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Q1 : What is globalization? What are its benefits? How does globalization help in international business? Give some instances.

Ans:- Globalisation is a process where businesses are dealt in markets around the world, apart from the local and national markets. According to business terminologies, globalisation is defined as ‘the worldwide trend of businesses expanding beyond their domestic boundaries’. It is advantageous for the economy of countries because it promotes prosperity in the countries that embraceglobalisation. In this section, we will understand globalisation, its benefits and challenges.

Benefits of globalisation The merits and demerits of globalisation are highly debatable. While globalisation creates employment opportunities in the host countries, it also exploits labour at a very low cost compared to the home country. Let us consider the benefits and ill-effects of globalisation. Some of the benefits of globalisation are as follows:• Promotes foreign trade and liberalisation of economies.• Increases the living standards of people in several developing countries through capital investments in developing countries by developed countries.• Benefits customers as companies outsource to low wage countries. Outsourcing helps the companies to be competitive by keeping the cost low, with increased productivity.• Promotes better education and jobs.• Leads to free flow of information and wide acceptance of foreign products, ideas, ethics, best practices, and culture.• Provides better quality of products, customer services, and standardised delivery models across countries.• Gives better access to finance for corporate and sovereign borrowers.• Increases business travel, which in turn leads to a flourishing travel and hospitality industry across the world.• Increases sales as the availability of cutting edge technologies and production techniques decrease the cost of production.• Provides several platforms for international dispute resolutions in business, which facilitates international trade.

Globalizations help in international business

Global companies – Companies, which invest in other countries for business and also operate from other countries, are considered as global companies. They have multiple manufacturing plants across the globe, catering to multiple markets. The transformation of a company from domestic to international is by entering just one market or a few selected foreign markets as an exporter or importer. Competing on a truly global scale comes later, after

the company has established operations in several countries across continent sand is racing against rivals for global market leadership. Thus, there is a meaningful distinction between a company that operates in few selected foreign countries and a company that operates and markets its products across several countries and continents with manufacturing capabilities in several of these countries. Companies can also be differentiated by the kind of competitive strategy they adopt while dealing internationally. Multinational strategy and global competitive strategy are the two types of competitive strategy.

Multinational strategy – Companies adopt this strategy when each country’s market needs to be treated as self contained. It can be for the following reasons:° Customers from different countries have different preferences and expectations about a product or a service.° Competition in each national market is essentially independent of competition in other national markets, and the set of competitors also differ from country to country.° A company’s reputation, customer base, and competitive position in one nation have little or no bearing on its ability to successfully compete in another nation. Some of the industry examples for multinational competition include beer, life insurance, and food products.

Global competitive strategy

– Companies adopt this strategy when prices and competitive conditions across the different country markets are strongly linked together and have common synergies. In a globally competitive industry, a company’s business gets affected by the changing environments in different countries. The same set of competitors may compete against each other in several countries. In a global scenario, a company’s overall competitive advantage is gauged by the cumulative efforts of its domestic operations and the international operations worldwide. A good example to illustrate is Sony Ericsson, which has its headquarters in Sweden, Research and Development setup in USA and India, manufacturing and assembly plants in low wage countries like China, and sales and marketing worldwide. This is made possible because of the ease in transferring technology and expertise from country to country.

Q.2 What is culture and in the context of international business environment how does it impact international business decisions?

Ans:- Culture is defined as the art and other signs or demonstrations of human customs, civilisation,and the way of life of a specific society or group. Culture determines every aspect that is from birth to death and everything in between it. It is the duty of people to respect other cultures, other than their culture. Research shows that national ‘‘cultures’’ generally characterise the dominant groups’ values and practices in society, and not of the marginalised groups, even though the marginalised groups represent a majority or a minority in the society. Culture is very important to understand international business. Culture is the part of environment, which human has created, it is the total sum of knowledge, arts, beliefs, laws, morals, customs, and other abilities and habits gained by people as part of society.

The culture in an international business organisation.

1. Cross cultural management Cross cultural management is defined as the development and application of knowledge about cultures in the practice of international management, when people involved have diverse culturalidentities.International managers in senior positions do not have direct interaction that is face-to-face with other culture workforce, but several home based managers handle immigrant groups adjusted into a workforce that offers domestic markets. The factors to be considered in cross cultural management are:• Cross cultural management skills. Handling cultural diversity.• Factors controlling group creativity. Ignoring diversity.

Cross cultural management skills The ability to demonstrate a series of behaviour is called skill. It is functionally linked to achieving a performance goal. The most important aspect to qualify as a manager for positions of international responsibility is communication skills. The managers must adapt to other culture and have the ability to lead its members.

The managers cannot expect to force members of other culture to fit into their cultural customs, which is the main assumption of cross cultural skills learning. Any organisation that tries to enforce its behavioral customs on unwilling workers from another culture faces conflict. The manager has to possess the skills linked with the following:• Providing inspiration and appraisal systems.• Establishing and applying formal structures.• Identifying the importance of informal structures.• Formulating and applying plans for modification.• Identifying and solving disagreements.

Handling cultural diversity Cultural diversity in a work group offers opportunities and difficulties. Economy is benefited when the work groups are managed successfully. The organization’s capability to draw, save, and inspire people from diverse cultures can give the organization spirited advantages instructures of cost, creativity, problem solving, and adjusting to change. Cultural diversity offers key chances for joint work and co-operative action. Group work is a joint venture where, the production of two or more individuals or groups working in cooperation is larger than the combined production of their individual work.

Factors controlling group creativity On complicated problem solving jobs diverse groups do better than identical groups. Diverse groups require time to solve issues of working together. In diverse groups, over time, the work experience helps to overcome gender, racial, and organizational and functional discriminations. But the impact cannot be evaluated and there is always risk in creating a diverse group. A successful group is profitable with respect to quick results and the creation of concern for the future. Negative stereotypes are emphasised if it fails. Factors related with the industry and company culture are also important. Diverse groups do well when the members:• Assist to make group decisions.• Value the exchange of different points of view.• Respect each other’s skills and share their own.• Value the chance for cross-cultural learning.• Tolerate uncertainty and try to triumph over the inefficiencies that occur when members of diverse cultures work together. A diverse group is known to be more creative, where the members are tolerant

of differences. The top management level provides its moral and administrative support, and gives time for the group to overcome the usual process difficulties. They also provide diversity training, and the group members are rewarded for their commitment.

Ignore diversity It may be difficult to manage diversity. It is better to ignore, which is an alternative. The management must:• Ignore cultural diversity within the employees.• Down-play the importance of cultural diversity. This rejection to identify diversity happens when management:• Fails to have sufficient awareness and skills to identify diversity.• Identifies diversity but does not have the skill to manage the diversity.• Recognizes the negative consequences of identifying diversity probably cause greater issues than ignoring it.• Thinks the likely benefits of identifying and managing diversity do not validate the expected expenses.• Identifies that the job provides no chances for drawing advantages from diversity. Strategies to ignore diversity may be possible when culture groups are given various jobs, and sharing required resources are independent in the workplace. Groups and group members are equally incorporated and work together. In such cases, confusion occurs when the diverse value systems are not identified that are held by different staff groups.

Q.5 Discuss the international marketing strategies. How is it different from domestic marketing strategies?

Ans:- International marketing can be defined as marketing of goods and services outside the firm’s home country. International marketing has the following two forms of marketing: • ? Multinational marketing. ? Global marketing. Multinational marketing is very complex as a firm engages in marketing operations in many countries. In multinational marketing, a firm visualises different countries as one market and build their brand or service according to the business environment of the foreign countries. Global marketing indicates the integrated and coordinated marketing activities across many different markets. Taking into account the various conditions on which markets vary and depend, appropriate marketing strategies should be devised and adopted. Like, some countries prevent foreign firms from entering into its market space through protective legislation. Protectionism on the long run results in inefficiency of local firms as it is inept towards competition from foreign firms and other technological advancements. It also increases the living costs and protects inefficient domestic firms. The decision of a firm to compete internationally is strategic; it will have an effect on the firm, including its management and operations locally. The decision of a firm to compete in foreign markets has many reasons. Some firms go abroad as the result of potential opportunities to exploit the market and to grow globally. And for some it is a policy driven

decision to globalise and to take advantage by pressurising competitors. 1. Segmentation Firms that serve global markets can be segregated into several clusters based on their similarities. Each such cluster is termed as a segment. Segmentation helps the firms to serve the markets in an improved way. Markets can be segmented into nine categories, but the most common method of segmentation is on the basis of individual characteristics, which include the behavioral, psychographic, and demographic segmentations. The basis of behavioral segmentation is the general behavioral aspects of the customers. Demographic segmentation considers the factors like age, culture, income, education and gender. Psychographic segmentation takes into account: beliefs, values, attitudes, personalities, opinions, lifestyles and so on.

