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    Strategic management chapter wise notes




    The various interactions between organisation and environment can be analysed as under:



    1. Organisation analyses the external environment variables, generates important information, and uses it for its planning, decision-making and control purposes.

    And to get over the problems of uncertainty and complexity..

    1. Information is to be generated on economic activity and market conditions, technological developments, social and demographic factors, etc.


    The organisation transmits information to several external agencies:

    1. Voluntarily: Product Advertisement, Road Shows, etc.
    2. Inadvertently: It is possible to obtain information from the behaviour of the organisation itself. E.g. VRS Plan Announcement
    3. Legally: Reports/Returns to Governmental Agencies, investors, employees, etc.



    1. Organisation receives inputs- human, physical, finance and technology from the external environment through contractual and other arrangements.
    2. A business enterprise competes and collaborates with other organisations for consistent supply of inputs.


    1. Organisation is dependant on external environment for disposal of output of products and services to wide clientele.
    2. This is an interaction process – perceiving needs of external environment and catering to the needs of customers, employees, shareholders, creditors, etc.



    1. The external environment holds considerable power over the organisation by virtue of its command over resources, information and other inputs.
    2. It offers a range of opportunities, rewards on one hand, and set of constraints, threats on the other.


    1. External environment is subject to the influence and power of the Firm in some respects.
    2. Organisation can dictate terms to external forces. E.g., Resources which are consumed by and organisation should be utilized gainfully.

    Direct competition is between organizations, which are in same business activity. At the same time, competition can also be indirect. For example, competition between a holiday resort and car manufacturing. Company for available discretionary income of affluent customers is indirect competition.

    It is a worldwide enterprise chartered by a substantially non-political international body such as IMF or World Bank. Its functions are:

    1. International business serviceand it performs service in nations which permit its entry.
    2. It should be able to draw the economic world closer together.
    3. It could serve all nations without being especially attached to anyone of them.

    In competitive environment, cooperation between different member firms can be compared to oligopoly. In oligopoly, a small number of only manufactures/sellers of a product may join together to have monopolistic behaviour. An example of oligopoly can be Organization of the Oil Exporting Countries (OPEC).
    Cooperation can take the following forms –

    • Cooperation in organisations forming cartels (a term used to define the groups in oligopoly) may be in form of deciding market shares, prices and profits.
    • Business arrangement with enterprises in related activities. E.g. Co-branding, tie-up, etc
    • Kieretsus.


    The benefits of c
    ooperation are seen in Japan, where
    large cooperative networks of businesses are known as kieretsus.

    These are formed in order to enhance the abilities of individual member businesses to compete in their respective industries.

    In Kieretsu members remain independent companies in their own right: the only strategy they have in common is to prefer to do business with other kieretsu members, both when buying and when selling.
    Kieretsu members are peers and may own significant amounts of each other's stock and have many board members in common.

    They are different from conglomerates (Common in western countries and also found in India) wherein all members are lineated through ownership pattern.
    A kieretsu also differs from a consortium or an association, as the primary purpose of a kieretsu is to share purchasing, distribution or any other functions.


    Strategy can never be perfect, flawless and optimal: It is in the very nature of strategy that it is flexible and pragmatic; it includes allowance for second-best choices, trade-offs sudden emergencies, failures and frustrations.


    According to William Glueck and Lawrence Jauch, strategic alternatives can be considered in four generic ways. These are :
    1.STABILITY STRATEGY: One of the important goals of a business enterprise is stability − to safeguard its existing interests and strengths, to pursue well established objectives, to continue in the chosen business path, to maintain operational efficiency on a sustained basis, to consolidate the commanding position already reached, and to optimise returns on the resources committed in the business.

    Expansion is a promising and popular strategy that tends to be equated with dynamism, vigour, promise and success. It is often characterised by significant reformulation of goals, major initiatives and moves involving investments, exploration into new products, new technology and new markets, action programmes and so on. Expansion also includes diversifying, acquiring and merging businesses.

    1. Expansion through diversification: Diversification is defined as entry into new products or product lines, new services or new markets, involving substantially different skills, technology and knowledge.


    • Growth : Diversification offers greater prospects of growth and profitability.
    • Innovation: Innovative and creative Firms look for opportunities and challenges to venture into new activities.
    • Capacity Utilisation: They may have excess capacity in manufacturing facilities, investible funds, marketing channels, managerial and other manpower, research and development, and so forth.
    • Synergy: Another reason for diversification lies in its synergistic advantage. It may be possible to improve the sales and profits of existing products by adding suitably related or new products, because of linkages in technology and/or in markets.

    1. Expansion through acquisitions and mergers: Acquisition or merger with an existing concern is an instant means of achieving the expansion. It circumvents the time, risks and skills involved in internal growth opportunities and building up necessary resource base required to materialize growth.


    1. Growth : To meet the business urge to grow.
    2. Synergy : To achieve a measure of synergy between the parent and the acquired enterprises which results from such factors as physical facilities, technical and managerial skills, distribution channels, general administration, R&D and so on.

    3. RETRENCHMENT STRATEGY: A business organization can redefine its business by divesting a major product line or market. Retrenchment or retreat becomes necessary for coping with particularly hostile situations in the environment. Retreat is not always a bad proposition to save the enterprise's vital interests, to minimise the adverse effects of advancing forces, or even to regroup and recoup the resources before a fresh assault and ascent on the growth ladder is launched.

    4 COMBINATION STRATEGIES: The above strategies are not mutually exclusive. It is possible mix the above strategies based on situations. An enterprise may seek stability in some areas of activity, expansion in some and retrenchment in the others. Retrenchment of ailing products followed by stability and capped by expansion in some situations may be thought of.


    The overall objective of strategic management is two fold:

    To create competitive advantage, so that the company can outperform the competitors in order to have dominance over the market.
    To guide the company successfully through all changes in the environment.


    The strategy-making/strategy-implementing process consists of five interrelated managerial tasks. These are:

    Setting vision and mission: Forming a strategic vision of where the organization is headed, so as to provide long-term direction, delineate what kind of enterprise the company is trying to become and infuse the organization with a sense of purposeful action.

    Setting objectives: Converting the strategic vision into specific performance outcomes for the company to achieve.

    Designing a strategy to achieve the desired outcomes.

    Implementingand executing the chosen strategy efficiently and effectively.

    Evaluating performance and initiating corrective adjustments in vision, long-term direction, objectives, strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities.


    The strategic management process can best be understood by using a model. This model is not a sure-shot success, but it does represent a clear and practical approach for formulating, implementing, and evaluating strategies. Relationships among major components of the strategic management process are shown in the model.

    Identifying an organization's existing vision, mission, objectives, and strategies is the starting point for any strategic management process because an organization present situation and condition may preclude certain strategies and may even dictate a particular course of action. Every organization has a vision, mission, objectives, and strategy, even if they are not consciously designed, written, or communicated.

    The strategic management process is dynamic and continuous. A change in any one of the major components in the model can necessitate a change in any or all of the other components. Therefore, strategy formulation, implementation, and evaluation activities should be performed on a continual basis.

    Application of the strategic management process is typically more formal in larger and well-established organizations. Formality refers to the extent that participants, responsibilities, authority, duties, and approach are specified. Firms that have many divisions, products, markets, and technologies also tend to be more formal in applying strategic-management concepts.

    Strategists do not go through the process in lockstep fashion. Generally, there is give-and-take among hierarchical levels of an organization.


    Head Office


    Division A
    Division B
    Divison C

    Business Functions
    Business Functions
    Business Functions


    Market A Market B Market C

    1. Consists of Chief Executive Officer (CEO), other Senior Executives, Board of Directors, and Corporate Staff.
    2. They occupy the apex of decision making within the organisation.
    3. Their role is to develop corporate strategies along with other senior executives.
    4. Responsibilities :

    • Setting overall strategic objectives,
    • Allocating resources among the different business areas,
    • Deciding whether the Firm should divest itself/ acquire any of its businesses,
    • Ensuring Shareholder Welfare.


    1. The principal General Manager at the Business Level, or the Business Manager, is the head of the concerned division.
    2. The strategic role of these managers is to translate the general statement of direction and intent that come from the corporate level, into concrete strategies for individual businesses.
    3. To develop strategies for competing in individual business areas, such as financial services.

    Thus, corporate level general managers are concerned with strategies that span individual businesses; business level general managers are concerned with strategies that are specific to a particular business.


    1. Functional-level managers are responsible for the specific business functions or operations (human resources, purchasing, product development, customer service, and so on) that constitute a company or one of its divisions.
    2. Functional level managers develop functional strategies in their area that help fulfil the strategic objectives set by business and corporate level managers.
    3. Functional managers provide most of the information that makes it possible for business and corporate managers to, formulate realistic and attainable strategies because they are closer to the customer.


    (Marketing, financial, production and Human Resource), is based on the functional capability factors. For each functional area, first the major sub areas are identified and then follow a discussion of each of these sub functional areas regarding the content of functional strategies, important factors, and their importance in the process of strategy implementation.
    In terms of the levels of strategy formulation, functional strategies operate below the SBU or business-level strategies. Within functional strategies, there might be several sub-functional areas. Functional strategies are made within the guidelines set at higher levels. Functional managers need guidance from the business strategy.


    Implementation: The strategic decisions are implemented by all the parts of an organization.

    Control: There is a basis available for controlling activities in the different functional areas of business.
    Managerial Efficiency:The time spent by functional managers in decision-making is reduced as plans lay down clearly what is to be done and policies provide the discretionary framework within which decisions need to be taken.
    Consistency : Similar situations occurring in different functional areas are handled in a consistent manner by the functional managers.
    Coordination:Coordination across the different functions takes place where necessary.
    Feasibility:The development of functional strategies is aimed at making the strategies formulated at the top management level practically feasible at the functional level.

    The factors that affect Functional Strategy are:

    1. Corporate Strategies.
    2. Environmental Factors relevant to each functional area
    3. Resource Allocation decisions
    4. Other objective and subjective factors, e.g. measurability, need for harmonising different work areas, availability of choice/options etc.


    Figure: Value Delivery Network
    2.1 Marketing Issues: Countless marketing variables affect the success or failure of strategy implementation. Some examples of marketing decisions that may require policies are as follows:
    1. To use exclusive dealerships or multiple channels of distribution.
    2. To use heavy, light, or no TV advertising.
    3. To limit (or not) the share of business done with a single customer.
    4. To be a price leader or a price follower.
    5. To offer a complete or limited warranty.
    6. To reward salespeople based on straight salary, straight commission, or a combination salary/commission.
    7. To advertise online or not.

    The Marketing Process:
    Once the strategic plan has defined the company’s overall mission and objectives’, marketing plays a role in carrying out these objectives.
    The marketing process is the process of analyzing market opportunities, selecting target markets, developing the marketing mix, and managing the marketing effort.
    Target customers stand at the centre of the marketing process.

    Connecting with consumers
    To succeed in today’s competitive marketplace, companies must be customer centred. They must win customers from competitors and keep them by delivering greater value. Since companies cannot satisfy all consumers in a given market, they must divide the total market (market segmentation), choose the best segments (market targeting), and design strategies for profitably serving chosen segments better than the competition (market positioning).

