V M PATEL INSTITUTE OF MANAGEMENT & AMPICS(MBA) Ganpat University

Time: 2.5 Hrs.

Instruction:

Mid Semester Examination, MBA Semester-III Management Information System

Date: 02-11-2012

1. It is a closed book examination. 2. All the questions are compulsory. . 3. Be precise and to the point in your answers. Substantiate answers with examples. 4. Figure on the right side indicates the marks of the question.

Wt: 30 Marks

Q-1 "With so many ~eadymade and customized software available, the need for a manager is to learn 6 to use them effectively, rather than learn to program them." Evaluate the statement in light of the current era.

f'io.-2 What is the purpose of an information system from a business perspective? What role does it 6 play in the business information value chain?

Q-3 How do the Internet and Internet Technology work and how do they support communication and 6 e-business?

Q-4 Explain various DBMS with example. What are the different ways of distributing the database? 6 Explain each way of distributip.g the database with appropriate example

Q-5 Explain various systems used in organization from its functional perspective. 6

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Mid Semester Examination, MBA Semester III · Strategic Management

Time: 2.5 Hrs. Date:Ol/1112012 Wt: 30Marks

Instructions:

Q.1

Q.2

Q.3

Q.4

Q.5

1. This is a closed book examination. 2. All the questions are compulsory. 3. Figures to the right indicate marks of an individual question.

Explain in de~il the relationship among objectives, strategies and policies.

Give the example of a recent political development that changed the O>'CraL strategy of an organization. Be specific .

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What do you mean by driving forces? For a mobile handset indw,try \ . :1 5 factors would you lik,e to study as driving forces?

What do you mean by value chain of a company? Why value chain of ~he 5 companies belonging from the same industry may differ?

Read the case "Bum~ Philp" and answer· the questions given aUhe ~nd of it. 10

A brief history of Burns Philp's International diversification strategy

The headquart~r· s of Bums Philp are located in an old sandstone building in Bridge Street, Sydney. They .are reminiscent of a bygone era, with oak paneling inlaid with mahogany and leather seating, setting the organizational tenor of an 'establishment' corporate player. Until quite recently, Bums Philp was indeed a pillar of the Sydney corporate establishment.

James Bums first began operating trading and mercantile shops in Queensland, Australia in 1867, later expanding into trading and shipping in .the Pacific. In 1883, he went int9 partnership with a former employee, Robert Philp, to form Bums Philp & Co. In 1880, the firm had acquired the contract to supply mail services to Thursday Iceland, in the Torres Strait betweeJ;I Australia and what is now Papua New Guinea. This bought the firm into contract with other regional traders operating into. the Polynesian and Melanesian islands to Australia's north and north-east, and soon the firm became involved in 'blackbirding', the recruitment (most often by very dubious means) of indentured lab~r~rs to serve in the cane fields in North Queensland. By 1901, the firm was ari estabUshed part of Australian business and regional trade. It had established stores in Port Moresby; Samarai, Vila, and Nukelofa.

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The history of conservative management of the firm continued for some time-firm growth emerged, as the business developed in retailing, shipping, and insurance. Returns in these businesses, though, were low, and management sought to ene~gize the business through acquisitions. In the early 1970s, the management started buying a varlet~ of businesses in a haphazard manner. Between 1973 and 1983, over $ 200 Iilillion was invested in seventeen major acquisitions, that were as diverse as cosmetics, car rentals and iron ore mining, hardware, insurance, and a trustee company. At the end of this process, the firm owned over 100 types of businesses, with tnost perforliling poorly.

Problems in corporate governance were endelilic in such a company. In many, clear managerial oversight was necessary for effective risk assessment (this was the case in Burns Philp Trustees, for example). The company developed a strong bureaucratic approach---centralizing as many operations as possible. In many ways, this exacerbated performance problems in subsidiary firms, and performance declined across most of the firm's businesses.

Towards Corporate Re-focus

In July, 1984, Andrew Turnbull was appointed as the new Chief Executive of Bums Philp, and he accelerated a decisive focus on core business development. Profits grew strongly throughout the 1980s, and soon the food divi~ton contributed more than half of Bums Philp's bottom line profits. Turnbull was quoted in 1987 as saying that he was not satisfied with fmancial performance within the firm, and he required a fifteen percent after-tax return on shareholders' funds invested in each division. Many of the smaller activities that Burns Philp were involved with were sold during Turnbull's early tenure, though by the early 1990s Bums Philp was still a conglomeration of yeast, island trading, and hardware retailing, with a large equity holding in QBE insurances. The BBC hardware chain was sold t.) Howard Slilith, another Australian listed company, and the QBE stake was also sold. In total, these sales netted Bums Philp more than $ 550 million dollars. It is worth noting that the prices gained for these two businesses were low. The BBC chain was sold for little more than nine times the 1992 earnings. Likewise, QBE Insurance's share price has grown strongly since 1992.

In 1983, Bums Philp purchased Mauri Bros. and Thompson, two European yeast manufacturers. These firms were leaders in yeast technology, and Bums used capabilities from these firms to transform the operational processes of the North American Fleischmanns' yeast and vinegar operations that they later purchased from Nabisco in 1986. Bums Philp soon came to dolilinate the world yeast and vinegar markets. In 1992, further expansion occurred with the acquisition of Tones in the United States and DHW, Germany's leading yeast manufacturer.

Burns Philp's dominant position in the global yeast and vinegar businesses made growth either by investment or acquisition in these areas difficult. The management was mindful though, that in seeking a growth policy, unrelated diversification needed to be avoided at all costs. It was the lack of operational synergy that had weighed on the firm's performance in the past.

The management sought synergistic expansion that would leverage off their dolilinance in yeast and vinegar. It was decided by Turnbull and the board to replicate the success of their yeast investments with a move into the global spice business. This time around though, success was a little more elusive.