2. Market positioning The next step in the marketing process is, the firms should position their product in the global market. Product positioning is the process of creating a favorable image of the product against the competitor’s products. In global markets product positioning is categorised as high-tech or high–touch positioning. The classification of high-tech and high-touch products. One challenge that firms face is to make a trade-off between adjusting their products to the specific demands of a country and gaining advantage of standardization such as the maintenance of a consistent global brand image and cost savings.

3. International product policy Some thinkers of the industry tend to draw a distinction between conventional products and services, stressing on service characteristics such as heterogeneity, inseparability from consumption, intangibility, and perishability. Typically, products are composed of some service component like, documentation, a warranty, and distribution. These service components are an integral part of the product and its positioning. Thus, it is important to consider the findings of marketing research and determine customer’s desires, motives, and expectations in buying a product. Firms have a choice in marketing their products across markets. Many a times, firms opt for a strategy which involves customisation, through which the firm introduces a unique product in each country, believing that tastes differ so much between countries that it is necessary to create a new product for each market. Standardization proposes the marketing of one global product, with the belief that the same product can be sold in different countries without significant changes. Finally, in most cases firms will go for some kind of adaptation. Here, when moving a product between markets minor modifications are made to the product.

4. International pricing decisions Pricing is the process of ascertaining the value for the product or service that will be offered for sale. In international markets, making pricing decisions is entangled in difficulties as it involves trade barriers, multiple currencies, additional cost considerations, and longer distribution channels. Before establishing the prices, the firm must know its target market well because when the firm is clear about the market it is serving, then it can determine the price appropriately. The pricing policy must be consistent with the firms overall objectives. Some common pricing objectives are: profit, return on investment, survival, market share, status quo, and product quality. The strategies for international pricing can be classified

into the following three types:•

Market penetration: It is the technique of selling a new product at a lower price than the current market price. Market holding: It is a strategy to maintain buy orders in order to maintain stability in a downward trend.• Market skimming: It is a pricing strategy where price of the goods are set high initially to skim the revenue from the market layer by layer. The factors that influence pricing decisions are inflation, devaluation and revaluation, nature of product or industry and competitive behaviour, market demand, and transfer pricing.

5. International advertising International advertising is usually associated with using the same brand name all over the world. However, a firm can use different brand names for historic reasons. The acquisition of local firms by global players has resulted in a number of local brands. A firm may find it unfavorable to change those names as these local brands have their own distinctive market. Therefore, the company may want to come-up with a certain advertising approach or theme that has been developed as a result of extensive global customer research. Global advertising themes are advisable for marketing across the world with customers having similar tastes. The purpose of international advertising is to reach and communicate to target audiences in more than one country. The target audience differs from country to country in terms of the response towards humour or emotional appeals, perception or interpretation of symbols and stimuli and level of literacy. Standardization is required for products by some firms. Standardization helps to achieve economies of scale and a consistent image can be established across markets.Standardisation also assists in utilising creative talent across markets, and facilitates good ideas to be transplanted from one market to other. International advertising can be thought of as communication process that transpires in multiple cultures that vary in terms of communication styles, values, and consumption patterns. International advertising is a business activity and not just a communication process. It involves advertisers and advertising agencies that create ads and buy media in different countries. International advertising is also reckoned as a major force that mirrors both social values, and propagates certain values worldwide. 6. International promotion and distribution Distribution of goods from manufacturer to the end user is an important aspect of business. Companies have their own ways of distribution. Some companies directly perform the distribution service by contacting others whereas a few companies take help from other companies who perform the distribution services. The distribution services include:• The purchase of goods.• The assembly of an attractive assortment of goods.• Holding stocks.• Promoting sale of goods to the customer.• The physical move

Q.3 Cosmos Limited wants to enter international markets. Will country risk analysis help Cosmos Limited to take correct decisions? Substantiate your answer.

Ans:- Country Risk Analysis (CRA) identifies imbalances that increase the risks in a cross-border investment. CRA represents the potentially adverse impact of a country’s environment on the multinational corporation’s cash flows and is the probability of loss due to exposure to the political, economic, and social upheavals in a foreign country. All business dealings involve risks. An increasing number of companies involving in external trade indicate huge business opportunities and promising markets .When business transactions occur across international borders, they bring additional risks compared to those in domestic transactions. These additional risks are called country risks which include risks arising from national differences in socio- political institutions, economic structures, policies, currencies, and geography. The CRA monitors the potential for these risks to decrease the expected return of a cross-border investment. Analysts have categorised country risk into following groups: • Economic risk – This type of risk is the important change in the economic structure that produces a change in the expected return of an investment. Risk arises from the negative changes in fundamental economic policy goals (fiscal, monetary, international, or wealth distribution or creation

Transfer risk – Transfer risk arises from a decision by a foreign government to restrict capital movements. It is analysed as a function of a country’s ability to earn foreign currency. Therefore, it implies that effort in earning foreign currency increases the possibility of capital controls.

Exchange risk – This risk occurs due to an unfavorable movement in the exchange rate. Exchange risk can be defined as a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

Location risk – This type of risk is also referred to as neighborhood risk. It includes effects caused by problems in a region or in countries with similar characteristics. Location risk includes effects caused by troubles in a region, in trading partner of a country, or in countries with similar perceived characteristics.•

Sovereign risk – This risk is based on a government’s inability to meet its loan obligations. Sovereign risk is closely linked to transfer risk in which a government may run out of foreign exchange due to adverse developments in its balance of payments. It also relates to political risk in which a government may decide not to honor its commitments for political reasons.•

Political risk – This is the risk of loss that is caused due to change in the political structure or in the politics of country where the investment is made. For example, tax laws, expropriation of assets, tariffs, or restriction in repatriation of profits, war, corruption and bureaucracy also contribute to the element of political risk. Risk assessment requires analysis of many factors, including the decision-making process in the government, relationships of various groups in a country and the history of the country. Country risk is due to unpredicted events in a foreign country affecting the value of international assets, investment projects and their cash flows. The analysis of country risks distinguishes between the ability to pay and the willingness to pay. It is essential to analyse the sustainable amount of funds a country can borrow. Country risk is determined by the costs and benefits of a country’s repayment and default strategies. The ways of evaluating country risks by different firms and financial institutions differ from each other. The international trade growth and the financial programs development demand periodical improvement of risk methodology and analysis of country risks.

Country Risk The historical brief helps to identify aspects that interfere in the future behavior of the country, reducing the ability to payback any external commitment. The main historical data provides a good understanding of the key factors which draw the behaviour of the society, the government, the private sector, the legal environment, the economical, political, and the relationships to neighbour nations and the world as a whole. The organization of the government and its features like political and administrative organization are also relevant aspects to be approached. The political forces which act in the country, their representatives and the main national issues must be focused. The other considerations include social aspects and their key-indicators like population growth rate, unemployment ratio, infant mortality rate, composition of the population and life expectancy. The geographic positioning and its related strengths and weaknesses are also critical aspects.

Q.4 How can managers in international companies adjust to the ethical factors influencing countries? Is it possible to establish international ethical codes? Briefly explain. Ans:- Ethics can be defined as the evaluation of moral values, principles, and standards of human conduct and its application in daily life to determine acceptable human behaviour. Business ethics pertains to the application of ethics to business, and is a matter of concern in the corporate world. Business ethics is almost similar to the generally accepted norms and principles. Behaviour that is considered unethical and immoral in society, for example dishonesty, applies to business as well. Most countries have similar ethical values, but are practiced differently. This section deals with the way individuals in different countries approach ethical issues, and their ethically acceptable behaviour. With the rise in global firms, issues related to ethical values and traditions become more common. These ethical issues create complications to Multi-National Companies (MNCs) while dealing with other countries for business. Hence, many companies have formulated well-designed codes of conduct to help their employees. Two of the most prominent issues that managers in MNCs operating in foreign countries face are bribery and corruption and worker compensation.

