BAD 64185 Spring 2010 Acar
BAD 64185
11135 - Acar
BUSINESS STRATEGY
Spring 2010
_______________
INSTRUCTOR Dr W. Acar, A413 BSA, 672-1156 – Home: 673-6514
E-mail: wacar@.kent.edu
Office hours: T-R 12:15-2:45 pm & 5:00-6:00 pm, and by appointment.
TEXT “Strategic Management and Competitive Advantage: Concepts and Cases”
by Jay B. Barney & William Hesterly, Pearson Prentice-Hall, 2008 (2nd edition)
ISBN-10: 0-13-233823-8 ISBN-13: 978-0-13-233823-3
COURSE OBJECTIVES
This "capstone" course pulls together your general knowledge gathered from your readings and living in this society, and the various elements of disciplinary knowledge you have accumulated during your various prior studies. Since your career is likely to take you to a consulting appointment or senior managerial position, this course is intended to introduce our MBA students to the principal concepts of strategic management as well as sensitize them to the overriding issues in this age of increasing globalization. We will work together so that you will come to see that, because they are the main producers as well as distributors of wealth, it behooves firms to better manage their resources and their future in light of potential environmental change.
COURSE PREREQUISITES
This course assumes that you are close to completing most of your MBA requirements. In order not to risk deregistration, in case of doubt please check with the GSM office.
COURSE REGISTRATION
It is the students’ responsibility to ensure they are properly enrolled in classes. Should you find an error in your class schedule, you need to correct the error with the advising office no later than Sunday 31 January. If registration errors are not corrected by these dates and you continue to attend or even participate in classes in which you are not officially enrolled, you are now advised that you will not receive a grade at the conclusion of the semester for any class in which you are not properly registered.
COURSE PRINCIPLES
It is essential that you not only learn to understand a firm’s situation as depicted in a case study, but you also need to be able to extract from it a sense of its strengths and weaknesses. The field of Strategy has progressed well beyond the limited question: “In what business should we be?” The author of your textbook is a major contributor to the recent developments in the field known as the resource-based view (RBV). In addition to gauging the strengths and weaknesses of a firm, you have to be able to sense the looming threats and opportunities potentially available. The approach of your instructor to the management of uncertainty is known as the scenario approach, to which he has been a contributor.
Can one do more than learn to avoid threats; could one ever hope to learn to turn them into opportunities? Organizational consultants are now spreading the faddish belief that environmental turbulence can best be handled by last-minute incrementalism; such a defeatist attitude may turn a firm into one that is “penny-wise, but pound foolish”. Instead of a focus on managing for the short term, this course will start you thinking in terms of strategic opportunities.
COURSE PROCEDURE
This type of course cannot be ingested passively, but requires your active participation in and before class. It has to become an interactive course. This will render it more rather than less interesting, since what you get out of a course is in direct relation to the effort that goes into it. Students will organize themselves into teams of 3-4 people (our version of "quality circles") for class and project preparation, as well as class discussion. More importantly, the class discussion is an integral part of this course. Students will be expected to reflect on their readings from the following four sources:
i) The theories and rationales found in the course material or presented in class.
ii) The theoretical knowledge derived from your earlier courses.
iii) Information gleaned from reading the business press (e.g., Business Week).
iv) General knowledge gleaned from your prior organizational experience.
Due to the fact that a number of best-selling books and even movies on business, business takeovers and restructurings, entrepreneurship, intrapreneurship and even corporate responsibility issues have been broadly publicized, this session will not rely on video presentations. They tend to constrict the time available; since many of you have already been exposed to this information, class time could be better used for reflecting upon and digesting the overload of information to which you are exposed.
CLASS ATTENDANCE & PARTICIPATION
An interactive class presupposes regular attendance buttressed by beforehand preparation. A 90% attendance rate will allow you to make allowance for emergencies. In such an eventuality, do not call your instructor; simply ask your quality-circle teammates to take notes for you.
STUDENTS WITH DISABILITIES
University policy 3342-3-18 requires that students with disabilities be provided reasonable accommodations to ensure their equal access to course content. If you have a documented disability and require accommodations, please contact the instructor at the beginning of the semester to make arrangements for necessary classroom adjustments. Please note, you must first verify your eligibility for these through the Student Accessibility Services (contact 330-672-3391 or visit www.kent.edu/sas for more information on registration procedures). [Also visit <http://www.registrars.kent.edu/disability/>]
GRADING
Individual class participation will be counted toward 25% of the grade, the remaining 75% being divided among seven case write-ups. The weights of the 6 cases are as follows:
· Case 1 = 5 pts
· Case 2 = 10 pts
· Case 3 = 10 pts
· Case 4 = 15 pts
· Case 5 = 15 pts
· Case 6 = 20 pts
* Team members should complement each other; it would be infeasible for them to duplicate each other's work. To provide for greater choice and flexibility, teammates do not all earn the same grade. Each team member will be evaluated by his or her peers by means of the division of a pie of 10 points (or 1.00 in decimal notation) in among the team members [see attached example]. This will allow the instructor to derive a multiplier to scale the group grade up or down for each individual according to his/her peer review.