    Developing the marketing mix
    Once the company has decided on its overall competitive marketing strategy, it is ready to begin planning the details of the marketing mix. The marketing mix is the set of controllable marketing variables that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything that the firm can do to influence the demand for its product. These variables are often referred to as the “four Ps.”

    • Product

    • Price

    • Place
    • Promotion

    Expanded Marketing Mix : In addition to the traditional four Ps the new marketing mix (particularly for services) includes people, physical evidences and process.

    • People :all human actors who play a part in delivery of the market offering and thus influence the buyer’s perception, namely the firm’s personnel and the customer.
    • Physical evidence: the environment in which the market offering is delivered and where the firm and customer interact.


    • Process: the actual procedures, mechanisms and flow of activities by which the product / service is delivered.

    Market Analysis is performed by:

    • Identifying environmental opportunities and threats,
    • Analysing strengths and weaknesses to determine which opportunities the Company can best pursue.
    • Feeding information and other inputs to each other marketing management functions.

    Areas to be analysed include:

    1. Task Environment: i.e. forces close to the Company, e.g. (a) ability to serve the customers (b) other Company Departments (c) Distribution Channel members (d) Suppliers (e) Competitors (f) Customers.
    2. General Environment : i.e. Broader forces like – (a) demographic and economic (b) political and legal forces (c) technological and ecological factors (d) social and cultural factors.


    1. Analysis:The structural elements that constitute a process provide the basis for its analysis, appraisal, and re-design for achieving higher levels of efficiency and effectiveness, quality and output.
    2. Linkages: A set of inter-connected processes comprise a Business System. The performance of the Business Firm is thus the outcome of the inter-related operations.
    3. Competitive Advantage: Core Business Processes are critical in a Company’s evaluation by its customers. Such processes are crucial for generating competitive advantage for the Firm.

    Meaning :A core business process creates value by the capabilities it provides to the competitiveness. Core business processes are critical in a company’s evaluation by its customers. They are vital for success in the industry sector within which the company is positioned. They are crucial for generating competitive advantages for a firm in the marketplace.
    In the insurance industry, the actual work that leads to a balance of competitive premium for customers, and profit after claims for the company, is a core business process.
    In the banking industry, the activities that help mobilise deposits and generate funds for advances to customers, is a core business process.
    Change : The core processes of a company may change over a period of time according to the shifting requirements of its competitiveness.
    Types :“The generic business processes of a firm needing redesign may be classified into three broad categories as follows:

    Processes pertaining to development and delivery of product(s) and/or services. These may include research, design, engineering, manufacturing, and logistics, besides purchasing / procurement and materials management.
    Process involving interface(s) with customers. These usually include marketing, advertising, order fulfilment, and service.
    Process comprising management activities: These include strategy formulation, planning and budgeting, performance measurement and reporting, human resource management, and building infrastructure.
    BPRstands for Business Process Re-Engineering . It refers to the analysis and redesign of workflows and processes within and between the organisations and external entities. Its objective is to improve performance in terms of time, cost, quality and responsiveness to customers. It implies giving up old practices and adopting the improved ones. Its an effective tool of realising new strategies.
    Issues that emerge from the foregoing discussions on the need for change form the underlying premises of Business Process Reengineering (BPR). They may be briefly outlined as follows:
    The operational excellence of a company is a major basis for its competitiveness.
    Process Orientation :The business strategy of a company should be oriented towards leveraging its operational excellence into the marketplace.
    No Old Ideas :For considering totally new ways of redesigning processes, each and every concept, assumption, purpose, and principle, needs to abandoned temporarily.
    Dramatic Improvement :Dramatic improvement in performance is the prerequisite for overcoming competition. Continuous improvement is a deficient approach when a company is far behind the industry standards, and needs rapid quantum leaps in performance.

    Competitive Advantage :How to compete is more important than deciding about where to compete.
    Top Management Support :BPR drive is supported by the vision and commitment of the Firm’s top leadership, to ensure its effective completion and implementation.

    Rationale of BPR :
    Improving business processes is paramount for businesses to stay competitive in today’s marketplace.
    Over the last decade several factors have accelerated the need to improve business processes. The most obvious is technology. New technologies (like Information Technology) are rapidly bringing new capabilities to businesses, thereby raising the strategical options and the need to improve business processes dramatically.
    After opening up of Indian economy companies have been forced to improve their business processes because of increased competition. More companies have entered the market place, and competition has become harder and harder. In today’s market place, major changes are required to just stay even. It has become a matter of survival for most companies.
    Customers are also demanding better products and services. If they do not receive what they want from one supplier, they have many others to choose from. They are ready to try new brands

    Business Process Re-engineering Conventional Methods of improving operational efficiency
    1 Totalre-designing of business processes. Partial modification of processes
    2 Dramaticimprovements in performance. Marginal improvements in performance.
    3 Re-engineering leads to re-structuring of the organisation. Its notnecessary.
    4 Altogether new processes are identified. Maynot be identified.
    5 Fundamentally re-thinking is involved. Need not be fundamentally modified.
    6 Leads to massiveorganisational change. May not involve a substantial change, as seen in BPR


    1. To obtain quantum gains in the performance of the process in terms of time, cost, output, quality, and responsiveness to customers.
    2. To simplify and streamline the processby – a) Eliminating all redundant steps, activities. b) Reducing drastically the no. of stages. c) Speeding up the work-flow through the use of info-tech systems.
    3. To obtain dramatic improvement in operational effectiveness, by re-designing core business processes and supporting business systems.

    TOTALQUALITY MANAGEMENT : “is mgmt philosophy , an abstract entity”
    Total Quality Management (TQM) : is a people-focused management system that aims at continual increase in customer satisfaction at continually lower real cost. There is a sustained management commitment to quality and everyone in the organisation and the supply chain is responsible for preventing rather than detecting defects.

    TQM is a total system approach (not a separate area or program) and an integral part of high-level strategy; it works horizontally across functions and departments, involves all employees, top to bottom, and extends backward and forward to include the supply chain and the customer chain. TQM stresses learning and adaptation to continual change as keys to organizational success.

    "Continuous improvement" refers to both incremental and "breakthrough" improvement. Improvements may be of several types:

    • Enhancing value to the customer through new and improved products and services;
    • Developing new business opportunities;

    • Reducing errors, defects, and waste;
    • Improving responsiveness and cycle time performance; and
    • Improving productivity and effectiveness in the use of all resources.

    1. SIX SIGMA:

    Primarily Six Sigma means maintenance of the desired quality in processes and end products. It means taking systemic and integrated efforts toward improving quality and reducing cost. It also means taking systematic and integrated efforts toward improving quality and reducing cost.
    Features :

    1. Highly disciplined process that helps in developing and delivering near-perfect products and services.
    2. It strives to meet and improve organizational goals on quality, cost, scheduling, manpower, new products and so on.
    3. Six Sigma has its base in the concept of probability and normal distribution in statistics.
    4. Six Sigma strives that 99.99966% of products manufactured are defect free. Six Sigma is a smarter way to manage a business or a department.
    5. Six Sigma puts the customer first and uses facts and data to drive better solutions.
    6. Full or Total Business Initiative, not merely a quality initiative.
    7. Seeks to achieve breakthroughs in every area of operation, not merely small marginal improvement.

    Medical organizations:

    • A successful hospital strategy for the future will require renewed and deepened collaboration with physicians.
    • Backward integration strategies include acquiring ambulance services, waste disposal services, and diagnostic services.
    • Many people research medical ailments online, which is causing a dramatic shift in the balance of power between doctor, patient, and hospitals.
    • Intel recently began offering a new secure medical service whereby doctors and patients can conduct sensitive business on the Internet, such as sharing results of medical tests and prescribing medicine.
    • The most successful hospital strategies today are providing physical rehabilitation centres, cardiac rehabilitation centres, women’s medicine services, and psychiatric services, etc.

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    Thumbs up IPCC - Alok Sir S.M notes.


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    Thumbs up IPCC - Strategic management notes.


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

    In other words, strategy is about:

    * Where is the business trying to get to in the long-term (direction)
    * Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
    * How can the business perform better than the competition in those markets? (advantage)?
    * What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
    * What external, environmental factors affect the businesses' ability to compete? (environment)?
    * What are the values and expectations of those who have power in and around the business? (stakeholders)
    Strategy at Different Levels of a Business
    Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it.

    Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".
    Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

    Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

    How Strategy is Managed - Strategic Management
    In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions above. In practice, a thorough strategic management process has three main components, shown in the figure below:

    Strategic Analysis
    This is all about the analysing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:

    PEST Analysis - a technique for understanding the "environment" in which a business operates
    Scenario Planning - a technique that builds various plausible views of possible futures for a business
    Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an industry
    Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users
    Directional Policy Matrix - a technique which summarises the competitive strength of a businesses operations in specific markets
    Competitor Analysis - a wide range of techniques and analysis that seeks to summarise a businesses' overall competitive position
    Critical Success Factor Analysis - a technique to identify those areas in which a business must outperform the competition in order to succeed
    SWOT Analysis - a useful summary technique for summarising the key issues arising from an assessment of a businesses "internal" position and "external" environmental influences.

    Strategic Choice
    This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.

    Strategy Implementation
    Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into organisational action.

    Strategy - Competitive Advantage
    Competitive Advantage - Definition
    A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.

    Competitive Strategies
    Following on from his work analysing the competitive forces in an industry, Michael Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The four strategies relate to the extent to which the scope of a businesses' activities are narrow versus broad and the extent to which a business seeks to differentiate its products.

    The four strategies are summarised in the figure below:

    The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry.
    Strategy - Differentiation

    This strategy involves selecting one or more criteria used by buyers in a market - and then positioning the business uniquely to meet those criteria. This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.

    Examples of Differentiation Strategy: Mercedes cars; Bang & Olufsen
    Strategy - Cost Leadership

    With this strategy, the objective is to become the lowest-cost producer in the industry. Many (perhaps all) market segments in the industry are supplied with the emphasis placed minimising costs. If the achieved selling price can at least equal (or near)the average for the market, then the lowest-cost producer will (in theory) enjoy the best profits. This strategy is usually associated with large-scale businesses offering "standard" products with relatively little differentiation that are perfectly acceptable to the majority of customers. Occasionally, a low-cost leader will also discount its product to maximise sales, particularly if it has a significant cost advantage over the competition and, in doing so, it can further increase its market share.

    Examples of Cost Leadership: Nissan; Tesco; Dell Computers

    Strategy - Differentiation Focus

    In the differentiation focus strategy, a business aims to differentiate within just one or a small number of target market segments. The special customer needs of the segment mean that there are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers. The important issue for any business adopting this strategy is to ensure that customers really do have different needs and wants - in other words that there is a valid basis for differentiation - and that existing competitor products are not meeting those needs and wants.

    Examples of Differentiation Focus: any successful niche retailers; (e.g. The Perfume Shop); or specialist holiday operator (e.g. Carrier)

    Strategy - Cost Focus
    Here a business seeks a lower-cost advantage in just on or a small number of market segments. The product will be basic - perhaps a similar product to the higher-priced and featured market leader, but acceptable to sufficient consumers. Such products are often called "me-too's".
    Examples of Cost Focus: Many smaller retailers featuring own-label or discounted label products.