Bribery and corruption

– Bribery can be defined as the act of offering, accepting, or soliciting something of value for the purpose of influencing the action of officials in the discharge of their duties. Corruption is the abuse of public office for personal gain. The issue arises when there are differences in perception in different countries. For example, in the Middle East, it is perfectly acceptable to offer an official a gift. In Britain it is considered as an attempt to bribe the official, and hence, considered unlawful.

Worker compensation – Businesses invest in production facilities abroad because of the availability of low-cost labour, which enables them to offer goods and services at a lower price than their competitors. The issue arises when workers are exploited and are underpaid compared to the workers in the parent country who are paid more for the same job. The disparity arises due to the differences in the regulatory standards in the two countries. Companies use management techniques to encourage ethical behaviour at an organizational level. Various techniques of managing ethics like practicing ethics at the top level management, special training on ethics, forming committees to oversee ethical issues, and defining and implementing code of ethics are;

1.Top management – The senior management of a company must be committed to ensure that ethical standards are met. The chief executive of the company must not engage in business practices harmful to employees, or the society. The top management must focus on ethical practices while informing employees of their intention.

2. Code of ethics – One of the best practices for ethics is creating a ‘corporate ethical statement ‘and communicating it within the company. Such practices enhance the company’s public image. Almost all Fortune 500 companies have such codes.

3. Ethics committee – There are ethics committees in many firms to help them deal with and advise on work related ethical issues. The Chief Executive Officer can head the committee that includes the Board of Directors. Such a committee answers employee queries, helps the company to establish policies in uncertain areas, advises the Board on ethical issues, and oversees the enforcement of the code of ethics.

4. Ethics hotline – A company’s ethical hotline helps its employees report any ethical issues they face at work. The ethics committee then investigates these issues. Such hotline calls are treated confidential, where the caller’s identity is protected to encourage employees to report on ethical issues.

5. Ethics training programs – Most firms take ethics seriously and provide training for its managers and employees. Such training programs help the employees become familiar with the official policy on ethical issues. These programs demonstrate the use of these ethic policies in everyday decision-making. Ethics training is most effective

when conducted by managers and when focused on work environment.

6. Ethics and law – Both law and ethics focus on defining the perfect human behaviour, but they are not the same. Law is the government’s attempt to formalise rightful behaviour, but it is rarely possible to enforce written laws. It depends on individual or business ethics to reduce unlawful incidents. Ethical concepts are more complex than written rules since it deals with human dilemmas that go beyond the formal language of law.

Code of conduct for MNCs The code of conduct for MNCs refers to a set of rules that guides corporate behaviour. These rules prescribe the duties and limitations of a manager. The top management must communicate the code of conduct to all members of the organisation along with their commitment in enforcing the code. Some of the ethical requirements for international companies are as follows:• Respect basic human rights.• Minimise any negative impact on local economic policies.• Maintain high standards of local political involvement.• Transfer technology.• Protect the environment.• Protect the consumer.• Employ labour practices that are not exploitative. When a manager of an international firm faces an ethical problem, certain models help in solving these ethical issues. The first task is to consider the ethical and legal consequences of the issue and whether the action or its consequences are in accordance with the law, both in the home and host country

QM0016

Q 1 – Describe the three leadership styles. Ans : Leadership is the skill in which one person supports others in accomplishing a given task. It is the powerful skill that has the ability to make or even break an organisation. Leaders in an organisation guide the people to create innovative ideas as well as help them to achieve goals. Leadership is concerned about satisfying customers' as well as employees' needs. Leadership is more committed to continuous improvement. According to Jacobs & Jaques, "Leadership is a process of giving purpose (meaningful direction) to collective effort, and causing willing effort to be expended to achieve purpose The dominant behaviour pattern of a leader-manager in relation to his subordinates is known as

leadership style. There are three basic styles of leadership as follows: Autocratic or Authoritative Style. Democratic or Participative Style, and Laissez-faire or Free-rein Style.

Autocratic or Authoritative style An autocratic leader centralises power and decision making in himself and exercises complete control over the subordinates. In this style subordinates are compelled to follow the orders of the leader under threat or penalties. They have no opportunity to take part in goal setting, or take initiative or make suggestions. They are subject to close supervision and, thus have a tendency to avoid responsibility. The autocratic manager has little concern for the well-being of employees, who suffer from frustration and low morale. They do not have any sense of belonging to the organisation and try to work as little as possible.

Limitations: It should be clear from the above that there are several limitations of the autocratic style of leadership. ? It results in low morale due to the inner dissatisfaction of employees. ? Efficiency of production goes down in the long run. ? It does not permit development of future managers from among capable subordinates.

Despite the above limitations, autocratic leadership can be successfully applied in the following situations: ? When subordinates are incompetent and inexperienced. ? The leader prefers to be active and dominate in decision-making. ? The company endorses fear and punishment for disciplinary techniques. ? There is a little room for error in final accomplishment. ? Under conditions of stress when great speed and efficiency are required.

Democratic or Participative style The democratic style is also known as participative style. In this style, decisions are taken by the leader in consultation with the subordinates and with their participation in the decision-making process. The participative leader encourages subordinates to make suggestions and take initiative in setting goals and implementing decisions. This enables subordinates to satisfy their social and ego needs, which in turn, lead to their commitment to the organisational goals and higher productivity. Frequent interactions between the manager and subordinates help to build up mutual faith and confidence. Several benefits can be derived from the participative style of leadership as listed below: ? It helps subordinates to develop their potential abilities and assume greater responsibilities. ? It provides job satisfaction and improves the morale of employees. ? The group performance can be sustained at a high level due to the satisfied and cohesive nature of the group. However, the democratic style cannot be regarded as the best style under all circumstances. Its limitations are as follows:

? Decisions taken through consultation may cause delay and require compromises to meet different view-points. ? A few vocal individuals may dominate the decision-making process. ? No one individual may take the responsibility for implementing the decision taken by the group as a whole.

Laissez-faire or Free-rein style Laissez faire leadership style is just the opposite of autocratic style. A manager, who adopts this style, completely gives up his leadership role. The subordinate group is allowed to make decisions and it is left to the members of the group to do as they like. The role of any leader is absent. The group members enjoy full freedom as regards goal setting and acting on it. Hence, there is chaos and mismanagement of group goals. However, laissez faire leadership is found to be quite suitable where the subordinates are well-trained, competent and the leader-manager is able to fully delegate the powers of decision-making and action to the subordinates. Laissez faire style is suitable in the following situations: ? When leader is interested in delegating decision-making fully. ? Subordinates are well trained and highly knowledgeable. ? Organisation goals have been communicated well. In spite of these factors, this style should be adopted rarely because it may lead to chaos and mismanagement.

Q2 – What is PDCA cycle ? How do you implement PDCA cycle ? Ans: A Quality Management System (QMS) is based on set of interrelated processes. These processes go through cycle of Plan-Do-Check-Act. PDCA (plan-do-check-act) is a four stage problem solving checklist used to improve business processes. The PDCA concept was advanced by Dr. W. Edwards Deming; hence it is also referred as Deming circle or Deming wheel. The PDCA Cycle is four-stage process, which enables you to get from problem-faced to problem solved stage. It was initially developed by Walter Shewhart, a statistician at Bell Laboratories in the US who developed statistical process control. Hence it is also referred as Shewhart Cycle. The PDCA Cycle directs your efforts to bring continuous improvement in the organisation. This cycle enable you to start the improvement process with careful planning and effective action, and then make it an iterative process.