* Alternatively, groups who unanimously make this choice may simply submit together a sheet signed by all members listing EACH person's percentage contribution to the group work.
The final grading will conform to (or possibly be more lenient than) the following numeric scale conversion:
· A : 92 <= X <=100
· A- : 90 <= X <= 91
· B+ : 88 <= X <= 89
· B : 82 <= X <= 87
· B- : 80 <= X <= 81
· C+ : 78 <= X <= 79
· C : 72 <= X <= 77
· C- : 70 <= X <= 71
· D+: 68 <= X <= 69
· D : 60 <= X <= 67
· F : 0 <= X <= 59
OPTIONAL PRESENTATIONS
To allow the students to participate even in designing the course contents, extra credit can be earned through class presentations approved by the instructor (maximum: 2 presentations per student).
- Individual presentation: 3% extra.
- Group presentation : 2% extra for each presenter.
LAST DATE TO WITHDRAW Sunday 4 April 2010
ACADEMIC HONESTY
Plagiarism is the misrepresentation of the source, nature or conditions of one’s academic work. The use of the intellectual property of others without giving them due credit is considered a serious academic offense. Cheating also occurs when two or more people cooperate in such misrepresentations. It is the University’s policy that cheating or plagiarism results in receiving a failing grade for the work or course. Repeat offenses result in dismissal from the University.
WRITING THE CASE REPORTS
The group work that carries 75% of the grade should be clearly divided into clearly identified sections and subsections (with sufficient white space separating them), and comprising the following contents:
Case Report 1
This first case should present the firm’s current situation as perceived by its managers, with an emphasis on its strengths and weaknesses, as well as the threats and opportunities they think it faces. The latter two categories can best be captured by looking at the reference scenario and change scenarios perceived by the executives – and their probabilities.
In addition, you should spell out the detailed strategies needed to confront each of the plausible scenarios that might actually materialize.
Case Report 2
This case report deals with the same subject matter as the first, but it carries more points. So you should carry out the entire same analysis you did in your previous report while improving on it. Yet keeping in mind the distortions that greed and wishful thinking can bring to accurate strategizing, your case report should:
a) Reproduce the entire first report that presented the views and visions of the managers – but simply improve on its editing, readability and presentability.
b) In addition, interspersed in-among its sections, should be your own (dispassionate and more plausible) re-analysis of all the same situational parameters as above, putting yourself in the shoes of impartial consultants to the company.
Case Report 3
Now this report would address a new situation, but pushing the analysis beyond the previous one. To do so, further to devising the strategies required to address each of the likely scenarios, the report should show how the firm’s resources and capabilities would be marshalled to support and enhance its chosen strategies.
Case Report 4
This case report deals with the same subject matter as the third, but it carries more points. So you should carry out the entire same analysis you did in your previous report while improving on it. Keeping in mind the distortions that greed and wishful thinking can bring to accurate strategizing, your case report should:
a) Reproduce the entire third report that presented the views and visions of the managers – but simply improve on its editing, readability and presentability.
b) In addition, interspersed in-among its sections, should be your own (dispassionate and more plausible) re-analysis of all the same situational parameters as above, putting yourself in the shoes of impartial consultants to the company.
Case Report 5
Following the same mode as previously, this most important report ought to include yet one more advance over its predecessors. What is left to do? So far you have learned to devise scenario-specific strategies and line up their requisite resources. But, as managers with only partial reading into the future, you do not know which scenario will actually turn up. Given this uncertainty, you have to devise a flexible set-up for the needed resources. A flexible system would allow the right combination of capabilities and resources set aside to be deployed without major inefficiencies when it becomes clearer which one, among the several anticipated scenarios, will actually occur.
Case Report 6
This case report deals with the same subject matter as the fifth, but it carries more points. So you should carry out the entire same analysis you did in your previous report while improving on it. Keeping in mind the distortions that greed and wishful thinking can bring to accurate strategizing, your case report should:
c)Reproduce the entire third report that presented the views and visions of the managers – but simply improve on its editing, readability and presentability.
d) In addition, interspersed in-among its sections, should be your own (dispassionate and more plausible) re-analysis of all the same situational parameters as above, putting yourself in the shoes of impartial consultants to the company.
IMPORTANT Case reports should be turned in at the beginning of the class in which they are due. Class absences due to working on late reports will not be excused.
