS) is
defined as a system of collection, storage and processing of financial and accounting
data that is used by decision makers. An Accounting Information System is generally a
computer-based method for tracking accounting activity in conjunction with information
technology resources.
The key components of an Accounting Information System are as follows:
 People: AIS helps various system users that include accountants, consultants,
business analysts, managers, chief financial officers and auditors etc. from different
departments within a company to work together.
 Procedure and Instructions: These include both manual and automated
methods for collecting, storing, retrieving and processing data.
 Data: This refers to the information pertinent to the organization's business
practices that may include sales orders, customer billing statements, sales analysis
reports etc.
 Software: These are the computer programs that provide quality, reliability and
security to the company's financial data that may be stored, retrieved, processed
and analyzed.
 Information Technology Infrastructure: This includes hardware such as personal
computers, servers, printers, surge protectors, routers, storage media, a backup
power etc.
 Internal Controls: These are the security measures such as passwords or as
complex as biometric identification to protect sensitive data against unauthorized
computer access and to limit access to authorized users.

Question 5
(a) Differentiate between Explicit Knowledge and Tacit Knowledge. (4 Marks)
(b) Explain the pre-requisites of ACID Test for any Transaction Processing System (TPS).
(4 Marks)
Answer
(a) Explicit Knowledge: Explicit knowledge is the knowledge which can be formalized
easily and as a consequence, is easily available across the organization. Explicit
knowledge is articulated, and represented as spoken words, written material and
compiled data. This type of knowledge is codified, easy to document, transfer and
reproduce. For example - Online tutorials, Policy and procedural manuals.
Tacit Knowledge: Tacit knowledge, resides in a few, often-in just one person and
has not been captured by the organization or made available to others. Tacit knowledge
is unarticulated and represented as intuition, perspective, beliefs, and values that
individuals form based on their experiences. It is personal, experimental and context-
specific. It is difficult to document and communicate the tacit knowledge. For example
– hand-on skills, special know-how, employee experiences.
(b) The ACID Test refers to the following prerequisites for any Transaction Processing
System (TPS).
 Atomicity: This means that a transaction is either completed in full or not at
all. TPS systems ensure that transactions take place in their entirety.
 Consistency: TPS systems exist within a set of operating rules or integrity
constraints. For Example - If an integrity constraint states that all transactions in
a database must have a positive value, any transaction with a negative value would
be refused.
 Isolation: Transactions must appear to take place in seclusion. For example,
the funds cannot be credited to an account before they are debited from another.
 Durability: Once transactions are completed they cannot be undone. To ensure
this, a log will be created to document all completed trans actions.
Question 6
(a) Discuss any four key characteristics of Cloud Computing. (4 Marks)
(b) What are the major process controls, which should be enforced through front end
application system, to have consistency in the control process? (4 Marks)

Answer
(a) Some of the key characteristics of Cloud Computing are as follows:
 Elasticity and Scalability: Cloud computing gives us the ability to expand and
reduce resources according to the specific service requirement.
 Pay-per-Use: We pay for cloud services only when we use them, either for the
short term or for a longer duration.
 On-demand: Because we invoke cloud services only when we need them, they are
not permanent parts of the IT infrastructure.
 Resiliency: The resiliency of a cloud service offering can completely isolate the
failure of server and storage resources from cloud users.
 Multi Tenancy: Public cloud service providers often can host the cloud services
for multiple users within the same infrastructure.
 Workload Movement: Cloud-computing providers can migrate workloads across
servers both inside the data center and across data centers.
(b) The Process Controls that should be enforced through the front end application system,
to have consistency in the control process are as follows:
 Run-to-Run Totals: These help in verifying data that is subject to process through
different stages. A specific record can be used to maintain the control total.
 Reasonableness Verification: Two or more fields can be compared and cross
verified to ensure their correctness.
 Edit Checks: Edit checks similar to the data validation controls can also be used
at the processing stage to verify accuracy and completeness of data.
 Field Initialization: Data overflow can occur, if records are constantly added to a
table or if fields are added to a record without initializing it.
 Exception Reports: Exception reports are generated to identify errors in data
processed.
 Existence/Recovery Controls: The check-point/restart logs facility is a short-term
backup and recovery control that enables a system to be recovered if failure is
temporary and localized.
Question 7
Write short notes on any Four of the following:
(a) Radical Redesign
(b) Android
(c) Peer-to-Peer Network (PsP)

(d) Electronic Purses

(e) Network Virtualisation (2 x 4 = 8 Marks)
Answer
(a) Radical Redesign: Radical redesign means that Business Process Reengineering (BPR)
is reinventing and not enhancing or improving. In other words, BPR is based on the
understanding that the products and services a company offers to the market are provided
through business processes, and a radical redesign of these processes is the road to
success. A radical rethinking on the way the business is run brings the finest out of the
organization.
(b) Android: Android is a Linux-based operating system designed primarily for touch
screen mobile devices such as smart phones and tablet computers. Android is an open
source and the permissive licensing allows the software to be freely modified and
distributed by device manufacturers, wireless carriers and enthusiast developers.
Android provides access to a wide range of useful libraries and tools that can be used
to build rich applications.
(c) Peer-to-Peer Network (P2P): A Peer-to-Peer (P2P) Network is created with two or more
PCs connected together and share resources without going through a separate server
computer. The prime objective goal of a P2P (Peer -to-Peer) file-sharing network is that
many computers come together and pool their resources to form a content distribution
system. Example – Napster, Freenet etc. Peer-to-Peer Networks are easy and simple to
set up, cost effective and if one computer fails to work, all other computers connected to
it continue to work.
(d) Electronic Purses: Electronic Purse Card is one way to make payments over the net
and is very similar to a pre-paid card. Bank issues a stored value card to its customer,
the customer can then transfer value from his/her account to the card at an ATM, a
personal computer, or a specially equipped telephone. The electronic purse card can
be used as an ATM card as well as a credit card. While making purchases,
customers pass their cards through a vendor's point of sale terminal. No credit check or
signature is needed and validation is done through a Personal Identification Number
(PIN).
(e) Network Virtualization: In IT, Virtualization is the process of creating logical computing
resources from available physical resources. This is accomplished using virtualization
software to create a layer of abstraction between workloads and the underlying physical
hardware. Network Virtualization allows a large physical network to be provisioned into
multiple smaller logical networks and conversely allows multiple physical LANs to be
combined into a larger logical network. This behavior allows administrators to improve
network traffic control, enterprise and security.

SECTION – B : STRATEGIC MANAGEMENT

Question 8
(a) Analyse the following cases in the context of Michael Porter’s Five Forces Model:
(i) A supplier has a large base of customers.
(ii) A manufacturer of sports goods has the advantage of economies of large scale
production.
(iii) Products offered by competitors are almost similar. (3 Marks)
(b) In your view, what is the role of Corporate level managers in Strategic management? (3 Marks)
(c) What does the concept of ‘question marks’ in the context of BCG Growth-share matrix
signify? What strategic options are open to a business firm which has some ‘question
marks’ in the portfolio of its businesses? (3 Marks)
(d) ‘Determining an appropriate mix of debt and equity in a firm’s capital structure can be
vital to successful strategy implementation’. Discuss. (3 Marks)
(e) What is an ‘hour glass structure’? How this structure benefits an organization? (3 Marks)
Answer
(a) (i) Large base of customers of an organization (supplier) may increase its bargaining
power in comparison to the bargaining power of the customer.
(ii) The manufacturer of sports goods would be in better position amongst existing
competitors since it has advantage of economies of scale. Even the threat of new
entrants gets reduced.
(iii) Similar products will reduce the bargaining power of the rivals, i.e., competitors. In
other words the bargaining power of the customer will be more.
(b) There are three main levels of management in a typical organisation: corporate,
business, and functional. The corporate level of management consists of the chief
executive officer (CEO), other senior executives, the board of directors, and corporate
staff. These individuals occupy the apex of decision making within the organization and
broadly have following roles:
1. Oversee the development of strategies for the whole organization.
2. Defining the mission and goals of the organization.
3. Determining what businesses it should be in.
4. Allocating resources among the different businesses.
5. Formulating and implementing strategies that span individual businesses.

6. Providing leadership for the organization.

7. Provide a link between the people who oversee the strategic development of a firm
and those who own it.
(c) The BCG growth-share matrix is the simplest way to portray a corporation’s portfolio of
investments. Using the matrix, organisations can identify four different types of products
or Strategic Business Units. Question Marks, sometimes called problem children or
wildcats, are low market share businesses in high-growth markets.
They require a lot of cash to hold their share. They need heavy investments with low
potential to generate cash. Question marks if left unattended are capable of becoming
cash traps. Since growth rate is high, increasing it should be relatively easier.
It is for business organisations to turn those businesses into stars and then to cash cows
when the growth rate reduces. Thus the strategic option that they must strive to achieve
is to build. Here the objective is to increase market share, even by forgoing short-term
earnings in favour of building a strong future with large market share.
(d) Successful strategy implementation often requires additional capital. Besides net profit
from operations and the sale of assets, two basic sources of capital for an organization
are debt and equity. Fixed debt obligations generally must be met, regardless of financial
or operating performance. This does not mean that equity issuances are always better
than debt for raising capital. If ordinary stock is issued to finance strategy
implementation; ownership and control of the enterprise gets diluted. This can be a
serious concern in today's business environment of hostile takeovers, mergers, and
acquisitions.
The major factors regarding which strategies have to be made by a financial manager
are: capital structure; procurement of capital and working capital borrowings; reserves
and surplus as sources of funds; and relationship with lenders, banks and financial
institutions. Strategies related to the sources of funds are important since they determine
how financial resources will be made available for the implementation of strategies.
Organizations have a range of alternatives regarding the sources of funds. While one
company may rely on external borrowings, another may follow a policy of internal
financing.
(e) In the recent years information technology and communications have significantly altered
the functioning of organizations. The role played by middle management is diminishing
as the tasks performed by them are increasingly being replaced by the technological
tools. Hourglass organization structure consists of three layers in an organisation
structure with constricted middle layer. The structure has a short and narrow middle
management level as shown in the figure given below.
Information technology links the top and bottom levels in the organization taking away
many tasks that are performed by the middle level managers. A shrunken middle layer
coordinates diverse lower level activities.

Hourglass Organization Structure

Hourglass structure has obvious benefit of reduced costs. It also helps in enhancing
responsiveness by simplifying decision making. Decision making authority is shifted
close to the source of information so that it is faster. However, with the reduced size of
middle management, the promotion opportunities for the lower levels diminish
significantly.
Question 9
(a) State with reasons which of the following statements is correct or incorrect.
(i) The PESTLE framework is used for analyzing both macro and micro environment.
(ii) Demarketing strategies may aim to reduce demand temporarily or permanently.
(2 x 2= 4 Marks)
(b) What are the characteristics of Six Sigma that separate it from earlier quality
programmes? Explain briefly. (3 Marks)
Answer
(a) (i) Incorrect: PESTLE Analysis is used in analysis of macro environmental factors and
not micro environment. It involves identification of political, economic, socio-cultural,
technological, legal and environmental influences on an organization and providing
a way of scanning the environmental influences that have affected or are likely to
affect an organization or its policy. The advantage of this tool is that it encourages
management into proactive and structured thinking in its decision making.
(ii) Correct: Demarketing is a marketing strategy to reduce demand temporarily or
permanently – the aim is not to destroy demand, but only to reduce or shift it. This
happens when the demand is too much to handle. 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.

(b) Primarily six sigma means maintenance of the desired quality in processes and end
products. It means taking systemic and integrated efforts toward improving quality and
reducing cost. Six sigma has its base in the concept of probability and normal distribution
in statistics. Six sigma strives that 99.99966% of products manufactured are defect free.
Six sigma is an improvement over other quality programmes because of its
characteristics. The following key characteristics separate six sigma from earlier quality
programs:
i. Six sigma is customer focused. It strives to provide better satisfaction to the
customer owning the product.
ii. Six sigma is a total management commitment and philosophy of excellence,
process improvement and the rule of measurement.
iii. Six sigma induces changes in management operations - new approaches to
thinking, planning and executing to achieve results.
iv. Six Sigma projects produce major returns on investment.
v. Six sigma combines both leadership and grassroots energy and involvement for its
success.
Question 10
The Management of a sick company manufacturing various electrical home appliances seeks your
advice for an appropriate retrenchment strategy. What will be your advice and why? (7 Marks)
Answer
A sick company has huge accumulated losses that have eroded its net worth. The electric
home appliance company may analyse its various products to take decisions on their
individual viability.
Retrenchment becomes necessary for coping with hostile and adverse situations in the
environment and when any other strategy is likely to be suicidal. The nature, extent and timing
of retrenchment are matters to be carefully decided by management, depending upon each
contingency.
Retrenchment strategy is adopted because:
 The management no longer wishes to remain in business either partly or wholly due to
continuous losses and unviability.
 The environment faced is threatening.
 Stability can be ensured by reallocation of resources from unprofitable to profitable
businesses.
Retrenchment grand strategy is followed when an organization substantially reduces the
scope of its activity. This is done through an attempt to find out the problem areas and

diagnose the causes of the problems. Next, steps are taken to solve the problems. These
steps result in different kinds of retrenchment strategies.
Turnaround strategy: If the organization chooses to focus on ways and means to reverse the
process of decline, it adopts a turnaround strategy. It may try to reduce costs, generate
revenue, improve coordination, better control, minimize pressures and so on. It may also
involve changes in top management and reorienting leadership.
Divestment Strategy: Divestment strategy involves the sale or liquidation of a portion of
business, or a major division, profit centre or SBU. Divestment is usually a part of
rehabilitation or restructuring plan and is adopted when a turnaround has been attempted but
has proved to be unsuccessful.
Liquidation Strategy: In the retrenchment strategy, the most extreme and unattractive is
liquidation strategy. It involves closing down a firm and selling its assets.
It is considered as the last resort because it leads to serious consequences such as loss of
employment for workers and other employees, termination of opportunities where a firm could
pursue any future activities, and the stigma of failure. Many small-scale units, proprietorship
firms, and partnership ventures liquidate frequently but medium-and large-sized companies
rarely liquidate in India. The company management, government, banks and financial
institutions, trade unions, suppliers and creditors, and other agencies are extremely reluctant
to take a decision, or ask, for liquidation.
Liquidation strategy may be unpleasant as a strategic alternative but when a "dead business is
worth more than alive", it is a good proposition.
The management of a Sick company manufacturing various electrical home appliances be
explained about the each of the above three options of retrenchment strategy with their pros
and cons. But the appropriate advice with respect to a particular option of retrenchment
strategy will depend on the specific circumstances of each electrical home appliances and
management goals of the company.
Question 11
(a) To which industries the following environmental changes will offer opportunities and pose threats
(name any two industries in each case). Give reasons for your answer. (2 x 4 = 4 Marks)
(i) Significant reduction in domestic air-fares spanning over a long period.
(ii) Cut in interest rates by banks.
(b) What steps would you take to construct a “Strategic Group Map’ for an industry? (3 Marks)
Answer
(a) (i) Significant reduction in domestic air fares spanning over a long period will have
opportunities and threats as follows:
Opportunities
1. Tourism as there would be more demand.

