Essential Reading 4

ESSENTIAL READINGS 4
STRATEGIC BUSINESS UNIT

Strategic business unit basically known as profit center is a fully-functional unit of a business
that has its own vision and direction. Typically, a strategic business unit operates as a separate
unit, but it is also an important part of the company. It reports to the headquarters about its
operational status. These business units are absolutely essential for multi-product organizations
or Conglomerate holding companies. They are focused towards a set of products and are
responsible for each and every decision / strategy to be taken for that particular set of products.
Strategic business units can be best explained with an example from Reliance Industries
limited. Its major subsidiaries and associations include: Reliance Petroleum,
Reliance retail, Reliance Life sciences, Reliance logistics, Reliance Jio Infocomm Limited,
Reliance Institute of Life Sciences, Reliance Solar, Reliance Clinical Research Services,
Relicord, Reliance Industrial Infrastructure Limited, LYF, Network 18.
6 reasons why Strategic Business Units are Important:
1. SBU’s make business Organized
The first principle of time management is to get organized. For a manager handling 3-4
products at a time there will be no time for creativity or innovation and all the time will be
spent in just handling the existing work rather than expansion. Thus the first thing SBU’s
do is they help business in getting organized.
2. Help in Focus
For large companies Strategic Business Units are Important because they help managers
be focused on the different factors within the same organization. Each product or business
unit has various requirements and these requirements can be managed efficiently by giving
them their individual attention.
3. STP
The success of a product depends on its segmentation targeting and positioning. Each of
these processes requires being continuously in touch with the market, receiving feedback,
identifying target market, targeting them and then positioning accordingly.
4. Investments
The best reference for investments in SBU’s can be the BCG matrix. In the BCG matrix,
the SBU’s are divided as per their market share and the market growth rate. Thus
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Course-: MSL-723 (Telecom Systems Management)
Course Coordinator: Prof. Mahim Sagar
depending on the BCG matrix, the type of investments which each product needs can be
decided.
5. Decision making
The better performing businesses are supposed to handle the load of any newly starting
business or any business which is undergoing a slump. However, if one of these revenues
generating SBU’s get hit, the other SBUs cover up for the cash crunch?
6. Profitability
By micromanaging each and every product and dividing it into SBU’s, we can obtain a
holistic view of the organization. This view is also used in preparing the financial
statements as well as to keep tabs on the investments and returns for the organization from
each SBU. Thus, the overall profitability of the firm can be decided. Ultimately Strategic
Business Units are Important because they contribute to better profitability of the
organization.
LEGAL, NO LEGAL, ILLEGAL