Each stage of the PDCA cycle involves:

? Plan: The first stage “Plan” identifies the problems and brings suitable ideas to solve these problems. The plan developed to make any changes must bring improvements in the organisation. This stage establishes processes to obtain results consistent with the expected output. With the focus of obtaining

the expected output, it plans to make accurate specification of the techniques, as part of its improvement process. ? Do: The stage “Do” develops and executes new design or process to solve the identified problems. The testing of new design or process does not interrupt the existing design, which works on a regular basis. The changes are done on small scale for trial basis. ? Check: The next stage “Check” helps to verify whether or not the results obtained from the changes done on trial basis meets the expected results. It is necessary to check the quality of the results to avoid any new problems. It compares the outputs of the new processes against the expected outputs to find out the any differences This stage finds out if the changes made to any process are in working condition.

? Act: Act implements the above evaluated changes on a large scale if it provides the expected results. This involves implementing the changes on the works that are done regularly. This stage makes sure the organisation gets the greatest benefits from the changes.

Implementing a PDCA cycle Implementing a PDCA cycle involves following steps:

1. PLAN: It involves the following steps:

? Step 1: Identify the problem ? Select the problem to be analysed. ? Define the problem and set up an accurate problem statement. ? Determine a measurable goal towards problem solving effort. ? Organise a process and gain approval of leadership.

? Step 2: Analyse the problem ? Identify and select one of the processes that cause the problem ? Map the process. ? Validate the map of the process. ? Find out the possible cause of the problem. ? Collect and analyse data related to the problem. ? Validate the original problem statement and revise if needed. ? Find out the root cause of the problem by collecting additional data.

2. DO: It involves the following steps:

? Step 3: Develop the solution ? Establish measures for selecting a solution. ? Create possible solutions to address the root causes of the problem. ? Select a solution. ? Gain authorisation for the selected solution.

? Plan the solution. ? Step 4: Implement a solution ? Execute the selected solution on a trial basis.

3. CHECK: It involves the following steps:

? Step 5: Evaluate the results ? Collect data on the solution. ? Examine the data on the solution. ? Check whether or not the solution executed on trial basis is achieving the desired result. ? Continue to look for incremental improvements.

At this level check whether the goals are achieved or not? If the goals are achieved then go to next step else go to step 1. 4. ACT: It involves the following steps:

? Step 6: Standardise the solution ? Identify the changes and appropriate training needed for full implementation. ? Implement the solution. ? Monitor of the solution. ? Refine the solution by incremental improvements.

Q3 – Differentiate between mission statement and vision statement. Ans : Mission statement: A short, formal statement which defines the organisation in terms of its business, its customers, the intention of the business and the aim of the organisation. It is a formal, short written statement for the purpose of the current functioning of the company or an organisation. The actions of the organisation are guided by the mission statement. Mission statement should spell out the overall goal, provide a sense of direction and guide in decision making. Critical components that clarify each organisation’s purpose are common in case of all effective mission statements. Mission statements often contain the following: ? Purpose and aim of the organisation. ? The organisation’s primary stakeholders: clients, stockholders, congregation etc. ? Responsibilities of the organisation towards the stake holders. ? Products and services offered.

As described by Hill, the mission statement consists of: A statement that contains the reason for using the product.

A statement of some desired future state (vision). A statement of the key values the organisation is committed to. A statement of major goals.

To resolve the differences between business stake holders, the mission statement can be used. Stake holders include employees consisting of both managers and executives, stockholders, board of directors, customers, suppliers, distributors, creditors, governments (local, state, federal etc), unions, competitors, NGO’s and the general public. The organisation’s strategies are affected by the stake holders. As per Vern McGinis, a mission statement should satisfy the following points: ? Define what the company is. ? Define what the company aspires to be (Vision Statement). ? Limit to execute some ventures. ? Broad enough to allow for creative growth. ? Distinguish the company from all others. ? Serve as framework to evaluate current activities. ? State clearly so that information is understood by all.

The firm’s core ideology and visionary goals are communicated by the company’s mission. This also comprises the company’s core values, core purpose and visionary goals. The visionary goals when selected, the core values and purpose of the firms should be discovered. Values and purpose must firmly exist in the organisation. In such case, the stake holders are most likely to believe in the company’s mission.

Vision statements To convey clearly and concisely the direction of the organisation, vision statements are coined, to be inspiring words chosen by successful leaders. One can powerfully communicate their intentions and motivate the team or organisation to realise an attractive and inspiring common vision of the future by crafting a clear mission statement and vision statement. Vision statement also defines the organisation’s purpose, but these statements do so in terms of the organisation’s values rather than bottom line measures (values are guiding beliefs about how things should be done). This statement defines the goal of the organisation for a specified time, and spell how the mission statements are executed as per plan. The purpose and the value of an organisation are both communicated by the vision statement. In case of employees, this gives a direction about how they are expected to behave and inspires them to give their best. When shared with customers and/or stake holders, it shapes customer/stake holder’s understanding of why they should be associated with this organisation. A vision statement is sometimes called as a future’s picture of the company. The vision statement along with the mission statement helps in strategic planning. The vision statement may apply to an entire organisation or to a single division of the company. A vision statement doesn’t tell how to get there; rather it sets the direction for business planning. Hence, it is important while crafting a vision statement to capture one’s imagination and passion to predict the future. While writing a vision statement, the mission statement and the core competencies are a valuable starting point for articulating ideas. While creating it one must be sure not to make it fall

into the trap of only thinking ahead a year or two. Once a vision statement is done, it will have a huge influence on decision making and the way one allocate resources.

Q4 - What is mean by strategic Quality Planning? Explain. Ans: Strategic quality planning is an integral part of every quality management activity. When quality is chosen by organisations as the differentiating factor, it becomes the central issue in strategic planning. Strategic quality planning process will shift the organisation and/or a department’s quality management team ahead of the notion of quick fixes and into the sphere of solutions. This leads to the development of quality management strategies. This process starts with defining what quality means with respect to an organisation’s point of view for developing quality standards, creating an idea for quality and translating the idea into a series of quality strategies.

1) Identify the organisational quality initiatives: The analysis in this phase consists of an understanding about the quality initiatives that are being used, why being used, the impact they had on the organisation, and if they are no longer used, why they were eliminated 2) Understanding the voice of the customer: this stage focuses on an organisation’s delivery of products and services to their customers. This will make sure a clear customer focus is given to the development of the strategic quality plan. 3) Identify employee involvement: Achieving employee’s understanding of customer relationships is crucial to the success of the strategic quality plan. 4) Conduct benchmark: At times, it happens that opportunities needs to be explored external to an organisation to learn what others are doing and to learn from them is often missed. Such attempt is typically highly beneficial and helps to give ideas as to how to improve the internal quality processes. 5) Develop the vision and strategic direction: The strategic quality vision will be initiated by the quality team. This will envision the structure and approach to quality throughout an organisation. 6) Develop a statement of quality and standards: Before heading towards the development of quality strategies, the team should develop a statement of quality. The appropriate quality standards applicable will be identified in this phase. 7) Identify the quality strategies: the quality strategies are developed in this stage. The quality strategies will translate the quality vision, the quality statements and quality standards into key strategies. 8) Develop operational effectiveness: the operational effectiveness plan will recognise the objectives needed to meet each quality strategy and the detailed action plans required to meet each objective. 9) Develop strategy measurements: The correct measures are critical to the effective management in the delivery of the quality strategies. They must be specific and critical.