2. Hotels as travel would be cheaper and there would be more commuters.

Threats
1. Airlines Industry as there would be squeeze in their profits.
2. In flight catering as they would face pressure to reduce cost.
(ii) Cut in interest rates by banks will have opportunities and threats as follows:
Opportunities
1. Capital intensive infrastructure as the interest cost will come down
2. Real Estate as demand for property on loan will increase.
Threats
1. Banking industry facing reduction in saving and investments.
2. Financial services industry in the area of managing funds such as pension
funds, mutual funds as their income will recede.
(b) A strategic group consists of those rival firms with similar competitive approaches and
positions in the market. Companies in the same strategic group can resemble one
another in any of the several ways. An industry contains only one strategic group when
all sellers pursue essentially identical strategies and have comparable market positions.
The steps for constructing a strategic group map and deciding which firms belong in
which strategic group are as follows:
 Identify the competitive characteristics that differentiate firms in the industry. The
typical variables are price/quality range (high, medium, low); geographic coverage
(local, regional, national, global); degree of vertical integration (none, partial, full);
product-line breadth (wide, narrow); use of distribution channels (one, some, all);
and degree of service offered (no-frills, limited, full).
 Plot the firms on a two-variable map using pairs of these differentiating
characteristics.
 Assign firms that fall in about the same strategy space to the same strategic group.
 Draw circles around each strategic group making the circles proportional to the size
of the group's respective share of total industry sales revenues.
Question 12
(a) Do you agree with the statement that “Strategic Management concepts are of no use to
Government organization and Medical organizations”? Explain with reasons. (4 Marks)
(b) Quite often strategies of most business organizations are a combination of planned
strategies and reactive strategies. Explain with reasons. (3 Marks)

Answer
(a) Business organization can be classified as commercial or non-commercial on the basis of
the interest they have. Typically, a government or medical organisation may function
without any commercial objectives. A commercial organization has profit as its main aim.
We can find many organizations around us, which do not have any commercial objective
of making profits. Their genesis may be for social, charitable, or educational purposes.
The strategic-management process is being used effectively by countless non-profit
governmental organizations. Many non-profit and governmental organizations outperform
private firms and corporations on innovativeness, motivation, productivity, and strategic
management.
Compared to for-profit firms, non-profit and governmental organizations often function as
a monopoly, produce a product or service that offers little or no measurability of
performance, and are totally dependent on outside financing. Especially for these
organizations, strategic management provides an excellent vehicle for developing and
justifying requests for needed financial support.
(b) Strategies are both proactive and reactive. In a proactive strategy, organizations will
analyze possible environmental scenarios and create strategic framework after proper
planning and set procedures and work on these strategies in a predetermined manner.
However, in reality no company can forecast both internal and external environment
exactly. Everything cannot be planned in advance. It is not possible to anticipate moves
of rival firms, consumer behaviour, evolving technologies and so on.
There can be significant deviations between what was visualized and what actually
happens. Strategies need to be attuned or modified in light of possible environmental
changes. There can be significant or major strategic changes when the environment
demands. Reactive strategy is triggered by the changes in the environment and provides
ways and means to cope with the negative factors or take advantage of emerging
opportunities.
Thus owing to the reasons as mentioned above, quiet often strategies of most business
organisations are a combination of planned strategies and reactive strategies.
Question 13
(a) Strategy Formulation and Strategy Implementation. (4 Marks)
(b) Vision and Mission. (3 Marks)
Answer
(a) Although inextricably linked, strategy implementation is fundamentally different from
strategy formulation in the following ways:

Strategy Formulation Strategy Implementation

- It involves the design and choice - It is the process of putting the
of appropriate organisational various strategies into action of
strategies. organizations.
- It is positioning forces before the - It is managing forces during the
action. action
- It focuses on effectiveness. - It focuses on efficiency.
- It is primarily an intellectual - It is primarily an operational process.
process.
- It requires good intuitive and - It requires special motivation and
analytical skills. leadership skills.
- It requires coordination among a - It requires coordination among many
few individuals. individuals.
(b) A Mission statement tells you the fundamental purpose of the organization. It
concentrates on the present. It defines the customer and the critical processes. It informs
you of the desired level of performance. On the other hand, a Vision statement outlines
what the organization wants to be. It concentrates on the future. It is a source of
inspiration. It provides clear decision-making criteria.
A mission statement can resemble a vision statement in a few companies, but that can
be a grave mistake. It can confuse people. Following are the major differences between
vision and mission:
1. The vision describes a future identity while the Mission serves as an ongoing and
time-independent guide.
2. The vision statement can galvanize the people to achieve defined objectives, even if
they are stretch objectives, provided the vision is specific, measurable, achievable,
relevant and time bound. A mission statement provides a path to realize the vision
in line with its values. These statements have a direct bearing on the bottom line
and success of the organization.
3. A mission statement defines the purpose or broader goal for being in existence or in
the business and can remain the same for decades if crafted well while a vision
statement is more specific in terms of both the future state and the time frame.
Vision describes what will be achieved if the organization is successful.
Question 14
(a) Product Life Cycle (PLC) and its significance in portfolio diagnosis. (4 Marks)
(b) Publicity and Sales Promotion.

OR
Conglomerate Merger. (3 Marks)
Answer
(a) Product Life Cycle is an important concept in strategic choice and S-shaped curve which
exhibits the relationship of sales with respect of time for a product that passes through
the four successive stages.
The first stage of PLC is the introduction stage in which competition is almost negligible,
prices are relatively high and markets are limited. The growth in sales is also at a lower
rate.
The second stage of PLC is the growth stage, in which the demand expands rapidly,
prices fall, competition increases and market expands.
The third stage of PLC is the maturity stage, where in the competition gets tough and
market gets stabilized. Profit comes down because of stiff competition.
The fourth stage is the declining stage of PLC, in which the sales and profits fall down
sharply due to some new product replaces the existing product.
Product Life Cycle

PLC can be used to diagnose a portfolio of products (or businesses) in order to establish
the stage at which each of them exists. Particular attention is to be paid on the
businesses that are in the declining stage. Depending on the diagnosis, appropriate
strategic choice can be made. For instance, expansion may be a feasible alternative for
businesses in the introductory and growth stages. Mature businesses may be used as
sources of cash for investment in other businesses which need resources. A combination
of strategies like selective harvesting, retrenchment, etc. may be adopted for declining
businesses. In this way, a balanced portfolio of businesses may be built up by exercising
a strategic choice based on the PLC concept.
(b) Publicity and Sales promotion are adopted by organizations when they are undertaking
promotion in the overall marketing mix.

Publicity is a non-personal form of promotion similar to advertising. However, no

payments are made to the media as in case of advertising. Organizations skillfully seek
to promote themselves and their product without payment. Publicity is communication of
a product, brand or business by placing information about it in the media without paying
for the time or media space directly.
Thus it is way of reaching customers with negligible cost. Basic tools for publicity are
press releases, press conferences, reports, stories, and internet releases. These
releases must be of interest to the public.
Sales promotion is an omnibus term that includes all activities that are undertaken to
promote the business but are not specifically included under personal selling, advertising
or publicity. Activities like discounts, contests, money refunds, installments, kiosks,
exhibitions and fairs constitute sales promotion. All these are meant to give a boost to
the sales. Sales promotion done periodically may help in getting a larger market share to
an organization.
Or (Alternative Choice)
Merger is considered to be a process when two or more companies come together to
expand their business operations. In such a case the deal gets finalized on friendly terms
and both the organizations share profits in the newly created entity.
Conglomerate merger happens in case of organizations that are unrelated to each other
combine together. There are no linkages with respect to customer groups, customer
functions and technologies being used. There are no important common factors between
the organizations in production, marketing, research and development and technology. In
practice, however, there is some degree of overlap in one or more of these factors.

DISCLAIMER

Question 1
Answer all the following questions in brief:
(a) Differentiate between flow-chart and data flow diagram.
(b) What is Bluetooth? Name any two devices that utilize Bluetooth technology.
(c) Define Virtual Private Networks (VPN).
(d) What is the difference between electronic cheque and paper cheque?
(e) What are the objectives of business process automation? (2 x 5 = 10 Marks)
Answer
(a)
Flowchart Data Flow Diagram
Flow chart presents steps to complete Data Flow Diagram presents the flow of
a process. data.
Flow chart does not have any input DFD describes the path of data from an
from or output to an external source. external source to internal source or vice
versa.
The timing and sequence of the Whether processing of data is taking place
process is aptly shown by a flowchart. in a particular order or several processes
are taking place simultaneously is
described by a DFD.
Flow chart shows how to make a DFD defines the functionality of a system.
system function.
Flow chart is used in designing a DFD is used to describe the path of data
process. that will complete the process.
Types of Flow charts – System, Data, Types of DFD – Physical data flow and
Document and Program. Logical data flow.
(b) Bluetooth: Bluetooth is a wireless technology standard for exchanging data over short
distances up to 50 meters (164 feet) from fixed and mobile devices, creating Personal
Area Networks (PANs) with high levels of security. Bluetooth is like a very low-power,
short-range radio signal. Bluetooth signals are secure from the moment they're sent.

Few devices that utilize Bluetooth technology are as follows:

• Keyboards;
• Mice;
• Printers;
• Mobile Phones;
• Headsets;
• PDAs (Personal Digital Assistants);
• Desktop;
• Laptop Computers;
• Digital Cameras; and
• Remotes.
(c) Virtual Private Network: It is a private network that uses a public network (usually the
Internet) to connect remote sites or users together. By using a VPN, businesses ensure
security – anyone intercepting the encrypted data can’t read it. VPN is a secure network
that uses the Internet as its main backbone network, but relies on the firewalls and other
security features of the Internet and Intranet connections and those of participating
organizations.
(d) An e-cheque is an instrument where one person issues it to pay another person but there
is no paper involved. Everything is electronic. An electronic cheque can be protected
against any fraud by encoding sender’s account number with the bank’s public key
thereby not revealing the sender’s account number to the merchant. As with the SET
protocol, digital certificates can be used to authenticate the payer, the payer’s bank, and
bank account. However, no such encoding of sender’s account number is possible in
case of paper cheque. E-cheque is faster and more convenient than paper cheque. It is
environmentally friendly too.
(e) The objectives of Business Process Automation are as follows:
• Confidentiality: To ensure that data is only available to persons who have right to
see the same;
• Integrity: To ensure that no un-authorized amendments can be made in the data;
• Availability: To ensure that data is available when asked for; and
• Timeliness: To ensure that data is made available in at the right time.
Question 2
(a) What are the various key factors to be considered in implementing Business Process
Management (BPM) in an enterprise? (4 Marks)

(b) What are the major reasons for failure of Business Process Management System
(BPMS)? (4 Marks)
Answer
(a) Various key factors to be considered in implementing Business Process Management
(BPM) in an enterprise are as follows:
Factors Key Considerations
Scope A single process, a department, the entire company.
Goals Process understanding, Process Improvement, Process
Automation/ Optimization and Process re-engineering.
Methods to be used Six Sigma, BPM Life Cycle Method, TQM, Informal
methods.
Skills Required Consultants, Train Employees, Formal Certification,
Basic Education, Existing Skill sets.
Tools to be used White-Boards, Sticky Notes, Software For Mapping,
Documenting, Software for Simulation, Comprehensive
BPMS.
Investments to Make Training, Tools, Time.
Sponsorship/Buy-in Executive Level, Department Level, Process Owner
Needed Level, Employee Level.
(b) Major reasons for the failure of Business Process Management Systems (BPMS) include
the following:
• Inadequate investment in ongoing training for involved personnel;
• Lack of corporate policy protecting the integrity of the data in the BPM Systems;
• Superficial or deficient executive involvement;
• Deficient project management;
• Breakdown in gap analysis;
• Limited options for customization of the BPM software are required;
• Not flexible enough or too complicated to be customized to meet the precise
workflow and business process;
• Failure to identify future business needs;
• Inadequate assessment of the need for change management;
• Persistent compatibility problems with the diverse legacy systems of the partners;
• Resources not available when desirable;
• Software fails to meet business needs;

• System may be over-engineered when compared to the actual requirements; and

• Technological obsolescence.
Question 3
(a) What is cloud computing? Describe any three types of clouds in cloud computing
environment. (4 Marks)
(b) What is mobile computing? What are the three major concerns related to mobile
computing? (4 Marks)
Answer
(a) Cloud Computing: Cloud computing is the use of various services, such as software
development platforms, servers, storage, and software, over the Internet, often referred
to as the "Cloud."
The Cloud Computing environment can consist of multiple types of clouds based on their
deployment and usage. They are Public Cloud, Private/Internal Cloud, Community
Cloud and Hybrid Cloud.
• Public Cloud: The public cloud is made available to the general public or a large
industry group. They are administrated by third parties or vendors over the Internet,
and services are offered on pay-per-use basis. It is widely used in the development,
deployment and management of enterprise applications, at affordable costs; and
allows organizations to deliver highly scalable and reliable applications rapidly and
at more affordable costs.
• Private/Internal Cloud: This cloud computing environment resides within the
boundaries of an organization and is used exclusively for the organization’s
benefits. They are built primarily by IT departments within enterprises who seek to
optimize utilization of infrastructure resources within the enterprise and have more
control.
• Community Cloud: This refers to the sharing of computing infrastructure in
between organizations of the same community. For example, all Government
organizations within India may share computing infrastructure on the cloud to
manage data. The risk is that data may be stored with the data of competitors.
• Hybrid Cloud: It is a composition of two or more clouds (Private, Community or
Public) and is maintained by both internal and external providers. They are bound
together by standardized data and application portability. With a hybrid cloud,
organizations might run non-core applications in a public cloud, while maintaining
core applications and sensitive data in-house in a private cloud.
(b) Mobile Computing: Mobile Computing is the use of portable computing devices (such as
laptop and handheld computers) in conjunction with mobile communication technologies
to enable users to access the Internet and data on their home or work computers from

anywhere in the world. Mobile computing is enabled by use of mobile devices (portable
and hand held computing devices) such as PDA, laptops, mobile phones, MP3 players,
digital cameras, tablet PC and Palmtops on a wireless network.
Major concerns relating to mobile computing are given as follows:
• Mobile computing has its fair share of security concerns as any other technology.
• Dangers of misrepresentation - Another problem plaguing mobile computing are
credential verification.
• Power consumption - When a power outlet or portable generator is not available,
mobile computers must rely entirely on battery power.
• Potential health hazards.
Question 4
(a) What is Bus Topology? List its two advantages and two disadvantages. (3 Marks)
(b) What do you mean by threat and vulnerability? Explain any three facts responsible for
occurrence of vulnerabilities in the software. (5 Marks)
Answer
(a) Bus Topology: In a Bus Topology, a single length of wire, cable, or optical fiber
connects a number of computers. All communications travel along this cable, which is
called a bus.
Advantages of Bus Topology include the following:
• There is no host computer or file server, which makes bus network reliable as well
as easy to use and understand.
• If one of the microcomputers fails, it will not affect the entire network.
• It requires the least amount of cable to connect the computers together and
therefore is less expensive than other cabling arrangements.
• It is easy to extend. Two cables can be easily joined with a connector, making a
longer cable for more computers to join the network.
• A repeater can also be used to extend a bus configuration.
Disadvantages of Bus Topology include the following:
• Heavy network traffic can slow a bus considerably since any computer can transmit
at any time.
• Each connection between two cables weakens the electrical signal.
• The bus configuration can be difficult to troubleshoot. A cable break or
malfunctioning computer can be difficult to find and can cause the whole network to
stop functioning.

(b) Threat: A threat is anything that can disrupt the operation, functioning, integrity, or
availability of a network or system.
Vulnerability: Vulnerability is an inherent weakness in the design, configuration, or
implementation of a network or system that renders it susceptible to a threat.
The following facts are responsible for occurrence of vulnerabilities in the software:
• Software Bugs - Software bugs are so common that users have developed
techniques to work around the consequences, and bugs that make saving work
necessary every half an hour or crash the computer every so often are considered
to be a normal part of computing. For example - buffer overflow, failure to handle
exceptional conditions, access validation error, input validation errors are some of
the common software flaws.
• Timing Windows - This problem may occur when a temporary file is exploited by
an intruder to gain access to the file, overwrite important data, and use the file as a
gateway for advancing further into the system.
• Insecure default configurations - Insecure default configurations occur when
vendors use known default passwords to make it as easy as possible for consumers
to set up new systems. Unfortunately, most intruders know these passwords and
can access systems effortlessly.
• Trusting Untrustworthy information - This is usually a problem that affects
routers, or those computers that connect one network to another. When routers are
not programmed to verify that they are receiving information from a unique host,
bogus routers can gain access to systems and do damage.
• End users - Generally, users of computer systems are not professionals and are
not always security conscious. For example, when the number of passwords of a
user increases, user may start writing them down, in the worst case to places from
where they are easy to find. In addition to this, users do human errors, for example
save confidential files to places where they are not properly protected.
Question 5
(a) Briefly explain the two main approaches to establish access controls in Software
Systems. (4 Marks)
(b) Explain the different components of Decision Support Systems. (4 Marks)
Answer
(a) The two main approaches to establish access controls in Software systems are as
follows:
• Role-based Access Control (RBAC): RBAC largely eliminates discretion when
providing access to objects. Instead, administrators or automated systems place
subjects into roles. Subjects receive only the rights and permissions assigned to

those roles. RBAC uses a centrally administered set of controls to determine how
subjects and objects interact. When an employee changes jobs, all previous access
is removed, and the rights and permissions of the new role are assigned. RBAC
enforces static constraints based on a user’s role. It is the best system for an
organization that has high turnover.
• Rules-based Access Control (RAC): RAC is largely context-based that takes into
account the data affected, the identity attempting to perform a task, and other
triggers governed by business rules. RAC uses specific rules that indicate what can
and cannot happen between a subject and an object. A manager, for example, has
the ability to approve his/her employees’ hours worked. However, when s/he
attempts to approve his/her own hours, a rule built into the application compares the
employee record and the user, sees they are the same, and temporarily removes
approval privilege. It is not necessarily identity based.
(b) The components of Decision Support Systems (DSS) are as follows:
(i) The user: The user is usually a manager with an unstructured or semi-structured
problem to solve and may be at management - level of an organization.
(ii) One or more databases: Databases contain both routine and non-routine data
from both internal and external sources.
(iii) Planning languages: Planning languages can either be general-purpose or special
purpose allowing users to perform routine tasks and specific tasks respectively.
(iv) Model Base: Model base is the brain of the DSS as it performs data manipulations
and computations with the data provided to it by the user and the database. The
planning language in DSS allows the user to maintain a dialogue with the model
base.
Question 6
(a) List out different types of delivery channels though which information is delivered to the
user. (4 Marks)
(b) Briefly explain Grid Computing. What are possible reasons of using grid computing?
(4 Marks)
Answer
(a) Delivery channels refer to the mode through which information or products are delivered
to users. Delivery Channels for Information include the following:
• Intranet: Network within the company/enterprise;
• E-mail: The most widely used delivery channel for information today;
• Internal newsletters and magazines;
• Staff briefings, meetings and other face-to-face communications methods;

• Notice boards in communal areas;

• Manuals, guides and other printed resources;
• Hand-held devices (PDAs, etc.); and
• Social networking sites like Facebook, WhatsApp etc.
(b) Grid Computing: Grid Computing is a computer network in which each computer's
resources are shared with every other computer in the system. In the ideal grid
computing system, every resource is shared, turning a computer network into a powerful
supercomputer. With the right user interface, accessing a grid computing system is no
different than accessing a local machine's resources.
Some of the reasons of using Grid Computing are as follows:
• Civil engineers collaborate to design, execute, & analyze shake table experiments.
• An insurance company mines data from partner hospitals for fraud detection.
• An application service provider offloads excess load to a compute cycle provider.
• An enterprise configures internal & external resources to support e-Business
workload.
• Large-scale science and engineering are done through the interaction of people,
heterogeneous computing resources, information systems and instruments, all of
which are geographically and organizationally dispersed.
Question 7
(a) Hardware Virtualization
(b) Total Quality Management (TQM)
(c) HTTPS
(d) eXtensible Business Reporting Language (XBRL)
(e) Software as a Service (SaaS) (2 x 4 = 8 Marks)
Answer
(a) Hardware Virtualization: Hardware Virtualization refers to the creation of a virtual
machine that acts like a real computer with an operating system. Software executed on
these virtual machines is separated from the underlying hardware resources. Hardware
virtualization can give root access to a virtual machine.
(b) Total Quality Management (TQM): It is the organization-wide effort to install and make
permanent a climate in which it continuously improves its ability to deliver high-quality
products and services to customers.