    Strategic Planning - Mission

    A strategic plan starts with a clearly defined business mission.
    Mintzberg defines a mission as follows:
    “A mission describes the organisation’s basic function in society, in terms of the products and services it produces for its customers”.
    A clear business mission should have each of the following elements:

    Taking each element of the above diagram in turn, what should a good mission contain?

    (1) A Purpose
    Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the needs of all stakeholders (including employees, and society at large?)

    (2) A Strategy and Strategic Scope
    A mission statement provides the commercial logic for the business and so defines two things:
    - The products or services it offers (and therefore its competitive position)
    - The competences through which it tries to succeed and its method of competing
    A business’ strategic scope defines the boundaries of its operations. These are set by management.
    For example, these boundaries may be set in terms of geography, market, business method, product etc. The decisions management make about strategic scope define the nature of the business.

    (3) Policies and Standards of Behaviour
    A mission needs to be translated into everyday actions. For example, if the business mission includes delivering “outstanding customer service”, then policies and standards should be created and monitored that test delivery.
    These might include monitoring the speed with which telephone calls are answered in the sales call centre, the number of complaints received from customers, or the extent of positive customer feedback via questionnaires.

    (4) Values and Culture

    The values of a business are the basic, often un-stated, beliefs of the people who work in the business. These would include:

    • Business principles (e.g. social policy, commitments to customers)
    • Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for the good of the business as a whole? And does the business demonstrate a high level of commitment and loyalty to its staff?)
    • Guidance on expected behaviour – a strong sense of mission helps create a work environment where there is a common purpose
    What role does the mission statement play in marketing planning?
    In practice, a strong mission statement can help in three main ways:
    • It provides an outline of how the marketing plan should seek to fulfil the mission
    • It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission?
    • It provides an incentive to implement the marketing plan

    Strategy - Analysing competitive industry structure

    Defining an industry
    An industry is a group of firms that market products which are close substitutes for each other (e.g. the car industry, the travel industry).
    Some industries are more profitable than others. Why? The answer lies in understanding the dynamics of competitive structure in an industry.
    The most influential analytical model for assessing the nature of competition in an industry is Michael Porter's Five Forces Model, which is described below:

    Porter explains that there are five forces that determine industry attractiveness and long-run industry profitability. These five "competitive forces" are
    - The threat of entry of new competitors (new entrants)
    - The threat of substitutes
    - The bargaining power of buyers
    - The bargaining power of suppliers
    - The degree of rivalry between existing competitors
    Threat of New Entrants
    New entrants to an industry can raise the level of competition, thereby reducing its attractiveness. The threat of new entrants largely depends on the barriers to entry. High entry barriers exist in some industries (e.g. shipbuilding) whereas other industries are very easy to enter (e.g. estate agency, restaurants). Key barriers to entry include
    - Economies of scale
    - Capital / investment requirements
    - Customer switching costs
    - Access to industry distribution channels
    - The likelihood of retaliation from existing industry players.
    Threat of Substitutes
    The presence of substitute products can lower industry attractiveness and profitability because they limit price levels. The threat of substitute products depends on:

    - Buyers' willingness to substitute
    - The relative price and performance of substitutes
    - The costs of switching to substitutes
    Bargaining Power of Suppliers

    Suppliers are the businesses that supply materials & other products into the industry.
    The cost of items bought from suppliers (e.g. raw materials, components) can have a significant impact on a company's profitability. If suppliers have high bargaining power over a company, then in theory the company's industry is less attractive. The bargaining power of suppliers will be high when:

    - There are many buyers and few dominant suppliers
    - There are undifferentiated, highly valued products
    - Suppliers threaten to integrate forward into the industry (e.g. brand manufacturers threatening to set up their own retail outlets)
    - Buyers do not threaten to integrate backwards into supply
    - The industry is not a key customer group to the suppliers

    Bargaining Power of Buyers
    Buyers are the people / organisations who create demand in an industry
    The bargaining power of buyers is greater when
    - There are few dominant buyers and many sellers in the industry
    - Products are standardised
    - Buyers threaten to integrate backward into the industry
    - Suppliers do not threaten to integrate forward into the buyer's industry
    - The industry is not a key supplying group for buyers
    Intensity of Rivalry
    The intensity of rivalry between competitors in an industry will depend on:
    - The structure of competition - for example, rivalry is more intense where there are many small or equally sized competitors; rivalry is less when an industry has a clear market leader
    - The structure of industry costs - for example, industries with high fixed costs encourage competitors to fill unused capacity by price cutting
    - Degree of differentiation - industries where products are commodities (e.g. steel, coal) have greater rivalry; industries where competitors can differentiate their products have less rivalry
    - Switching costs - rivalry is reduced where buyers have high switching costs - i.e. there is a significant cost associated with the decision to buy a product from an alternative supplier
    - Strategic objectives - when competitors are pursuing aggressive growth strategies, rivalry is more intense. Where competitors are "milking" profits in a mature industry, the degree of rivalry is less
    - Exit barriers - when barriers to leaving an industry are high (e.g. the cost of closing down factories) - then competitors tend to exhibit greater rivalry.

    Product portfolio strategy - introduction to the boston consulting box

    The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities.

    The company must:

    (1) Analyse its current business portfolio and decide which businesses should receive more or less investment, and
    (2) Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

    Methods of Portfolio Planning
    The two best-known portfolio planning methods are from the Boston Consulting Group (the subject of this revision note) and by General Electric/Shell. In each method, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organised.

    The Boston Consulting Group Box ("BCG Box")

    Using the BCG Box (an example is illustrated above) a company classifies all its SBU's according to two dimensions:
    On the horizontal axis: relative market share - this serves as a measure of SBU strength in the market
    On the vertical axis: market growth rate - this provides a measure of market attractiveness
    By dividing the matrix into four areas, four types of SBU can be distinguished:

    Stars - Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows.

    Cash Cows - Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars.

    Question marks - Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors. Management have to think hard about "question marks" - which ones should they invest in? Which ones should they allow to fail or shrink?

    Dogs - Unsurprisingly, the term "dogs" refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.
    Using the BCG Box to determine strategy

    Once a company has classified its SBU's, it must decide what to do with them. In the diagram above, the company has one large cash cow (the size of the circle is proportional to the SBU's sales), a large dog and two, smaller stars and question marks.

    Conventional strategic thinking suggests there are four possible strategies for each SBU:

    (1) Build Share: here the company can invest to increase market share (for example turning a "question mark" into a star)
    (2) Hold: here the company invests just enough to keep the SBU in its present position
    (3) Harvest: here the company reduces the amount of investment in order to maximise the short-term cash flows and profits from the SBU. This may have the effect of turning Stars into Cash Cows.
    (4) Divest: the company can divest the SBU by phasing it out or selling it - in order to use the resources elsewhere (e.g. investing in the more promising "question marks").
    Strategy - Portfolio Analysis - ge matrix
    The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities.

    The company must:

    (1) Analyse its current business portfolio and decide which businesses should receive more or less investment, and
    (2) Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

    The two best-known portfolio planning methods are the Boston Consulting Group Portfolio Matrix and the McKinsey / General Electric Matrix (discussed in this revision note). In both methods, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organised.

    The McKinsey / General Electric Matrix
    The McKinsey/GE Matrix overcomes a number of the disadvantages of the BCG Box. Firstly, market attractiveness replaces market growth as the dimension of industry attractiveness, and includes a broader range of factors other than just the market growth rate. Secondly, competitive strength replaces market share as the dimension by which the competitive position of each SBU is assessed.

    The diagram below illustrates some of the possible elements that determine market attractiveness and competitive strength by applying the McKinsey/GE Matrix to the UK retailing market:

    Factors that Affect Market Attractiveness
    Whilst any assessment of market attractiveness is necessarily subjective, there are several factors which can help determine attractiveness. These are listed below:

    - Market Size
    - Market growth
    - Market profitability
    - Pricing trends
    - Competitive intensity / rivalry
    - Overall risk of returns in the industry
    - Opportunity to differentiate products and services
    - Segmentation
    - Distribution structure (e.g. retail, direct, wholesale
    Factors that Affect Competitive Strength
    Factors to consider include:
    - Strength of assets and competencies
    - Relative brand strength
    - Market share
    - Customer loyalty
    - Relative cost position (cost structure compared with competitors)
    - Distribution strength
    - Record of technological or other innovation
    - Access to financial and other investment resources

    Strategy - Introduction to PEST analysis

    PEST analysis is concerned with the environmental influences on a business.
    The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business.

    Identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.
    The table below lists some possible factors that could indicate important environmental influences for a business under the PEST headings:

    Political / Legal Economic Social Technological
    - Environmental regulation and protection - Economic growth (overall; by industry sector) - Income distribution (change in distribution of disposable income; - Government spending on research
    - Taxation (corporate; consumer) - Monetary policy (interest rates) - Demographics (age structure of the population; gender; family size and composition; changing nature of occupations) - Government and industry focus on technological effort
    - International trade regulation - Government spending (overall level; specific spending priorities) - Labour / social mobility - New discoveries and development
    - Consumer protection - Policy towards unemployment (minimum wage, unemployment benefits, grants) - Lifestyle changes (e.g. Home working, single households) - Speed of technology transfer
    - Employment law - Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates) - Attitudes to work and leisure - Rates of technological obsolescence
    - Government organisation / attitude - Exchange rates (effects on demand by overseas customers; effect on cost of imported components) - Education - Energy use and costs
    - Competition regulation - Inflation (effect on costs and selling prices) - Fashions and fads - Changes in material sciences
    - Stage of the business cycle (effect on short-term business performance) - Health & welfare - Impact of changes in Information technology
    - Economic "mood" - consumer confidence - Living conditions (housing, amenities, pollution) - Internet!

    Strategy - The Strategic Audit
    In our introduction to business strategy, we emphasised the role of the "business environment" in shaping strategic thinking and decision-making.

    The external environment in which a business operates can create opportunities which a business can exploit, as well as threats which could damage a business. However, to be in a position to exploit opportunities or respond to threats, a business needs to have the right resources and capabilities in place.

    An important part of business strategy is concerned with ensuring that these resources and competencies are understood and evaluated - a process that is often known as a "Strategic Audit".

    The process of conducting a strategic audit can be summarized into the following stages:
    (1) Resource Audit:
    The resource audit identifies the resources available to a business. Some of these can be owned (e.g. plant and machinery, trademarks, retail outlets) whereas other resources can be obtained through partnerships, joint ventures or simply supplier arrangements with other businesses.

    (2) Value Chain Analysis:
    Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("outsourced").

    (3) Core Competence Analysis:
    Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analysing core competencies is recognising that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required to undertake them. So the goal is for management to focus attention on competencies that really affect competitive advantage.