Q5 – Write a note on customer satisfaction. What is mean by customer relationship Management? Ans: Customer satisfaction is a popular term that actually refers to the state perception of the customer. It is

used to describe the degree to which the customer’s requirements have been fulfilled when using the product or service. In the current global market, there is strong competition from foreign players who penetrate with deep pockets to promote their products in various media. Local companies need to have other means to increase customer base. Studies and surveys have proved that customer satisfaction is a key differentiator and hence has become a key business strategy both for local and global companies. Gaining customer loyalty is a seen as a cost-free, long-lasting method to acquire new customer. Customer satisfaction leads to positive word-of-mouth. It is seen as a key performance marker within the business and is considered as a part of the balanced scorecard. It helps to measure organisational performance against strategic goals. There are ways and means to measure customer satisfaction, like online and handwritten reviews, measuring stock-outs, measuring returns and studying the after – sale complaints and services records. Customer satisfaction is measured based on the feedback given by the customer. It helps to find out the areas of weaknesses that enables firm to work on methodologies to rectify defective processes and enhance performances. It is necessary for the organisation to make their customers be aware of such processes in order to give them assurance of the quality improvement process of the organisation. Customers should participate in the customer grievance redress system of the organisation. It gives lot of confidence to the customers to rely on the organisation?s systems as they also become part of the organisation in developing its processes for quality. The process to determine the customer satisfaction consists of various steps that are listed: ? Problem identification ? Define criteria and standards ? Collection of data ? Compare performance with criteria and standards ? Implementing change

Basic principles for customer satisfaction

Some of the basic principles used to satisfy customers are as follows:

? Stay in touch with your customers on regular basis. ? Create a customer focus group and invite 10-20 loyal customers to meet on regular basis. ? Create a website for customers to navigate easily and include „FAQ? page that explains users and customers. ? It is best to resolve customer?s complaints quickly and completely. Answering email and phone-calls within a stipulated time shows your care. ? Make your contact information easily available. Let them reach you in more than one ways – a dedicated mail service, phone service, personal mails or even a toll-free number helps. ? Make your employees be familiar about your customer service policy. ? Give your customers more than what they expect. Long term customers have to be specially accorded with a message.

? Customers have to be treated with respect. Courtesy principles like smiles, welcoming, using please, and thank you are polite manners which will endear them. ? Practise rewarding the customers with points for any referral, purchasing, etc. ? Invite your customers to your office during special occasions if your business is in local area

Customer Relationship Management Customer Relationship Management (CRM) is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends. CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. Some of the advantages of CRM are as follows:

? Provide better customer service. ? Increase customer revenues. ? Discover new customers. ? Sell products more effectively. ? Help sales staff to close deals faster. ? Simplify marketing and sales processes. ? Customer relationship management (CRM) includes: ? processes that help form individualized relationships with customers (to improve customer satisfaction) and provide the highest level of customer service to the most profitable customers; ? processes that provide employees with the information they need to know their customers' wants and needs, and build relationships between the company and its customers ? CRM processes that help identify and target their best customers, generate quality sales leads, and plan and implement marketing campaigns with clear goals and objectives;

Q6 – What are the major responsibilities of Senior Management? Ans: A team of individuals at the top most level of an organisational management are often referred as senior management or the management team. They are responsible for the day to day activities of managing an organisation Any quality improvement has to be sustained over a period of time to be part of the organisational culture and senior management executives play a vital role in enforcing the same. These people are often referred to, inside corporations as executive management, top management, upper management, higher management or simply seniors. The responsibility for establishing the appropriate policies and practices that facilitate a flexible workplace are handled by the senior management.

They cover responsibilities like establishing a flexible workplace policy that helps employees to adjust to the differing work environments. Senior management are ultimately responsible for their firm’s risk management.

The Management commitment has been an important element in all quality standards and the management initiatives would be propagated only through the effort of the senior management.

The major responsibilities of Senior management are:

? Coaching for Team Success. ? Create an environment oriented to trust, open communication, creative thinking, and cohesive team effort. ? Provide the team with a vision of the project objectives. ? Motivate and inspire team members. ? Lead by setting a good example (role model) - behaviour consistent with words. ? Senior management should direct towards the set goals in proper way. ? Informational Leadership. ? Familiarize the team with the customer needs, specifications, design targets, the development process, design standards, techniques and tools to support task performance. ? Initiate sub-groups or sub-teams as appropriate to resolve issues and perform tasks in parallel. ? Help keep the team focused and on track.

? Proper Usage of power and authority ? Senior management should be like leaders. No leader is effective unless the subordinates obey his orders. Therefore, the Senior management, like a good leader should use appropriate power so that subordinates willingly obey the orders and come forward with commitment.

? Strive for Effectiveness ? Senior management should provide reward structure to encourage performance of employees. ? Senior management should delegate authority where needed and invites participation where possible to achieve the better result. ? By communicating to workers what is expected of them, leader brings effectiveness to organization. ? Senior management should provide all the necessary resources for reaching the set goals and bringing effectiveness.

? Maintain good relationship ? Senior management should ensure that there is good relationship maintained with the employees. ? Also the senior management should ensure that their employees maintain good and healthy relationship with the customers and suppliers who come in contact. For this the senior management

should create awareness among employees about the importance of maintaining good relationship with customers and suppliers for overall effectiveness in the Organization.

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Q1. What is mean by Quality Management System? What are its benefits?

Ans: Quality Management System, in the simplest of terms, is defined as “The process of Management of the Systems of an organisation, with regard to its Quality related activities, for „meeting and enhancing customer satisfaction? and also taking care of all other interested parties such as legislative and regulatory bodies, shareholders, suppliers, employees, etc.” A Quality Management System (QMS) is required for any organisation which desires to demonstrate its ability to consistently provide products that meet both customer needs and the applicable regulatory requirements. Quality Management System is a process that integrates the fundamental management techniques with the principles and methodologies of Total Strategic Quality (TSQ). This helps in developing and implementing successful business strategies throughout the organisation.

Quality in its direct form results as “Customer Satisfaction”. A customer is anyone who is affected by the service, product, or the process. Thus, the way in which the collective plans, activities and events of the organisation are managed in order to obtain the expected quality outcome is termed as “Quality Management Systems”. Quality Management System is a complete and planned approach to organisational management. It seeks to improve the quality of various products and services through ongoing refinements in response to continuous feedback. The requirements of the Quality Management System are industry-specific and are defined individually by the respective organisations. It strictly adheres to the established standards, based on the ISO 9000 series. The Quality System of an Organisation basically consists of its structure, procedures, processes and resources required for adequate and effective management of all its quality related activities. This quality system is created by the organisation primarily, to satisfy its own internal requirements, for determining & implementing its quality policy, and fulfilling its objectives for survival and growth. The “Quality Management System” (QMS) is that organisation?s management system, which focuses on the achievement of results, in relation to the quality objectives, to satisfy the needs and expectations of all interested parties. The QMS thus directs and controls all quality related activities of the Organisation Quality Management System can be implemented to any type of organisation. The major function of the Quality Management System include identifying the customer needs and demands, defining quality rules

and policies, establishing quality processes for manufacturing products and services and documenting the same, applying suitable methodologies for inspection and testing, reviewing internally through the internal auditing process and finally subjecting to periodic audits from the external certification agency. Quality Management System Benefits There are various benefits of implementing an ISO 9000 based Quality Management System. Some of them are listed below:

? It improves the quality of products and services to meet the needs of the customer. ? It increases the productivity of manufacturing processes and commercial business. ? It reduces manufacturing and service costs. ? It determines and improves the marketability of products and services. ? It reduces consumer prices of products and services. ? It ensures on time deliverables and availability. ? It assists in the management of the organisation. ? It mainly focuses on the customer requirements and customer service. ? It conveys commitment to quality and partnering. ? It provides promotional credibility to an international standard. ? It facilitates access to markets and bids. ? It reduces customer quality audits. ? It facilitates employees to become more responsive to the needs and requirements of the customer. ? It facilitates in outlining the current process, the requirements of the standard and then optimises the process with input from the process users. ? It composes of various built in systems to report on key quality indicators such as internal audits and preventive actions. ? It facilitates business and quality planning. ? It provides a universal approach to quality and various business strategies. ? It assists in establishing operational baselines and enterprise configuration. ? It motivates self assessment and maintains internal consistency. ? It controls various processes and systems. ? It establishes operational controls. ? It ensures that all the internal operations are effective and efficient. ? It ensures that product development and design changes are controlled. ? It creates awareness of the need for training and facilitates operational problem solving. ? It facilitates implementation of corrective and preventive solutions for the problems related to quality.

? It enhances and ensures continual improvement in terms of production and on time delivery. ? It enhances customer-supplier relationships and customer satisfaction. ? It serves as a blueprint for efforts to improve the quality system of an organisation. ? It ensures that quality is constantly checked and measured. ? It facilitates procedures that ensure that corrective actions are taken whenever defects occur. ? It ensures that defects are fixed at an early stage of the project at a lower cost. ? It assists the organisation to retain or increase market share, increasing sales or revenues.