The Development of a Flawed Strategy

The 1991 Bums Philp Annual Report states that 'we identified herbs and spices as a natural extension to our existing food ingredient business' (Bums Philp, 1991, 17). As their own core

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business (yeast) was mature and crowded, the management ventured. into a business that they thought was related (spices). In fact, this business was very different, and very hostile. This was perhaps the company's biggest error. At the time of their foray into spices, Burns Philp probably had sound reason to think that they weJ;"e 'on a winner'. There were some limited synergies in the markets and distribution of their two main products (yeast and spices). At the time, profits from the food ingredients acquisitions were strong. The spice business, though, had little of the potential that Bums Philp had tapped in their profitable investments in yeast seven years before.

The management's use of the term 'food ingredients' to. aggregate together yeast and spices belied a lack of understanding of the fact that the businesses were in fact quite different. With regards to the relative industry competitive make-up, the industries were as alike as chalk and cheese.

Burns Philp was a successful player in the world yeast business. The international spice business, though, was dominated by the US giant, McCormick and Company Inc. (McCormick). McCormick was a tough, cashed-up competitor. It had well developed supply and distribution chains in an industry where these were vital aspects of success. Bums Philp may, for a time, have had available to them the possibility of a merger or takeover of McCormick, though in the end Burns Philp set about creating a competitor for McCormick by buying a range of firms that were regional playei"s. Purchases were made in the US, Gennany, France, Britain, and Holland, and as Burns Philp were the ones with the money to spend, and little time to spend it, it was a sellers' market.

The US expansion of the finn's spice assets was anchored by its purchase of Tones, McCormick's fiercest competitor in the wholesale of spices to supermarkets. McCormik responded with gusto and alac1ity. Litigation that was settled later showed that Bums Philp management., when they acquired Tones, had misunderstood the nature and value of parts of Tones' business (supermarket slotting contracts). It soon became clear that Bums Philp management did have has a clear level of fundamental understanding of the complexity of the global spices industry, and that many of the acquisitions made in the US and elsewhere were driven by haste and expediency.

Burns had to borrow money to add to its cash to fund the purchases. The company went from having a net positive cash position to a debt position in a matter of months. As interest rates climbed steadily in 1991 and 1992, their leveraged position, together with limited cash flows from the new businesses, created major problems both for company's profits and also the company's balance sheet. The company hurriedly sold assets outside the food ingredients area to reduce debt, though the sales did not reflect values that a more orderly process may have achieved. For example, the company's 45% interest in QBE Insurance was sold for $ 317 million. By mid-1998, this stake in QBE would be worth more than $ l billion. Burns Philp had held an interest in QBE for more than one hundred years.

The Impact of a Flawed Strategy

McCormick did not sit idly by, as the new competitor got established. They undercut prices, and tied up 'slotting contracts'-supennarket shelf space-in the vital North American markets. Brown (1998, 4) notes that Burns Philp did not foresee this strong reaction by McCormick and when it came, they were unprepared. A senior McCormick manager noted that 'McCormick was determined to protect and grow J11arket share.'

Bums Philp management began to acknowledge the growing impact McCormick was having in 1996. The Bums Philp Managing Director, Ian Clack, stated that 'clearly, we

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underestimated the competitive reaction to our strategy to quickly and significantly increase our, presence in the global food ingredients market'. He further noted that 'this year's fmancial results overshadowed many of our successes'. In fact, the poor financial results were a fair reflection of' the relative values and future potential of the firm's new assets. '

From an organizational competency point of view, the lack of experience in the global spice business soon emerged as a key problem: The 1996-97 Board of the company was comprised of one manager and one former manager, two lawyers, an engineer, an accountant, and a finantial adviser. There were no members of the board then, nor before, who had direct knowledge of, or · extensive work experience in, the international spice business.

In 1994, the Bums Philp CEO, Andrew Turnbull, retired from his management position. His protege, Ian Clack, was appointed to replace him. Turnbull was elected as Chairman of the Board of Directors. It would have been hard for management and other board members to reverse, or even question, strategies put in place by Turnbull when he was in charge of Burns Philp. This situation was compounded when Turnbull became seriously ill with cancer in 1995. Turnbull was unable to carry out many of his responsibilities, and the board was unwilling to question the direction of the business while their long-time friend and leader was unwell.

Andrew Turnbull finally succumbed to cancer in May 1997. The first four months of operation that year had seen the spice division lose $ 40 million, due in no small part to a collapse in margins in the US market. The death of Turnbull, it seems, focussed the minds of the board, and they began to seek buyers for the spice business. The share price jumped momentarily in mid-June as New Zealand entrepreneur Graeme H<trt purchased 19.9 per cent of the company for $ 262 million in an opportunistic raid. The share price rise was to be short-lived.

Baring Brother Burrows had been appointed by the Board to seek international buyers for the spice business at something approaching its book value of $ 850 million-a value that they themselves had established. None were found at this or any other similar price. The spice business was losing millions of dollars each week. In June, soon after the $ 262 million investment by Hart, Burns Philp announced that it had written down the value of its spice division by $ 700 million to $ 150 million. The finn's market capitalization dropped to $ 150 million from $ 1.25 billion earlier that month. Graeme Hart, the unfortunate New Zealand investor, had lost about a quarter of a billion dollars, most of his fortune.

DISCUSSION QUESTIONS

1. Define the core competency of Burns Philp prior to their entry into the international spice business.

2. Analyze the reasons for Burns Philp's failure in the international spice business.

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V M PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Time: 2.5 Hrs

Instructions:

Mid Semester Examination, MBA Semester III Management of Travel Business

Date: 03/11/2012

1. Figures to the right indicate individual marks of each question.· 2. All the questions carry equal marks. 3. Be precise and to the point in your answers.