    (4) Performance Analysis
    The resource audit, value chain analysis and core competence analysis help to define the strategic capabilities of a business. After completing such analysis, questions that can be asked that evaluate the overall performance of the business. These questions include:
    - How have the resources deployed in the business changed over time; this is "historical analysis"
    - How do the resources and capabilities of the business compare with others in the industry - "industry norm analysis"
    - How do the resources and capabilities of the business compare with "best-in-class" - wherever that is to be found- "benchmarking"
    - How has the financial performance of the business changed over time and how does it compare with key competitors and the industry as a whole? - "ratio analysis"

    (5) Portfolio Analysis:
    Portfolio Analysis analyses the overall balance of the strategic business units of a business. Most large businesses have operations in more than one market segment, and often in different geographical markets. Larger, diversified groups often have several divisions (each containing many business units) operating in quite distinct industries.
    An important objective of a strategic audit is to ensure that the business portfolio is strong and that business units requiring investment and management attention are highlighted. This is important - a business should always consider which markets are most attractive and which business units have the potential to achieve advantage in the most attractive markets.

    Traditionally, two analytical models have been widely used to undertake portfolio analysis:
    - The Boston Consulting Group Portfolio Matrix (the "Boston Box");
    - The McKinsey/General Electric Growth Share Matrix

    (6) SWOT Analysis:
    SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is an important tool for auditing the overall strategic position of a business and its environment.

    Porter's Generic Strategies

    If the primary determinant of a firm's profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. Even though an industry may have below-average profitability, a firm that is optimally positioned can generate superior returns.
    A firm positions itself by leveraging its strengths. Michael Porter has argued that a firm's strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus. These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent. The following table illustrates Porter's generic strategies:

    Porter's Generic Strategies

    Target Scope Advantage
    Low Cost Product Uniqueness

    (Industry Wide) Cost Leadership
    Strategy Differentiation

    (Market Segment) Focus Strategy
    (low cost) Focus Strategy

    Cost Leadership Strategy
    This generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share. In the event of a price war, the firm can maintain some profitability while the competition suffers losses. Even without a price war, as the industry matures and prices decline, the firms that can produce more cheaply will remain profitable for a longer period of time. The cost leadership strategy usually targets a broad market.
    Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether. If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage based on cost leadership.

    Firms that succeed in cost leadership often have the following internal strengths:

    • Access to the capital required to make a significant investment in production assets; this investment represents a barrier to entry that many firms may not overcome.
    • Skill in designing products for efficient manufacturing, for example, having a small component count to shorten the assembly process.
    • High level of expertise in manufacturing process engineering.
    • Efficient distribution channels.
    Each generic strategy has its risks, including the low-cost strategy. For example, other firms may be able to lower their costs as well. As technology improves, the competition may be able to leapfrog the production capabilities, thus eliminating the competitive advantage. Additionally, several firms following a focus strategy and targeting various narrow markets may be able to achieve an even lower cost within their segments and as a group gain significant market share.
    Differentiation Strategy
    A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product. Because of the product's unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily.

    Firms that succeed in a differentiation strategy often have the following internal strengths:

    • Access to leading scientific research.
    • Highly skilled and creative product development team.
    • Strong sales team with the ability to successfully communicate the perceived strengths of the product.
    • Corporate reputation for quality and innovation.
    The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. Additionally, various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments.

    Focus Strategy
    The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly.

    Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less bargaining power with their suppliers. However, firms pursuing a differentiation-focused strategy may be able to pass higher costs on to customers since close substitute products do not exist.

    Firms that succeed in a focus strategy are able to tailor a broad range of product development strengths to a relatively narrow market segment that they know very well.

    Some risks of focus strategies include imitation and changes in the target segments. Furthermore, it may be fairly easy for a broad-market cost leader to adapt its product in order to compete directly. Finally, other focusers may be able to carve out sub-segments that they can serve even better.

    A Combination of Generic Strategies
    - Stuck in the Middle?
    These generic strategies are not necessarily compatible with one another. If a firm attempts to achieve an advantage on all fronts, in this attempt it may achieve no advantage at all. For example, if a firm differentiates itself by supplying very high quality products, it risks undermining that quality if it seeks to become a cost leader. Even if the quality did not suffer, the firm would risk projecting a confusing image. For this reason, Michael Porter argued that to be successful over the long-term, a firm must select only one of these three generic strategies. Otherwise, with more than one single generic strategy the firm will be "stuck in the middle" and will not achieve a competitive advantage.

    Porter argued that firms that are able to succeed at multiple strategies often do so by creating separate business units for each strategy. By separating the strategies into different units having different policies and even different cultures, a corporation is less likely to become "stuck in the middle."

    However, there exists a viewpoint that a single generic strategy is not always best because within the same product customers often seek multi-dimensional satisfactions such as a combination of quality, style, convenience, and price. There have been cases in which high quality producers faithfully followed a single strategy and then suffered greatly when another firm entered the market with a lower-quality product that better met the overall needs of the customers.

    Generic Strategies and Industry Forces
    These generic strategies each have attributes that can serve to defend against competitive forces. The following table compares some characteristics of the generic strategies in the context of the Porter's five forces.

    Generic Strategies and Industry Forces

    Force Generic Strategies
    Cost Leadership Differentiation Focus
    Barriers Ability to cut price in retaliation deters potential entrants. Customer loyalty can discourage potential entrants. Focusing develops core competencies that can act as an entry barrier.

    Power Ability to offer lower price to powerful buyers. Large buyers have less power to negotiate because of few close alternatives. Large buyers have less power to negotiate because of few alternatives.

    Power Better insulated from powerful suppliers. Better able to pass on supplier price increases to customers. Suppliers have power because of low volumes, but a differentiation-focused firm is better able to pass on supplier price increases.

    Threat of
    Substitutes Can use low price to defend against substitutes. Customer's become attached to differentiating attributes, reducing threat of substitutes. Specialized products & core competency protect against substitutes.

    Rivalry Better able to compete on price. Brand loyalty to keep customers from rivals. Rivals cannot meet differentiation-focused customer needs.

    MBA – Recommended Books

    1. Management Principles and Practice.
    • Koontz & Weirich - Essentials Of Management, Tata McGraw Hill (Rs.250)
    2. Organizational Behavior.
    • Peter
    3. Managerial Economics & Environment.
    • A.N.Agarwal – Indian Economy – Wishwa Prakashan
    4. Executive Communication.
    • Rajendra Paul and Koralahalli – Business Communication
    5. Statistics & Research Methodology
    • Kothari C.R. – Research Methodology (Rs.200)
    6. Operations Management.
    • Pannerselvam – Production and Operations Management, PHI (Rs.295)
    7. Marketing Management.
    • Philip Kotler – Marketing Management, Pearson Education / PHI, 2003
    8. Financial & Management Accounting.
    • Prasanna Chandra – Financial Management – Theory and Practice, Tata McGraw Hill, New Delhi (1994) (Rs.425)
    • S.N.Maheswari – Management Accounting
    9. Human Resource Management.
    • Gary Dessler – Human Resource Management, Seventh Edition, Prentice-Hall Of India P.Ltd., Pearson
    • VSP Roa – Human Resource Management : Text and Cases, First Edition, Excel Books, New Delhi – 2000
    10. Operations Research.
    • Kanti Swarup, Gupta and Man Mohan – Operations Research


    How to develop personality

    IT IS as important to think about the development of personality as it is to think about spirituality. A poet from Delhi says,
    ‘If God had created man to offer Him prayers there are many angels to do this.
    Man was created to become human.’

    Many think that nature is greater than art. I say: art perfects nature. Someone proudly told me, ‘ I was brought up by my parents just like a plant.’ And I said, ‘It is a great pity.’ When people say one should let children alone, let them go their own way, this means that although they live in the world which is itself a work of art they do not give their children any education in that art, which is needed for living in this world. By doing this I do not mean that one should not be natural.

    One should develop naturally, for if one remains undeveloped one loses a great deal. Even if one were a spiritual person and the personality was not developed one would be missing a great deal in life. The personality must be developed. Parents think very little about this nowadays; they think that these are old-fashioned ideas; to be new-fashioned is to overlook all these things. But I say that it is not so at all; it is just the fashion to think about it in this way.

    Individuality is one thing and personality is another. A soul is born an individual, but without a personality. Personality is built after one is born. What the soul has brought along is hands and legs and face, but not personality; this is made here on earth.
    Very often people have taken the ascetic path and have gone where they could keep away from the world. Because they did not care for the personality, for the self, they kept themselves aloof from the crowd. In this way they are free to be as they wish to be; if they want to be like a tree or a plant or a rock they may.

    But at the same time, when it comes to personality it is a different thing. You can either have a manner or not have it; you can either have an ideal or not have one; you can either have principles or be without them; you can either be conventional or not. All these things have their place; manner, conventionality, principle, ideal, all have their value in life. And the person who goes about without considering any of these things is just like a wild horse let loose in the city, running here and there, frightening everybody and causing a lot of harm. That is what an untrained personality is. Real culture is a matter of personality, not mathematics or history or grammar.

    All these different studies are practical studies, but the real study is how to develop personality. If you are a businessman, a lawyer, a professional man, an industrialist, a politician, whatever you occupation in life, you are forced, expected, to have a personality in every walk of life. It is the personality of the salesman, which sells not

    always the goods. In the case of a doctor it is his personality which can heal and cure a person much sooner than medicine can.

    There are four different grades of evolution, and these differ according to the four different kinds of personality. A person is either born in it or a person evolves through it. The first grade is called ‘Ammara’ in Sufi terms, and it denotes a person who is coarse and crude, thoughtless and ill mannered. And ill manner is connected with ill luck, and so whenever there is thoughtlessness there is failure connected with it; whenever there is blindness there is always a disaster. This is the first kind of person.

    When a man is a little more evolved then there comes a certain consideration, a civilized manner, a refinement, and a choice of action. This is called ‘Lawwama’. A person who has advanced to the third stage, ‘Mutmainna’, is still further developed. It is not only that he is thoughtful but he is sympathetic, it is not only that he is considerate but he is kind, it is not only that his has a civilized manner but he has a natural politeness, it is not only that he is refined but he is tender-hearted. And when a person goes still further then he has even greater charm and personality, then there is calm, quietness, gentleness, mildness, tolerance, forgiveness, and understanding of all beings.

    It is when this fourth personality, or ‘Alima’, is developed that a person is entitled to embark on the spiritual path. Until then he is not entitled to go on it. The modern way of recognizing the wrong kind of equality has taken away the idea of better personality. That respect and appreciation which were due to a higher personality is taken away by this madness of equality. If a person has no ideal before him to reach up to then he has no way in which to progress. People who think, ‘I am satisfied as I am. I earn so much money every day, is this not sufficient?’ have nothing to reach up to. In spite of all the faults and errors of the ancient peoples they at any rate always kept this thought alive.

    We have wiped this ideal from our minds. Where is the real democracy? The kingliness of greeting the dervish first, that is democracy. But when a man who is not evolved is pulling the most evolved down to his level, that is the wrong democracy; it is going downward instead of going upward. If mannerlessness (lack of courtesy) and thoughtlessness can be democracy it takes away its real ideal and true spirit. Democracy is the result of Aristocracy; when the spirit of aristocracy has evolved enough then it becomes democracy. Then a person thinks, ‘I am the equal of any person in the world; there is no person lower than me; ‘ but if a person says, ‘There is no one higher than me,’ that is not democracy.