Q 2. Write a note on ISO 9001:2008 Ans: ISO 9001:2008 is the latest International standard for Quality Management System from the International Organisation of Standardisation (ISO). It is applicable to all types and sizes of the organisations. It facilitates both the product as well as the service organisations to achieve defined standards of Quality. The ISO 9001:2008 provides an organisation a set of principles which ensure process excellence and customer satisfaction. The International Organisation for Standardization (ISO) was founded in 1946. The first standard was published in 1987 and it has been under constant revision in 1994, 2000. The current revision published in Nov 2008 is ISO 9001:2008. ISO 9001:2008 is a written set of standards that describes the basic elements and clauses of the Quality Management System. It is a systematic approach to managing processes in an organisation that ensures that the products and services of an organisation meet or exceed the needs of the customers. It is necessary that the ISO 9001:2008 based Quality Management System is well documented, tested, measured and assessed. An organisation must essentially verify that the objectives of the QMS implemented are measurable and reflect the overall objectives of the organisation.

The ISO 9001:2008 standard specifies all the necessary requirements for a quality management system where: ? The organisation has to demonstrate its ability to consistently provide products that meets the customer and the regulatory requirements. ? The organisation should aim to enhance the customer satisfaction through effective application of the system. ? The organisation has to demonstrate ability to continually improve processes. The products/service provided should conform to the regulatory and statutory requirements.

ISO 9001:2008 generally defines basic clauses of the Quality Management System. It also enables you to incorporate quality improvement process and measure the effectiveness of the systems through regular reviews.The standard contains eight requirement sections commonly known as “Clauses”. This is illustrated in the following figure

The ISO 9001 strategy provide a comprehensive model for Quality Management. There are many advantages that an organisation obtains by implementing the ISO 9001 guidelines. Some of them are

? Increased customer satisfaction and retention. ? Reduced audits.

? Enhanced marketing. ? Increased profits. ? Improved stakeholder relationships. ? Proved business credentials through independent verification against recognised standards. ? Conveyed commitment to quality and partnering with the customers. ? Quality is persistently measured. ? Defined procedures ensure that corrective action is taken whenever defects occur. ? Increased market share. ? Extensive applicability and basis for various sectors. ? Better supplier relationships.

Q3. Explain in brief the clauses of ISO/TS 16949. Ans: ISO/TS 16949 is a Technical Specification, as denoted by the letters TS. The standard aims for the development of Quality management system requirements for design, development, production, and services of automotive-related products. It includes the requirements of ISO 9001 and is combined further to contain sector specific requirements designed specifically to the organisations of the automotive industry. ISO/TS 16949:2009 is the latest version of this standard which replaces the standard 2002 edition used by the major automotive manufacturers. This combines the version of ISO 9001:2008 along with 130 sector specific requirements. The ISO/TS16949 standard specifies eight different Clauses which have to be followed by the organisation to meet the objectives and confirm customer requirements as follows.

Table : The eight clauses of ISO/TS 16979 Clause number Contents 0 Introduction 1 Scope 2 Normal Reference 3 Terms and Definitions 4 Quality management system 5 Management Responsibility 6 Resource Management 7 Product Realisation 8 Measurement, Analysis and Improvement

The first four clauses i.e. Clause 0-Introduction to Clause 3-Terms and Definitions does not provide requirements to the Quality Management System (QMS). Instead they give a brief overview of the standard like the concepts and principles used in the standard (e.g. process approach; PDCA); guidance on the QMS scope; reference to related documents; and key terms and definitions used. The remaining five clauses i.e. Clause 4-Quality Management System to Clause 8-Measurement, Analysis and Improvement provide the quality management requirements that must be implemented by the QMS. Each major clause will contain its sub clauses as explained below:

1. Clause 4 – Quality management system ? With addition to the conformance of customer requirements the organisation must retain the responsibility of the outsourced processes [4.1.1] ? The organisation must have a process that performs a periodic review, distribution and implementation of all customer standards as per the customer requirement schedule [4.2.3.1] ? The organization must maintain a record of customer requirements [4.2.4.1]

2. Clause 5 – Management responsibility ? The top management should review the product realisation on a periodic basis that must be documented [5.1.1] ? The Top management must describe the quality objectives and measurements to be incorporated in the business plan and their use to set up a quality policy [5.4.1.1] ? The Top management shall appoint ‘customer representatives’ with specific responsibility to guarantee conformity with customer requirements [5.5.2.1]

3. Clause 6 – Resource management ? The management must choose a personnel with product design responsibility to achieve design requirements and skilled in application tools and techniques [6.2.2.1] ? The organisation must establish and sustain documented procedures for identifying training needs and achieving competency for all personnel performing activities that affect compliance to product requirement [6.2.2.2] ? The organization must provide on-the-job training to the personnel affecting compliance to product requirements [6.2.2.3]

4. Clause 7 – Product realisation ? The organisation must determine all customer specific requirements for designation, documentation etc [7.2.1.1] ? The organisation must have different approaches to prepare for product awareness [7.3.1.1] ? The organisation must identify, document, review and review the product design including customer requirements, identification etc [7.3.2.1] ? The organisation must identify, document and review the manufacturing process design inputs like product design data, customer requirements if any, specific experience from previous developments [7.3.2.2] ? Identify special characteristics such as product requirement and process parameters [7.3.2.3] ? All system changes must be reflected in the control plan [7.5.1.1]

5. Clause 8 – Measurement, analysis and improvement ? The appropriate statistical tools must be selected during quality planning and include it in the control plan [8.1.1]

? The statistical concepts like variation, control must be understood and used in the organisation [8.1.2] ? Audit the quality management system to ensure conformity to the standard [8.2.2.1] ? The organisation must audit each manufacturing process to determine its effectiveness [8.2.2.2] ? The organisation must perform product audit at every stage of the production to confirm to all specified requirements [8.2.2.3]

Q4. What is COPC 2000? What are the benefits of COPC 2000? Ans: The Customer Operations Performance Centre (COPC) helps organisations to provide high performance, best practices and benchmarks that increases the service quality and boosts the efficiency in organisation. These Standards focuses on reducing costs, increasing customer satisfaction and productivity in organisation. The most common objective that COPC helps to achieve improve customer service, Customer – employee satisfaction and achieve recognition as a quality customer service provider in an increasingly competitive environment. COPC is the world?s leading authority on service chain operation management. It includes the performance enhancement for the following: ? Buyers and providers of customer service. ? Customer contact centre. ? Business process outsourcing operations.

Three standards comprise the COPC family of Standards:

COPC-2000 CSP Standard. COPC-2000 VMO Standard. COPC-2000 CSP Gold Standard.

COPC Family of Standards is based on the following Terminology and relationships:

Benefits of COPC 2000 Standards are as follows:

? The Standard provides a sustainable performance management framework for the contact centre, linking performance objectives with operational processes and the people who manage and maintain them ? It focuses on developing and driving initiatives that implements high performance in customer-service organisations. ? The Standard specifies minimum operational requirements in critical functional areas.

? Helps CSPs in demonstrating capability to achieve a majority of their performance targets. ? The Standard drives proactive management of the supplier base, lowers outsourcing management costs and improves internal client satisfaction. ? The Standard helps Organizations to identify all operational gaps between requirements set in the COPC 2000 CSP standard and internal operations. ? The COPC-2000 VMO Standard equips outsourcing management teams with key management tools including supplier assessment methodology and measurement reporting. ? VMO with the help of the standard is able to actively monitor and manage the system over time to improve performance. ? Drive high performance – improve Revenue, Service, Quality and Cost.

Q5. Describe the different CMM levels. Ans: Capability Maturity Model (CMM) is related to the area of software development, it can be applied as a generally applicable model to assist in understanding the process capability maturity of organisations in areas such as, software engineering, system engineering, project management, software maintenance, risk management, system acquisition, information technology (IT), and personnel management. The Capability Maturity Model (CMM) is the world’s most popular and useful software production process of evaluation criteria. Capability Maturity Model (CMM) is a methodology used to develop and refine an organisation's software development process propounded by Carnegie Mellon University. The model describes a five-level path of increasingly organised arrangement of processes. The Capability Maturity Model was first developed in the late 1980(1987 – 1997) s by the Software Engineering Institute at Carnegie Mellon University. The Capability Maturity Model for software is a widely accepted set of guidelines for developing high-performance software organisations. The five levels are:

? Level 1: Initial (chaotic, ad hoc, individual heroics) – Start point for using a new process. In this level there is little consistency of project management that does not protect developers from the irrational commitments or extreme requirements changes. Essentially, the Level 1 organisation lacks the capability to meet commitments consistently. ? Level 2: Managed – Process is managed according to the metrics described in the Defined stage. Level 2 centres to develop the capabilities of project managers to: ? Plan attainable assurance. ? Create control of requirement baselines. ? Product configurations.