Wt: 30 Marlq

Q # 1 Discuss c,ritically the "Incredible India" campaign. (6 marks)

Q # 2 Discuss the role of tour operator and tour agents in tourism marketing. (6 marks)

Q # 3 Make a package of Indian Hill Station for seven days of your choice (6 marks) including its itinerary planning and costing. Discuss key points of concern while planning itinerary and you can make necessary assumptions for the same.

Q # 4 Explain in detail marketing mix of tourism with suitable examples. (6 marks)

Q # 5 List out travel docum~nts required for both domestic and overseas travel and (6 marks) discuss it in detail.

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V. M. PATEL INSTITUTE Of MANAGEMENT & AMPICS (MBA)

Ganpat University Mid Semester Examination, MBA Semester Ill

.. Banking Management · · Time: 2.5 Hrs. Date: 03 -11-2012

Wt: 30Marks

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Instructions:

1. This is a closed Book examination

2. All the questions are compulsory 3. Figures to the right indicate marks of each question.

Q#l , Discuss the Regional rural Bat.J<. and itr. role. in rural development 5

Q#2 Discuss the Merchant Banker role in pre issue and post is~~e of shares 5

Q#3 Discuss the power and functions of Reserve Bank of India (RBI) 5

Q#4 Discuss the rating methodology used by Credit rating agencies in India. 5

Q#5

Q#6

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What is letter. of credit ? Discuss the types of lettt::r of credit

Discuss the Banker's rights & Obligations

'END OF PAPER'

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V. M. PAJEL INSTITUTE OF MANAGEMENT.& AMPICS (MBA) Ganpat University

Mid Semester Examination, MBA Semester III Consumer Behavior

Time: 2.5 Hrs. Date: 07/11/2012 Wt: 30 Marks

Instructions: (1) All the que~tions are compulsory (2) Figures to the right indicate respective marks (3) Close book examinations ·

Q.l. What do you understand by extensive problem solving, limited problem solving (6) and routinized response behaviour? What kind of decision .process can you expect in the followin'g cases and why ?

(a) Purchase of a greeting card for a close friend. (b) Purchase of an Laptop for sister/Brother

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Q.2. Discuss various strategies adopted by marketers to bring attitudinal change (6) among Consumers. What is linkage among consumer's belief, attitude and purchase intentions?

Q.3. Which stage of the family life cycle would constitute the most suitable segment (6) for the following products?

(a) Fast Food (b) DVD Player (c) Mutual fund (d) Time Share Holidays

Q.4. Compare and contrast the adoption and diffusion processes. Discuss each process in (6) terms ofthe market ac.ceptance ofColourTelevision and Cellular phone.

Q.5. Why should every consumer research study include search for secondary (6) information before collection of primary data? What are major sources of secondary data?

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V M PATEL INSTITUTE OF MA-NAGEMENT & AMPICS (MBA) Ganpat University

Time: 2.5 Hrs

Instructions:

Mid Semester Examination, MBA Semester III Sales and Distribution Management

Date: 06/11/2012

1. Figures to the right indicate individual marks of each question. 2. All the questions carry equal marks. 3. Be precise and to the point in your answers.

Wt: 30 Marks

Q # 1 Tata Timken markets. heavy equipment ball bearing in India. They had a (6 marks) countrywide sale.s network of 120 salespeople but the. sales were stagnant and

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the organization~ was ~n the red. As a ·restructuring practice, the company decided to follow a different selling model and fired the entire sales staff. They appointed ~5 independent· manufacturer's .. representatives. Manufacturer's representatives were not employed in the company and they sold goods of other companies as well. The representatives sold various other items with the ball b~ill'ing equipments. The sales picked up, old customers came bac;k to tl~e. company, and new customers als.o started buying. What reasons can be attributed to this development? What were the advantages and disadvantages of appointing manufacturer's representatives compared to the company's salespeoplt(?

Q # 2 What are the various kinds and shapes of territories that can be designed for (6 marks) sales organizations ~d what criteria should a sales manager use while designing these s.ales territories?

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Q # 3 Write a note on "compensation schemes for sales people". (6 marks)

Q # 4 What are the various c;.riteria used for perform~ce evaluation of ~alespeople? (6 marks) Give examples of each criterion and explain under what conditions does each criterion gives better results.

Q # 5 How do distributiqn channel help in bridging discrepancies that exist between (6 m.arks) the manufacturing activity and the co~sumption activity? Also assume an FMCf! company trying to distribute its products directly to its consumers. What wou~d be the hurdles, advantages·and disadvantages .by following this strategy?

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V M PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Mid Semester Examination, MBA Semester III Integrated Marketing Communications

Time: 2.5 Hrs · Date: 08/11/2012 Wt: 30 Marks Instructions:

1. Figures to the right indicate individual marks of each question. 2. All the questions carry equal marks. 3. Be precise and to the point in your answers.

Q # 1 Move over Barbie-here come the Bratz. The race to win the hearts of little girls (5) everywhere has heated up recently as MGA Entertainment's ultra-fashionable Bratz dolls aims to reduce Mattei's Barbie to little more than "the doll mom used to play with". Compete with bare midriffs, bee-stung lips, trendy duds and funky names, the Bratz are the epitome of 21st century girl-sassy and self-aware. Using concepts from STP marketing approach, analyze the Bratz phenomenon in light of threat it poses to Barbie's position in toy-doll market.

Q # 2 Discuss Michael Ray's· alternative response hierarchy with suitable examples. (5)

Q # 3 When does source credibility exert its influence on beliefs and persuasion? Discuss (5) various risks involved in using celebrity endorsements by giving suitable examples.

Q # 4 Advertising can solve only message-related problems such as image, attitude, (5) perception and knowledge of information. In what ways does advertising solve these problems? What is the impact on consumers? On the advertising budget?

Q # 5 Explain various ~lements of a print advertisement with various styles of writing (5) heading and body copy; each with suitable example.

Q # 6 Evaluate the pros and cons of using humor as the basis for an advertising campaign. (5) Find an example of an advertising campaign that supports your argument for and against the use of humor?