    There is one example of true democratic religious feeling. The people of Burma are Buddhists, and they are of a wonderful type. Here you will find the one race who for centuries has believed that there is no religion inferior to others. Just think of it today, when the followers of a particular religion look down upon the followers of any other religion! But these people say, ‘Whatever be the religion, Christian, Muslim, or Jewish, it is not worse than ours. Perhaps it is even better.’ This is something wonderful, but when a person says, ‘No one is better than I,’ that is not democracy; it is going down, for it means closing our eyes to that which is greater, higher, and better. And if we cannot appreciate cannot see, then we cannot rise to it. We can only rise towards that which we value and to which we aspire.

    If, instead of telling people simple things like this, I were to speak about the occult power, psychic power, spirit communication, breathing practices, they would be glad to hear me. But suppose one did not develop personality, what about spirituality? A man should first of all be a person; then only should he be spiritual. If he is not a person then what is the use of being spiritual? Man is born to fulfill the purpose of his life; he is made to be a man, a human being, a man who can be relied upon, a man whose word can be accepted, who uses thought and consideration, to whom we can entrust our secret; a man who under all conditions will never humiliate himself, who will never go back on his word, who will not deceive or cheat anybody; a man who will carry out what he has once undertaken.

    All these qualities make a man a human being. Today our condition is such that we cannot believe each other’s word. We have to have a stamp on a contract. Why are we in such a state? Because we are not evolving toward that great ideal which the ancient people had, that is why we cannot trust each other individually, that is why nations cannot trust each other. Human beings live only in order to exist from day to day, to strive and work for a loaf of bread. That is all. But is it all? If it is only to earn a loaf of bread we do no better than dogs and cats.

    Rich and poor, all are wretched in every walk of life, because there is nothing but competition between individuals, nations, parties, and communities. We have made our life wretched. What are we here for? If we were only born to meditate and to be spiritual then we had better go into the forest or to the mountain caves; then it would not be necessary to remain in the world. And if we only had to live as animals do then we could do as worldly people are generally doing today, and accomplish nothing. Therefore the first necessity for those who are seeking after truths is to develop the spirit of personality.

    I remember a quotation: ‘If one has gold and jewels it means nothing; if one has no personality they are valueless than wealth.’ How strange it is that there is such a large population in this world, and that there are so few personalities. It is as the Greek philosopher said, who was going about with a lantern in daylight, and when people asked him what he was looking for he answered, ‘For a human being.
    This subject has only been overlooked; it is not that man is not capable of understanding it. Man is capable of it more than ever before, because he has so much to suffer. This life as we live it is a most painful life. It crunches and grinds him to make him a better man. If he gave his thought to it he would profit by it and would become a better person. In ancient times people underwent different ordeals, trials and tests. We today do not need to do this. We have other trials today; we do not need to seek for them. If we only knew how to profit by them! At this time, when every little bone and piece of skin of every animal is used for something, we yet do not make use of our own life’s experience, which is more precious than anything else. If there is news of an oil-well or a gold- and silver-

    mine everyone is interested, but people are not interested in this gold- and silver-mine, this mine of jewels and gems, the cultivation of which will produce all that can be produced! They do not think about the most valuable thing of all. Nevertheless, the great gurus and teachers of all times have put much emphasis on this one point, that those who wish to seek after truth must above all give their thought and mind to the development of personality.

    The possible combinations of the basic preferences form 16 different Personality Types. This does not mean that all (or even most) individuals will fall strictly into one category or another. If we learn by applying this tool that we are primarily Extraverted, that does not mean that we don't also perform Introverted activities. We all function in all of these realms on a daily basis. As we grow and learn, most of us develop the ability to function well in realms which are not native to our basic personalities. In the trials and tribulations of life, we develop some areas of ourselves more throughly than other areas. With this in mind, it becomes clear that we cannot box individuals into prescribed formulas for behavior.

    However, we can identify our natural preferences, and learn about our natural strengths and weaknesses within that context.
    The theory of Personality Types contends that each of us has a natural preference which falls into one category or the other in each of these four areas, and that our native Personality Type indicates how we are likely to deal with different situations that life presents, and in which environments we are most comfortable.

    Learning about our Personality Type helps us to understand why certain areas in life come easily to us, and others are more of a struggle. Learning about other people's Personality Types help us to understand the most effective way to communicate with them, and how they function best.

    Practical Application for Personality Types

    • Career Guidance What types of tasks are we most suited to perform? Where are we naturally most happy?
    • Managing Employees How can we best understand an employee's natural capabilities, and where they will find the most satisfaction?
    • Inter-personal Relationships How can we improve our awareness of another individual's Personality Type, and therefore increase our understanding of their reactions to situations, and know how to best communicate with them on a level which they will understand?
    • Education How can we develop different teaching methods to effectively educate different types of people?
    • Counselling How we can help individuals understand themselves better, and become better able to deal with their strengths and weaknesses?


    If you are thinking of starting a business, you will need a broad array of entrepreneurial skills to succeed in today's competitive market. You must possess basic skills necessary to enable you to start, develop, finance, and market your own home business enterprises. There are a number of qualities and skills you need to have, including personal attributes, business skills and management capability. While you may not have all of them right now, there are five basic skills you really must have to run any kind of business.

    These five skills are:

    1. Sales and marketing skills.
    Sales and marketing are the two most important skills you must have when you plan to start your own business. A business is nothing if it has no customers. You may have the fanciest computer with the latest graphics software, but if no one is knocking at your door to hire you as a graphic designer, then you better rethink why you are in business in the first place. Maybe you are better off employed by a firm. To have revenues and profits, you first need to have customers. To get customers, you must be able to market your business and possess the skills to close the sale.

    As you plan your business, you must begin to think how to reach your target audience and the people who may need your products or service. This entails understanding the concept of marketing, and using the tools that your budget permits. You must have a knack for understanding what people wants, listening to their needs, and interact well with other people.

    It would be extremely helpful if you possess excellent written and oral communication skills to help you sell your products and services (more so if you are a solo entrepreneur who will be doing everything by yourself). You need to create a buzz about your business by talking to people and presenting to them your business. You need to write ads, press releases and story ideas about your business. Starting a business is a time to get out of your timid self and begin to aggressively market your venture. That’s the only way you can succeed.

    2. Financial know-how
    You are in business to make money. Therefore, the most important skill you must have is the ability to handle money well. This includes knowing how to stretch the limited start-up capital that you have, spending only when needed and making do with the equipment and supplies that you currently have. You also need to identify the best pricing structure for your business in order to get the best kind of return for your products or services.

    Success in business is not limited to those who have tons of capital in the beginning. Look at the failed dot-coms with funding of as much as $100 million. Even if they are awash with cash, they still ended up as a failure because they were not able to manage their money well. They lavished themselves with high-tech office furniture and gave their CEOs fancy jets to fly, only to have their cash flow depleted in less than a year.

    If you are able to manage your cash flow well when the business starts to run, you will be able to survive the ups and downs of self employment. The important thing is to always focus on the bottomline. For every spending, always ask yourself: “How much will this contribute to my bottom line?” If it will not give your business anything in return financially, better think twice before opening your wallet.

    3. Self-motivation skills
    As an entrepreneur, you do not have the luxury of bosses and bureaucracy to tell you what needs to be done. Everything rests on your shoulder from thinking where to get the money to fund the business, to developing the product, to determining how to reach the customer, and so on. Only you will create the plans, and change them should the situation shifts. You need to be smart enough to know when you need to go ahead, and when to stop.

    To succeed in business, you must be a self-starter with a clear desired goal in mind. You must have the confidence in yourself, and in your ideas (how can you sell your ideas to others if you yourself do not believe in them?). More importantly, you must be willing to focus your energy and work hard towards each and every step that will make your enterprise a success. Especially if you work at home, it is doubly hard to get into the work mindset: sometimes, the television is just too tempting that it is hard to get out of your pajamas and begin typing in your computer. You therefore must have that extra drive and commitment to make sure that you are taking the necessary steps to make your dream of a successful business a reality.

    4. Time management skills
    The ability to plan your day and manage time is particularly important for a home business. When you wake up in the morning, you must have a clear idea of the things you must do for the day. Especially if you are running a one-person operation, you must have the ability to multi-task be the secretary at the start of the day typing all correspondences and emails, become the marketing man writing press releases before noon, make sales call in the afternoon, and become a bookkeeper before your closing hours. Imagine if you are selling products and you still have to create the products, deliver and fulfill the orders, rush to the bank to cash the checks. Lots of job for a simple home-based business! No, you don’t have to be a superman (or superwoman). You simply have to know how to manage time and prioritize your tasks.

    One difficulty of working from home is that you can never seem to stop. There are simply too many things to do, as if work never stops (and it doesn’t!). Part of having good time management skills is knowing when to stop and when to leave work, and begin doing your other roles in your family as the husband, wife, mother or father. You must be able to know how to keep your home life separate from your work life, and ensure that there exists a balance between the two.

    5. Administration skills
    If you can afford to hire an assistant who will organize your office space and file your papers and mails, lucky you! However, most start-up entrepreneurs cannot afford such luxuries. Over and above the tasks of managing, marketing and planning your business, you also need to possess a great deal of administration skills. You need to file your receipts so tax time will not be a trip to Hades. You need to do all the work in terms of billing, printing invoices, collecting payments, and managing your receivables.

    Starting a business is never easy, even if you have the perfect background and possess all the above skills. Having all the needed skills and qualities will not even ensure your success. But having these basic skills will, at least, lessen the pain of the start-up process, giving you greater chance in seeing your business grow and prosper.

    Entrepreneur personality:

    Before committing yourself to the extraordinary investment of time, energy and money that starting a business requires, you need to engage in some personal soul-searching. You need to review your pluses and minuses, your strengths and weaknesses to determine if you are a suitable match for the challenge. Remember, the entrepreneur IS the business – its originator, its motivating force, its energy. Without the needed ingredients, the business can fail as quickly as it started.

    There is no “ideal” entrepreneurial personality – successful entrepreneurs can be analytical or intuitive, risk-averse or thrill seeking, or gregarious and taciturn. However, experts have documented research that indicates that successful small business entrepreneurs, whether male or female, have some common characteristics.
    Below is a checklist to help you determine if you have what it takes to make a success of your own business. On this checklist, write a "Y" if you believe the statement describes you; an "N" if it does not; and a "U" if you cannot decide. Do this exercise before you quit your job, invest your money, or spend your time in starting the new business:
    • I have a strong desire to be independent and be my own boss, not taking orders from others and relying on my own talents. I can move on my own without waiting for someone to push me.

    • Win, lose or draw, I want to be master of my own financial destiny. I want the chance to work at something I enjoy, because of a desire for security in the form of steady income.

    • I have significant specialized business ability based on both my education and my experience. I also love the challenge of pitting my resources and skills against the environment.

    • I am willing to take reasonable risks and handle the pressure that results from a degree of insecurity.

    • I have an ability to conceptualize the whole of a business; not just its individual parts, but how they relate to each other. I am an individual who always comes up with new ideas.