? Level 3: Defined – Process is defined/confirmed as a standard business process, and decomposed to levels 0, 1 and 2 (the latter being Work Instructions). At level 3, the standards, process descriptions, and events for a project are altered from the organisation’s set of standard processes to match a particular project or organisational unit. ? Level 4: Quantitatively managed - At this level organisation set a quantitative quality goal for both software process and software maintenance. Sub processes are selected that considerably add to overall

process performance. These selected sub processes are managed by using statistical and other quantitative techniques. ? Level 5: Optimising – process management includes deliberate process optimisation/improvement. It focuses on repeatedly improving process performance through both incremental and inventive technological improvements. Quantitative process-improvement objectives for the organisation are recognised, frequently revised to reflect changing business objectives, and used as criteria in managing process improvement.

Q6. Explain the importance of ISO 10002. Ans: ISO 10002:2004 is a standard that provides various regulations on the process of complaints handling related to various products in an organisation. This standard also includes planning, design, operation, maintenance and improvement. The complaints handling process is best suited for use as one of the processes of an overall Quality Management System. The lifeline of any business is its customers, one of the main stakeholders. It is essential that their requirements as well their complaints are taken seriously. It provides guidance on various processes of complaints handling related to products within an organisation, including planning, design, operation, maintenance and improvement. Servicing customers and customer satisfaction has become utmost important for today’s organisations. It is termed as a critical component of profitability. This international standard provides a framework that the information obtained through the complaints handling process can lead to improvement in various products and processes. According to ISO 10002:2004 “A complaint is defined as an expression of dissatisfaction made to an organisation, related to its products, or the complaints handling process itself, where a response or resolution is explicitly or implicitly expected” Thus, the customer satisfaction standard, ISO 10002:2004 provides various guidelines for implementing a complaints management system. This helps the organisation to identify, manage and understand how efficiently the customers’ complaints should be dealt with. The structure of ISO 10002 comprises of eight clauses. The first three are scope, normative reference, and terms and definitions. The other five are

? Guiding principles

? Complaints handling framework

? Planning and design

? Operation of the complaints handling process

? Maintenance and improvement

There are various benefits of ISO 10002:2004 that addresses all the aspects of complaints handling. They are as listed; ? Customer satisfaction: ? Customer confidence: ? Management system: ? Management focus: ? Product improvement: ? Credibility ? Improved efficiency: ? Better relationship: ? Continual improvement: ? Transparent system:

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Q3. What is mean by Performance Analysis ? Describe the “Job Performance needs” in an organization. Ans: Performance Analysis Performance is a situational concept associated with the experience which is being studied. For example, in the context of organisational financial performance, performance is considered as a measure of the change of the financial state of an organisation, or the financial outcomes that result from management decisions and the implementation of those decisions by members of the organisation. Performance analysis is an assessment of process, equipment, employee, or any other factor to gauge progress towards predetermined goals. It is guided and assessed by effectiveness, efficiency, and equity. Front-end performance analysis is one of the most important investments that the organisations should make to achieve maximum return on all other investments in human performance. Performance analysis provides a fresh view and direction for the organisation in a practical and systemic manner. A thorough performance analysis: ? Identifies elements of effective management for performance under review. ? Develops required training and non-training performance improvement programs. ? Provides cost-effective ways for significant potential to improve performance.

Performance analysis explores organisational effectiveness. Letts, Ryan and Grossman2 suggest five main capacities for organisational effectiveness

Job Performance Needs

This is the second need in performance analysis. There is a slight difference between business needs and job performance needs. Business needs work on the future needs or visionary needs whereas job performance needs normally look at what is required right now. Business needs are future oriented whereas the job performance needs work towards the present needs. Job performance mainly deals with job processes, environment, and actual performance versus need performance. It always links the person who is performing with the organisation. This evaluation is further divided into three types: ? People ? Things ? Data

On the basis of these three types, job performance analysis is done in a simpler way. To make sure that all the job performance needs have been completed, the analysis should focus on the process level to evaluate the performance (Behaviour) of the employees of the organisation. After completion of the business and job performance needs, one must know the whole concept of the current and the future requirements. There are some tools used for this analysis which has been listed below:

? Performance Gaps: The difference between the actual or present performance and optimal performance is gauged with a formula. Here the present behaviour noted as (B) is subtracted from the standard that is desired (S) to measure the performance gap (G). The measurement, S-B=G needs to shortened in order to achieve objective. The formula can also be used to determine future standard also. ? Analysis Information: The data gathered out of the four levels of evaluations are scrutinised for further decomposition into templates. ? Jobs and Tasks: The five components describing Jobs are analysed. This consist of a description of the person doing the job, the duties (which can include one or more tasks), task which is identified by a definite beginning and end, the elements(which contain 2 or more KSA) and the Knowledge, Skills and Attitudes (KSA) ? Tasks: Task is an action that contributes a specified end result and accomplishes an objective. Whenever there is a new process or equipment, when job performance is below the standard, task or need analysis is performed. Here task frequency, task criticality, the difficulties in learning, the importance to train, task difficulty, overall task importance are all described ? Analysis Templates: Through the use of analysis templates it helps to gain an understanding of the system, such as department or process analysis. These templates help analysts and developers a background to work upon. ? Various Approaches to Needs Analysis: It combines different methods like People-data-things analysis, tabletop analysis, Cognitive task analysis, Hybrid methods, observing the expert analysis, functional analysis etc.

Q4. What are the various concepts and tasks that help you to build a strong partnership with suppliers? Ans: PARTNERSHIP WITH SUPPLIERS AND VENDORS The following concepts and tasks help you to build a strong organisation and partnership with the suppliers:

? Togetherness ? Ex-employees as Vendors ? Vendor Control ? Vendor Incentive ? Vendor Rating ? Vendor Selection and Capability

Togetherness: It establishes an emotional bond on sound ethical business lines to promote understanding, cooperation and long-term interests of the organisation and its suppliers. You can build the spirit of togetherness through the following: ? Mutual respect between the organisation and its suppliers. ? Mutual recognition of the need for each other. ? Fair and open dealings. ? Reasonable price, mutually acceptable terms and conditions linked with quantity and service.

Ex-employees as Vendors: It introduces the potential candidate with all the details about the product to be supplied right from its material of construction to all its specifications, and their importance. After some time, an enterprise will have a number of employees who will be competent and capable with proven track record, deserve to be promoted but cannot be, due to organisational limitations. You can handle this situation by making these employees as vendors of the enterprise. There are many advantages in this approach, important being the existing togetherness will be reinforced, time and effort to train new vendor is not required.

Vendor Control: This is the most crucial phase in the assurance of procurement quality. Here, the control is by vendor on himself .The purpose of control is to: ? Work on re-inspection/evaluation of materials in the enterprise.

? Accept materials supplied on the basis of certification given by the vendor. ? Attain a stage where materials are used immediately without being reinserted, stored, and re-issued with all the assistant documents at different points of transaction.

Vendor Incentive: You should encourage vendors. Incentives should be given to the deserving ones and the recipient must also feel its need and derive benefit through them. Some of the different incentives practiced are: ? Favourable terms of payment. ? Bonus on quarterly or half-yearly basis. ? Extending the business to other items. ? Recommending to other organisations. ? Providing technical help. ? Extending financial support through financing and/or as guarantor. The emerging vender incentive is providing a large portion of an order to those who have won national awards in quality achievement.