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V. M •. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Mid Semester Examination, MBA Semester III

Time: 2.5 Hrs. International Marketing Management

Date: 05-11-2012 Wt: 30 Marks Instructions: I) This is a closed book examination.

2) Figure 9n the right side indicates marks of the question. 3) Substantiate your answer with suitable example. ·

Q # 1 Multinational firms that apply a coordinated global strategy see the world as one (6) large production and marketing platform and develop standardized products that are. then marketed worldwide using a uniform marketing approach. In reality, however, most firms do not apply a purely global strategy. At the same time, a strictly multi domestic approach is inefficient. While a few large countries (e.g China, Japan and U.S.) might warrant individual treatment, many firms strike a compromise by dividing the world into regions. Usually these firms apply a geographic area strategy for their international operations. What is the rationale for using a ~ional approac!Lwhen thinking about, and devising strategy for, international usu1ess?

Q # 2 A small Canadian firm that has developed some valuable new medical products (6) using its unique biotechnology know-how is trying to decide how best to serve

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the European Community market. Its choices are:

a. Manufacture the products at home and let foreign sales agent· handle marketing

b. lVfanufacture the products at home and set up a wholly own subsidiaries in . Europe to handle marketing

c::. Enter into· a strategic alliance with a large European pharmaceutical firm. The product would be maw.:.r1tc;t~ir~d in Europe by the 50/50 joint venture and marketed by the European firm.

The cost of in,estment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm's only options, which one would you advice it to choose? Why? .

Explain the concept of International Product Life Cycle and strategies for each stage of IPLC with suitable example, Also check the validation of IPLC

Explain all INCOTERMS in details. How the price quotation is affected by incoterms? Explain with suitable example.

'Reduction)~ import tariffslhas resulted in bringing up new non-tariff marketing baniers by developed countries.' Critica!ly examined the statement with the suitable example.' Also explain types of trade barriers in brief v-rith suitable example.

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Time: 2.5 Hrs.

Mid Semester Examination, MBA Semester III Corporate Tax Planning

Date:OStll/20 12 Wt: 30 Marks

Q # 1 Briefly discuss the difference between Tax Avoidance & Tax Evasion and Tax (OS) Planning & Tax Management

Q # 2 Pioneer Private Limited is a company which was started on April 1. 2000 and in (05) which there are only equity shares. The shares are held throughout by X. Y and Z equally. The company has made losses/profits in the past as under and the same have been accepted in the income tax assessments.

Assessment Business Loss Unabsorbed Total Year Depreciation Rs.

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2008-09 Nil 3000000 3000000 2009-10 Nil 1800000 1800000 2010-11 950000 870000 1820000

Total 950000 5670000 6620000

During the previous year ending march 31, 2011, X transferred his shares to P and during the previous years ended march 31, 20 12; Y transferred his shares to Q. During the previous year ended March 31,2011, the company made a profit ofRs. 1200000 (before debiting Rs. 600000 depreciation) and during the previous year ended March 31, 2012, the company made a profit of Rs. 8000000 (before debiting Rs. 500000 for depreciation). Compute the taxable income of the company for the assessment year 2012-1 ~. Working should form part of your answer.

Q # 3 Discuss the provisions of section 1 OB and 1 OBA with reference to location of new (05) (A) business.

(B) X Company owns two qualifying ships of 36300 and 24500 tonnage capacity respectively. The ships are operated on average 25 clays in a month. You are required to calculate taxable income from the business and tonnage tax liability of the company for the previous year.

Q # 4 From the following particulars calculate comparative tax liability in case of firm (05) and in case of sole proprietorship for the previous year and find out the best option from tax perspective.

In a firm profit is shared by four partners equally. Each partner contributing Rs. 500000 as capital on which they are entitled to get interest at the rate of 12%. Besides each partner is entitled to get salary of Rs. I 2JOO per month. Other income of the partners includes income from other sources Rs_, 30000 and income from capital gain Rs. 140000. Deduction under section 80C is available to all partners Rs. 50000. Profit of the firm for the previous year is Rs. 900000.

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Q # 5 The income and Expenditure Account of Dr. Dave for the previous year is under: (1 0)

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Expenditure Rs. Income Rs. To Staff salary 1,24,000 By Income from Nursing

Home 60,000 (Surgical)

To Marriage expenses of 36,000 By Income from 90,000 son operations To Electricity 14,000 By Dividend (Gross) 6,000 To Purchase of medicine 16,000 By Interest ofTreasury 2.000 and store saving certi

----· ---------To Telephone expenses 10.000 By Consultatio12 fee~-- 12.000

--- - ------------To Rent of nursing home 36,000 By winning from lottery 6.000 To Depreciation of 12,000 By Birthday gift (of a 61,000 Surgical instrument minor son) To Depreciation of other 2,000 By Rental income of 92.000 assets house property

-------· ----- ----~- --· --

To Local taxes ·s,ooo To Rent of equipment 4,000 To Insurance premium 14,000 To Excess of income over 53,000 expenses

3,29,000 3,29,000

Additional Information: 1. Salary included Rs.l2,000 paid to his wife who is a qualified nurse and

attends duty on weekends only. 2. The allowable depreciation on surgical instruments is Rs.20.000 and on

other assets is Rs.l ,500. 3. Municipal taxes include the sum of Rs.3.000 paid in respect of his property

which is let out. 4. He has received honorarium of Rs. 15,000 as a visiting professor. 5. Insurance premium includes Rs.4,000 being mediclaim msurance (self)

and Rs.2000 being life insurance premium.

Compute the taxable income of Mr.Dave from business and profession for previous year.

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA)

Ganpat University Mid Semester Examination, MBA Semester III

Indian Financial Systems Time: 2.5 Hrs. Date: 06-11-2012 Wt: 30 Marks

Instructions: 1. This is a closed Book examination 2. All the questions are compulsory 3. Figures to the right indicate marks of each"question.