Parsons (1960) viewed legitimacy as the "appraisal of action in terms of shared or common
values in the context of the involvement of the action in the social system”. Although
organizational legitimacy has been conceptually defined in the sociological literature, it has
received little empirical attention. As Terreberry has noted, "An input called 'legitimacy' is
popular in sociological circles but highly resistant to empirical specification".
"Legitimation is the process whereby an organization justifies to a peer or super ordinate
system its right to exist that is to continue to import, transform, and export energy, material, or
information”.
Legitimacy is not defined solely by what is legal or illegal. There are at least three reasons why
this is so. First, we have the dynamic nature of norms which change over time whereas legal
change, which is much more formal, is delayed and must await a specific statutory or common
law enactment. Second, norms may be and are contradictory, whereas there is a greater
presumption of consistency in the legal code. Third, there is the question of the formal nature
of law; societies may be prepared to tolerate certain behaviour informally but not to give them
legal sanction - gambling prostitution may be in this category. Under more authoritarian forms
of government, there may be even less correlation between legality and legitimacy.
KEY WORDS: Social legitimacy- Legal, Illegal, No Legal, Social Relevance
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EXAMPLES: Over the top service providers deal in no legal zone in India. Registered as
vendors in India, the service providers such as WhatsApp, Facebook have their offices
registered in their parent countries. This puts them out of legal framework in India. In India,
the laws and framework for cyber security are yet to be strengthened. Medical tourism, Block
chain, crypto currencies are other examples of no legal zone. Any business which has social
relevance and legitimacy become legal in due course of time because of popular support,
government gets obliged to legitimize them. No legal arena has scope for legitimatization in
future.
Bibliography
Dowling, J., & Pfeffer, J. (1975). Organizational legitimacy: Social values and organizational
behavior. Pacific sociological review, 18(1), 122-136
ORGANISATION
Koontz and O'Donnell, defined organisation as “the structural relationship by which an
enterprise is bound together and the framework in which individual effort is coordinated.” It
is structural framework within which the various efforts are coordinated and related to each
other.
Thus the following are the characteristics of organisation:
1. Attainment of Objectives
2. Minimise Conflicts
3. Effective Administration
4. Elimination of Overlapping and Duplication
5. Facilitates Growth and Diversification
6. It decreases Likelihood of “Run Around”
7. Easy Communication
8. It helps to promotions
9. Encourage Creativity
10. It Aids in Wages and Salary Administration
11. Optimum use of Organisational Resources
12. Reduction in the Workload of Top Management
13. Increased Cooperating and a Sense of Pride
Source: https://www.businessmanagementideas.com/
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ORGANIZATIONAL STRUCTURE
Organizational structures define the hierarchy or an organization, and determine the way
information flows within it. When establishing a structure, business leaders should decide
how a structure best aligns with the company’s principles and goals and how it outlines
and sets up tasks for each employee. In the anatomy of business, the overall structure
should be a stable backbone where everything else rests. However, the initial
establishment of the structure does not end the discussion surrounding them. Each
organizational structure brings with it various benefits and challenges that management
needs to be aware of.
1. Functional Organizational Structure
This is a traditional structure and includes divisions based upon specialty. This forms
the well-known hierarchy of senior management, marketing, finance, human resources,
and operations.
This is one of the more common forms, and it is not necessarily designed to respond to
change quickly. A functional structure also facilitates the development of specialists.
Since professionals who do work in the same field are pulled together, this arrangement
pulls individuals away from a generalist role.
Pros:
I. A clear definition of top management and other specialized departments sets the
expectation of who reports to who, and how they can communicate with one another.
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II. This set-up also puts professionals who specialize in one thing together. This allows
for teams to easily share information between one another and further optimizes the
department they are a part of.
III. Also, there is a clear path of promotion for employees, which makes it likely that
managers participate in the tasks workers are involved in making them more aware of
decisions that need to be made.
Cons:
I. Because of the specialized departments, management can forget to implement
mechanisms for units to communicate across one another or collaborate when
appropriate.
II. It is also easy for departments to slip into a mindset where they only worry about their
own results and forget how their numbers impact other departments in the company.
III. This type of structure makes it difficult to have a holistic view. As a result, innovation
and forward-thinking ideas can quickly become stifled.
2. Divisional Organizational Structure

Instead of focusing on specialties, this structure groups individuals based on the products
or projects they are undertaking. At the top is the CEO, and after them is a hybrid of
functional grouping: public relations, legal, finance, global research, business
development, and human resources.
After that, the cluster becomes project-based with lower-level employees in groups that
address the company’s work in healthcare, energy, aviation, transportation, and a few
other projects.
Pros:
I. This structure has autonomy for each project. Normally, each group has a vice
president or director which makes it easier for them to obtain the resources they need.
II. Also, since these individuals know the project the best they can ensure it is treated
with the attention it requires. Things can get difficult if an organization-defining project
is funneling through a functional structure as a specialized unit might not give the
project the same attention it needs since it is not a primary priority.
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Cons:
I. The main disadvantage of this structure is that it is easy for office politics to take hold
and for one divisional team to undermine and compete with another for resources.
II. It is easy for a group to feel their product or project is more important than another
because of the amount of time and dedication they spend working on it. This can create
tunnel vision that prevents workers from understanding the needs of co-workers
tending to another project. This situation breeds a company personality of competition
that can do more harm than good in the long-run.
III. Also, each division has a unique purpose which makes it difficult to be managed.
3. Matrix Organizational Structure