(c) HTTPS: HyperText Transfer Protocol Secure (HTTPS) is a communications protocol for
secure communication over a computer network, with especially wide deployment on the
Internet. The security of HTTPS uses long term public and secret keys to exchange a
short term session key to encrypt the data flow between client and server.
(d) eXtensible Business Reporting Language (XBRL): XBRL is freely available
international standards-based business reporting language developed by accountants for
financial reporting. It is a single reporting language to report to government.
(e) Software as a Service (SaaS): It includes a complete software offering on the cloud.
Users can access a software application hosted by the cloud vendor on pay-per-use
basis. SaaS is a model of software deployment where an application is hosted as a
service provided to customers across the Internet by removing the need to install and run
an application on a user’s own computer. SaaS can alleviate the burden of software
maintenance and support but users relinquish control over software versions and
requirements.

SECTION – B
Answer any five questions from the rest
Question 8
(a) You have been hired as a consultant by a company to advise it on factors it need to
consider for environmental scanning. Explain briefly these factors. (3 Marks)
(b) “A strategic vision is a road map of a company's future." Comment. Draft a strategic
vision statement of any well known national level Educational Institution you are familiar
with. (3 Marks)
(c) In your view what are the Key Success Factors for operating in a competitive market
place? (3 Marks)
(d) How would you argue that Research and Development Personnel are important for
effectively strategy implementation? (3 Marks)
(e) What steps would you suggest to change a company's problem culture? (3 Marks)
Answer
(a) Organizational environment consists of both external and internal factors. Environment
must be scanned so as to determine development and forecasts of factors that will
influence organizational success. The factors that need to be considered are explained
below:
• Events: Events are important and specific happenings in the internal or external
organisational environment which can be observed and tracked.
• Trends: Trends are grouping of similar or related events that tend to move in a
given direction, increasing or decreasing in strength of frequency of observation.
• Issues are the current concerns that arise in response to events and trends. Identifying
an emerging issue is more difficult.
• Expectations are the demands made by interested groups in the light of their
concern for issues.
(b) A Strategic vision is a roadmap of a company’s future – providing specifics about
technology and customer focus, the geographic and product markets to be pursued, the
capabilities it plans to develop, and the kind of company that management is trying to
create.
The vision of ICAI is - World’s leading accounting body, a regulator and developer of
trusted and independent professionals with world class competencies in accounting,
assurance, taxation, finance and business advisory services.

(c) KSFs are the rules that shape whether a company will be financially and competitively
successful. Important key success factors for operating in competitive markets are:
♦ Cost structure of the market.
♦ The price sensitivity of the market.
♦ Technological structure of the market.
♦ The existing distribution system of the market.
♦ Is the market mature?
(d) Research and development (R&D) personnel can play an integral part in strategy
implementation. These individuals are generally charged with developing new products
and improving old products in a way that will allow effective strategy implementation.
R&D employees and managers perform tasks that include transferring complex
technology, adjusting processes to local raw materials, adapting processes to local
markets, and altering products to particular tastes and specifications.
Strategies such as product development, market penetration, and concentric
diversification require that new products be successfully developed and that old products
be significantly improved. But the level of management support for R&D is often
constrained by resource availability.
(e) Changing problem cultures is very difficult because of deeply held values and habits. It
takes concerted management action over a period of time to replace an unhealthy culture
with a healthy culture or to root out certain unwanted cultural obstacles and instil ones
that are more strategy-supportive.
♦ The first step is to diagnose which facets of the present culture are strategy supportive
and which are not.
♦ Then, managers have to talk openly and forthrightly to all concerned about those
aspects of the culture that have to be changed.
♦ The talk has to be followed swiftly by visible, aggressive actions to modify the culture-
actions that everyone will understand are intended to establish a new culture more in
tune with the strategy.
The menu of culture-changing actions includes revising policies and procedures, altering
incentive compensation, recruiting and hiring new managers and employees, replacing
key executives, communication on need and basis to employees and so on.
Question 9
(i) Strategic vision and mission statements are needed only by large business houses.
(ii) An industry can have more than one strategic group. (2 x 2 = 4 Marks)

(b) What is meant by backward integration? Name any two backward integration strategies
that hospitals may pursue. (1 + 2 = 3 Marks)
Answer
(a) (i) Incorrect: Every organization whether it is large or small requires strategic vision
and mission statements. Organisations irrespective of their size face similar
business environment and have to sail through competition. Small organizations
have to plan strategies for their survival in the market where large organizations are
also present.
(ii) Correct: An industry contains only one strategic group when all sellers pursue
essentially identical strategies and have comparable market positions. At the other
extreme, there are as many strategic groups as there are competitors when each
rival pursues a distinctively different competitive approach and occupies a
substantially different competitive position in the marketplace.
(b) Backward integration is a step towards, creation of effective supply by entering business
of input providers. Strategy employed to expand profits and gain greater control over
production of a product whereby a company will purchase or build a business that will
increase its own supply capability or lessen its cost of production.
In case of hospitals there can be number of businesses that can be entered. Following
are indicative list of backward integration strategies that hospitals may pursue:
• Drugs and pharmaceuticals – Specific drugs can be manufactured or traded.
• Business of gases required in hospitals – oxygen.
• Pathology labs / diagnostic services. This can be created in-house if not available
already. Alternatively, a chain can be started.
• Blood Banks.
• Ambulance services.
Question 10
How does the Internet Technology influence an industry's competitive environment? Explain.
(7 Marks)
Answer
The impact of the Internet and the rapidly emerging e-commerce environment is substantial
and widespread. Growing use of the Internet by businesses and consumers reshapes the
economic landscape and alters traditional industry boundaries. Characteristics of E-commerce
environment changing competitive scenario are as under:
(a) The Internet makes it feasible for companies everywhere to compete in global markets.

(b) There are new e-commerce strategic initiatives of existing rivals and new entrants in form
of e-commerce rivals.
(c) Entry barriers into the e-commerce world are relatively low.
(d) Increased bargaining power of customers to compare the products, prices and other
terms.
(e) Possibility for business organizations to locate the best suppliers across the world to gain
cost advantage and collaborate closely with them to achieve efficiency gains and cost
savings.
(f) Internet and PC technologies are advancing rapidly, often in uncertain and unexpected
directions. Such changes are often bringing in new opportunities and challenges.
(g) Organisations in emerging countries and elsewhere can use the internet to monitor the
latest technological developments and to stay abreast of what is happening in developed
markets.
(h) The e-commerce environment demands that companies move swiftly. In the exploding e-
commerce world, speed is a condition of survival.
(i) E-commerce technology opens up a host of opportunities for reconfiguring industry and
company value chains.
(j) The Internet can be an economical means of delivering customer service. Organisations
are discovering ways to deliver service in a centralised manner – online or through
telephone.
(k) The capital for funding potentially profitable e-commerce businesses is readily available.
(l) The needed e-commerce resource in short supply is human talent-in the form of both
technological expertise and managerial know-how.
Question 11
(a) “Management of internal linkages in the value chain could create competitive advantage
in a number of ways”. Briefly explain. (4 Marks)
(b) How strategic decisions differ in nature from other routine decisions taken in day-today
working of an organization? Explain. (3 Marks)
Answer
(a) The management of internal linkages in the value chain could create competitive
advantage in a number of ways:
• There may be important linkages between the primary activities. For example, a
decision to hold high levels of finished stock might ease production scheduling
problems and provide for a faster response time to the customer. However, an
assessment needs to be made whether the value added to the customer by this
faster response through holding stocks is greater than the added cost.

• It is easy to miss this issue of managing linkages between primary activities in an

analysis if, for example, the organization's competences in marketing activities and
operations are assessed separately. The operations may look good because they
are geared to high-volume, low-variety, low-unit-cost production. However, at the
same time, the marketing team may be selling speed, flexibility and variety to the
customers. So competence in separate activities need to be compatible.
• The management of the linkages between a primary activity and a support activity
may be the basis of a core competence. It may be key investments in systems or
infrastructure which provides the basis on which the company outperforms
competition. Computer-based systems have been exploited in many different types
of service organization and have fundamentally transformed the customer
experience.
• Linkages between different support activities may also be the basis of core
competences. For example, the extent to which human resource development is in
tune with new technologies has been a key feature in the implementation of new
production and office technologies. Many companies have failed to become
competent in managing this linkage properly and have lost out competitively.
(b) Strategic decisions 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 issues require top-management decisions.
♦ Strategic issues involve the allocation of large amounts of company resources.
♦ Strategic issues are likely to have a significant impact on the long term prosperity of
the firm.
♦ Strategic issues are future oriented.
♦ Strategic issues usually have major multifunctional or multi-business consequences.
♦ Strategic issues necessitate consideration of factors in the firm’s external
environment.
Question 12
(a) In the context of Ansoff’s Product-Market Growth Matrix, identify with reasons, the type of
growth strategies followed in the following cases:
(i) A leading producer of tooth paste, advises its customers to brush teeth twice a day
to keep breath fresh.
(ii) A business giant in hotel industry decides to enter into dairy business.
(iii) One of India's premier utility vehicles manufacturing company ventures to foray into
foreign markets.

(iv) A renowned auto manufacturing company launches ungeared scooters in the

market. (4 Marks)
(b) To which industries the following developments offer opportunities and threats?
"Increasing trend in India to organize IPL (Cricket) type of tournaments in other sports
also." (3 Marks)
Answer
(a) The Ansoff’s product market growth matrix (proposed by Igor Ansoff) is a useful tool that
helps businesses decide their product and market growth strategy. This matrix further
helps to analyse different strategic directions. According to Ansoff there are four
strategies that organisation might follow.
(i) Market Penetration: A leading producer of toothpaste, advises its customers to
brush teeth twice a day to keep breath fresh. It refers to a growth strategy where the
business focuses on selling existing products into existing markets.
(ii) Diversification: A business giant in hotel industry decides to enter into dairy
business. It refers to a growth strategy where a business markets new products in
new markets.
(iii) Market Development: One of India’s premier utility vehicles manufacturing
company ventures to foray into foreign markets. It refers to a growth strategy where
the business seeks to sell its existing products into new markets.
(iv) Product Development: A renowned auto manufacturing company launches
ungeared scooters in the market. It refers to a growth strategy where business aims
to introduce new products into existing markets.
(b) An opportunity is a favourable condition in the organisation’s environment which enables
it to strengthen its position. On the other hand a threat is an unfavourable condition in the
organisation’s environment which causes a risk for, or damage to, the organisation’s
position. An opportunity is also a threat in case internal weaknesses do not allow
organization to take their advantage in a manner rivals can.
The IPL (Cricket) tournament is highly profit and entertainment driven. A number of
entities and process are involved in this IPL type tournament. So financial opportunity are
for:
• Stadiums.
• Sports Industry.
• Manufactures of sports items.
• Media Industry – Sports channels / television, advertisers. It is also threat to
entertainment industry as competitors will be fighting for same viewers.
• Tourism and hotel Industry.

• Event Management.
Question 13
Distinguish between:
(a) Divestment strategy and Liquidation strategy. (4 Marks)
(b) Unfreezing the situation and Refreezing - the two stages of Kurt Lewin change process.
(3 Marks)
Answer
(a) Divestment Strategy: Divestment strategy involves the sale or liquidation of a portion of
business, or a major division, profit centre or SBU. Divestment is usually a part of
rehabilitation or restructuring plan and is adopted when a turnaround has been attempted
but has proved to be unsuccessful. The option of a turnaround may even be ignored if it
is obvious that divestment is the only answer.
Liquidation Strategy: Liquidation as a form of retrenchment strategy is considered as
the most extreme and unattractive. It involves closing down a firm and selling its assets.
It is considered as the last resort because it leads to serious consequences such as loss
of employment for workers and other employees, termination of opportunities a firm could
pursue, and the stigma of failure.
(b) Unfreezing the situation: The process of unfreezing simply makes the individuals or
organizations aware of the necessity for change and prepares them for such a change.
Lewin proposes that the changes should not come as a surprise to the members of the
organization. Unfreezing is the process of breaking down the old attitudes and
behaviours, customs and traditions so that they start with a clean slate. This can be
achieved by making announcements, holding meetings and promoting the ideas
throughout the organization.
Refreezing: Refreezing occurs when the new behaviour becomes a normal way of life.
The new behaviour must replace the former behaviour completely for successful and
permanent change to take place. In order for the new behaviour to become permanent, it
must be continuously reinforced so that this new acquired behaviour does not diminish or
extinguish.
Question 14
(a) Strategic responses to business environment. (4 Marks)
(b) Expansion through acquisitions and mergers. (3 Marks)
OR
Expanded Marketing Mix.
Answer

(a) The business organization and its many environments have innumerous interrelationship
that at times it becomes difficult to determine exactly where the organization ends and
where its environment begins. It is also difficult to determine exactly what business
should do in response to a particular situation in the environment. Strategically, the
businesses should make efforts to exploit the opportunity and avoid the threats.
In this context following are the approaches:
(i) Least resistance: Some businesses just manage to survive by way of coping with
their changing external environments. They are simple goal-maintaining units. They
are very passive in their behaviour and are solely guided by the signals of the
external environment. They are not ambitious but are content with taking simple
paths of least resistance in their goal-seeking and resource transforming behaviour.
(ii) Proceed with caution: At the next level, are the businesses that take an intelligent
interest to adapt with the changing external environment. They seek to monitor the
changes in that environment, analyse their impact on their own goals and activities
and translate their assessment in terms of specific strategies for survival, stability
and strength. This is an sophisticated strategy than to wait for changes to occur and
then take corrective-adaptive action.
(iii) Dynamic response: At a still higher sophisticated level, are those businesses that
regard the external environmental forces as partially manageable and controllable
by their actions. Their feedback systems are highly dynamic and powerful. They not
merely recognise and ward off threats; they convert threats into opportunities. They
are highly conscious and confident of their own strengths and the weaknesses of
their external environmental ‘adversaries’. They generate a contingent set of
alternative courses of action to be picked up in tune with the changing environment.
(b) Acquisitions and mergers are basically combination strategies. Some organizations
prefer to grow through mergers. Merger is considered to be a process when two or more
companies come together to expand their business operations. In such a case the deal
gets finalized on friendly terms and both the organizations share profits in the newly
created entity. In a merger two organizations combine to increase their strength and
financial gains along with breaking the trade barriers.
When one organization takes over the other organization and controls all its business
operations, it is known as acquisition. In this process of acquisition, one financially strong
organization overpowers the weaker one. Acquisitions often happen during recession in
economy or during declining profit margins. In this process, one that is financially
stronger and bigger establishes it power. The combined operations then run under the
name of the powerful entity. A deal in case of an acquisition is often done in an unfriendly
manner, it is more or less a forced association where the powerful organization either
consumes the operation or a company in loss is forced to sell its entity.
OR

Expanded Marketing Mix: Typically, all organizations use a combination of 4 Ps in some

form or the other. However, the above elements of marketing mix are not exhaustive.
There are a few more elements that may form part of an organizational marketing mix
strategy as follows:
♦ 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.
♦ Physical evidence: the environment in which the market offering is delivered and
where the firm and customer interact.
♦ Process: the actual procedures, mechanisms and flow of activities by which the
product / service is delivered.

Question 1
Answer all the following questions briefly:
(a) What are device drivers? Name any two devices that require drivers.
(b) Define "Bit" and "Byte”.
(c) What is the difference between backup and recovery?
(d) What are the functions of Transport Layer and Internet Layer in Transmission Control
Protocol/Internet Protocol (TCP/IP)?
(e) What is the difference between Integrity and Authenticity with reference to E-Commerce?
(2 x 5 =10 Marks)
Answer
(a) Device Drivers: Device drivers are small files that act as interfaces between hardware in
a computer system and the Operating System (OS). Hardware requires device drivers so
that the OS can “see” the devices and handle them effectively and efficiently.
The common devices that require drivers include:
• Keyboards;
• Mice;
• Controllers;
• Graphics cards;
• Audio hardware;
• Ethernet hardware;
• Wireless cards;
• Ports;
• Card readers;
• Card slots and
• CD/DVD drives.
(b) Bit: Bit is defined as the smallest basic unit of storage in the computer memory that is an
abbreviation of binary digit 0 or 1.