Q#l

Q#2

Q#3

Q#4

Q#5

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Discuss the component of the formal financial System

Discus the benefit of depository system as well as National Securities Depository Limited (NSDL).

Explain the role of Industrial Development Bank of India (IDBI) for the development of industry in India.

Discuss the. duties, power and function ofiRDA.

Write short notes: . Green Shoe Option

Treasury Bill GDR Book Building Rolling settlement

'END OF PAPER'

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, V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Mfd'Semester Examination, MBA Semester III Security Analysis and Portfolio Management

Time: 2.5 Hrs. Date: 07.11.12 Wt: 30 Marks Instruction:

• Right hand side indicates marks • Answer to the point • This is closed book exaJnination. • Give appropriate example whenever needed

Q#1 (A) Differentiate investment versus speculation (B) Following are the annual risk and returns for different markets:

Name ofthe Market USA INDIA CHINA JAPAN .LONDON FRANKFURT AUSTRALIA

Returns(%) 15.61 14.99 16.22 10.46 14.88 11.34 8.7

Risk (Std. Dev. %) 14.12 21.08 25.60 17.55 13.60 16.75 7.50

You are required to select market for investment based on its risk/return ratio.

(6)

Q#2 (6) (A) List the key characteristics in an industry analysis (B) Describe indicator approach of economic forecast

Q#3 (6) (A) Assume ROA = 15%, T =50%, EIR = 6%, and firm have 100 lakhs of equity and

100 lakhs of debt with expected PIE of 15. Also, if firm had 3 lakhs of outstanding shares than Wl}a~ would be firms HPY? (current price of firm is Rs.50 with no dividena) · ·

(B) Brief the different form of efficient market hypothesis

Q#4 Based on following detail measure the performance of best portfolio compare to (6) index: Parameters Nifty Best Portfolio Average Returns 2.24 5.68 Std. Dev. 4.92 15.23 Beta 1.00 (2.83

Y ot: ·are required to measure the performance using: a} Sharpe's Model · b) treynor's Model c) Jensen Model

Also,.give your comment about best portfolio performance.

*Note: .. Risk fr~e-rate of returns for given period is 1.75 percent Page 1 of2

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~ 00 (A) Explain the capital market line assuming lending and borrowing at the risk-free rate

of return (B) Following are tbe. annual risk and returns for two di fferent securities:

Security Returns(%) 'Risk (Std. Dev. %) X 9· 2 y 9 4

You are required to find out portfolio risk and returns in following case: a) Equal weight of both stock in portfolio b) One third portion of investment in security Y and two third portion of

investment in security X is invested

*Note: correlation coefficient between security X and Y is -0.5

END OF PAPER

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Mid Semester Examination, MBA Semester III

Time: 2.5 Hrs. Commodity Market and Futures

Date: 08.11.12 Wt: 30 Marks Instruction:

• Right hand side indicates marks • Answer to the point • This is closed book examination • Give appropriate example whenever needed

Q#l Brief the differ~nt types of commodity traded on the NCDEX platform. (6)

Q#2 For one year gold futures contract consider following: (6)

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• Fixed charge is Rs.31 0 per deposit up to 500Kg • Variable costs are Rs.55 per week (1 year= 52 week) • Spot price of gold is Rs.6000 per 10 gms • Risk - free rate is 7 percentage per annum • What would the price of one year future contract for 1kg of delivery?

In case of price of three month contract is A) Rs.6200 per 10 gms and B) Rs.6000 per 1 0 gms explain steps for arbitrage if any.

(A) Brief the investment assets versus consumption assets. (B) Explain the limitations ofhedging

Q#4 Option pricing as on 22.10.2012: ~· .

Description of contract Nifty Oct CE 5600 Nifty Oct PE 5600 Nifty Oct CE 5700 Nifty Oct PE 5700 Nifty Oct CE 5800 Nifty Oct PE 5800

Premium 125 45 85 80 50 120

Using above price calculate the break even points imd also draw pay-offs for following strategies:

a) butter fly strategy using call option (Long) b) butter fly strat~gy using put optioh (Short)

* Note: There is no transaction cost

(6)

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Q#S The stock price 6 month from the expiration of an option is Rs.81 0, the exercise (6) price of the option is Rs.800, the risk-free interest rate is 5 per cent per annum, and the volc:jtility is ~0 per cent per annum. You are required to find out:

• Value of European call and European put at Rs.800 strike price using binomial two step tree.

• Consider dividend yield of 2 % and then calculate again

ENDOFPAPER

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Gallpat University

Mid Semester Examination, MBA Semester III Training & Development

Time: 2.5 Hrs. Date: bf \\. t 12. Wt: 30 Marks

Instructions:

1. Close book examination. 2. Write to the points. 3. Figure at right indicate marks.

Q.l. Differentiate Training from Education. 5

Q.2. Why does it necessary for any organization to align training function 10 with business strategy?

Q.3. Read the case carefully and answer each question. 15 (Each question carries equal weightage).

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CASE-2

Toyota Motor Company's Toyota Technical Training Institute in India

In August 2007, one of the world's leading automobile manufacturers, Toyota Motor Corporation (TMC), announced that its joint venture in India, Toyota Kirloskar Motor Private Limited 1 (TKM) had set up a tech­nical training school called Toyota Technical Training Institute (TTTI), on the outskirts of Bangalore, India. The company said that TTTI was meant for those who had passed out of middle school (Class 1 0) but could not continue their education due to financial or other con.;;traints. TMC projected the setting up of this insti­tute as a corporate social responsibility initiative that was aimed at benefiting a disadvantaged section of

·tndlan society by increasing their employability. At the institute's opening ceremony held on August 1, 2007, TMC'~ Executive Vice President, Mitsuo Kinoshita, said, "I am confident that the establishment ofTTTI will contribute to the betterment of Indian society by cultivating the power of the nation's youth."2

The seeds of this institution were reportedly sown in the year 2005, when Atsushi Toyoshima (Toyoshima), Managing Director, TKM, visited a number of technical institutes in India. He felt that the curriculum in these institutions was outdated and not in sync with the requirements of the industry. Analysts noted that despite the 4,500-odd technical institutes in the country, the kind of products they were churning out were not of much use to the manufacturing companies. For a company like Toyota, which had aggressive growth plans in the rapidly growing Indian automobile market, this was a major hindrance as the company had little talent to choose from. This prompted Toyoshima to ask the management at Japan to set up a technical institute in India on the lines of the Toyota Technical Skills Academl (TTSA).