The matrix structure can get a bit confusing. It is a combination of the functional and
divisional structures. Companies are divided into departments of specialization, and
then within those units, they are separated further into projects and products. It has a
tendency to be highly sophisticated, and as a result of that, it will take a lot of planning
to implement it correctly.
Pros:
I. Since the functional and divisional groups are blended, communication can travel
faster to where it needs to go. This should increase productivity and quickly hip
managers to any issues that may arise since information moves fast.
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II. It also allows for employees to be exposed to various other departments and work
processes since they have to work so closely to accomplish set projects.
III. This organizational style is also flatter since team members are directly involved in
decision-making.
IV. Managers get the opportunity to be included in the day-to-day tasks of projects which
makes it easier for them to address problems and regulate communications.
Cons:
I. Because there are functional and divisional managers, it can be difficult for employees
to know who they report to. A manager could ask a worker to do something that
contradicts what they were just told, or it could add more pressure on top of what they
have to accomplish for other managers.
II. Another issue is expenses. This structure requires two sets of leadership at the same
level which is double the salaries and benefits.
4. Geographical Organisational Structure

Organizations that cover a span of geographic regions structure the company according to
the geographic regions they operate in. This is typically found in organizations that go
beyond a city or state limit and may have customers all across the country or across the world.
It brings together employees from different functional specialties and allows
geographical division. The organization responds more quickly and efficiently to market
needs, and focuses efforts solely on the objectives of each business unit, increasing results.
Though this structure increases efficiency within each business unit, it reduces the overall
efficiency of the organization, since geographical divisions duplicate both activities and
infrastructure. Another main challenge with this model is that it tends to be resource
intensive as it is spread across and also leads to duplication of processes and efforts.
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OCP - ORGANIZATIONAL CAPABILITY PROFILING
Organizational capability factors are strategic strengths and weaknesses existing in different
functional areas within an organization, which are of crucial importance to strategy formulation
and implementation. The organisation into six largely accepted and commonly understood
functional areas. These are:
1. Financial
2. Marketing
3. Operations
4. Personnel
5. Information
6. General Management
An organizational capability profile describes the skills, knowledge and resources that enable
a company to provide quality products or services to customers. The profile provides useful
background information for its marketing and corporate communications. It can also be used
as part of a formal bid document to win contracts. To draft the profile, first identify the
capabilities that are important to for customers and that differentiate the organization from
competitors andthen incorporate them in a presentation or document.
Examples of Organizational Capability
Financial Capability
Reliance- Cash reserve, High investor confidence
Marketing Capabilities
Airtel- Marketing of services
Vodafone Idea- Distribution Channel
SAP – STRATEGIC ADVANTAGE PROFILE

Strategic advantage profile is a summary statement which provides an overview of the
advantages and disadvantages in key areas likely to affect future operations of a firm. it is a
total for making systematic evaluation of strategic advantage factors which are significant for
the company in its environment. it involves functional areas like marketing, production,
finance, accounting, personnel, human resource and R$D.
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Capability Factor Competitive Strengths or Weakness
High cost of capital; reserves and surplus position
Finance
unstisfactory
Fierce compatition in industry; company’s position secure at
Marketing
present
Plant and machinery in excellent condition; captive sources
Operations for parts and
components available
Quality of managers and workers comparable with that in
Personal competitor
companies
Advanced management information system in place; most
Information traditional
functions such as payroll and accounting computerised
High quality and experienced top management generally
General
adopts a
Management
proactive stance with regard to decision-making
Source:https://www.scribd.com/doc/46155586/Organisational-Capability-Profile
DCF - DISTINCT CAPABILITY FACTOR