Byte: A byte is a basic grouping of 8 bits that the computer operates on as a single unit
and is used to represent a character by the American Standard Code of Information
Interchange (ASCII) and Extended BCD Interchange Code (EBCDIC) systems.
(c) Backup: Backup is a utility program used to make a copy of the contents of database
files and log files. The database files consist of a database root file, log file, mirror log
file, and other database files called “dbspaces”.
Recovery: Recovery is a sequence of tasks performed to restore a database at some
point-in-time. It is performed when either hardware such as a disk drive/controller card
failure or media failure like unexpected database error while data processing occurs.
(d) Transport Layer: The Transport Layer in TCP/IP provides end-to-end communication
between applications and verifies correct packet arrival.
Internet Layer: The Internet Layer in TCP/IP provides packet routing for error checking
and addressing and integrity.
(e) With reference to E-commerce -
Integrity is defined as the ability to ensure that information being displayed on a web site
or transmitted or received over the internet has not been altered in any way by an
unauthorized party.
Authenticity is the ability to identify the identity of a person or entity with whom we are
dealing in the internet.
Question 2
(a) Describe any four benefits of database management solution for an organization.
(4 Marks)
(b) Explain in brief the following features of an Operating System:
(i) Multi programming
(ii) Multi processing
(iii) Multi tasking
(iv) Multi threading (4 Marks)
Answer
(a) The benefits of DBMS solution for an organization are as follows:
(i) It reduces data redundancy and inconsistency.
(ii) It enhances data integrity and security.
(iii) It provides logical and physical data independence.
(iv) It provides application data independence.
(v) It reduces complexity of the organization’s Information System environment.

(vi) It provides faster data accessibility and improved data sharing.

(vii) It increases productivity of application development.
(viii) It provides low cost of developing and maintaining system.
(ix) It provides systematic storage of data in the form of table.
(x) It provides multiple simultaneous usages by good number of users.
(xi) Different privileges can be given to different users.
(xii) It provides backup & recovery.
(b) (i) Multi programming: Multi programming is defined as an execution of two or more
programs that all reside in primary storage. Since the CPU can execute only one
instruction at a time, it cannot simultaneously execute instructions from two or more
programs. The purpose of multiprogramming is to increase the utilization of the
computer system as a whole.
(ii) Multi processing: Multi processing (or parallel processing) refers to the use of two
or more central processing units, linked together, to perform coordinated work
simultaneously.
(iii) Multi tasking: Multi tasking refers to the operating system’s ability to execute two
or more of a single user’s tasks concurrently.
(iv) Multi threading: Multi threading allows a process to keep running even if some
threads within the process are stalled, working on a lengthy task, or awaiting user
interaction, thus improve the performance of processing the task.
Question 3
(a) What is a 'threat'? Explain any three types of Network Security threat? (4 Marks)
(b) What do you mean by distributed database? Also briefly explain the two methodologies
of distribution of a database. (4 Marks)
Answer
(a) Threat: A threat is anything that can disrupt the operation, functioning, confidentiality,
integrity, or availability of a network or system.
Network security threats can be categorized into four broad themes:
• Unstructured threats - These originate mostly from inexperienced individuals using
easily available hacking tools from the Internet. These tools include port-scanning
tools, address-sweeping tools, and many others.
• Structured threats - These originate from individuals who are highly motivated and
technically competent and usually understand network systems design and the
vulnerabilities of those systems. An individual who presents a structured threat
typically targets a specific destination or group.

• External threats - These originate from individuals or organizations working outside

an organization, which does not have authorized access to organization’s computer
systems or network. They usually work their way into a network from the Internet or
Dialup Access servers.
• Internal threats - These threats originate from individuals who have authorized
access to the network. These users either have an account on a server or physical
access to the network. An internal threat may come from a discontented former or
current employee or contractor.
(b) Distributed Database: An organization may require decentralizing its database by
scattering it with computing resources to several locations so that running of applications
programs and data processing are performed at more than one site. This refers to
Distributed Database and its processing facilitate savings in time and costs by concurrent
running of application programs at various sites. When processing is distributed, the
database needs to be distributed fully or partly, depending on the organizational
requirements.
There are two methodologies of distribution of a database which are given as under:
• Replicated Database: In this, duplicates of data are provided to the sites so that
the sites can have frequent access to the same data concurrently. But this method
of replication is costly in terms of system resources and also maintaining the
consistency of the data elements.
• Partitioned Database: In this, a database is divided into parts or segments that are
required and appropriate for the respective sites so that only those segments are
distributed without costly replication of the entire data.
Question 4
(a) Describe briefly any four features of Application Servers.
(b) List the two advantages and two disadvantages of 3 tier architecture.
Answer
(a) Features of the Application Servers are as follows:
• Component Management: This provides the manager with tools for handling all the
components and runtime services like session management, and synchronous/
asynchronous client notifications, as well as executing server business logic.
• Fault Tolerance: It is an ability of an application server with no single point of
failure, defining policies for recovery and fail-over recovery in case of failure of one
object or group of objects.
• Load Balancing: It is the capability to send the request to different servers
depending on the load and availability of the server.

• Transaction Management: It is an ability to process one or more logical unit of

work requested by the client. The server ensures that the transaction processes
completely.
• Management Console: It refers to the single point graphical management console
for remotely monitoring clients and server clusters.
• Security: The accessibility of data and application is restricted through user
authentication at first tier of application server for security measures.
(b) Advantages of three-tier architecture are as follows:
• Clear separation of user-interface-control and data presentation from
application logic: Through this separation, more clients are able to have access to
a wide variety of server applications. The two main advantages for client-
applications are quicker development through the reuse of pre-built business-logic
components and a shorter test phase.
• Dynamic load balancing: If bottlenecks in terms of performance occur, the server
process can be moved to other servers at runtime.
• Change management: It is easy and faster to exchange a component on the server
than to furnish numerous PCs with new program versions.
Disadvantages of three-tier architecture are as follows:
• Creates an increased need for network traffic management, server load balancing,
and fault tolerance.
• Current tools are relatively immature and are more complex.
• Maintenance tools are currently inadequate for maintaining server libraries. This is a
potential obstacle for simplifying maintenance and promoting code reuse throughout
the organization.
Question 5
(a) Explain the following with regard to Internet connection:
(i) SDSL connection
(ii) Satellite connection (4 Marks)
(b) Explain step by step online transaction processing in an e-commerce environment.
(4 Marks)
Answer
(a) SDSL Connection: Symmetric Digital Subscriber Line (SDSL) is a technology that allows
more data to be sent over existing copper telephone lines. Symmetric Digital Subscriber
Line (SDSL) works by sending digital pulses in the high-frequency area of telephone
wires and cannot operate simultaneously with voice connections over the same wires. It
requires a special SDSL modem and supports data rates up to 3 Mbps. It is called
symmetric because it supports the same data rates for upstream and downstream traffic.

Satellite Connection: Internet over Satellite (IoS) allows a user to access the Internet
via a satellite that orbits the earth. A satellite is placed at a static point above the earth's
surface, in a fixed position. Because of the enormous distances signals must travel from
the earth up to the satellite and back again, IoS is slightly slower than high-speed
terrestrial connections over copper or fiber optic cables.
(b) Following is a step by step online transaction processing in an e-commerce environment:
(i) Order Placed: Customer places order through secure connection on website, or
merchant manually keys in transaction.
(ii) Authorization Request: Payment Gateway receives the transaction through the secure
internet connection, encrypts it, and submits an authorization to the credit card issuing
bank.
(iii) Authorization Response: Credit card issuing bank either approves or declines the
request and sends a response back through the payment gateway to the website.
(iv) Order Fulfilled: Once approved the merchant processes and ships the customer's
order.
(v) Settlement Request: The Payment Gateway sends a settlement request to the
merchant account provider each day that transactions are processed.
(vi) Settlement Deposited: The merchant account provider deposits the amount for
each settlement into the merchant's bank account that usually takes 24 - 48 hours.
Question 6
A Housing Society in a newly developed Smart City has provided several advanced security
systems to each house in that city. Based on the value of these advanced security systems
installed in each house, the Society has divided all the houses in four categories and fixed the
criteria for annual maintenance charges as under:
Maintenance charges as % of value of advanced security
House Category
systems installed at house
A 8%
B 6%
C 4%
D 3%
In addition to above there is a service tax @ 12.36% on the amount of maintenance charges.
Considering house number and value of advanced security system installed, as input, draw a
flow chart to have printed output as house number, maintenance charges, service tax and the
total amount to be paid by each house owner.

Answer
Let us define the variables first:
HNO: House Number HC: House Category
VAL_ASS: Value of Advanced Security Systems MC: Maintenance Charges
ST: Service Tax TA: Total Amount
The desired flowchart is given as follows:
Start
Read HNO, VAL ASS

A
Yes
If HC= A? MC = 0.08 * VAL_ASS
No
If HC= B? Yes MC = 0.06 * VAL_ASS
No
Yes
If HC= C? MC = 0.04 * VAL_ASS
No
MC = 0.03 * VAL_ASS
ST = 0.1236 * MC
TA = MC + ST
Print HNO, MC, ST, TA
Yes
More HNO? A
No
Stop

Question 7
(a) Firewall
(b) Data Mining
(c) VoIP
(d) Object Oriented Programming (OOP)
(e) Front End Communication Processors: (2 x 4 = 8 Marks)
Answer 7
(a) Firewall: Firewall is a system which controls the flow of traffic between the Internet and
the firm’s internal LANs and systems. They are usually packaged as turnkey
hardware/software packages and are set up to enforce the specific security policies that
are desired. A firewall is a proven, effective means of protecting the firm’s internal
resources from unwanted intrusion.
(b) Data Mining: The process of recognizing patterns among data contained in a data
warehouse or a data mart is called a process of Data Mining. Data mining tools are
software that allows users to perform detailed mathematical and statistical calculations
on detailed data warehouse data to detect trends, identify patterns and analyze data.
Data Mining is responsible for finding the patterns by identifying the underlying rules and
features in the data and picking out relevant information. Examples of Data mining
Software’s are SPSS, SAS, Think Analytics and G-Stat etc.
(c) VoIP: Voice over Internet Protocol (VoIP) commonly refers to the communication
protocols, technologies, methodologies, and transmission techniques involved in the
delivery of voice communications and multimedia sessions over Internet Protocol (IP)
networks, such as the Internet. Other terms commonly associated with VoIP are IP
telephony, Internet telephony, Voice over BroadBand (VoBB), broadband telephony, and
broadband phone. This allows delivery of voice communications over IP networks, for
example, phone calls.
(d) OOP: In Object-Oriented Programming (OOP), objects are combined and small amount
of code is written instead of writing a program line by line. The advantages of OOP are its
graphical interface; ease of use; faster program development; enhanced programmer
productivity and more reliable programs that contain fewer errors. The disadvantages of
OOP are its steep initial development costs; more extensive start-up time and power PCs
and workstations requirement. Some common object-oriented languages are small talk,
C++, Visual Basic and Java.

(e) Front End Communication Processors: These are programmable devices which
control the functions of communication system. They support the operations of a
mainframe computer by performing functions, which it would otherwise be required to
perform itself. These functions include code conversions, editing and verification of data,
terminal recognition and control of transmission lines. The mainframe computer is then
able to devote its time to data processing rather than data transmission.

SECTION – B
Question 8
(a) Mission statement of a company focuses on the question:
‘Who we are’ and ‘What we do’. Explain briefly. (3 Marks)
(b) State the factors of human resource that influence on employees competence. (3 Marks)
(c) Assume that you are an entrepreneur who has an intense desire to get into the business.
What types of information relating to macro environment would you need to determine
external opportunities and threats? (3 Marks)
(d) What does corporate strategy ensure? Explain. (3 Marks)
(e) Briefly describe the impact of corporate culture on an organization. (3 Marks)
Answer
(a) A company’s mission statement is typically focused on its present business scope —
“who we are and what we do”; mission statements broadly describe an organizations
present capabilities, customer focus activities and business makeup. An organisation’s
mission states what customers it serves, what need it satisfies, and what type of product
it offers. It is an expression of the growth ambition of the organisation. It helps
organisation to set its own special identity, business emphasis and path for development.
Mission amplifies what brings the firm to this business or why it is there, what existence it
seeks and what purpose it seeks to achieve as a business firm.
In other words, the mission serves as a justification for the firm's very presence and
existence; it legitimizes the firm's presence.
(b) Human resource management has been accepted as a strategic partner in the
formulation of organization’s strategies and in the implementation of such strategies
through human resource planning, employment, training, appraisal and reward systems.
The following points should be kept in mind as they can have a strong influence on
employee competence:
i. Recruitment and selection: The workforce will be more competent if a firm can
successfully identify, attract, and select highly competent applicants.
ii. Training: The workforce will be more competent if employees are well trained to
perform their jobs properly.
iii. Appraisal of performance: The performance appraisal is to identify any performance
deficiencies experienced by employees due to lack of competence. Such

deficiencies, once identified, can often be solved through counselling, coaching or

training.
iv. Compensation: A firm can usually increase the competency of its workforce by
offering pay, benefits and rewards that are not only attractive than those of their
competitors but also recognizes merit.
(c) Macro environment mainly consists of economic, technological, political, legal and socio-
cultural elements. For an entrepreneur it is important to identify those factors that are
likely to affect the new business. Each of the elements can have a bearing on the
opportunities and the threats.
Particularly, he should scan the relevant changes that have happened in recent past that
can provide competitive edge. For example, a technological innovation in the production
process can be opportunity. Incentives such as cheaper land, tax free periods can be
other form of opportunities. Entrepreneur has to identify such opportunities that can be
capitalized to enter markets or provide an edge over the competitors. Entrepreneur has
to also take care as these opportunities can also act as threats when competitors are
able to exploit them.
(d) Corporate strategy in the first place ensures the growth of the firm and ensures the
correct alignment of the firm with its environment. It serves as the design for filling the
strategic planning gap. It also helps build the relevant competitive advantages. It works
out the right fit between the firm and its external environment. Basically the purpose of
corporate strategy is to harness the opportunities available in the environment,
countering the threats embedded therein.
Corporate strategy brings methodical responses to the environment. Strategy is the
opposite of adhoc responses to the changes in the environment in competition, consumer
tastes, technology and other variables. It amounts to long-term, well thought-out and
prepared responses to the various environment forces.
(e) Corporate culture refers to values, beliefs, business principles, traditions, ways of
operating, and internal work environment. An organization’s culture is either an important
contributor or an obstacle to successful strategy execution. The beliefs, vision,
objectives, business approaches and practices underpinning a company's strategy may
be compatible with its culture or not. When they are, the culture becomes a valuable ally
in strategy implementation and execution. When the culture is in conflict with some
aspect of the company's direction, performance targets or strategy, the culture becomes
a stumbling block that impedes successful strategy implementation and execution.
A culture grounded in values, practices, and behavioural norms that match what is
needed for good strategy execution helps energize people throughout the company to do
their jobs in a strategy-supportive manner, adding significantly to the power and
effectiveness of strategy execution.