The company's decision to start the TTTI in India was first announced in March 2007. "In addition to making quality automobiles, we believe in proactively contributing to society by consolidating the knowl­edge and know-how within Toyota to develop capable human resources and thus contribute to the develop­ment of a prosperous society,',<~ said Toyoshima. The company placed advertisements for a three-year technical skills program in the local newspapers and started accepting applications from the next month for the selection of the first batch of 60 students. 5 The institute would provide the courses, boarding, and lodg-

Ictal Center for Manageme.nt Res~arch .... J www.ocmrlndoa.org ·-- __

One time permission to reproduce granted by ICMR.

Copyright © 2008, Ic.fai Center for Management Research (ICMR). Hyderabad, India. This case was prepared by Debapratim Purkayastha. 1 Toyota Kirloskar Motor Private Ltd. (TKM), a joint venture between TMC ami Kirloskar Group of India, began oper

ations in December 1999. As of 2007, it produced approximately 50,000 Inn ova and Corolla vehicles per annum and had around 2,400 employees. (Source: Toyota Motor Company, Sustainability Report 2007, www.toyota.co.jp.)

2 "Toyota Opens Toyota Technical Training Institute in India," www.japancorp.net, August 1, 2007.

Toyota Technical Sk'ills Academy (TTSA) was established in 1938 by TMC, where the company developed young people into technical personnel who would later join Toyota's production operations. TTSA is located in Toyota City, Japan.

4 "Toyota Sets Up Technical Training Institute," www.oneindia.in, March 23 2007.

"Toyota to Open Toyota Technical Training Institute in India," www.indiacar.net, March 24, 2007.

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Case 2 : Toyow Motor Company's Tovota Techmcol Trointng lnstttute m Indio 461

ing free-of-cost, and also pay each trainee a stipend in the range of Rs. l ,800-2,200 per month.6 Promising trainees would also be providedwith fellowships (USS 180 and US$230) and a chance to join the company after successfully corupleting the course. Around 5,000 applicants applied for the program. Subsequently in June 2007. an admission test was held and 64 trainees were selected for the first batch. 7

The TTTI was established at a cost of Rs. 220 million (US$5.6 million). TLe institute \Vas spread acrr:s a 48,726 square meter area within the premises of the TKM facility at Bidadi, Bangalore. It initially started ifs operations with a total staff strength of 25, including I 7 teaching sta~f, headed by V Ramamurthy and i Somanath (Somanath) as Dean and Principal respectively. Through the three-year residential program, the company sought to provide the trainees with the ski II s of Monozukuri. 8 The institute offered four practical­oriented courses in painting, welding, automobile assembly, and mechatronicsY The courseware was similar to that ofTTSA, but was adapted keeping the Indian market in mind. The students were also provided les­sons in subjects such as English and History, self-improvement courses such as Yoga and Home Science, and lessons in cleanliness, grooming, and discipline.

In addition to academic sessions, the trainees would gain significant exposure to the company's famous r Toyota Production System and the Toyota Way. 10 Toyoshima said, "We hope the students will be able to

appreciate various aspects of Monozukuri or skilled manufacturing in the Toyota Way. They will not just learn but also practice Monozukuri." 11

Though the company hoped to employ all the trainees once they had completed the program, the trainees were not under any compulsion to join the company. Somanath said, "It is a corporate social responsibility initiative for us." 12 Analysts too agreed that the company was indeed making a positive difference in the life of the trainees. They were not only getting a taste of a better life and had a better future to look forward to, but were also in a position to send home a part of their stipend.

According to the company, TTTI was still in the testing phase and the first batch would be like a test case for the future. The institute would train approximately I 80 trainees across three academic years. 13 The man­agement at the company felt that keeping the future growth of the Indian market in mind, setting up of the TTTI in India made good business sense. India was one of the world's fastest growing car markets and was poised to grow at an astounding I 4. 9 percent through 20 I 0, according to Frost & Suilivan 14

•15 According to

some estimates, by 20 I 0, the number of cars sold in India annually would double to 3 million, compared to 2007. In such a scenario, TKM had to quickly ramp up its presence in the market. As of 2007, TKM had a mere 4 percent market share in India. 16

6 "Toyota Opens Toyota Technical Training Institute (TTTJ) in India," www.business-standard.com, August 2, 2007. 7 "Toyota Opens Toyota Technical Training Institute in India," www.equitybulls.com, Aug I, 2007. 9 The word 'Mechatronics'is derived from the words mechanical and electronics. It is used to refer to an interdiscipli­

nary engineering field that is the combination of mechanical engineering, electronic engineering, and software engineering. (Source: www.en. wikipedia.org)

10 The Toyota Production System (TPS) is Toyota's philosophy based on lean manufacturing. The company uses this phi­losophy to organize manufacturing and logistics, including the interaction with suppliers and customers. Its main goals are design out muri (overburden), and mura (inconsistency), and eliminate muda (waste). It is a part of the manage­ment philosophy of the company called the Toyota Way. (Source: www.en.wikipedia.org)

11 "TTTI Inaugurated Near Bangalore," www.moneycontrol.com, August 7, 2007. 12 Nandini Lakshman, "Toyota Trains India Teens," www.businessweek.com, January 23, 2008.

u "Toyota Opens Toyota Technical Training Institute in India," www.japancorp.net, August I, 2007. 14 Frost & Sullivan, headquartered in Palo Alto,-Califomia, USA, is one of the world's leading consulting firms.