Vendor Rating: It is a quantification exercise. It is a means to arrive at a composite score which covers price, quality and service associated with the product supplied. The maximum score is 100. Rating close to 100 indicates that the supplier has performed well on all the scales of the rating. You should note that vendor performance rating (VPR) is different from product rating. VPR is used to review, compare and select vendor. It helps to identify vendors to be dropped from approved lists or who need assistance to improve their performance. VPR provides a comparison and indicates the area of improvement for each supplier.

Vendor Selection and Capability: The qualification process should assess the vendor’s quality capability through some or all of the following means: ? Information supplied by or available on the vendor ? Vendor plant survey ? Trial order/sample

Capability has to be assessed with care and thoroughness. Apart from financial stability, economic performance, business standing in the society etc., the following need to be considered to rely on quality suppliers: ? Technically competent and skills are available. ? Responsible and adapt to the changing needs. ? Follow process and are capable to the meet product specifications. ? Follow quality system and procedures.

Q5 . Describe the steps involved in Innovation Process in an organization. Ans:

Our former President Mr A.P.J. Abdul Kalam had said, “A nation has to evolve as a knowledge centre through innovation and creativity”. Creativity and Innovation has a great role to play in nation building, so also in the organisational functioning. Innovation can be defined as the application of an idea, a change in the thought process for doing something, or the useful application of new inventions or discoveries. Innovation is doing new things. Innovation happens at the crossroads of two important uncertainties. They are: ? Uncertainty about the future. ? Uncertainty about what suits best for the organisation.

STEPS INVOLVED IN INNOVATION PROCESS IN ORGANISATION Establishing an innovation process in your organisation requires many steps and given below is a checklist of those steps:

1. Analyse the current situation: The first step in innovation process is to determine what is impeding innovation at present. It can be a lack of vision or a self-satisfied culture, or maybe a difficult approval procedure for new ideas and thoughts. 2. Set goals and objectives: Set appropriate goals and objectives which help you to calibrate the organisational progress. The types of goals and objectives you select will certainly depend on your circumstances. These circumstances must be quantifiable and they must have timescales. For example: five new products that should be brought into market within the next year, 20 prototypes to be examined with customers, two new routes leading to market or a new logistical techniques that are executed to decrease the inventories by 30%. 3. Design and train: An innovation process is designed, and the staffs are involved at all levels of innovation process. This step involves dealing with the problems raised in the Innovation Audit, and it will determine the activities to achieve the goals. The leaders and innovation champions present throughout the organisation are trained in the tools and techniques required to make innovation an accepted part of the organisational activities. 4. Run innovation programs: Implement the innovation programs that are created to accomplish the goals. These might usually include: a company intranet site construction required to support all innovation processes, implementing ideas and campaigns for both individuals and teams, recognising internal and external sources for ideas, and establishing idea evaluation and execution systems. 5. Assess, evaluate, and implement: The ideas must be promptly assessed and evaluated against clear criteria because these ideas come from the Innovation Programs. An innovation funnel is launched and the most capable ideas and concepts enter this funnel and get a thorough analysis and support. Shortly, innovative products, techniques, procedures, and partnerships are shifting from trial stage to full implementation stage. 6. Measure, communicate, and adapt: It is evident that progress against the goals is measured and successes are achieved. Everyone in the organisation is considered regarding developments. The innovation program is adapted and improved to make it more efficient and to maintain it fresh in people's minds.

Q6. Explain the concept of “Value Engineering”. Mention some of the areas around value Engineering.

Ans :

Value Engineering as a systematic and a powerful problem-solving tool that has the ability to bring desired functions of the product, a process, a system or a service at minimum costs and time without compromising on the quality, reliability, performance and safety. Value Engineering is termed as an in-progress use of a methodology by various cross functional teams in order to accomplish the goals and objectives of an organisation. Value Engineering can be introduced in any situation of the life cycle of the product, systems or procedures.

On employing the techniques and concepts of value engineering an organisation derives numerous benefits. Some of them are: ? Reduced costs and assure cost effectiveness. ? Enhanced Quality. ? Reduced and eliminated unwanted and imprecise design elements. ? Foster innovation and enhance productivity.

During the1940?s Value Engineering emerged in the United States. It was first initially conceived by Lawrence D. Miles. He discovered that if value was methodically managed then General Electric could possibly gain a competitive edge in the marketplace.

Miles understood that the products were bought either for their ability to perform, or for their aesthetic qualities. Using this as a foundation principle, he concentrated on the “function” of the component being manufactured. His inquiry to achieve the function by improving the design of the process or by using an alternate material or using an alternate approach gave birth to value analysis. In the year 1954, the U.S. Navy Bureau of ships applied the concepts of Value analysis in various procurement activities. This activity held by the bureau of ships named the alternate method of finding the best quality solutions with maintaining lesser cost investment as “Value Engineering”.

Areas around Value Engineering

There are 12 areas around Value Engineering. ? Design Optimisation: The area of design optimisation of value engineering refers to the application of various numerical algorithms, techniques and concepts to the engineering systems. This ensures that the performance, reliability and cost of the Value engineering system are improved. The methodologies and concepts of design optimisation can be applied during the product development phase in order to ensure that the completed design has the highest quality performance, reliability and low cost. ? Material Optimisation: This area facilitates in optimising and finding a shape to the process in order to

ensure that it minimises a certain amount of cost and resources while still satisfying the given and defined constraints and variables. ? Weight Reduction: This area facilitates in reducing the weight, cost and hence, results in better enhancement of the product quality. It ensures that minimum load is carried on to the process execution so that any associated failures are identified and eliminated. ? Variant Reduction: This area around value engineering refers to a procedure that is used to enhance the precision of the estimates of the products to be produced. This can be achieved for any number of iterations defined. Thus, in order to attain award winning levels of value of this simulation effect, and to achieve a greater precision for the output, various variance reduction techniques are employed in value engineering methodology. ? Feature Enhancement: It is that area of value engineering that provides additional and alternate features to the existing product and process version. It also helps in distinguishing an enhancement of already existing capacity of the product from a totally new capability. This area provides with enhanced and other sophisticated features of the existing process. ? Performance Improvement: Improvement of performance is an area of value engineering that is best used for establishing and analysing various problems of performance and setting up systems in order to ensure enhanced performance. It is applied largely and efficiently to various groups of employees within the organisation or performing same jobs. Thus, performance improvement is a procedure and an area for achieving the desired results of both the individual and the industry. The major objective of value engineering performance improvement refers to the essentials of enhanced services that are measurable. The results are achieved through a process that considers the organisational context of the employees and various concepts of value engineering. This concept describes the desired performance, identifies gaps between desired and actual performance, identifies root causes, and selects interventions to close the gaps and measures any associated changes in the performance in order to increase the outcome of VE. ? Assembly Problem solving: In certain cases where the traffic of the processing and operation functionality is high, it will naturally lead to congestion thereby resulting in errors or problems in the manufacturing process. This area of VE ensures that crisis identified and associated with the assembly line is analysed and consequently solved. An assembly line is a manufacturing procedure in which the indistinguishable and identical parts and components are added to a product in a sequential manner. ? Field failure problem solving: Value engineering systematically identifies the likely failures in the field process and solves them. This area helps in enhancing the reliability of the product, reduces design lead time, develops trouble free manufacturing process, eliminates expensive engineering charges, predicts and solves potential and unavoidable problems and errors of VE. ? Alternate material: This area helps in producing alternate materials in case of shortcomings such as material shortage, faulty material and any other unexpected need for alternate material commodity. This becomes useful, as in any case of failure, alternate materials do not cause the processing systems to halt or terminate the operations of the VE systems. ? Alternate manufacturing group: Various manufacturing strategies of Value Engineering rely on both the product as well as the process technologies. It ensures that alternate groups are available for the process of manufacturing in case of shortage of inventory, elapsed inventory delivery time and other crises.

? Alternate assembly: This area of Value Engineering refers to a manufacturing process in which various alternate parts such as the interchangeable parts are added to an existing product in a sequential manner. ? Alternate design: It is a very important area of value engineering. It depicts that an alternate and an interchangeable design should always be available to support the systems of Value Engineering in case of crash/failure. It also becomes useful when the defined or the implemented design of the Value engineering system is not meeting the requirements of the end users or not supporting the framework of the organisation.