    • I develop an inherent sense of what is "right" for a business and have the courage to pursue it. I believe in giving priority to getting the job done.

    • One or both of my parents were entrepreneurs; calculated risk-taking runs in the family.

    • My life is characterized by a willingness and capacity to persevere. I welcome the responsibility that goes to owning a business.

    • I recognize that much of my success will depend on how well I deal with people.

    • I possess a high level of energy, sustainable over long hours to make the business successful.

    • A powerful drive to accumulate wealth, and the opportunity to earn far more than I ever could working for others.
    Not every successful home based business owner starts with a "Y" answer to all of these questions, because there is no such thing as the “perfect” entrepreneur! Many proprietors who sense entrepreneurial deficiencies seek extra training and support from a skilled team of business advisors such as accountants, bankers and attorneys. The important thing is that you have a realistic understanding of your strengths and weaknesses. However, four or five "N"'s and "U"'s should be sufficient reason for you to stop and give second thought to going it alone.
    If you are lucky enough to possess a higher-than-average level of self-confidence; if you can think positively about (and are not turned off by) the prospect of hard work, long hours, and onerous responsibility; if each new problem challenges you to tackle it with everything at your command, then owning your own business may be your proper road to success.

    Traits of a successful entrepreneur:

    What makes a good leader? For starters, leaders don't wait for other people to give them permission to do something. They just do it. Leaders accept responsibility for the choices they make in life. They don't get sucked into the "victim mentality" syndrome, which is characterized by a persistent desire for people to blame others for their poor choices.

    Bottom line: Leaders realize that the decisions they make are all theirs, and thus take full responsibility for any resulting failures.
    In the world of business - especially network marketing and direct sales - leadership is the defining ingredient that separates the mediocre from the superstars. It's the act of persuasion. It's getting people to see new perspectives and do things they normally wouldn't do. It's about setting your ego aside and having the passion and charisma to get people to follow you. Leaders don't follow. They just do.
    Can an average person become a leader? Yes, most certainly. People can transform themselves and make huge strides in leadership abilities just as they do in other areas of personal development. It starts with inner self-leadership and expands outward to influence and move others around you. Leadership is about self-direction and self-control and shows in what "we do." Become the right kind of person (passionate, responsible, doer, believer) and others will flock right into your lap, and not until.

    But, like other areas of self improvement, it's no easy task, because man's natural instinct is mediocrity. Yes, mediocrity. It would be nice if we could all become leaders by simply following a few simple steps. But the path to leadership requires finding our own way. The direction we take will differ for each of us. However, there are a few key traits we can focus on.

    No Fear But Fear Itself:

    So what is it that keeps us from pursuing opportunities, leading others, taking action and doing what we really want to do? One word: FEAR. Fear of rejection. Fear of people. Fear of trying new things. Fear of not being perfect. Enjoying our comfort zone (average).

    It's almost as if the fears we have actually begin to become like bondage. Ever feel that way? You can usually tell who lives in fear. They usually wear them on their sleeves. Ever hear people say:
    "I would try that but I just don't have time." "That program will never work. I already tried networking and it didn't work before." "I would listen to you, but that sounds like some pyramid scheme."

    The list of the doubts and fears that roll off people's lips is endless. Stand in any line with people, on the bus or at work, and listen to the idle chatter. You'll hear people's fear in their everyday conversation. "Oh, I hate working here, but the job market is just too difficult to try and find something else." If you want to be a great leader, learn to conquer your fears.

    Embrace Failure

    Study the histories of all great leaders and you'll see lives littered with failures. It's called "failing forward fast." And it's one of the top traits of successful leaders. That's why it takes guts to be a leader. Many people are scared of failure and don't like to tackle the tough issues. (Then again, not everyone wants to be a leader, right.) It requires being decisive and a willingness to take chances. And yes, to FAIL - but to accept it, learn from it and move on.

    Become A Believer

    Children need to "see it" in order to believe it. Leaders believe it BEFORE they see it. Here's something to try: Try doing what you say you will do. (Remember, the odds are against you). When faced with problems and obstacles, choose to learn from the experience and turn them into an opportunities. Don't whine and complain about yesterday's defeats. (It's counter-productive and you look like a fool next to Thomas Edison). Key: Until you're able to wipe out the past mistakes from the movie projector that keeps playing in your head, you'll never be able to move forward. Leaders believe in themselves and believe in abundance.

    Take Some Risks

    Leaders are the ones willing to make huge sacrifices in time, money and family in order to achieve their goals. Risk is the price you pay for success. You must carry the burden and have the backbone to make decisions that are not popular. Be internally directed, not "socially fit." You'll never achieve wealth and success as long as you care what other people thing of you. Yes, leadership has a price, (risk) but it also offers tremendous rewards.

    Don't Follow The Crowd

    Here's a crucial defining trait of a leader: they don't follow the crowd. Nothing great was ever accomplished by a crowd. A crowd merely blows with the wind, like scattered leaves. Crowds have no purpose and end up nowhere. It takes courage to go against the crowd and be a true individual, but it's the most exciting, exhilarating thing we can do. It's also the most difficult and frightening. That's why success is so elusive and so rare.
    Take Ted Turner of CNN fame, for instance. He said, "Lead, follow, or get out of the way!" Was Turner moving with the herd? No, he was the captain, not one of the deck hands. Most people live in a state of self-consciousness. They go to work, support their families are active in their communities and are good citizens. Their egos are socially supported which means they go with the flow. Thus, because they are moving with the herd and moving with the group's collective consciousness, they struggle. It's never their goals, their vision or their choices. Most people rarely, if ever, move into the direction of freedom and true self expression.

    While the world continues to change, the traits of good leaders remain constant. The principles are timeless. Once you learn how to liberate the leader within you, extraordinary things happen.

    What are the barriers to effective listening?

    Nature of listeningWhen listening is mentioned, we think primarily of the act of sensing sounds. In human communication, of course, the sounds are mainly spoken words.
    How well we sense the words around us is determined by 2 factors. One factor is our ability to sense sounds – how well our ears can pick them up. The other factor is our attentiveness to listening. Most specifically, this is our mental concentration – our will to listen.

    Barriers to effective listening
    We do not receive specific training in listening and do not fully realize the significance of the act of listening; when someone is distracted we tend to say, “Will you stop talking….” when we ought to say, “Will you please listen…..”
    There are many reasons why people’s abilities to listen are not as good as it should be. Some persons are self – centered and want others to listen to them but are not willing to listen to what others have to say while others listen selectively and listen only to what interests them.
    Some of the barriers to effective listening are:

    Distraction in one’s own mind
    This is a great barrier to listening and must be firmly checked. If we allow our mind to go on a joyride, there’ll be more listening. It takes a great deal of self control and discipline to stay tuned to another person. However, if our mind is occupied by personal anxiety or worry, it is better to postpone or delegate the listening responsibility for the time being.
    Wandering attention
    It arises from the natural difference between speaking speed and listening speed. The average speaking speed is about 150 words per minute; listening capacity is about 500 words a minute. While listening to a speaker, the mind has excess time and is likely to wander off if we’re not watchful. We can learn to keep our mind usefully occupied in reviewing the talk and connecting the various ideas that are put across by the speaker.

    Planning to present a good argument
    Trying to plan a good answer is a nice distraction while we listen. If the speaker makes a controversial statement which conflicts with our views, we may get excited and engaged in mental argument. In preparing an argument, or a question to ask, we might miss the rest of the speech.

    Lack of interest
    Not being interested in the topic might make we reject the speaker of the subject as dull or boring. Such an attitude to the speaker arises from narrow interests and a closed mind. Very often, uninteresting speakers communicate useful information and ideas, while interesting and amusing speakers may have very little useful matter. Pretending to be attentive is usually not possible as body language will show the boredom.

    Avoiding the effort to understand what is difficult
    This makes the listener switch off attention; if this becomes a habit, it makes the mind more and more lazy. If we are in the habit of avoiding discussion programs on the TV, we might be on the path of mental decay. A little daily effort to follow a serious discussion on radio or TV is useful for improving listening ability.

    Tendency to criticize
    Criticizing the speaker’s appearance, manner, voice, and so on, is another cause of poor listening. No doubt, style adds to the effectiveness of speech; but the content is always more important than the appearance or style of the speaker.

    Emotional blocks
    Most people have “deaf spots”; this is a tendency not to catch certain ideas. This defect can prevent a person from taking in and retaining certain ideas. Some people find it difficult to listen to figures or descriptions of surgical operations or stories of horror. A deep seated inability to endure going through something which we find painful causes us to block it out of our mind.
    Another type of deaf spot is the inability to face an idea that goes against a prejudice or an opinion that we have held for a long time. We may hear it wrongly or it may get distorted in our mind if we do not pay careful attention.

    Emotional excitement
    We may get disturbed by the speaker’s use of certain words. Words and phrases acquire different meanings and connotations in different cultures; a perfectly good word may appear loaded with prejudice or ill – feeling to a person from another culture. Feeling angry in the name of gender bias, or racial prejudice, or some other cause, may bar we from giving attention to the speaker. It is important to guard against getting upset by words which may have been used innocently by the speaker.

    We often have no patience to wait until another has finished speaking. We want to answer or add our own points to the discussion, or narrate our own experience. There is nothing more boring than a dialogue in which one party is constantly using his/her own frame of reference, talking about one’s own experiences, narrating one’s own anecdotes, fancies and imposing one’s own frame of reference on what the speaker is saying. This competitive desire to talk indicates lack of maturity.

    Poor health
    No doubt, any physical pain demands all our attention in coping with it, and we cannot be expected to pay attention to work. But besides pain, poor state of general health makes a person impatient, inattentive and unable to concentrate; it impairs listening ability.

    Excessive note taking
    Trying to take down extensive notes is a sure way to disturb our listening and to miss some points. No matter how fast we write, we cannot write as fast as the words are spoken unless we write shorthand very well. Cultivate the art of taking notes and limit it to writing down the general ideas.

    If there is noise in the environment, it makes hearing difficult and distracts attention. Noise disturbs listening and frustrates the speaker. One can avoid it by insisting on discipline.

    Going off on objects
    Again, this gives the message that we really don’t think what they are saying is important enough to listen.

    Entering every discussion with the mind set that we must win, no matter what. We’re too busy plotting our next move to really pay attention to what the other is saying.

    Jumping to the conclusion that we are being blamed or criticized, and responding defensively. This makes it difficult for others to talk with we about anything important.

    2. Suggest methods, tips, techniques to improve listening skills.

    Improving our listening is largely a matter of mental conditioning – of concentrating on the activity of sensing. We have to want to improve it, for listening is a willful act. If we are like most of us, we are often tempted not to listen.
    Once we’ve decided that we would like to listen, we must make an effort to pay attention. How we do this depends on our mental makeup, for the effort requires disciplining the mind. We must force ourself to be alert, to pay attention to the word spoken.

    In addition to working on the improvement of our sensing, we should work on the accuracy of our filtering. To do this, we will need to think in terms of what words mean to the speakers that use them rather than what the dictionary says or what we think the word means in our mind. We must try to think as the speaker thinks – judging the speaker’s words by the speaker’s knowledge, experiences, view points and such. Like improving our sensing, improving our filtering (give meaning to incoming message) requires conscious effort.