Question 9
(a) State with reasons which of the following statements are correct or Incorrect.
(i) Stability strategy is not a 'do-nothing' strategy.
(ii) Six sigma efforts target following main areas:
(x) Improving customer satisfaction.
(y) Reducing wastage
(z) Reducing defects (2 x 2 = 4 Marks)
(b) What are the major stages in the strategic management process? (3 Marks)
Answer
(a) (i) Correct: Stability strategies are implemented by approaches wherein few functional
changes are made in the products or markets. It is not a ‘do nothing’ strategy. It
involves keeping track of new developments to ensure that the strategy continues to
make sense. This strategy is typical for mature business organizations. Some small
organizations will also frequently use stability as a strategic focus to maintain
comfortable market or profit position.
(ii) Correct: Primarily Six Sigma means maintenance of the desired quality in
processes and end products. It is a highly disciplined process that helps in
developing and delivering near-perfect products and services. Improvements in
these areas usually represent dramatic cost savings to businesses, as well as
opportunities to retain customers, capture new markets, and build a reputation for
top performing products and services.
(b) The major stages in the strategic management process are:
(i) Develop vision and mission statements
(ii) Perform internal and external audit
(iii) Establish long-term objectives
(iv) Generate, evaluate, and select strategies
(v) Implement strategies considering management issues
(vi) Implement strategies marketing, finance, accounting, R&D, MIS issues
(vii) Measure and evaluate performance
Question 10
What is the rationale behind Business Process Reengineering (BPR)? What steps would you
recommend to implement BPR in an organization? (7 Marks)

Answer
Business Process Reengineering (BPR) is an approach to unusual improvement in operating
effectiveness through the redesigning of critical business processes and supporting business
systems. It is revolutionary redesign of key business processes that involves examination of
the basic process itself.
It looks at the minute details of the process, such as why the work is done, who does it, where is it
done and when it is done. BPR refers to the analysis and redesign of workflows and processes
both within the organization and between the organization and the external entities like suppliers,
distributors, and service providers. The orientation of redesigning efforts is basically radical. In
other words, it is a total deconstruction and rethinking of business process in its entirety.
BPR involves the following steps:
i. Determining objectives and framework: Objectives are the desired end results of the
redesign process which the management and organization attempts to achieve. This will
provide the required focus, direction, and motivation for the redesign process.
ii. Identify customers and determine their needs: The designers have to understand
customers – their profile, their steps in acquiring, using and disposing a product. The
purpose is to redesign business process that clearly provides added value to the
customer.
iii. Study the existing process: The existing processes will provide an important base for
the redesigners. The purpose is to gain an understanding of the ‘what’, and ‘why’ of the
targeted process. However, some companies go through the reengineering process with
clean perspective without laying emphasis on the past processes.
iv. Formulate a redesign process plan: Formulation of redesign plan is the real crux of the
reengineering efforts. Customer focused redesign concepts are identified and formulated.
Alternative processes are considered and the optimum is selected.
v. Implement the redesign: It is easier to formulate new process than to implement them.
It is the joint responsibility of the designers and management to operationalise the new
processes.
Question 11
(a) Discuss the leadership role played by the managers in pushing for good strategy execution.
(4 Marks)
(b) What do you understand by functional structure? (3 Marks)
Answer
(a) A strategy manager has many different leadership roles to play: visionary, chief
entrepreneur and strategist, chief administrator, culture builder, resource acquirer and
allocator, capabilities builder, process integrator, crisis solver, spokesperson, negotiator,

motivator, arbitrator, policy maker, policy enforcer, and head cheerleader. Managers
have five leadership roles to play in pushing for good strategy execution:
1. Staying on top of what is happening, closely monitoring progress, working through
issues and obstacles.
2. Promoting a culture that mobilizes and energizes organizational members to
execute strategy and perform at a high level.
3. Keeping the organization responsive to changing conditions, alert for new
opportunities and remain ahead of rivals in developing competitively valuable
competencies and capabilities.
4. Ethical leadership and insisting that the organization conduct its affairs like a model
corporate citizen.
5. Pushing corrective actions to improve strategy execution and overall strategic
performance.
(b) Functional structure is widely used because of its simplicity and low cost. A functional
structure groups tasks and activities by business function.
The functional structure consists of a chief executive officer or a managing director and
limited corporate staff with functional line managers in dominant functions such as
production, accounting, marketing, R&D, engineering, and human resources.
Disadvantages of a functional structure are that it forces accountability to the top,
minimizes career development opportunities, etc.
Question 12
(a) How would you argue that modem enterprises pursue multiple objectives and not a single
objective? (4 Marks)
(b) Explain the significance of SWOT analysis. (3 Marks)
Answer
(a) Objectives are organizations performance targets – the results and outcomes it wants to
achieve. They function as yardstick for tracking an organizations performance and
progress.
Today, organizations are capable of achieving multiple objectives and they focus on
different objectives rather than a single objective. In general, we may identify a set of
business objectives being pursued by the business. These may relate to profitability,
productive efficiency, growth, technological dynamism, stability, self-reliance, survival,
competitive strength, customer service, financial solvency, product quality, diversification,
employee satisfaction and welfare, and so on. Organizations need to balance these
objectives in an appropriate manner.
(b) An important component of strategic thinking requires the generation of a series of
strategic alternatives, or choices of future strategies to pursue, given the company's

internal strengths and weaknesses and its external opportunities and threats. The
comparison of strengths, weaknesses, opportunities, and threats is normally referred to
as SWOT analysis. SWOT analysis helps managers to craft business model that will
allow a company to gain a competitive advantage. Key reasons for SWOT analyses are:
♦ It provides a logical framework for systematic identification of issues having bearing
on the business situation, generation of alternative strategies and the choice of a
strategy.
♦ It presents a comparative account of both external and internal environment in a
structured form where it is possible to compare external opportunities and threats
with internal strengths and weaknesses.
♦ It guides the strategist in strategy identification. It guides the strategist to think of
overall position of the organization that helps to identify the major purpose of the
strategy under focus.
Question 13
(a) Cost Leadership and Differentiation Strategies (4 Marks)
(b) Social Marketing and Service Marketing (3 Marks)
Answer
(a) According to Porter, strategies allow organizations to gain competitive advantage from
three different bases: cost leadership, differentiation, and focus. Cost leadership
emphasizes producing standardized products at a very low per-unit cost for consumers
who are price-sensitive. Differentiation is a strategy aimed at producing products and
services considered unique industry wide and directed at consumers who are relatively
price-insensitive.
A primary reason for pursuing forward, backward, and horizontal integration strategies is
to gain cost leadership benefits. But cost leadership generally must be pursued in
conjunction with differentiation. Different strategies offer different degrees of
differentiation. A differentiation strategy should be pursued only after a careful study of
buyers’ needs and preferences to determine the feasibility of incorporating one or more
differentiating features into a unique product. A successful differentiation strategy allows
a firm to charge a higher price for its product and to gain customer loyalty.
(b) Social Marketing and Service Marketing are marketing strategies primarily with different
orientations. Social Marketing 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 or
encouraging girl child, etc.
On the other hand, service marketing is applying the concepts, tools, and techniques, of
marketing to services. Service is any activity or benefit that one party can offer to another

that is essentially intangible and non-perishing. These may be from business to

consumer and from business to business.
Question 14
(a) Experience Curve (4 Marks)
(b) Production System (3 Marks)
OR
Characteristics of Strategic Business Unit (SBU) (3 Marks)
Answer
(a) Experience curve is similar to learning curve which explains the efficiency gained by
workers through repetitive productive work. Experience curve is based on the commonly
observed phenomenon that unit costs decline as a firm accumulates experience in terms
of a cumulative volume of production.
The implication is that larger firms in an industry would tend to have lower unit costs as
compared to those of smaller organizations, thereby gaining a competitive cost
advantage. Experience curve results from a variety of factors such as learning effects,
economies of scale, product redesign and technological improvements in production.
(b) Production System is concerned with the capacity, location, layout, product or service
design, work systems, degree of automation, extent of vertical integration, and such
factors. Strategies related to production system are significant as they deal with vital
issues affecting the capability of the organisation to achieve its objectives.
Strategy implementation would have to take into account the production system factors
as they involve decisions which are long-term in nature and influence not only the
operations capability of an organisation but also its ability to implement strategies and
achieve objectives.
or
Strategic Business Unit (SBU) is a unit of the company that has a separate mission and
objectives and which can be planned independently from other businesses of the
orgnanisation. The three most important characteristics of SBU are:
♦ It is a single business or a collection of related businesses which offer scope for
independent planning and which might feasibly stand alone from the rest of the
organization.
♦ Has its own set of competitors.
♦ Has a manager who has responsibility for strategic planning and profit performance.
He has control of profit-influencing factors.

DISCLAIMER

Question 1
Describe briefly the following terms with reference to Information Technology.
(i) Data Dictionary
(ii) Transaction Log
(iii) Binary Coded Decimal (BCD)
(iv) Unicode
(v) Hub
(vi) Protocol Converter
(vii) Multiplexer
(viii) Web Casting
(ix) Intranet
(x) Data Publishing (as internet application) (1 x 10 = 10 Marks)
Answer
(i) Data Dictionary: Data Dictionary maintains information pertaining to structure and usage
of data and Meta data. Each piece of data and various synonyms of data field are
determined in consultation with database users.
(ii) Transaction Log: A transaction log is a file that records database modifications that
consist of inserts, updates, deletes, commits, rollbacks, and database schema changes.
A transaction log is not required but is recommended.
(iii) Binary Coded Decimal (BCD): The BCD is the simplest binary code that uses 4 bits to
represent a decimal number. Each digit is represented by a combination of the binary
digits 0 and 1.
(iv) Unicode: Unicode is a worldwide character code standard. In this code system, 16-bits
(2 bytes) are used to represent a single character or symbol. Using this code system,
65,536 different characters can be represented inside the computer.
(v) Hub: A hub is a multi port connecting device that is used to interconnect LAN devices by
means of simple twisted pair wires. A hub can be used to extend the physical length of a
network.

(vi) Protocol Converter: A protocol converter is a device that provides interoperability

amongst networking devices by converting protocols of one device to another in order to
transform data and commends from one application to another for exchanging
information.
(vii) Multiplexer: This device enables several devices to share one communication line. The
multiplexer scans each device to collect and transmit data on a single line to the CPU.
(viii) Web Casting: This refers to the transmission of data by one node and received by many,
sometimes all, of the other nodes over the Internet.
(ix) Intranet: Intranet is a type of information system that facilitates communication with
Internet technology within the organization among widely dispersed departments,
divisions and regional locations using Web browsers, Web servers and Data
warehouses.
(x) Data Publishing (as Internet application): Data publishing is an Internet application
that refers to either forwarding of the information that needs to be made available to
others to specific addresses or kept on display in a special site.
Question 2
(a) What is the difference between compilers and interpreters? Describe any two advantages
of interpreters over compilers. (2 + 2 = 4 Marks)
(b) Discuss any four benefits of an Expert System. (4 Marks)
Answer
(a) Compilers: Compilers translate the entire program into machine language before the
program is executed. The compiler translates the program (called as source Program or
Source Module) submitted for compilation into machine language, producing an Object
Program (or Object Module). Linkage editor then binds the Object Module to object
modules of any subprograms of this program, producing a resultant program called a
Load Program (or load module), ready for execution.
Interpreters: Interpreters are system software which translates program into machine
language one line at a time as they are being run. Each statement is translated into
machine language just before it is executed. No object module or storable load module is
ever produced.
Some of the advantages of Interpreters over Compilers are as follows:
(i) Interpreters are usually easier and faster to use than compilers.
(ii) Interpreters typically provide users with superior error messages. When a program
contains an error and “blows up,” the interpreter knows exactly which statement
triggered the error – the one it last translated, thus helping the programmers debug
their programs.

(iii) An interpreter for a Third Generation Language typically requires less storage space
in primary memory than a compiler for that language.
(iv) Interpreters are usually less expensive than compilers.
(b) An Expert System (ES) is a computerized information system that allows non-experts to
make decisions comparable to those of an expert. Some of the benefits of Expert
Systems are as follows:
(i) They provide a cost-effective alternative to human experts.
(ii) They can outperform a single expert because their knowledge is representative of
numerous experts. They are faster and more consistent and do not get distracted,
overworked, or stressed out.
(iii) They produce better-quality and more consistent decisions. Expert systems assist
users in identifying potential decision making problems, which increases the
probability that sound decisions will be made.
(iv) They can increase productivity.
(iv) They preserve the expertise of an expert leaving the organization.
Question 3
(a) Describe various stages of Data Mining. (4 Marks)
(b) Define “Data Definition Language” (DDL). Describe various functions of DDL. (4 Marks)
Answer
(a) Stages in Data Mining are discussed below:
(i) Selection: Selecting or segmenting the data according to some criteria so that
subsets of the data can be determined. For example, all those people who own a
car can be criteria for selection.
(ii) Pre-processing: This is the data cleansing stage where certain information is
removed which is deemed unnecessary and may slow down queries. Also the data
is re-configured to ensure a consistent format as there is a possibility of inconsistent
formats because the data is drawn from several sources.
(iii) Transformation: The data is not merely transferred across but transformed. For
example, demographic overlays are commonly used in market research. The data is
made usable and navigable.
(iv) Data Mining: This stage is concerned with the extraction of patterns from the data. A
pattern can be defined as a given set of facts (data) F, a language L and some
measures of certainty C.

(v) Integration and evaluation: The patterns identified by the systems are interpreted
into knowledge which can then be used to support human decision making. For
example, prediction and classification tasks, summarizing the contents of a data
base or explaining observed phenomena.
(b) Data Definition Language (DDL): It defines the conceptual schema providing a link
between the logical (the way the user views the data) and physical (the way in which the
data is stored physically) structures of the database. The logical structure of a database
is a schema. A subschema is the way a specific application views the data from the
database.
Some of the functions of Data Definition Language (DDL) are as follows:
(i) They define the physical characteristics of each record, field in the record, field’s
data type, field’s length, field’s logical name and also specify relationships among
the records,
(ii) They describe the schema and subschema,
(iii) They indicate the keys of the record,
(iv) They provide means for associating related records or fields,
(v) They provide for data security measures,
(vi) They provide for logical and physical data independence.
Question 4
(a) Explain Star Network Topology. Discuss its advantages and disadvantages. (4 Marks)
(b) Describe various value added services offered by a Data Centre. (4 Marks)
Answer
(a) Star Network Topology: Star topology is characterized by communication channels
emanating from centralized control. The processing nodes in a star network topology
interconnect directly with a central system. Each terminal, small computer or large main
frame can communicate only with the central site and not with other nodes in the
network. If it is desired to transmit information from one node to another, it can be done
only by sending the details to the central node, which in turn sends them to the
destination. For example, a star network may be used in banking for centralized record
keeping in an on-line branch office environment.
Advantages:
• It is easy to add new nodes and remove existing nodes.
• A node failure does not bring down the entire network.
• It is easier to diagnose network problems through a central hub.

Disadvantages:
• If the central hub fails, the whole network ceases to function.
• It costs more to cable a star configuration than other topologies as more cable is
required than for a bus or ring configuration.
(b) Value added services provided by a data centre:
(i) Database monitoring: This is done via a database agent, which enables the high
availability of the database through comprehensive automated management.
(ii) Web monitoring: This is to assess and monitor website performance, availability,
integrity and the responsiveness from a site visitor’s perspective. It also reports on
HTTP, FTP service status, monitors URL availability and round-trip response times,
and verifies Web content accuracy and changes.
(iii) Backup and Restore: It provides centralized multi-system management
capabilities. It is also a comprehensive integrated management solution for
enterprise data storage using specialized backup agents for the operating system,
database, open files and application.
(iv) Intrusion Detection System (IDS): Host-based Intrusion Detection Systems operate on
a host to detect malicious activity on that host and Network-based ID systems operate
on network data flows. The IDS is scalable so that the system grows with the
organization, from smaller networks to enterprise installation. It provides automated
network-based security assessment and policy compliance evaluation.
(v) Storage on Demand: It provides the back-end infrastructure as well as the
expertise, best practices and proven processes so as to give a robust, easily
management and cost-effective storage strategy. It provides data storage
infrastructure that supports users’ ability to access information at any given
moments – one that gives the security, reliability and availability needed to meet
company demands.
Question 5
(a) URN and URL (2 Marks)
(b) HTTP and HTML (3 Marks)
(c) Half Duplex and Full Duplex Connection (3 Marks)
Answer
(a) URN: A Uniform Resource Name (URN) is a specification of URI (Uniform Resource
Identifier) that identifies the resource by name ie. it functions like a person's name.
URL: A Uniform Resource Locator (URL) is a specification of URI that defines the
network location of a specific resource ie. it resembles to a person's street address. It is

used to address and access individual Web pages and Internet resources. The format of
a URL is: protocol/Internet address/Web page address.
(b) HTTP: HTTP stands for HyperText Transfer Protocol and is defined as the set of rules for
transferring files (text, graphic images, sound, video, and other multimedia files) on the
World Wide Web. All computers in the web communicate with each other using HTTP. As
soon as a Web user opens their Web browser, the user is indirectly making use of HTTP.
HTML: HTML stands for HyperText Markup Language and is the main markup language
for web page. HTML lets the creator of a Web page specify how text will be displayed
and how to link to other Web pages, files, and Internet services. These links are formally
known as hypertext links, because they are activated when a user clicks on specific text
or images within a Web page.
(c) Half-duplex Connection: A half-duplex connection (or Semi-duplex) is a connection in
which the data flows in one direction or the other, but not both at the same time. With this
type of connection, each end of the connection transmits in turn. This type of connection
makes it possible to have bidirectional communications using the full capacity of the line.
For example: Walkie Talkie.
Full-Duplex Connection: A Full-duplex connection is a connection in which the data
flows in both directions simultaneously. Each end of the line can thus transmit and
receive at the same time, which means that the bandwidth is divided in two for each
direction of data transmission if the same transmission medium is used for both
directions of transmission. For example: mobile phones.
Question 6
A book publisher of Information Technology offers discount to its customers on the basis of
customer type as detailed below:
Customer Type Discount
Book Seller 30%
Library 20%
Student 10%
Further if number of copies purchased is more than 20, then additional discount of 5% is
allowed irrespective of customer type. Number of books, unit price of each book and customer
type are given as input.
Draw a flow chart to calculate the net amount after all discount and print customer type,
number of copies and net amount. (8 Marks)

Answer
Let us define the variables:
Customer Type: CT; Discount: DISC; Unit Price of Each Book: X
Number of Copies: NC; Net Amount: AMT
Start
Read CT, NC, X
If CT= If CT= If CT= No

No No Student
Book Library
Seller? ? ?
Yes Yes Yes
If NC Yes If NC Yes If NC Yes

> 20? > 20? > 20?
No No No
DISC = 0.3 DISC = 0.35 DISC = 0.25 DISC = 0.15
DISC = 0.2 DISC = 0.1
Print
“Invalid
Customer
AMT = NC *(X - DISC*X)
Type”
Print CT, NC, AMT
Stop

Question 7
(i) Smart Cards
(ii) Bluetooth
(iii) Collaborative CRM
(iv) Operational Data Store (ODS)
(v) Telnet (2 x 4 = 8 Marks)
Answer
(i) Smart Cards: Smart cards have an embedded microchip instead of magnetic strip. The
chip contains all the information a magnetic strip contains but offers the possibility of
manipulating the data and executing applications on the card. Three types of smart cards
are widely available - Contact Cards, Contactless Cards and Combi Cards.
(ii) Bluetooth: Bluetooth is a specification that describes how mobile phones, computers
and Personal Digital Assistants (PDA) can be easily interconnected using a short range
wireless connection. Using this technology, users of cell phone and PDA can get quickly
synchronized with information in desktop or notebook, initiate the sending or receiving of
a fax, initiate a print out or in general, have a total coordination between these devices.
(iii) Collaborative CRM: Collaborative CRM facilitates interactions with customers through
all channels like personal, letter, fax, phone, web, E-mail and supports co-ordination of
employee teams and channels. It is a solution that brings people, processes and data
together so companies can better serve and retain their customers. The data/activities
can be structured, unstructured, conversational, and/or transactional in nature.
(iv) Operational Data Store (ODS): An ODS is an integrated database of operational data.
Its sources include legacy systems and it contains current or near term data. An ODS
may contain 30 to 60 days of information and are used in some data warehouse
architectures to provide near real time reporting capability in the event where the data
warehouse's loading time or architecture prevents it from being able to provide near real
time reporting capability.
(v) Telnet: Telnet is a protocol that allows us to connect to remote computers (called hosts)
over a TCP/IP network (such as the Internet). We use software called a telnet client on
our computer to make a connection to a telnet server (i.e., the remote host). Once our
telnet client establishes a connection to the remote host, our client becomes a virtual
terminal, allowing us to communicate with the remote host from our computer.