'5 Chanchal Pal Chauhan, "Indian Roads Get Ready for Battle of the Little Giants," www.in.rediff.com, March 8, 2007.

16 Nandini Lakshman, "Toyota Trains India Teens," www.businessweeb::om, January 23, 2008.

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462 Employee Training and Development

... Analysts noted that the company was lagging far behind its competitors, and felt that this initiative would

help TK.M become more competitive in the future. They expected TTTI to play a key role in the development of human resources at the company and to help bolster the company's production operations in India in the future. 17 Some industry watchers also pointed out that between 2002 and 8 Monozukuri is a Japanese word consisting of two words mono (products) and zukuri (process of making). But the meaning of the word goes beyond the combined meaning of the two words to encompass 'excellence, skill, spirit, zest, and pride in the ability to make things very well.' (Source: Kozo Saito, "Development of the University of Kentucky -Toy­ota Research Partnership: Monozukuri: PART I," Energia, Vol.17. No. 4, 2006.)

2007, TK.M had suffered due to labor unrest in its facilities in India, and viewed this initiative. as an attempt by the company to breed loyalty on the shop floor. BusinessWeek noted, "Another, ulterior motive was ensuring labor loyalty. For the past five years, Toyota India has suffered a series of strikes and a lockout, with labor unions protesting in support of better wages and against the dismissal of two of their members. Training youth in-house helps build loyalty for Toyota on the assembly line."18

Questions for Discussion

1. Describe the probable reasons for the setting up of the TTTI in India. Describe the direct and indirect ben­efits accruing to TK.M by running the TTTI. What, according to you, are the short-term and long-term benefits to the company?

2. The TTTI trainees were not under any compulsion to join the company (TKM) once they had completed the training program. What are the possible advantage( s) and disadvantage( s) of such a policy?

3. In your opinion, will similar training initiatives be successful in the services sector? Explain in the context of a few service industries that you are familiar with.

References and Suggested Readings

1. Kozo Saito, "Development of the University of Kentucky -Toyota Research Partnership: Monozukuri: PART 1," Energia, Vol.l7. No.4, 2006.

2. Chanchal Pal Chauhan, "Indian Roads Get Ready for Battle of the Little Giants," www.in.rediff.com,~ March 8, 2007.

3. "Toyota Sets Up Technical Training Institute," www.oneindia.in; March 23, 2007.

4. "Toyota's Automotive Training Centre near Bangalore," www.indiaedunews.net, March 24, 2007. 5. "Toyota to Open Toyota Technical Training Institute in India," www.indiacar.net, March 24, 2007.

6. "Toyota Opens Toyota Technical Training Institute in India," www.equitybulls.com, August 1, 2007.

7. "Toyota Opens Toyota Technical Training Institute in India," www.japancorp.net, August 1, 2007.

8. "Toyota Opens Toyota Technical Training Institute (TTTI) in India," www.businessstandard. com, August 2, 2007.

9. "TTTI Inaugurated near Bangalore," www.moneycontrol.com, August 7, 2007.

10. Toyota Motor Company, Sustainability Report 2007, www.toyota.co.jp.

11. Nandini Lakshman, "Toyota Trains India Teens," www.businessweek.com, January 23, 2008.

12. www.en.wikipedia.org

17 "Toyota's Automotive Training Centre near Bangalore," www.indiaedunews.net, March 24, 2007. 18 Nandini Lakshman, "Toyota Trains India Teens," www.businessweek.com, January 23, 2008.

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Mid Seme.ster Examination, MBA Semester III Compensation Management

Time: 2.5 Hrs. Date: 07.11.2012 Wt.: 30 Marks

Instructions: 1. It is a closed book examination. 2. Substantiate your answers with practical examples as far as possible. 3. Figures to the right indicate individual marks of each question.

Q# 1 Write short notes on the following (6) a. Cafeteria Compensation b. Adjudication c. Competency b~sed compensation.

Q #2 Describe the major provisions of The payment of Wages Act, 1936. (6)

Q # 3 Define &differentiate PayRange from Broad banding with examples. (6) ~ .

Q # 4 Pescribe the recent trends in the field of Managerial compensation. (6)

Q # 5 What is meant by collective bargaining? Discuss various strategies of (6) collective bargaining & the necessary conditions for effective collective bargaining.

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V. M. PATEL INSTITUTE OF MANAGEMENT & AMPICS (MBA) Ganpat University

Time: 2.5 Hrs.

Instructions:

Mid Semester Examination, MBA Semester III Organization Development & Change

Date: 6} 11 )2-o (2..

1. Close book examination. 2. Write to the points. 3. Figure at right indicate marks.

Wt: 30 Marks

Q.1. Explain First Order and Second Order change process. Give relevant 10 examples.

Q.2. 'Change is the only constant thing in organizational lift:.' Explain. 5

Q.3. Read the case carefully and answer each question. (Each question carries equal weightage).

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S 08 • Industrial Relations: Emerging Paradigms

Dilemma of Restructuring Synergy Formulations (India) limited was a public limited company and had been in business of pharmaceuticals and drugs since 1988. The company set up its manufacturing plant at Ghaziabad near Delhi in 1988, having tablets, capsules and liquid oral departments.

Under its expansion programme, an ultra modern state of art plant was commissioned at Meerut in U.P. The company had its corporate office at Lucknow and registered office at Delhi. Synergy Formulations was a premier pharmaceutical company with a nation-wide distribution network. The company's annual turnover in 1995 was Rs.1 0 crore. In the last three years Synergy had been able to increase its turnover from Rs.1 0 crores to Rs.35 crore. Till 1998, the company was organized into two groups: the generic and OTC (oyer the counter) grouped together and the ethical division which functioned independently. In 1998, the company decided to restructure its marketing organisation into three separate and independent divisions in view of its phenomenal growth.