    Certainly, there are limits to what the mind can retain, but authorities agree that few of us come close to them. By taking care to hear what is said, and by working to make our filtering process give we more accurate meanings to the words we hear, we add strength to the message we receive. The results should be improved retention.
    In addition to the foregoing advice, various practical steps may prove helpful. Assembled in a classic document titled,“The Ten Commandments of Listening”, the following list summarizes the most useful of them:

    1. Stop talking
    Unfortunately, most of us prefer talking to listening. Even when we are not talking, we are inclined to concentrate on what to say next rather than on listening to others. So we must stop talking before we can listen.

    2. Put the talker at ease
    If we make the talker feel at ease, he/ she will do a better job of talking. Then we will have better input to work with.

    3. Show the talker we want to listen
    If we can convince the talker that we are listening to understand rather than oppose, we will help create a climate for information exchange. We should look and act interested. Doing things like reading, looking at our watch and looking away distracts the talker.

    4. Remove distractions
    The things we do also can distract the talker. So don’t doodle, tap with our pencil, shuffle papers or the like.

    5. Empathize with the talker
    If we place ourself in the talker’s position and look at things from the talker’s point of view, we will help create a climate of understanding that can result in a true exchange of information.

    6. Be patient
    We will need to allow the talker plenty of time. Remember that not everyone can get to the point as quickly and clearly as we. And do not interrupt. Interruptions are barriers to the exchange of information.

    7. Hold our temper
    From our knowledge of the workings of our minds, we know that anger impedes communication. Angry people built walls between each other. They harden their positions and block their minds to the words of others.

    8. Go easy on argument and criticism
    Argument and criticism tend to put the talker on the defensive. He /she tends to “clam up” or get angry. Thus, even if we win the argument, we lose. Rarely does either party benefit from argument and criticism.

    9. Ask questions
    By frequently asking questions, we display an open mind and show that we are listening and we assist the talker in developing his/ her message and in improving the correctness of meaning.
    10. Stop talking!!
    The last commandment is to stop talking. It was also the first. All the other commandments depend on it.

    From the preceding review, it should be clear that to improve our listening ability, we must set our mind to the task. Poor listening habits are ingrained in us and it is up to us to improve our listening skills to become successful and respected – as individuals and as managers.


    This stress management section of Mind Tools helps to survive the intense stress that comes with a challenging career.

    The first articles helps to understand stress and what causes it: This is an important starting point for effective stress management. They introduce the three main approaches to stress management, and then shows how one can identify the key sources of stress in normal life.

    We then look at range of stress management techniques. Unlike some other approaches to stress management, the Mind Tools approach is, where possible, to tackle stress at source. This means that not only do we show you how to deal with the symptoms of stress, we show you how to deal with the underlying causes as well.

    By the end of the section, one should have a clearer understanding of stress and the importance of managing it. You should be able to analyze the points of pressure in your life, and plan to neutralize them. You will also have access to a range of different stress management techniques.

    Also remember, as you work through, that if you have have particular issues in bringing balance to your life, this is where our coaches can help.

    Stress Management Techniques :

    Much research has been conducted into stress over the last hundred years. Some of the theories behind it are now settled and accepted; others are still being researched and debated. During this time, there seems to have been something approaching open warfare between competing theories and definitions: Views have been passionately held and aggressively defended.

    What complicates this is that intuitively we all feel that we know what stress is, as it is something we have all experienced. A definition should therefore be obvious…except that it is not.

    “stress is not necessarily something bad – it all depends on how you take it. The stress of exhilarating, creative successful work is beneficial, while that of failure, humiliation or infection is detrimental.”
    Since then, a great deal of further research has been conducted, and ideas have moved on. Stress is now viewed as a "bad thing", with a range of harmful biochemical and long-term effects. These effects have rarely been observed in positive situations.

    This is the main definition used by this section of Mind Tools, although we also recognize that there is an intertwined instinctive stress response to unexpected events. The stress response inside us is therefore part instinct and part to do with the way we think.Some of the early research on stress established the existence of the well-known “fight-or-flight” response. Some work showed that when an organism experiences a shock orperceives a threat, it quickly releases hormones that help it to survive.

    In humans, as in other animals, these hormones help us to run faster and fight harder. They increase heart rate and blood pressure, delivering more oxygen and blood sugar to power important muscles. They increase sweating in an effort to cool these muscles, and help them stay efficient. They divert blood away from the skin to the core of our bodies, reducing blood loss if we are damaged. As well as this, these hormones focus our attention on the threat, to the exclusion of everything else. All of this significantly improves our ability to survive life-threatening events.

    Not only life-threatening events trigger this reaction: We experience it almost any time we come across something unexpected or something that frustrates our goals. When the threat is small, our response is small and we often do not notice it among the many other distractions of a stressful situation.

    Unfortunately, this mobilization of the body for survival also has negative consequences. In this state, we are excitable, anxious, jumpy and irritable. This actually reduces our ability to work effectively with other people. With trembling and a pounding heart, we can find it difficult to execute precise, controlled skills. The intensity of our focus on survival interferes with our ability to make fine judgments by drawing information from many sources. We find ourselves more accident-prone and less able to make good decisions.

    There are very few situations in modern working life where this response is useful. Most situations benefit from a calm, rational, controlled and socially sensitive approach.

    In the short term, we need to keep this fight-or-flight response under control to be effective in our jobs. In the long term we need to keep it under control to avoid problems of poor health and burnout.

    These skills fall into three main groups:
    • Action-oriented skills: In which we seek to confront the problem causing the stress, often changing the environment or the situation;
    • Emotionally-oriented skills: In which we do not have the power to change the situation, but we can manage stress by changing our interpretation of the situation and the way we feel about it;
    • and Acceptance-oriented skills: Where something has happened over which we have no power and no emotional control, and where our focus must be on surviving the stress.
    In the rest of this section of Mind Tools, we look at some important techniques in each of these three groups.

    This is a much-abridged excerpt from the ‘Understanding Stress and Stress Management’ module of Managing Stress for Career Success, the Mind Tools Stress Management Masterclass. As well as covering this material in more detail, it also discusses:
    • Long-term stress: The General Adaptation Syndrome and Burnout
    • The Integrated Stress Response
    • Stress and Health
    • Stress and its Affect on the Way We Think
    • Pressure & Performance: Flow and the ‘Inverted-U’
    These sections give you a deep and robust understanding of stress, helping you to develop your own stress management strategies for handling unique circumstances. Click here to find out more about the Stress Management Masterclass and here to visit the Stress.MindTools.Com site, which has many more articles…

    Stress can cause severe health problems and, in extreme cases, can cause death. While these stress management techniques have been shown to have a positive effect on reducing stress, they are for guidance only, and readers should take the advice of suitably qualified health professionals if they have any concerns over stress-related illnesses or if stress is causing significant or persistent unhappiness. Health professionals should also be consulted before any major change in

    We all know the feeling of sickness in our stomach before an important presentation or performance. We have all experienced the sweaty palms, the raised heart rate, and the sense of agitation that we feel as these events approach. We have probably all also experienced how much worse this becomes when things go wrong in the run up to an event. The Thought Awareness, Rational Thinking and Positive Thinking technique that we look at later may be enough to help you manage the fears, anxieties and negative thoughts that may arise in a small performance.

    For larger events, it is worth preparing a Performance Plan. This is a pre-prepared plan that helps you to deal effectively with any problems or distractions that may occur, and perform in a positive and focused frame of mind.

    To prepare your Performance Plan, begin by making a list all of the steps that you need to do from getting prepared for a performance through to its conclusion.
    Start far enough in advance to sort out any equipment problems. List all of the physical and mental steps that you need to take to:
    • Prepare and check equipment, and repair or replace it where it does not work;
    • Make travel arrangements;
    • Pack your equipment and luggage;
    • Travel to the site of your performance;
    • Set up equipment;
    • Wait and prepare for performance; and
    • Deliver performance.
    • Everything that could reasonably go wrong at each step with equipment

    Work through all of the things that could go wrong. Look at the likelihood of the problem occurring. Many of the things you have listed may be extremely unlikely. Where appropriate, strike these out and ignore them from your planning.

    Look at each of the remaining contingencies. These will fall into three categories:
    1. Things you can eliminate by appropriate preparation, including making back-up arrangements and acquiring appropriate additional or spare equipment;
    2. Things you can manage by avoiding unnecessary risk; and
    3. Things you can manage with a pre-prepared action or with an appropriate stress management technique

    For example, if you are depending on using a data projector for a presentation, you can arrange for a back up projector to be available, purchase a replacement bulb, and/or print off paper copies of the presentation in case all else fails. You can leave earlier than strictly necessary so that you have time for serious travel delays. You can also think through appropriate alternatives if your travel plans are disrupted. If you are forced to wait before your event in an uncomfortable or unsuitably distracting place, prepare the relaxation techniques you can use to keep a calm, positive frame of mind. Research all of the information you will need to take the appropriate actions quickly, and ensure that you have the appropriate resources available.

    Also, prepare the positive thinking you will use to counter fears and negative thoughts both before the event and during it. Use stress anticipation skills to ensure that you are properly prepared to manage stress. Then use thought awareness, rational thinking and positive thinking skills to prepare the positive thoughts that you will use to protect and build your confidence.

    Write your plan down on paper in a form that is easy to read and easy to refer to. Keep it with you as you prepare for, and deliver, your performance. Refer to it whenever you need it in the time leading up to the event, and during it.

    Performance Plans help you to prepare for an important performance. They bring together practical contingency planning with mental preparation to ensure that you are fully prepared to handle any situations and eventualities that may realistically occur.

    This gives you the confidence that comes from knowing you are as well prepared for an event as is practically possible to be. It also helps you to avoid the unpleasant stresses that come from poor preparation, meaning that you can deliver your performance in a relaxed, positive and focused frame of mind, whatever problems or upsets may have occurred.
    Thought Awareness, Rational Thinking and Positive Thinking

    Quite often, our experience of stress comes from our perception of the situation. Often that perception is right, but sometimes it is not. Often we are unreasonably harsh with ourselves or instinctively jump to wrong conclusions about people’s motives. This can send us into a downward spiral of negative thinking that can be hard to break.

    Thought Awareness, Rational Thinking and Positive Thinking are simple tools that help you to change this negative thinking.

    We have already mentioned that the most common accepted definition of stress is that it occurs when a person perceives that “demands exceed the personal and social resources the individual is able to mobilize.” In becoming stressed, people must make two main judgments: First, they must feel threatened by the situation, and second, they must judge whether their capabilities and resources are sufficient to meet the threat. How stressed someone feels depends on how much damage they think the situation can do them, and how closely their resources meet the demands of the situation.

    Perception is key to this as situations are not stressful in their own right. Rather it is our interpretation of the situation that drives the level of stress that we feel.

    Quite obviously, sometimes we are right in what we say to ourselves. Some situations may actually be dangerous, may threaten us physically, socially or in our career. Here, stress and emotion are part of the early warning system that alerts us to the threat from these situations.