SECTION – B
Question No. 8 is compulsory.
Question 8
(a) “Business environment exhibits many characteristics.” Explain. (3 Marks)
(b) What are the different responsibilities of a strategic leader? (3 Marks)
(c) “Firms can use benchmarking process to achieve improvement in diverse range of
management functions.” Elucidate. (3 Marks)
(d) Why functional strategies are needed for any business? (3 Marks)
(e) Discuss the major dimensions of strategic decisions. (3 Marks)
Answer
(a) Business environment exhibits many characteristics as follows:
• Environment is complex: The environment consists of a number of factors,
events, conditions and influences arising from different sources and is complex
because it is somewhat easier to understand in parts but difficult to grasp in totality.
• Environment is dynamic: The environment is constantly changing in nature. Due
to the many and varied influences operating; there is dynamism in the environment
causing it to continuously change its shape and character.
• Environment is multi-faceted: What shape and character an environment
assumes depends on the perception of the observer. A particular change in the
environment, or a new development, may be viewed differently by different
observers, i.e. as an opportunity for one company and a threat for another.
• Environment has a far reaching impact: The growth and profitability of an
organization depends critically on the environment in which it exists. And thus any
environmental change has an impact on the organization in several different ways.
(b) A strategic leader has several responsibilities, including the following:
♦ Environment Scanning.
♦ Dealing with the diverse and cognitively competitive situations.
♦ Managing human capital.
♦ Effectively managing the company's operations.
♦ Sustaining high performance over time.
♦ Willing to make candid, courageous, and yet pragmatic decisions.
♦ Decision-making responsibilities that cannot be delegated.
♦ Seeking feedback through face-to-face communications.
♦ Being spokesman of the organisation.

(c) Benchmarking is a process of finding the best practices within and outside the industry to
which an organisation belongs. Knowledge of the best practices helps in setting
standards and finding ways to match or even surpass own performances with the best
performances.
Benchmarking is a process of continuous improvement in search for competitive
advantage. Firms can use benchmarking process to achieve improvement in diverse
range of management function such as mentioned below:
1. maintenance operations,
2. assessment of total manufacturing costs,
3. product development,
4. product distribution,
5. customer services,
6. plant utilisation levels; and
7. human resource management.
(d) The reasons why functional strategies are really important and needed for business can
be enumerated as follows:
• Functional strategies facilitate flow of strategic decisions to the different parts of an
organisation.
• They act as basis for controlling activities in the different functional areas of
business.
• The time spent by functional managers in decision-making is reduced as plans lay
down clearly what is to be done and policies provide the discretionary framework
within which decisions need to be taken.
• Functional strategies help in bringing harmony and coordination as they remain part
of major strategies.
• Similar situations occurring in different functional areas are handled in a consistent
manner by the functional managers.
(e) The major dimensions of strategic decisions are given below:
• Strategic issues require top-management decisions: Strategic issues involve
thinking in totality of the organizations and also there is lot of risk involved and
hence required to be considered by the top management.
• Strategic issues involve the allocation of large amounts of company
resources: They may require huge financial investment to venture into a new area
of business or the organization may require huge number of manpower with new set
of skills in them.

• Strategic issues are likely to have a significant impact on the long term
prosperity of the firm: Generally the results of strategic implementation are seen
on a long term basis and not immediately.
• Strategic issues are future oriented: Strategic thinking involves predicting the
future environmental conditions and how to orient for the changed conditions.
• Strategic issues usually have major multifunctional or multi-business
consequences: As they involve organization in totality they affect different sections
of the organization with varying degree.
• Strategic issues necessitate consideration of factors in the firm’s external
environment: Strategic focus in organization involves orienting its internal
environment to the changes of external environment.
Question 9
(i) A company’s strategy has always to be proactive in nature.
(ii) Culture promotes better execution of strategy. (2 x 2 = 4 Marks)
(b) A global company has three characteristics. Explain. (3 Marks)
Answer
(a) (i) Incorrect: A company’s strategy is a blend of proactive actions and reactive actions
by the management. Reactive actions are required to address unanticipated
developments and environmental conditions. Thus, not every strategic move is the
result of proactive and deliberate management actions. At times, some kind of
strategic reaction or adjustments are also required.
(ii) Correct: Strong cultures in an organisation promotes good strategy execution when
there’s fit and hurt execution when there’s negligible fit. A culture grounded in
values, practices, and behavioural norms that match what is needed for good
strategy execution helps energize people throughout the company to do their jobs in
a strategy-supportive manner, adding significantly to the power and effectiveness of
strategy execution.
(b) The global company views the world as one market minimizing the importance of national
boundaries. It has three attributes:
(i) It is a conglomerate of multiple units located in different parts of the globe but all
linked with common ownership.
(ii) Multiple units draw a common pool of resources such as money, credit, patents,
trade name, etc.
(iii) The units respond to common strategy.

Question 10
Explain the major steps which are required for the successful implementation of supply chain
management in the business organization. (7 Marks)
Answer
The following are the major steps which are required for the successful implementation of
Supply Chain Management in the business organizations:
1. Product development: Customers and suppliers must work together in the product
development process. When products are developed and launched in shorter time, it
would help organizations to remain competitive.
2. Procurement: Procurement requires careful resource planning, quality issues, identifying
sources, negotiation, order placement, inbound transportation and storage. Organizations
have to coordinate with suppliers in scheduling the uninterrupted supplies and also to
involve them in planning the manufacturing process.
3. Manufacturing: Flexible manufacturing processes must be in place to respond to market
changes. They should be adaptive to accommodate customization and changes in the
taste and preferences. Changes in the manufacturing process be made to reduce
manufacturing cycle.
4. Physical distribution: Delivery of final products to customers is the last position in a
marketing channel. Availability of the products at the right place at right time is important
for each channel participant. Through physical distribution processes serving the
customer become an integral part of marketing.
5. Outsourcing: Outsourcing is not limited to the procurement of materials and
components, but also include outsourcing of services that traditionally have been
provided within an organization. The company ought to focus on those activities where it
has competency and everything else will be outsourced.
6. Customer services: Organizations through interfaces with the company's production
and distribution operations develop customer relationships so as to satisfy them. They
work with customer to determine mutually satisfying goals, establish and maintain
relationships. This in turn helps in producing positive feelings in the organization and the
customers.
7. Performance measurement: There is a strong relationship between the supplier,
customer and organisation. Supplier capabilities and customer relationships can be
correlated with a firm performance. Performance is measured in different parameters
such as costs, customer service, productivity and quality.
Question 11
From the following information relating to X Ltd. company, prepare BCG Matrix and also
analyse it.

Product Revenues Percent Profit Percent Percentage Percentage

(in `) Revenues (in `) Profit Market Industry
Share Growth
Rate
A 60 Crore 48 1200 Lakh 48 80 + 15
B 40 Crore 32 500 Lakh 20 40 + 10
C 20 Crore 16 750 Lakh 30 60 - 20
D 05 Crore 04 50 Lakh 02 05 - 10
Total 125 Crore 100 2500 Lakh 100
(4+3 = 7 Marks)
Answer
Using the BCG approach, a company classifies its different businesses on a two dimensional
Growth-Share Matrix. In the Matrix, the vertical axis represents market growth rate and
provides a measure of market attractiveness. The horizontal axis represents relative market
share and serves as a measure of company strength in the market. With the given data on
market share and industry growth rate of X Ltd., its four products are placed in the BCG matrix
as follows:
Relative Market Share
High Low
Product A Product B
Market Growth Rate
[80% Market Share [40%Market Share

High
+15% Growth Rate] +10%Growth Rate]

Stars Question Marks
Product C Product D
[60% Market Share [05% Market Share
Low
-20% Growth Rate] -10% Growth Rate]

Cash Cows Dogs
Product A. It falls in the Star category and is in the best position with high relative market
share and a high industry growth rate. This product has the best opportunities for expansion. It
will require heavy investment to maintain its present position.
Product B. It is a question mark product that has a relatively low market share, yet competes
in a high growth industry. This product will also need lot of cash to hold its share. If
unattended, it is capable of becoming a cash trap.
Product C. It is a cash cow for the business, has a relatively high market share competing in
an industry with negative growth rate. The company should take advantage of its present

position that may be difficult to maintain in the long run. Currently it needs less investment to
maintain its market share.
Product D. It is presently placed in the Dog category, is in the worst position as it has
relatively a low market share and competes in an industry with negative growth rate. This
product does not have much future. It should be minimized by means of divestment or
liquidation.
Question 12
(a) Identify the Generic Strategy used in the following examples:
(i) Bell Computer has decided to rely exclusively on direct marketing.
(ii) Our basic strategy was to charge a price so low that micro computer makers
couldn’t do the software internally for that cheaply.
(iii) ‘MD TV’, a TV channel has identified a profitable audience niche in the electronic
media. It has further exploited that niche through the addition of new channels like
‘MD TV’ Profit and Image. (3 Marks)
(b) What do you mean by Logistic Strategy? What are the different areas to examine while
developing a logistic strategy? (1 + 3 = 4 Marks)
Answer
(a) In the given examples the generic strategies that are being followed are given as under:
(i) Differentiation: Bell Computers is differentiating on product delivery as computer
market is highly competitive and the products are very similar.
(ii) Cost Leadership: Keeping the prices low so that micro computer makers acquire
the software rather than developing themselves is a case of cost leadership.
(iii) Focus: MD TV has identified a profitable area (audience niche) and is focusing on it.
(b) Management of logistics is a process that integrates the flow of supplies into, through
and out of an organization to achieve a level of service that facilitate movement and
availability of materials in a proper manner.When a company creates a logistics strategy
it is defining the service levels at which its logistics is smooth and is cost effective.
A company may develop a number of logistics strategies for specific product lines,
specific countries or specific customers because of constant changes in supply chains.
There are different areas that should be examined for each company that should be
considered and should include:
• Transportation: Does the current transportation strategies help service levels
required by the organisation?
• Outsourcing: Areas of outsourcing of logistics function are to be identified. The
effect of partnership with external service providers on the desired service level of
organisation is also to be examined.

• Competitors: Review the procedures adopted by competitors. It is also to be

judged whether adopting the procedures followed by the competitors will be overall
beneficial to the organisation. This will also help in identifying the areas that may be
avoided.
• Availability of 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.
• Strategic uniformity: The objectives of the logistics should be in line with overall
objectives and strategies of the organisation. They should aid in the
accomplishment of major strategies of the business organisation.
Question 13
(a) Concentric Diversification and Conglomerate Diversification. (4 Marks)
(b) Operational Control and Management Control. (3 Marks)
Answer
(a) The following are the principal points of distinction between concentric diversification and
conglomerate diversification:
(i) Concentric diversification occurs when a firm adds related products or markets. On
the other hand conglomerate diversification occurs when a firm diversifies into areas
that are unrelated to its current line of business.
(ii) In concentric diversification, the new business is linked to the existing businesses
through process, technology or marketing. In conglomerate diversification, no such
linkages exist; the new business/product is disjointed from the existing
businesses/products.
(iii) The most common reasons for pursuing a concentric diversification are that
opportunities in a firm’s existing line of business are available. However, common
reasons for pursuing a conglomerate growth strategy is that opportunities in a firm's
current line of business are limited or opportunities outside are highly lucrative.
(b) Differences between Operational Control and Management Control are as under:
(i) The thrust of operational control is on individual tasks or transactions as against
total or more aggregative management functions. When compared with operational,
management control is more inclusive and more aggregative, in the sense of
embracing the integrated activities of a complete department, division or even entire
organisation, instead or mere narrowly circumscribed activities of sub-units. For
example, procuring specific items for inventory is a matter of operational control, in
contrast to inventory management as a whole.

(ii) Many of the control systems in organisations are operational and mechanistic in
nature. A set of standards, plans and instructions are formulated. On the other hand
the basic purpose of management control is the achievement of enterprise goals –
short range and long range – in an effective and efficient manner.
Question 14
(a) Product Life Cycle (4 Marks)
(b) Components of Value Chain (3 Marks)
OR
Six Sigma (3 Marks)
Answer
(a) Product Life Cycle is a useful concept for guiding strategic choice. Product Life Cycle is
an S-shaped curve which exhibits the relationship of sales with respect of time for a
product that passes through the four successive stages of introduction, growth, maturity
and decline.
Introduction Stage: The first stage of PLC is the introduction stage in which competition
is almost negligible, prices are relatively high and markets are limited.
Growth Stage: The second phase of PLC is growth stage. In the growth stage, the
demand expands rapidly, prices fall, competition increases and market expands. The
customer has knowledge about the product and shows interest in purchasing it.
Maturity Stage: The third phase of PLC is maturity stage. In this stage, the competition
gets tough and market gets stablised. Profit comes down because of stiff competition. At
this stage organisations may work for maintaining stability.
Decline Stage: In the declining stage of PLC, the sales and profits fall down sharply due
to some new product replaces the existing product. So a combination of strategies can
be implemented to stay in the market either by diversification or retrenchment.
Introduction
Maturity
Decline
Growth
Sales
Time
Figure: Product Life Cycle

(b) EITHER
Value chain. It describes the activities within an organization that go to make up a
product / service. Value chain of a manufacturing organization comprises of primary and
supportive activities.
Primary Activities are inclusive of:
• inbound logistics,
• operations,
• outbound logistics,
• marketing and sales; and
• services.
Supportive Activities relate to:
• procurement,
• human resource management,
• technology development; and
• infrastructure.
OR
Meaning of Six Sigma: Primarily Six sigma means maintenance of the desired quality in
processes and end products. It means taking systemic and integrated efforts toward
improving quality and reducing cost.
It is a highly disciplined process that helps in developing and delivering near-perfect
products and services. It strives to meet and improve organizational goals on quality,
cost, scheduling, manpower, new products and so on. It works continuously towards
revising the current standards and establishing higher ones. Six sigma strives that
99.99966% of products manufactured are defect free.
Six Sigma efforts target three main areas:
(i) Improving Customer Satisfaction
(ii) Reducing cycle time
(iii) Reducing defects