Distinctive capabilities in this framework are exactly what you would think – they are
capabilities that are unique to your business, which give you a competitive advantage over the
rest of the market. All business owners and managers understand that they need a unique
selling proposition, or USP, in order to make a dent in a competitive market. However, that
USP can be hard to find, unless you have the advantage of leveraging one or more distinctive
capabilities that are held by your company.
While a distinctive capability is not, in and of itself, a competitive advantage, it is what gives
you the opportunity to create a competitive advantage that can be taken to market. Think about
distinctive capabilities in the same way you would think about talent for an individual – it is a
differentiating factor, and it provides the opportunity to succeed down the road.
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SWOT – STRENGTHS, WEAKNESS, OPPORTUNITIES, THREATS
A SWOT analysis of a telecommunication company appraises the company's health by looking
at its resource strengths and weaknesses concerning the quality of how it sends and receives
data and information globally over fiber-optic cables, networks, antennas and other
communications equipment. The analysis also identifies external opportunities and threats that
may help or hurt the company in the future.
Strengths
Cutting-edge fibre-optics technology, high-performing cable equipment, a respected brand
name, excellent customer service and a strong sales team are just a few strengths that boost the
resource capabilities of a telecommunication company. These strengths are attributes that
enhance the company's competitive advantage.
Weaknesses
Corroded cable lines, slow service and lackluster sales are three weaknesses that can hurt a
telecommunications company. Company weaknesses are competitive deficiencies that place
the company at a disadvantage in the marketplace. If corroded cable lines aren't replaced and
slow service continues, for example, angry customers will switch to a rival telecommunication
company that offers better services.
Opportunities
New technologies, increasing consumer interest and a decrease in competition are just a few
external opportunities that can really help a telecommunications company in the long run.
Opportunities are beneficial, outside events that a company can use to boost its existing
strengths. A telecommunication company keen on rapidly adopting new technologies, for
example, would highly benefit from immediately investing in new fiber optics the moment
they're introduced in the marketplace, especially if they speed up service.
Threats
A sluggish economy, increasing competition and increased government regulations against the
telecommunications industry are just a few external threats that can limit a telecommunication
company's future success. Threats are outside events or influences that create future hurdles for
a company. New rivals that offer customers fast service and cutting-edge technology, for
example, may lure an older telecommunications company's existing customers away, especially
if the older company can't offer the same new features.
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ETOP + SAP = SWOT
ETOP ANALYSIS OF OTT SERVICES

Environmental Threat Opportunity Profiling of OTT services market in India:
CORE COMPETENCE
The term core competency was invented by Dr. C. K. Prahalad and Prof. Gary Hamel in
1989. Prahalad and Hamel stated that core competencies create core products which are not
directly sold to customers instead they are used to develop huge number of client products. The
notion of core competencies evolved from the resource-based view of the firm which
emphasized the fact that competitive advantage rests on the firm's possession of unique difficult
to imitate skills, knowledge, resources and competencies (Wernerfelt, 1984). Management
studies have demonstrated that generally, core competencies have been seen as capabilities held
by people within a firm that, when applied through corporate operational processes to create
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products and services, make a critical contribution to corporate competitiveness (Edgar and
Lockwood; 2012).
Core competence is associated with resource allocation, capabilities, knowledge, skills, and
expertise along with value chain. It needs three elements: skills, resources and processes
(Torkkeli,Tuominen, 2002), and it is communication, involvement, and a deep commitment to
working organizational boundaries (Franklin, 1997). Knowledge resources, innovative
creativity and expertise are success factors that create the critical potential of an organization
which is termed core competencies (Godbout, 2000). Therefore, a firm's core competence is
described as a set of problem-defining and problem-solving insights that fosters the
development of strategic growth alternatives (Lei et al., 1996).
The development of core competence is vital to organizational learning (Murray, 2003) and
organizational culture (Haland and Tjora, 2006). Instead of a static stock of knowledge
(Simpson,2002), core competence develops from "collective learning in the
organization"(Prahalad and Hamel, 1990) generating a set of problem-defining and problem
solving insights to create competitive advantage and acting as a vehicle for SBUs to find
common interests, problems, capabilities or opportunities (Javidan, 1998).
The major objective of core competencies is to gain sustainable competitive advantage. Studies
have found that core competencies generate competitive advantage and affect organizational
performance (Agha and Alrubaiee, 2012). A competitive advantage is significant if it is related
to an attribute valued by the market. Customers need to perceive a consistent difference in
important attributes between the producer's products or services and those of its competitors.
These differences must relate to some product/delivery attributes which are among the key
buying criteria for the market. Product/delivery attributes are those variables that impact the
customers' perceptions of the product or service, its usefulness and its availability.
Source:
https://www.civilserviceindia.com/subject/Management/notes/conceptofcorecompetence.html
ROLE OF A REGULATOR
The Policy clarified the role of TRAI in the telecom sector. This was done with regard to the
problem where the DoT refused to accept the TRAI’s jurisdiction over some legal questions.
The Policy expressly mentions that TRAI is envisioned to be an independent regulator with
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comprehensive powers. It stated that TRAI has the authority to hear disputes regarding
telecommunication and also issue directives to the Government.
The Policy also clarified that the Government will invariably take into consideration TRAI’s
recommendation with respect to licensing issues. It also completely ruled out any possibility
of delegation of the Government’s licensing and policy making powers as they are essential
sovereign functions that cannot be delegated. The Policy also specified regulatory and advisory
assignments for TRAI. It would be responsible for formulating regulatory details, licensing
conditions and various guidelines with respect to different classes of service providers.
ITU – INTERNATIONAL TELECOM UNION