Synergy Formulation Limited during the late 1997, reviewed its existing marketing organisation structure with the intention of bifurcating the OTC and generic division. The issue was debated at the corporate level. While the field staff and majority of managers at corporate level were of the opinion that the present arrangements were adequate and other strategies could be used to ensure better performance, the MD and one to two per cent of the senior executives at corporate level were vehemently propagating the reorganisation of marketing division. They felt that this would lead to better control of field staff, optimum utilisation of marketing resources and the independent groups would function more effectively which, in turn, would improve. the performance of the different divisions.

In spite of the prevailing divergent views, the MD's decision was implemented and the marketing organisation was reorganized into three divisions generic products: the unbranded products which were sold in bulk to hospitals, bulk buyers and nursing homes, ethic:ll products: the medicines which were sold to users on the prescription of doctors and OTC products, those

r- branded products which could be sold without any doctor's prescription.

Post Restructuring As a result of the restructuring exercise, all the sales staff of generic divisions were shifted to OTC division. New zonal and regional managers were hired for generic division. The company decided to discontinue field staff in generic division as it was felt that generic products were predominantly sold by the distribution channel and the role of field staff was limited. Hence, their absence would not affect the sale.s adversely. The company now maintained separate accounts for the different divisions to avoid conflicts. Soon after the reorganisation of the marketing department, the corporate office noticed that there were frequent clashes and disputes between the generic and the OTC divisions. The causes for the conflicts could be ascribed to the following reasons:

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Chapter 8 Case Studies • 509

+ The distribution channel (Annexure I) was common for all the three divisions due to which it was experienced that the OTC and generic divisions were competing with each other for orders from channel-members who had limited monetary resources. The purchase from one division often led to a cut in purchase from the other division. It appeared that the divisions were growing at the cost of each other at distributor's level. This fluctuating sales affected the incentives received by sales staff, since these were based on the volume of sales generatc:d by an individual. ·

+ The company, as a policy matter, did not supply products to distributors who had outstanding payments to the company, be it on the account of generic division or the OTC division. There was discontentment in the OTC division as they often found that supplies were not being made on orders received by them due to the outstanding of the generic division. This supply policy affected the performance of the OTC division and, in turn, their incentives.

+ When the field staff of generic divisions was transferred to OTC division the marketing overheads of the generic division were reduced and to encash on this the company decided to reduce· the prices of the generic products. The generic division became extremely price competitive in the market. In spite of the reduced prices, generic division did not show a considerable positive rise as was expected.

This fall in the performance of generic division was observed in the first quarterly review since the restructUring· of the organisation. The corporate executives of marketing felt concerned. The review showed that OTC division was flourishing and was in a position to double its sales in ·this period but the generic division continued to show decline in sales. The generic division was the largest contributor of the sales turnover of the company (Annexure II). Though the profit contribution of the generic division was less than OTC, the company could not afford loss of sales in the generic division any more. On discussion with the distributors, it was realized that the absence of intermediaries between the distributors and their bulk customers was leading to loss of goodwill and customers. The channel members were of the opinion that the transfer of field staff had been counterproductive to the marketing effort and, in the long term interest of the company, field staff was an essential element of the supply chain though they were able to generate only 30o/o of the total sales in the. generic division. They recommended the recruitment of field staff in generic division and the Status Quo ante be achieved. The organisation hired new junior field staff for the generic division in October 1998.

The recruitment of field staff led to an increase in the marketing overhead. Since, the organisation used cost plus pricing, it was forced to increase its MRP. This ~ncrease in price affected the sales of generic product adversely a~ generics are extremely price sensitive. Synergy Formulation was now caught in a catch 22 situatio~. It neither could reduce its prices nor discontinue the field staff in generic division.

[This case was developed by Prof. V G. Kondalkar, Prof. Mala Srivastava, Dl: Gulnar Sharma (Prestige Institute of Man.agement and Research, Indore), Prof. Ashish Pareekh (FMS, Ajmer) in the Third National Case Writing Workshop organised by Prestige Institute of Management and Research, Indore in collaboration with AIMS (Association of Indian Management Schools) on March 13-15, 199_9.]

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'"51 0 •- Industrial Relations: Emerging Paradigms

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Questions 1. Give suggestions to reduce the conflict between the two divisions.

2. What in your opinion were the problems faced by Synergy Generic Division. after its

bifurcation from the OTC division? 3. Do you think restructuring the marketing organisation was a wise decision? Justify your

answer.

Chapter 8 Case Studies • S I I

ANNEXURE-I

THREE LEVEL DISTRIBUTION CHANNEL

Manufacturer-Distributor-Stockist-Retailer-Customer

ANNEXURE-II

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V. M. PATEL INSTITUTE OF MANAGEMENT ... AMPICS (MBA) · Ganpat University

Mid Semester Examination, MBA Semester III Staffing and Performance Management

Time: 2.5 Hrs. Date:08.ll.i012 Wt.: 30 Marks

Instructions: 1. It is a closed book examination. 2. Substantiate your answers with practical examples as far as possible. 3. Figures to the right indicate individual marks of each question.

Q# 1 Write short notes on the following (6) a. Potential Appraisal b. MBO . c. Hurconomics.

Q #2 Define Career planning & differentiate it from "Succession Planning". Give (6) examples of ea~h:

Q # 3 "India biggest advantage in the coming years is going to be its people. A lot (6) more depends on how much & well the country's human capital is put to use". In the light of following statement describe the importance of Talent Management for corporates.

Q # 4 It is said that last decade has seen sweeping changes in the approach to (6) performance appraisal systems across the world. It is now felt that it is more important to focus on defining, planning & managing performance rather than merely appraising it. Do you agree with this is or not. Give suitable examples to support your stance. ·

Q#S Describe 360 -degree appraisal with its relative merits & demerits. (6)