Question 1
Describe briefly, the following terms with reference to Information Technology:
(i) Multi-Processing
(ii) Virtual Memory
(iii) Meta Data
(iv) Semantics
(v) Partitioned Database
(vi) Multimedia Network
(vii) Middleware
(viii) Repeaters
(ix) Extranet
(x) Uniform Resource Locator (URL) (1 x 10 =10 Marks)
Answer
(i) Multi-Processing: Multiprocessing refers to the use of two or more central processing
units, linked together, to perform coordinated work simultaneously. The jobs can be
processed more rapidly by adopting multiprocessing. This is used for major control
applications like railway traffic control etc
(ii) Virtual Memory: Virtual memory is a memory management technique developed for
multitasking kernels. It gives the programmers the illusion of a primary storage that is for
all practical purposes never ending. It uses the hardware and software features, which
provide automatic segmentation of program and for moving the segments from
secondary to primary storage when needed. It allows programmer to consider unlimited
memory size, though not in physical terms.
(iii) Meta Data : Meta data or ‘data about data’ is used to inform operators and users of the
data warehouse about its status and the information held within the data warehouse.
The most recent date for loading data, the business meaning of a data item and the
number of users that are logged in currently, are examples of meta data
(iv) Semantics: This is one of the aspects of digital communication defined by a protocol. It
refers to the type and order of messages used to ensure reliable and error free
information transfer.
(v) Partitioned Database: It is a type of distributed database where processing of

application programs and data can be performed at more than one site. In a partitioned
database, the database is divided into parts or segments that are required and
appropriate for respective sites so that only those segments are distributed without costly
replication of the entire data.
(vi) Multimedia Network: It is a communication network that transmits data, voice, image,
video etc.
(vii) Middleware: The network system implemented within the client/server technology is
commonly called as middleware. Middleware is all the distributed software needed to
allow clients and servers to interact. General Middleware allows communication,
directory services, queuing, distributed file sharing, and printing.
(viii) Repeaters: Repeaters are the devices that solve the snag of signal degradation, which
results as data is transmitted along the cables. It boosts or amplifies the signals before
passing it through to the next section of cable.
(ix) Extranet: An Extranet is an extension of an Intranet that makes the latter accessible to
outside companies or individuals with or without an Intranet. It is also defined as a
collaborative Internet connection with other companies and business partners. The
Extranet is thus an extended Intranet, which isolates business communication from the
Internet through secure solutions.
(x) Uniform Resource Locators (URL): A URL is the unique address for a file that is
accessible on the Internet and are used to address and access individual web pages as
well as internet resources. The format of URL is protocol / internet address / web page
address.
Question 2
(a) Describe any four basic functions of an operating system. (4 Marks)
(b) Convert the following from one number system to another number system along with
working notes :
(i) (10101.001)2 = ( )10
(ii) (55.25)10 =( )2 (2 × 2 = 4 Marks)
Answer
(a) The basic functions of an operating system are given as follows:
• Scheduling Jobs: Operating systems can determine the sequence in which jobs are
executed by using the priorities established by the organization.
• Managing Hardware and Software Resources: Operating systems cause the user’s
application program to be executed by loading it into primary storage and then cause
the various hardware units to perform as specified by the application.
• Maintaining System Security: They may require users to enter a password that
identifies users as being authorized to have access to the system.
• Enabling Multiple User Resource Sharing: They can handle the scheduling and
execution of the application programs for many users at the same time, this feature is
termed as multiprogramming.
• Handling Interrupts: An interrupt is a technique used by the operating system to
temporarily suspend the processing of one program in order to allow another program
to be executed. Interrupts are issued when a program requests an operation that
does not require the CPU, such as input or output, or when the program exceeds
some predetermined time limit.
• Maintaining Usage Records: Operating systems can keep track of the amount of time
used by each user for each system unit - the CPU, secondary storage, and input and
output devices. Such information is usually maintained for the purpose of charging
users’ departments for their use of the organization’s computing resources.
(b) (i) (10101.001)2 = ( )10
= 1 × 24 + 0 × 23 + 1 × 22 + 0 × 21 + 1 × 20 + 0 × 2-1 + 0 × 2-2 + 1 × 2-3
= 1 × 16 + 0 + 1 × 4 + 0 + 1 × 1 + 0 + 0 + 1/ 23
= 16 + 4 + 1 + 1/ 8
= 21 + .125
Therefore (10101.001)2 = (21.125)10
(ii) (55.25)10 = ( )2
55.25
2 55 .25 × 2 = .50 0
2 27 1 .50 × 2 = 1.00 1
2 13 1
2 6 1
2 3 0
2 1 1
0 1
=110111.01
Therefore (55.25)10 = (110111.01)2
Question 3
(a) Explain briefly any four components of Local Area Network (LAN). (4 Marks)
(b) Describe Mesh Network Topology. Discuss its advantages. (4 Marks)
Answer
(a) Major components of Local Area Network (LAN) are given as follows:
• File Server: A network file server is a computer system used for the purpose of
managing the file system, servicing the network printers, handling network
communications, and other functions. A server may be dedicated, in which all of its
processing power is allocated to network functions, or it may be non-dedicated
which means that a part of the servers functions may be allocated as a workstation
or DOS-based system.
• The network operating system: It is loaded into the server’s hard disk along with
the system management tools and user utilities. When the system is restarted,
NetWare boots and the server commands its control.
• Workstations: Workstations are attached to the server through the Network
Interface Card and the cabling. Workstations are normally intelligent systems, such
as the IBM PC. The concept of distributed processing relies on the fact that
personal computers attached to the networks perform their own processing after
loading programs and data from the server. Hence, a workstation is called an Active
Device on the network. After processing, files are stored back on the server where
they can be used by other workstations.
• Network Interface Card: Every device connected to a LAN needs a Network
Interface Card (NIC) to plug into the LAN. For example, a PC may have an Ethernet
card installed in it to connect to an Ethernet. LAN.
• Network Cabling: Once the server, workstations and network interface cards are in
place, networkcabling is used to connect everything together. The most popular
type of network cable is the shielded twisted-pair, co-axial and fibre optic cabling.
(b) Mesh Network Topology: In a mesh network topology, each of the network node and
other related devices are interconnected with one another. This is a type of networking
topology where each node must not only capture and disseminate its own data, but also
serve as a relay for other nodes, which means, it must collaborate to propagate the data
in the network. A mesh network can be designed using a flooding technique or a routing
technique. This type of topology is very expensive as there are many redundant
connections, thus it is not mostly used in computer networks.
A mesh network may be fully connected or connected with only partial links. In fully
interconnected topology, each node is connected by a dedicated point to point link to
every node. This means that there is no need of any routing function as nodes are
directly connected. The reliability is very high as there are always alternate paths
available if direct link between two nodes is down or dysfunctional. Fully connected
networks are not very common because of the high cost. Only military installations, which
need high degree of redundancy, may have such networks, that too with a small number
of nodes.
Partially connected mesh topology is the general topology for wide area networks. Here,
computer nodes are widely scattered and it is the only choice. The function of routing
information from one node to another is done using routing protocol or procedures.
Major advantages of Mesh Network Topology are given as follows:
• It yields the greatest amount of redundancy in the event therefore in case, one of
the nodes fails, the network traffic can be redirected to another node.
• In this topology, network problems are easier to diagnose.
• Since messages travel through a dedicated line, directly to the intended recipient;
therefore, privacy and security are enhanced.
Question 4
(a) Explain the factors in determining the best file organization. (4 Marks)
(b) What is the difference between Internet and www ? Explain. (4 Marks)
Answer
(a) The factors to be considered in determining the best file organization are given as
follows:
• File Volatility: It refers to the number of additions and deletions to a file in a given
period of time. A file that constantly keeps changing is a highly volatile file. An
Indexed-sequential file organization will not be suitable for such files, because
additions have to be placed in the overflow area and constant reorganization of the
file would have to occur. Other direct access methods would be a better choice.
Even the sequential file organization could be appropriate if there are no
interrogation requirements.
• File Activity: It is the proportion of master file records that are actually used or accessed
in a given processing run. At one extreme is the real-time file where each transaction is
processed immediately and hence at a time, only one master record is accessed. This
situation obviously requires a direct access method. At the other extreme is a file, such as
a payroll master file, where almost every record is accessed when the weekly payroll is
processed. In such case, a sequentially ordered file would be more efficient.
• File Interrogation: It refers to the retrieval of information from a file. When the retrieval
of individual record needs to be fast to support a real-time operation such as airline
reservation, then some direct organization would be required. But if requirements of
data can be delayed, then all the individual requests or information can be batched and
run in a single processing run with a sequential file organization.
• File Size: Large files that require many individual references to records with
immediate response must be organized for certain direct access method. However,
with small files, it may be more efficient to search sequentially or with more efficient
binary search, to find an individual record.
(b) Difference between Internet and WWW: The Internet & the World Wide Web (the Web),
though used interchangeably, are not synonymous. Internet is the hardware part - it is a
network of computer networks connected through either copper wires, fiber optic cables
or wireless connections whereas, the World Wide Web can be termed as the software
part – it is a collection of web pages connected through hyperlinks and URLs. In short,
the World Wide Web is one of the services provided by the Internet. Other services over
the Internet include e-mail, chat and file transfer services.
The following table highlights some of the major differences between Internet and WWW:
Internet WWW
Nature Hardware Software
Comprises of Network of networks, copper Files, folders & documents
wires, fiber - optic cables stored in various computers
& wireless networks
Governed By Internet Protocol Hyper Text Transfer Protocol
Dependency This is the base platform and is It depends on the Internet to
independent from WWW. work.
Question 5
(a) What is M-Commerce? Discuss the business areas affected by M-Commerce technology.
(4 Marks)
(b) Discuss any four dimensions of E-Commerce Security. (4 Marks)
Answer
(a) M-Commerce: Mobile Commerce or M-Commerce is about the explosion of applications
and services that are becoming accessible from Internet-enabled mobile devices. M-
commerce is the buying and selling of goods and services through wireless handheld
devices such as cellular telephone and Personal Digital Assistants (PDAs) known as
next-generation e-commerce; m-commerce enables users to access the Internet without
any need to find a place to plug in. The emerging technology behind m-commerce, which
is based on the Wireless Application Protocol (WAP), has made strides across the globe,
where mobile devices equipped with Web-ready micro-browsers are much more
common.
The business areas affected by M-Commerce include:

• Financial services, which includes mobile banking (when customers use their
handheld devices to access their accounts and pay their bills) as well as brokerage
services, in which stock quotes can be displayed and trading conducted from the
same handheld device.
• Telecommunications, in which service changes, bill payment and account reviews
can be conducted from the same handheld device.
• Service/retail, as consumers are given the ability to place and pay for orders on-the-
fly.
• Information services, which include the delivery of financial news, sports figures and
traffic updates to a single mobile device.
(b) Different dimensions of E-Commerce security are :
• Integrity - The ability to ensure that information being displayed on a web site or
transmitted or received over the internet has not been altered in any way by an
unauthorized party.
• Non-repudiation - The ability to ensure that e-commerce participants do not deny
(i.e. repudiate) their online actions.
• Authenticity - The ability to identify the identity of a person or entity with whom we
are dealing in the internet.
• Confidentiality - The ability to ensure that messages and data are available only to
those who are authorized to view them.
• Privacy - The ability to control the use of information about oneself.
• Availability - The ability to ensure that an e-commerce site continues to function as
intended.
Question 6
(a) Distinguish between "Condition Stub" and "Condition Entries" in a Decision, Table.
(2 Marks)
(b) Top town Municipality, is levying annual House Tax, as per following rules :
Size of House in Sq. Metre House tax rate per Square Metre
Less than 100 Nil
Upto Next 400 ` 10
Upto Next 500 ` 20
More than 1000 ` 25
There is a surcharge of 5% of the value of House Tax. Taking into account the above
factors, draw a flow chart to compute appropriate total House Tax including surcharge for
any one house. (6 Marks)
Answer
(a) Condition Stub: It is the part of a decision table. It comprehensively lists the
comparisons and conditions.
Condition Entries: They enable to list in its various columns; the possible permutations
of answers to the questions in the condition stub.
(b) Note: The information given in the question for drawing the flowchart is incomplete. In
the given conditions, it is not clear that what is the house tax rate for 1000 sq. metre. To
properly answer the question, any of the following assumptions can be made:
(i) upto 100/less than or equal to 100: Nil
or
(ii) 1000 and more than 1000: 25
Based on first assumption, the flowchart can be drawn as follows:
START
HOUSETAX = 0
INPUT H_SIZE
YES
IF H_SIZE HOUSETAX = (H_SIZE
> 1000 – 1000) x 25 + 500 x
20 + 400 x 10
NO
YES HOUSETAX = (H_SIZE

IF H_SIZE – 500) x 20 + 400 x 10
> 500
NO
NO
IF H_SIZE
>100
YES
PRINT
“HOUSE HOUSETAX = (H_SIZE - 100) x 10
TAX NIL”
HOUSETAX = HOUSETAX +
HOUSETAX x 0.05
PRINT
HOUSETAX
STOP
Question 7
(i) Spooling software
(ii) Program Debugging
(iii) Host-based Intrusion Detection (HID)
(iv) Honeypot
(v) Electronic Purses (2 x 4 = 8 Marks)
Answer
(i) Spooling software: The purpose of spooling software is to compensate for the speed
differences between the computer and its peripheral devices such as input and output
devices. It is used in large systems and network computing environment. To preclude the
computer from being slowed down by input and output devices, many computer systems
employ spooling software. These programs take the results of computer programs and
move them from primary memory to disk. The area on the disk where the program results
are sent is commonly called the output spooling area. Thus, the output device can be left
to interact primarily with the disk unit, not the CPU. Spooling utilities can also be used on
the input side, so that programs and data to be processed are temporarily stored in an
input spooling area on disk.
(ii) Program Debugging: Debugging is a process of finding and reducing the number of
bugs, or defects, in a computer program before putting the program into use. There is a
real necessity to debug a program, i.e. to cleanse it from errors. Debugging is a
necessary process followed in almost any new software. Towards this purpose, the
programmers device a set of test data transactions to test the various alternative
branches in the program. The results got from the computer are compared with one
derived manually prior to computer processing. If the results do not match for any
reasons, the programmer then verifies the flowchart and coding sheet to hunt for the
bugs. This process is called program debugging.
(iii) Host-based Intrusion Detection (HID): Host-based Intrusion Detection systems are
designed to monitor, detect, and respond to user and system activity and attacks on a
given host. Some more robust tools also offer audit policy management and
centralization, supply data forensics, statistical analysis and evidentiary support, and in
certain instances provide some measure of access control. It is concerned with what
occurs on the hosts themselves. Host-based intrusion detection is best suited to combat
internal threats because of its ability to monitor and respond to specific user actions and
file accesses on the host.
(iv) Honeypot: Honeypot is a trap set to gather information regarding an attacker or intruder
into our system. It is noteworthy to mention here that honeypots do not replace other
traditional internet security systems; rather they are an additional level or system.
Honeypots are designed to mimic systems that an intruder would like to break into but
limit the intruder from having access to the entire network. If a honeypot is successful,
the intruder will have no idea that s/he is being tracked and monitored. Most of the
honeypots are installed inside firewalls so that they can better be controlled, though it is
possible to install them outside of firewalls also. In a fully deployed Intrusion Detection
System (IDS), some administrators may choose to install a honeypot; essentially a
system component setup as bait or decoy for intruders. Honeypots can be used as early
warning systems on an attack, decoys from critical systems, and data collection sources
for attack analysis. A honeypot should only be deployed when the organization has the
resources to maintain it.
(v) Electronic Purses: Electronic purse is another way to make payments over the internet.
It is very similar to a prepaid card. For example, Bank issues a stored value cards to its
customers, the customers can then transfer value from their accounts to the cards at an
ATM, a personal computer, or a specially equipped telephone. The electronic purse card
can be used as an ATM card (debit card) as well as a credit card. While making
purchases, customers pass their cards through a vendor's point of sale terminal. No
credit check or signature is needed. Validation is done through a Personal Identification
Number (PIN Number).
Once the transaction is complete, funds are deducted directly from the cards and
transferred to the vendor's terminal. Merchants can transfer the value of accumulated
transactions to their bank accounts by telephone as frequently as they choose. When the
value on a card is spent, consumers can load additional funds from their accounts to the
card.
SECTION – B
Question 8
(a) "A business enterprise is a sub-system of the larger environmental system."Discuss
the relationship between the organization and its business environment. (3 Marks)
(b) What do you mean by financial strategy of an organization? How the worth of a
business is evaluated? (3 Marks)
(c) According to Michael Porter, strategies allow organizations to gain competitive
advantages from different bases. Explain these bases as mentioned by Porter.(3 Marks)
(d) “The Ansoff’s product market growth matrix is a useful tool that help businesses their
product and market growth strategy.” Elucidate this statement. (3 Marks)
(e) “Three key characteristics of six Sigma separate it from other quality programs of the
past,” Explain these characteristics. (3 Marks)
Answer
(a) A business does not function in isolation, rather, it acts as a sub-system of its
environment consisting of society, economy, laws, competitors and so on. Business
draws certain inputs from environment in form of resources and information and
transforms them into outputs. The relationship between the organization and its
environment may be discussed in terms of interactions between them that can be broadly
outlined as below:
• Exchange of information: The organization scans the external environmental
variables, their behaviour and changes, generates important information and uses it
for its planning, decision-making and control purposes.
On the other hand, the organization itself transmits information to several external
agencies either voluntarily, inadvertently or legally.
• Exchange of resources: The organization receives inputs — finance, materials,
manpower, equipment etc., from the external environment. It sustains itself by
employing the above inputs for involving or producing output of products and
services.
The organization is also dependent on the external environment for disposal of its
output of products and services to a wide range of clientele.
• Exchange of influence and power: The external environment holds considerable
power over the organization both by virtue of its being more inclusive as also by virtue of
its command over resources, information and other inputs. The external environment is
also in a position to impose its will over the organization. Governmental control,
competitors, customers, suppliers, investors etc., exercise considerable power and