The International Telecommunication Union (ITU) is an agency of the United Nations (UN)
whose purpose is to coordinate telecommunication operations and services throughout the
world. Originally founded in 1865, as the International Telegraph Union, the ITU is the oldest
existing international organization. ITU headquarters are in Geneva, Switzerland.
The International Telecommunication Union has been divided into three sectors (ITU-R, ITU-
T and ITU-D) and several study groups in each sector of the ITU help define the new
technologies and standards for the global telecommunication industry. Radio communication
(ITU-R)—ensures optimal, fair and rational use of the radio frequency (RF) spectrum.
Telecommunication Standardization (ITU-T) -- formulates recommendations for standardizing
telecommunication operations worldwide.
Telecommunication Development (ITU-D) -- assists countries in developing and maintaining
internal communication operations. ITU though its radio regulations plays an important role in
identifying the frequency bands that are ideal for various telecommunication standards. The
recommended bands help in efficient and effective use of the spectrum in providing the services
to the subscribers. Nations who are the members of ITU make use of these recommendations
in planning their spectrum allocations. ITU expects that 3G standards (IMT-2000) provide a
minimum of 2Mbits/sec for stationary or waking users whereas 348 kbits/sec in a moving
vehicle. The ITU sets and publishes regulations and standards relevant to electronic
communication and broadcasting technologies of all kinds including radio, television, satellite,
telephone and the Internet. The organization conducts working parties, study groups and
meetings to address current and future issues and to resolve disputes. The ITU organizes and
holds an exhibition and forum known as the Global TELECOM every four years.
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Another important aspect of the ITU's mandate is helping emerging countries to establish and
develop telecommunication systems of their own. Although the recommendations of the ITU
are non-binding, most countries adhere to them in the interest of maintaining an effective
international electronic communication environment.
Bibliography: Sagar et al, 2009
DIGITAL TRANSFORMATION:
Digital transformation refers to the integration of digital technologies into all aspects of a
business, including decision making. This can include the use of data analytics and artificial
intelligence to inform decision making, as well as the automation of certain business processes.
By leveraging digital tools and technologies, organizations can improve the speed and accuracy
of their decision making, as well as gain new insights into their operations and customers.
Additionally, digital transformation can also help organizations to become more agile and
responsive to changing market conditions.
The key points included in digital transformation are :
1. Defining the scope of digital transformation: Organizations need to define the specific
areas of their business that will be impacted by digital transformation.
2. Identifying key technologies: Organizations need to identify the key technologies that
will be used to support digital transformation, such as data analytics and artificial
intelligence.
3. Building a digital strategy: Organizations need to develop a clear strategy for how they
will implement digital technologies, including timelines and resource requirements.
4. Implementing new processes and systems: Digital transformation requires the
implementation of new processes and systems to support the use of digital technologies.
5. Embracing a culture of innovation: Organizations should encourage a culture of
innovation that supports the adoption of new technologies and encourages
experimentation.
6. Measuring progress: Organizations should establish metrics to measure the progress of
their digital transformation efforts, to ensure they are achieving the desired results.
7. Addressing challenges and resistance: Organizations should be prepared to address any
challenges or resistance that may arise during the digital transformation process.
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8. Continual improvement: Digital transformation is an ongoing process, and
organizations should strive for continuous improvement in their use of digital
technologies.
9. Data governance and security: Organizations should ensure that data governance and
security measures are in place to protect sensitive information and maintain compliance
10. Collaboration and partnerships: Organizations should leverage collaboration and
partnerships with other organizations and experts in the field to accelerate their digital
transformation journey.
Bibliography:
1. Vial, G. (2021). Understanding digital transformation: A review and a research
agenda. Managing Digital Transformation, 13-66.
2. Matt, C., Hess, T., & Benlian, A. (2015). Digital transformation strategies. Business &
information systems engineering, 57(5), 339-343.
TECHNOLOGY ADOPTION:
Technology adoption refers to the process by which individuals, organizations, and society as
a whole adopt and integrate new technologies into their daily operations. This process can
include the purchase and use of technology products, as well as the development of new
processes and organizational structures to support the use of technology.
The rate and success of technology adoption can depend on a variety of factors, including the
perceived value of the technology, the availability of training and support, and the level of
resistance to change within an organization.
Adopting new technologies can bring many benefits, such as increased productivity, improved
communication, and access to new markets. However, it also requires organizations to adapt
their business processes and culture, it can also bring challenges such as cost, lack of skills and
change management.
Some of the key points that could be included in technology adoption:
1. Understanding the value of the technology: Organizations need to understand the
potential benefits of the new technology before deciding to adopt it.
2. Assessing the readiness of the organization: Organizations need to assess their readiness
to adopt new technologies, such as whether they have the necessary resources and
infrastructure in place.
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3. Training and support: Adoption of new technologies will require training and support
for employees and stakeholders, to ensure they are able to use the technology
effectively.
4. Change management: Adopting new technologies often requires changes to
organizational processes and culture, so change management is a critical aspect of
technology adoption.
5. Monitoring and evaluating progress: Organizations should monitor and evaluate the
progress of their technology adoption efforts, to ensure they are achieving the desired
results.
6. Addressing challenges and resistance: Organizations should be prepared to address any
challenges or resistance that may arise during the adoption process.
7. Continual improvement: Adoption of technology is not a one-time event, it's an ongoing
process, and organizations should strive for continuous improvement.
8. Scalability and sustainability: Organisations should ensure that the technology they
adopt is scalable and sustainable, to ensure it can support their growth and long-term
success.
Bibliography:
1. Adoption of information technology in small and medium-sized enterprises: a review of the
empirical literature from 2000 to 2015, Journal of Small Business Management, Volume 55,
Issue 1, January 2017, Pages 80–104
2. Transforming Organizations with Technology Adoption: A Case Study, Journal of
Management Information Systems, Volume 36, Issue 1, Summer 2019, Pages 191–224
EXAMPLES DISCUSS IN THE CLASS:

1. Artel – SME, One Web, Retail (Pre paid and post-paid) , Corporate Communications
and Marketing Communications – Matrix Organization
2. Airtel – Africa Disaster – Strategic Business Unit.
3. 5G context – New Market & New Product
4. Crypto is neither legal zone nor illegal zone. Gaming applications are in no legal zone.
No legal zone means getting opportunity for some one
5. Pager started in 1999. Mobile Revolution has come into picture in 2000. Technology
life cycle.
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6. Reliance adopted CDMA technology i.e. Technology Choice. ‘Karlo Duniya Mutti
Mein’
7. OTT is content consumption, IVF technology, Gene Therapies, Elite Matrimony,
Online learning environment are all the opportunity mapping in social context
8. India is a yellow country (Gold) then Diamond company enter in the market with quote
“Hera hai sada k liye” to make the change in the market – Social Migration
9. Airtel is a good marketing companies in consumer connect whereas Reliance is a good
advantage in financial assets
10. Core competence – Amul, Apple is in design interface, Google core competence is in
search engine, Walmart core competence is merchandised planning, Finance core
competence is in liquidity. HR core competency is in motivation and retention.
SUGGESTED READING:
1. Competing for the future by C. K. Prahalad and Gary Hamel
2. The Z Factor: Pranjal Sharma and Subhash Chandra
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ESSENTIAL READINGS 4

STRATEGIC BUSINESS UNIT

LEGAL, NO LEGAL, ILLEGAL

2. Divisional Organizational Structure

3. Matrix Organizational Structure

4. Geographical Organisational Structure

SAP – STRATEGIC ADVANTAGE PROFILE

DCF - DISTINCT CAPABILITY FACTOR

ETOP ANALYSIS OF OTT SERVICES

ITU – INTERNATIONAL TELECOM UNION

EXAMPLES DISCUSS IN THE CLASS:

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