    Very often, however, we are overly harsh and unjust to ourselves in a way that we would never be with friends or co-workers. This, along with other negative thinking, can cause intense stress and unhappiness and can severely undermine self-confidence.

    One approach to it is to observe your stream of consciousness as you think about a stressful situation. Do not suppress any thoughts: Instead, you just let them run their course while you watch them, and write them down as they occur.

    Another more general approach to Thought Awareness comes with logging stress in your Stress Diary. One of the benefits of using the Stress Diary is that you log all of the unpleasant things in your life that cause you stress for one or two weeks. This will include negative thoughts and anxieties, and can also include difficult or unpleasant memories and situations that you perceive as negative. All of these can be looked at using the techniques in this module. By logging your negative thoughts for a reasonable period of time, you will quickly see patterns in your negative thinking. When you analyze your diary at the end of the period, you should be able to see the most common and the most damaging thoughts. Tackle these as a priority.

    Thought awareness is the first step in the process of managing negative thoughts, as you cannot manage thoughts that you are unaware of.

    “You are what you think. You feel what you want.”

    Why Think Positively?

    All of our feelings, beliefs and knowledge are based on our internal thoughts, both conscious and subconscious. We are in control, whether we know it or not.
    Aim high and do your best
    We can be positive or negative, enthusiastic or dull, active or passive.
    The biggest difference between people is their attitudes. For some, learning is enjoyable and exciting. For others, learning is a drudgery. For many, learning is just okay, something required on the road to a job.

    "Most folks are about as happy as they
    make up their minds to be."
    -Abraham Lincoln

    Our present attitudes are habits, built from the feedback of parents, friends, society and self, that form our self-image and our world-image. These attitudes are maintained by the inner conversations we constantly have with ourselves, both consciously and subconsciously. The first step in changing our attitudes is to change our inner conversations.One approach is called the three C's: Commitment, Control and Challenge.

    Make a positive commitment to yourself, to learning, work, family, friends, nature, and other worthwhile causes. Praise yourself and others. Dream of success. Be enthusiastic.
    Keep your mind focused on important things. Set goals and priorities for what you think and do. Visualize to practice your actions. Develop a strategy for dealing with problems. Learn to relax. Enjoy successes. Be honest with yourself.

    Be courageous. Change and improve each day. Do your best and don't look back. See learning and change as opportunities. Try new things. Consider several options. Meet new people. Ask lots of questions. Keep track of your mental and physical health. Be optimistic. Studies show that people with these characteristics are winners in good times and survivors in hard times. Research shows that,"... people who begin consciously to modify their inner conversations and assumptions report an almost immediate improvement in their performance. Their energy increases and things seem to go better ..."

    Commitment, control and challenge help build self-esteem and promote positive thinking. Here are some other suggestions.

    7 Suggestions for Building Positive Attitudes

    • In every class, look for positive people to associate with.
    • In every lecture, look for one more interesting idea.
    • In every chapter, find one more concept important to you.
    • With every friend, explain a new idea you've just learned.
    • With every teacher, ask a question.
    • With yourself, keep a list of your goals, positive thoughts and actions.
    • Remember, you are what you think, you feel what you want.

    [b]How to Be a Successful Student
    Good News! Even small improvements in study skills pays big dividends. Success in any field creates a positive feedback loop that increases motivation and performance, which encourages more success.

    Positive thinking means admitting into the mind thoughts, words and images that are conductive to growth, expansion and success. It is the expectation of good and favorable results. A positive mind anticipates happiness, joy, health and a successful outcome of every situation and action. Whatever the mind expects, it finds.

    Not everyone accepts or believes in positive thinking. Some consider the subject as just nonsense, and others scoff at people who believe and accept it. Among the people who are conversant with this subject, not many know how to use it effectively in order to get results. Yet, it seems that more people are becoming attracted to this subject, as evidenced by the many books, lectures and courses about it. This is a subject that is gaining popularity.

    It is quite common to hear people say: "Think positive!", to someone who feels down and worried. Most people do not take these words seriously, as they do not know what it really means, or do not consider it as useful and effective. How many people do you know that ever stop to think what the power of positive thinking means?

    Positive and negative thinking are both contagious. All of us affect, in one way or another, the people we meet. This happens instinctively and on a subconscious level, through thoughts and feelings transference and through body language. People sense our aura and are affected by our thoughts. Is it any wonder that we want to be around positive persons and shun negative ones? People are more disposed to help us if we are positive. They dislike and avoid anyone broadcasting negativity.

    Negative thoughts, words and attitude bring up negative and unhappy moods and actions. When the mind is negative, poisons are released into the blood, which cause more unhappiness and negativity. This is the way to failure, frustration and disappointment.

    In order to turn the mind toward the positive, knowledge and training are necessary. Attitude and thoughts do not change overnight.

    Read about this subject. Meditate about its benefits, and persuade your mind to try it. The power of thoughts is a mighty power that is always shaping our lives. This shaping is usually done subconsciously, but it is possible to make the process a conscious one. Even if the idea seems strange give it a try, as you have nothing to lose, but only to gain. Ignore what others might say or think about you if you change the way you think.
    Always visualize only favorable and beneficial situations. Use positive words in your inner dialogues or when talking with others. Smile a little more, as this helps to think positively. Disregard any feelings of laziness or a desire to quit. If you persevere, you will transform the way your mind thinks.

    Once a negative thought enters your mind, you have to be aware of it and endeavor to replace it with a constructive one. The negative thought will try again to enter your mind, and then you have to replace it again with a positive one. It is as if there are two pictures in front of you, and you choose to look at one of them and disregard the other. Persistence will eventually teach your mind to think positively and ignore negative thoughts. In case you feel any inner resistance when replacing negative thoughts with positive ones, do not give up, but keep looking only at the beneficial, good and happy thoughts in your mind.

    It does not matter what your circumstances are at the present moment. Think positively, expect only favorable results and situations, and circumstances will change accordingly. It may take some time for the changes to take place, but eventually they do.

    Another method to employ is the repetition of affirmations. It is a method which resembles creative visualization, and which can be used in conjunction with it. It is the subject of another article on this website.

    The other articles at this website, about the power of concentration, will power, self-discipline and peace of mind also contribute to the development of a positive mind, and are recommended for reading and practicing. Positive attitude is a real power, which is well worth to develop and maintain. It is a positive state of mind, which manifests in the way one thinks and acts. The power of positive attitude is a real power, which can make great changes and make life happier, brighter and more successful.

    Positive attitude expresses itself in the following ways:

    The expectation of success.
    Positive thinking.
    Constructive thinking.
    Creative thinking.
    The motivation to accomplish your goals.
    Being inspired.
    Choosing happiness.
    Not giving up.
    Looking at failure and problems as blessings in disguise.
    Believing in yourself and in your abilities.
    Displaying self-esteem and confidence.

    A positive attitude leads to happiness and success. It possesses the power to change your whole life. When you see the bright side of life, your life becomes filled with light. This light affects not only you and the way you look at the world, but also your whole environment and the people around you.

    The benefits of a positive attitude
    Achieving your goals and attaining success.
    Success achieved faster and more easily.
    More happiness.
    More energy.
    Greater inner power and strength.
    The ability to inspire and motivate yourself and others.
    Fewer difficulties encountered along the way.
    The ability to surmount any difficulty.
    Life smiles at you.
    People respect you.

    Negative attitude says: you cannot achieve success.
    Positive attitude says: You can achieve success.

    If you have been exhibiting a negative attitude, or expecting failure and difficulties, it is now the time to change your attitude. It is time to get rid of negative thoughts and behavior and lead a happy and successful life. Why not start today? If you have tried and failed, it only means that you have not tried enough.

    How can you develop a positive attitude, which will lead you to happiness and success?

    • Choose to be happy.
    • Look at the bright side of life.
    • Have faith in yourself and in the Power of the Universe.
    • Associate yourself with happy people.
    • Read inspiring stories.
    • Repeat affirmations that inspire and motivate you.
    • Visualize only what you want to happen.
    • Learn to master your thoughts.
    • Learn concentration and meditation.

    Even one single step toward manifesting a positive attitude will bring more light into your life!

    Positive attitude is a real power, which is well worth to develop and maintain. It is a

    A positive attitude leads to happiness and success. It possesses the power to change your whole life. When you see the bright side of life, your life becomes filled with light. This light affects not only you and the way you look at the world, but also your whole environment and the people around you.
    The benefits of a positive attitude
    Achieving your goals and attaining success.
    Success achieved faster and more easily.
    More happiness.
    More energy.
    Greater inner power and strength.
    The ability to inspire and motivate yourself and others.
    Fewer difficulties encountered along the way.
    The ability to surmount any difficulty.
    Life smiles at you.
    People respect you.

    Negative attitude says: you cannot achieve success.
    Positive attitude says: You can achieve success.

    If you have been exhibiting a negative attitude, or expecting failure and difficulties, it is now the time to change your attitude. It is time to get rid of negative thoughts and behavior and lead a happy and successful life. Why not start today? If you have tried and failed, it only means that you have not tried enough.
    How can you develop a positive attitude, which will lead you to happiness and success?

    • Choose to be happy.
    • Look at the bright side of life.
    • Have faith in yourself and in the Power of the Universe.
    • Associate yourself with happy people.
    • Read inspiring stories.
    • Repeat affirmations that inspire and motivate you.
    • Visualize only what you want to happen.
    • Learn to master your thoughts.
    • Learn concentration and meditation.

    Even one single step toward manifesting a positive attitude will bring more light into your life!

    Subprime Crisis
    The term "subprime" refers to the credit status of the borrower, which is being less than ideal. Subprime lending is a general term that refers to the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history.
    Subprime lending is also called B-Paper, near-prime, or second chance lending. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk.
    Sub-prime mortgage crisis begin when housing prices began spiraling upwards in the US in the early years of this decade and continued through mid-2006, with the borrowing and lending rates extremely lower which helped boost the demand for and supply of new and existing houses.
    Many institutions offered home loans to borrowers with poor or no credit histories by requiring higher than normal repayment levels, creating what is now referred to as “sub-prime mortgages”, attracting investment banks and hedge fund owners to bet big on this emerging aspect of the US economy.

    Subprime Crisis: Impact on Equity Markets
    At the global level, especially in advanced markets such as US, UK, France, Germany and Japan, the linkages between markets are strong. Pricing and participant linkages are strong. As interest rates have risen and sub-prime has affected risk appetite (investors are now showing appetite for lower risk), equity markets have been impacted. As FII flows and hedge fund investments have been significant factors in emerging markets, the developments in the US have spread the low risk appetite to other markets and lead to high degree of volatility in prices and price weakness.
    The sub-prime and credit market crisis is not likely to have an impact on the fundamental story in India. It is likely to have an impact on sentiment and liquidity flows. This could lead to high volatility and corrective phases. It does not change our long-term outlook and our view on likely trends in medium term in the markets.
    RBI: According to the reports, the banking system has the ability to cope with the situation arising out of any adverse development and a strong domestic growth will continue to have a positive impact on the balance sheet of the banking sector

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