influence over the organization.
In turn, the organization itself is sometimes in a position to wield power and influence
over the external environment by virtue of its command over resources and information.
(b) Meaning of the Financial Strategy: The financial strategies of an organization are related
to several finance/ accounting concepts considered to be central to strategy implementation.
These are: acquiring needed capital/sources of fund, developing projected financial
statements/budgets, management/ usage of funds, and evaluating the worth of a business.
Various methods for determining a business’s worth can be grouped into three main
approaches which are as follows:
(i) Net worth or stockholders’ equity: Net worth is the total assets minus total
outside liabilities of an individual or a company.
(ii) Future benefits to owners through net profits: These benefits are considered to
be much greater than the amount of profits. A conservative rule of thumb is to
establish a business’s worth as five times the firm’s current annual profit. A five-year
average profit level could also be used.
(iii) Market-determined business worth: This, in turn, involves three methods. First,
the firm’s worth may be based on the selling price of a similar company. The second
approach is called the price-earnings ratio method whereby the market price of the
firm’s equity shares is divided by the annual earnings per share and multiplied by
the firm’s average net income for the preceding years. The third approach can be
called the outstanding shares method whereby one has to simply multiply the
number of shares outstanding by the market price per share and add a premium.
(c) According to Porter, strategies allow organizations to gain competitive advantage from
three different bases: cost leadership, differentiation, and focus. These bases form
different generic strategies as follows:
• Cost leadership emphasizes producing standardized products at a very low per-
unit cost for consumers who are price-sensitive. It frequently results from
productivity increases and aggressive pursuit of cost reduction throughout the
development, production, marketing, and distribution processes. It allows a firm to
earn higher profits than its competitors.
• Differentiation is a strategy aimed at producing products and services considered
unique industry wide and directed at consumers who are relatively price-insensitive.
attributes like quality, environmental impact and customer service.
• Focus means producing products and services that fulfil the specific needs of small
groups of consumers. It involves selecting or focusing a market or customer
segment in which to operate. By focussing on the needs of particular segments that
exists within the industry, an organisation can achieve competitive advantage either
through lower cost or differentiation.
The basic purpose of following a generic strategy is to gain competitive advantage so as
to ensure long-time survival and growth.
(d) The Ansoff’s product market growth matrix (proposed by Igor Ansoff) is a useful tool that
helps businesses decide their product and market growth strategy. This matrix further
helps to analyse different strategic directions. According to Ansoff there are four
strategies that organisation might follow. These options for strategies are summarised
below and shown in the matrix drawn under:
• Market Penetration: Market penetration refers to a growth strategy where the
business focuses on selling existing products into existing markets.
• Market Development: Market development refers to a growth strategy where the
business seeks to sell its existing products into new markets.
• Product Development: Product development refers to a growth strategy where
business aims to introduce new products into existing markets.
• Diversification: Diversification refers to a growth strategy where a business
markets new products in new markets.
As market conditions change over time, a company may shift product-market growth
strategies. For example, when its present market is fully saturated there may be no
choice other than to pursue new market.
Existing
New Products
Products
Existing Market Product
Markets Penetration Development
Market
New Markets Diversification
Development
Ansoff’s Product Market Growth Matrix
(e) Three key characteristic that separate Six Sigma from other quality programs of the past.
1. Six Sigma is customer focused. While moving towards Six Sigma it is almost an
obsession to keep external customer needs in plain sight, driving the improvement
effort.
2. Six Sigma projects produce major returns on investment. Six Sigma can help in
improving the returns. A satisfied customer brings loyalty. Defects lead to increased
costs and complains. Ideally, an organisation wants to avoid any defects leading to
increased cost and reduced customer satisfaction. Thus, six sigma helps a
company to save more money by delivering near perfect products and services.
3. Six Sigma changes how management operates. Six Sigma is much more than
improvement project. Senior executives and leaders throughout a business are
learning the tools and concepts of Six Sigma: new approaches to thinking, planning,
and executing to achieve results. In a lot of ways, Six Sigma is about putting into
practice the notions of working smarter, not harder.
Question 9
(a) State with reasons which of the following statements is correct or incorrect.
(i) A strategic group consists of rival firms with similar competitive approaches and
positions in the market.
(ii) Total Quality Management (TQM) focusses on preventing rather than detecting
defects. (2 x 2 = 4 Marks)
(b) Explain the elements of strategic vision. (3 Marks)
Answer
(a) (i) Correct: A strategic group consists of those rival firms that have similar competitive
approaches and positions in the market. Organisations in the same strategic group
can resemble one another in any of the several ways: they may have comparable
product-line breadth, sell in the same price/quality range, emphasize the same
distribution channels, use essentially the same product attributes to appeal to
similar types of buyers, depend on identical technological approaches, or offer
buyers similar services and technical assistance.
(ii) Correct: TQM is a management philosophy that seeks to prevent poor quality in
products and services, rather than simply to detect and sort out defects. A little
precaution before a crisis occurs is preferable to a lot of fixing up afterward. This
also saves cost and time.
(b) A strategic vision steers an organization in a particular direction, charts a strategic path
for it to follow in preparing for the future, and moulds organizational identity. The three
elements of a strategic vision are:
1. Coming up with a mission statement that defines what business the company is
presently in and conveys the essence of “Who we are and where we are now?”
2. Using the mission statement as basis for deciding on a long-term course making
choices about “Where we are going?”
3. Communicating the strategic vision in clear, exciting terms that arouse organization
wide commitment.
Question 10
What do you mean by micro environment of business? Explain its elements. (7 Marks)
Answer
The environment of business can be categorised into two broad categories micro-environment
and macro-environment. Micro-environment is related to small area or immediate periphery of
an organization. Micro-environment influences an organization regularly and directly.
Developments in the micro environment have direct impact on the working of organizations.
Micro environment includes the company itself, its suppliers, marketing intermediaries,
customer markets and competitors. The elements of micro environment are specific to the said
business and affects its working on short term basis.
• Consumers / Customers: Customers who may or may not be consumers are the people
who pay money to acquire organisational products and services. Consumer is the one
who ultimately consumes or uses the product or services. The marketer has to closely
monitor and analyse the changes in the consumer tastes and preferences and their
buying habits. Consumer occupies the central position in the market.
• Competitors: Competitors are the other business entities that compete for resources as
well as markets. A study of the competitive scenario is essential for the marketer,
particularly threats from competition.
• Organization: Individuals occupying different positions or working in different capacities
in organizations consists of individuals who come from outside. They have different and
varied interests. An organization has several non-specific elements in form of individuals
and groups that may affect its activities. Owners, board of directors and employees form
part of organisation.
• Market: The market is larger than customers. The market is to be studied in terms of its
actual and potential size, its growth prospect and also its attractiveness. The marketer
should study the trends and development and the key success factors of the market.
• Suppliers: Suppliers form an important component of the micro environment. The
suppliers provide raw materials, equipment, services and so on. Suppliers with their own
bargaining power affect the cost structure of the industry. They constitute a major force,
which shapes competition in the industry.
• Market Intermediaries: Intermediaries bridge the gap between the organisations and
customers. They are in form of stockist, wholesalers and retailers. They exert
considerable influence on the business organizations. In many cases the consumers are
not aware of the manufacturer of the products they buy. They buy product from the local
retailers or big departmental stores.
Question 11
(a) How is TOWS Matrix an improvement over the SWOT Analysis? Describe the
construction of TOWS Matrix. (2+2 = 4 Marks)
(b) Explain the role of Strategic Management in non-profit organisations. (3 Marks)
Answer
(a) Through SWOT analysis organisations identify their strengths, weaknesses, opportunities
and threats. While conducting the SWOT Analysis managers are often not able to come
to terms with the strategic choices that the outcomes demand. Heinz Weihrich developed
a matrix called TOWS matrix by matching strengths and weaknesses of an organization
with the external opportunities and threats. The incremental benefit of the TOWS matrix
lies in systematically identifying relationships between these factors and selecting
strategies on their basis.
The matrix is outlined below:
Internal elements Organizational Organizational

Strengths Weaknesses
External Elements
Strategic Options
Environmental opportunities SO : Maxi – Maxi WO : Mini – Maxi
(and risks)
Environmental threats ST : Maxi – Mini WT : Mini – Mini
The TOWS Matrix is a relatively simple tool for generating strategic options. Through
TOWS matrix four distinct alternative kinds of strategic choices can be identified.
SO (Maxi-Maxi): SO is a position that any firm would like to achieve. The strengths can
be used to capitalize or build upon existing or emerging opportunities.
ST (Maxi-Mini): ST is a position in which a firm strives to minimize existing or emerging
threats through its strengths.
WO (Mini-Maxi): The strategies developed need to overcome organizational weaknesses
if existing or emerging opportunities are to be exploited to maximum.
WT (Mini-Mini): WT is a position that any firm will try to avoid. An organization facing
external threats and internal weaknesses may have to struggle for its survival.
(b) Business organization can be classified as commercial or non-commercial on the basis of
the interest they have. A commercial organization has profit as its main aim. We can find
many organizations around us, which do not have any commercial objective of making
profits. Their genesis may be for social, charitable, or educational purposes. Examples of
non-commercial organizations can be The Institute of Chartered Accountants of India,
municipal corporations, non-governmental organizations such as Help-Age or Child
Relief and You. Their main aim is to provide services to members, beneficiaries or public
at large.
The strategic-management process is being used effectively by countless non-profit
governmental organizations. Many non-profit and governmental organizations outperform
private firms and corporations on innovativeness, motivation, productivity, and strategic
management.
Compared to for-profit firms, non-profit and governmental organizations often function as
a monopoly, produce a product or service that offers little or no measurability of
performance, and are totally dependent on outside financing. Especially for these
organizations, strategic management provides an excellent vehicle for developing and
justifying requests for needed financial support.
Question 12
(a) Define Strategic Change. Explain the various stages/phases of change process as
propounded by Kurt Lewin. (1+3 = 4 Marks)
(b) Explain in brief, how E-commerce environment has affected the business? (3 Marks)
Answer
(a) The changes in the environmental forces often require businesses to make modifications
in their existing strategies and bring out new strategies. Strategic change is a complex
process and it involves a corporate strategy focused on new markets, products, services
and new ways of doing business.
To make the change lasting, Kurt Lewin proposed three phases of the change process
for moving the organization from the present to the future. These stages are unfreezing,
changing and refreezing.
(i) Unfreezing the situation: The process of unfreezing simply makes the individuals
or organizations aware of the necessity for change and prepares them for such a
change. Lewin proposes that the changes should not come as a surprise to the
members of the organization. Sudden and unannounced change would be socially
destructive and morale lowering. The management must pave the way for the
change by first “unfreezing the situation”, so that members would be willing and
ready to accept the change.
(ii) Changing to New situation: Once the unfreezing process has been completed and
the members of the organization recognise the need for change and have been fully
prepared to accept such change, their behaviour patterns need to be redefined.
H.C. Kellman has proposed three methods for reassigning new patterns of
behaviour. These are compliance, identification and internalisation.
(iii) Refreezing: Refreezing occurs when the new behaviour becomes a normal way of
life. The new behaviour must replace the former behaviour completely for
successful and permanent change to take place. In order for the new behaviour to
become permanent, it must be continuously reinforced so that this new acquired
behaviour does not diminish or extinguish.
(b) Growing use of the Internet by businesses and consumers reshapes the economic
landscape and alters traditional industry boundaries. The following features stand out:
• The Internet makes it feasible for companies everywhere to compete in global
markets.
• Competition in an industry is greatly intensified by the new e-commerce strategic
initiatives of existing rivals and by the entry of new, enterprising e-commerce rivals.
• Entry barriers into the e-commerce world are relatively low.
• Online buyers gain bargaining power because they confront far fewer obstacles to
comparing the products, prices, and shipping times of rival vendors.
• The Internet makes it feasible for companies to reach beyond their borders to find
the best suppliers and, further, to collaborate closely with them to achieve
efficiency gains and cost savings.
• Internet and PC technologies are advancing rapidly, often in uncertain and
unexpected directions.
• The internet results in much faster diffusion of new technology and new idea across
the world.
• The e-commerce environment demands that companies move swiftly.
• E-commerce technology opens up a host of opportunities for reconfiguring industry
and company value chains.
• The Internet can be an economical means of delivering customer service.
• The needed e-commerce resource in short supply is human talent-in the form of
both technological expertise and managerial know-how.
Question 13
(a) Transformational leadership style and Traditional leadership style. (4 Marks)
(b) Top-down and Bottom-up strategic planning. (3 Marks)
Answer
(a) Difference between Transformational and Traditional leadership style:
1. Traditional leadership borrowed its concept from formal Top-down type of
leadership such as in the military. The style is based on the belief that power is
bestowed on the leader, in keeping with the traditions of the past. This type of
leadership places managers at the top and workers at the bottom of rung of power.
In transformational leadership, leader motivates and empowers employees to
achieve company’s objectives by appealing to higher ideas and values. They use
charisma and enthusiasm to inspire people to exert them for the good of the
organization.
2. Traditional leadership emphasizes characteristics or behaviours of only one leader
within a particular group whereas transformational leadership provides a space to
have more than one leader in the same group at the same time. According to the
transformational leadership style, a leader at one instance can also be a follower in
another instance. Thus there is element of flexibility in the relationships.
3. Traditional leadership is more focused in getting the work done in routine
environment. Traditional leaders are effective in achieving the set objectives and
goals whereas transformational leaders have behavioural capacity to recognize and
react to paradoxes, contradictions and complexities in the environment.
Transformational leadership style is more focus on the special skills or talents that
the leaders must have to practice to face challenging situations. Transformational
leaders work to change the organisational culture by implementing new ideas.
4. In traditional leadership, followers are loyal to the position and what it represents
rather than who happens to be holding that position whereas in transformational
leadership followers dedicate and admire the quality of the leader not of its
position.
(b) Difference between Top Down and Bottom-up Strategic Planning:
Strategic Planning is a top level management function. The flow of planning can be from
corporate to divisional level or vice versa. There are two approaches to strategic
planning: Top-Down or Bottom-up.
The difference between the two approaches to planning is as under:
1. Top-down strategic planning describes centralised approach to strategy formulation
in which the corporate centre or head office determines mission, strategic intent,
objectives and strategies for the organisation as a whole.
Bottom-up strategic planning is the characteristics of autonomous or semi-
autonomous divisions or subsidiary companies in which the corporate centre does
not conceptualise its strategic role as being directly responsible for determining the
mission, objectives or strategies of its operational character.
2. In Top-Down strategic planning, unit managers are seen as implementers of pre

specified corporate strategies.
In Bottom-up strategic planning the corporate level may prefer to act as a catalyst
and facilitator, keeping things reasonably simple and confining itself to perspective
and broader strategic intent.
Question 14
(a) Elements of Marketing Mix. (4 Marks)
(b) Importance of Strategic Management (3 Marks)
OR
Network Structure (3 Marks)
Answer
(a) Marketing mix is a systematic way of classifying the key decision areas of marketing
management. It is the set of controllable marketing variables that the firm blends to
produce the response it wants in the target market. The original framework of marketing
mix comprises of 4Ps- product, price, place and promotion. These are subsequently
expanded to highlight certain other key decision areas like people, processes, and
physical evidence. The elements of original framework are:
Product: stands for the “goods and service” combination the company offers to the target
market. Strategies are needed for managing existing product over time adding new ones
and dropping failed products. Strategic decisions must also be made regarding branding,
packaging and other products features such as warrantees.
Price: stands for the amount of money customers have to pay to obtain the product.
Necessary strategies pertain to the location of the customers, price flexibility, related
items within a product line and terms of sale. The price of a product is its composite
expression of its value and utility to the customer, its demand, quality, reliability, safety,
the competition it faces, the desired profit and so on.
Place: stands for company activities that make the product available to target customers.
One of the most basic marketing decisions is choosing the most appropriate marketing
channels. Strategies applicable to the middleman such as the wholesalers and the
retailers must be designed.
Promotion: stands for activities that communicate the merits of the product and
persuade target consumers to buy it. Strategies are needed to combine individual
methods such as advertising, personal selling, and sales promotion into a coordinated
campaign. In addition promotional strategies as a product move from earlier stages from
later stages of its life
EITHER
(b) Importance of Strategic Management: Strategic Management is very important for the
survival and growth of business organizations in dynamic business environment. Other
major benefits of strategic management are as follows:
• Strategic management helps organizations to be more proactive rather than reactive
in dealing with its future. It facilitates to work within vagaries of environment and
remains adaptable with the turbulence or uncertain future. Therefore, they are able
to control their own destiny in a better way.
• It provides better guidance to entire organization on the crucial point – what it is
trying to do. Also provides framework for all major business decisions of an
enterprise such as on businesses, products, markets, organizational structures, etc.
• It facilitates to prepare the organization to face the future and act as pathfinder to
various business opportunities. Organizations are able to identify the available
opportunities and identify ways and means as how to reach them.
• It serves as a corporate defense mechanism against mistakes and pitfalls. It helps
organizations to avoid costly mistakes in product market choices or investments.
• Over a period of time strategic management helps organization to evolve certain
core competencies and competitive advantages that assist in the fight for survival
and growth.
OR
Network structure is a newer and somewhat more radical organisational design. Its
essential features are as follows:
1. It is termed as “non-structure” as it eliminates in house functions and outsources
many of them.
2. An organisation organised in this manner is often called “virtual organisation”
because it is composed of a series of project groups or collaborations linked by
constantly changing non hierarchical, cob-web like structures.
3. Network structures become most useful when the environment of a firm is unstable
and is expected to remain so. Under such conditions, there is usually a strong need
for innovation and quick response.
4. Instead of having salaried employees, it may contract with people for a specific
project or length of time.
5. Long term contracts with suppliers and distributors replace services that company
could provide for itself.

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PAPER – 7: INFORMATION TECHNOLOGY AND STRATEGIC MANAGEMENT

SECTION – A: INFORMATION TECHNOLOGY

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(d) The attributes of Transaction Processing System (TPS) are as follows:

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• Sponsorship/Buy-in Needed: Executive Level, Department Level, Process Owner

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© The Institute of Chartered Accountants of India

The Five Rules of the Extranet are as follows:

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© The Institute of Chartered Accountants of India

5 Interpretation Have simple software for users Invest heavily in in-house

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© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

SECTION –B: STRATEGIC MANAGEMENT

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© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

♦ Deleting existing files from database,

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Centralized Computing is considered better than Decentralized Computing because of the

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• Design - Inventing, developing and analyzing possible alternative actions of the

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• Coding: Programmers must choose a module implementation and integration

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(b) The output for the above program is as follows:

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© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

SECTION –B: STRATEGIC MANAGEMENT

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© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

ii. Changing Relationships with customers and suppliers: Distinguishable, innovation is

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v. Research and Development: R&D strategy is designed to match external

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level support. on the direction of top

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© The Institute of Chartered Accountants of India

 Freedom from electrical interference.

Input Process Output

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Read PROD_TYPE, CUST_TYPE, VAL_ORDER

Yes DISC = 0.10 *VAL_ORDER

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If VAL_ORDER >=10,000? DISC = 0.20 * VAL_ORDER

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© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India