Dr W. Acar 18 January 2010
TENTATIVE COURSE CALENDAR
PART I: BASIC CONCEPTS OF STRATEGIC MANAGEMENT
1-19 Introduction to the Course and to MBA career Paths
· the reasons why many companies fail,
· your future role as a manager or a consultant,
· the difference between information and theory,
· the organization of the class into 4-person groups.
1-21 Read Ch 1: The Strategic Management Process (pp. 2-29)
Particularly important to study are:
- Defining Strategy and Strategic Management [p. 4 & top of p. 5]
- The concept of competitive advantage (CA) [11-12]
- Accounting measures of CA [14-18]
- Crisis management and the controversial notion of emergent strategy.
1-26 Read Ch 2: Evaluating a Firm’s External Environment (pp. 30-71)
Particularly important to study are:
- Synopsis of the S-C-P and the Five-Forces model [37-40]
- Industry structure and environmental opportunities [53-62]
- The SWOT approach to gauging a company’s situation [Instructor]
- The scenario approach to devising strategies [Instructor].
1-28 Read Ch 3: Evaluating a Firm’s Internal Capabilities (pp. 72-111)
Particularly important to study are:
- The resource-based view (RBV) of the firm [74-77]
- Barney’s “VRIO” encapsulation of the RBV [77-79
- The value chain model of business activities [91-84]
- The sources of costly imitation [p. 87]
- Implementing strategy: the “O” of VRIO
- An example: VRIO analysis of Southwest Airlines [93-96]
- Synopsis of the broader implications of the RBV [p. 101].
2-2 Review of the Resource-Based View
Review and Comparison of the RBV and the Scenario approaches.
2-4 Read Case 2-2: Jet Blue
Discussion of Jet Blue’s situation from the perspective of its managers.
2-9 Example of “Consulting Scenario Analysis”
Definition of scenarios and strategies, and trial case study of Jet Blue’s situation in class.
PART II: BUSINESS-LEVEL STRATEGIES
2-11 Read Ch 4: Cost-Leadership Strategies (pp. 114-143)
Particularly important to study are:
- The notions of: “corporation”, corporate-level and business-level strategy [p, 116]
- Economies of scale and cost-leadership strategies [117-119]
- Experience, the learning curve and competitive advantage [121-122]
- The theoretical justification of cost-leadership strategy [p. 127]
- Cost-leadership strategy and sustained competitive advantage [129-130]
- Organizing to implement cost-leadership strategies [135-138].
2-16 Read Ch 5: Product Differentiation Strategies (pp. 144-176)
Particularly important to study are:
- The concept of product differentiation and its bases [146-149]
- The theoretical justification of product differentiation strategy [154-155]
- Product differentiation strategy and sustained CA [156-160]
- Organizing to implement product differentiation strategies [163-267]
- Are cost-leadership and differentiation mutually exclusive? [168-170].
2-18 DUE: “Managerial” Group Reports on Case 2-4
First class discussion of Case 2-4, The Levi’s “Personal Pair” Proposal.
2-23 Review of Porter’s Framework and Comparison with the RBV
Review and discussion of the five theory chapters covered so far.
2-25 DUE: “Consulting” Group Reports on Case 2-4
Pursuing and concluding class discussion of Case 2-4, The Levi’s “Personal Pair” Proposal.
PART III: CORPORATE-LEVEL STRATEGIES
3-2 Read Ch 6: Vertical Integration Strategies (pp. 178-205)
Particularly important to study are:
- The chain of activities and the domain of vertical integration [180-180]
- Vertical integration and the threat of opportunism [183-185]
- An example of application of the theory: discussing the case of call centers [187-189]
- Vertical integration and sustained competitive advantage [190-192]
- Organizing to implement vertical integration [195-197].
3-4 Read Ch 7: Corporate Diversification (pp. 206-243)
Particularly important to study are:
- Rumelt’s types of corporate diversification [208-212]
- Economies of scope and the value of diversification [213-217]
- Diversification to exploit financial economies of scope 223-225]
- Diversification to exploit anti-competitive economies of scope [226-227]
- Corporate diversification and sustained competitive advantage [231-234].
3-9 Intra-Group Workshop on case writing.
Prepare your report for the next case (Case 1-5: Nucor in 2005).
3-11 Read Ch 8: Organizing to Implement Corp. Div’n (pp. 244-275)
Particularly important to study are:
- The corporate organizational structure [246-249]
- Executive roles and staff roles [254-255]
- Managing shared activities [258-259]
- Management controls and implementing diversification [259-261]
- Allocating corporate capital and transfer pricing [263-266]
- The “hot-button” issue of executive compensation [266-268].
3-16 DUE: “Managerial” Group Reports on Case 1-5
First class discussion of Case 1-5, Nucor in 2005.
3-18 Read Ch 9: Strategic Alliances (pp. 276-307)
Particularly important to study are:
- Defining strategic alliances [278-279]
- How strategic alliances create value [279-283]
- Incentives to cheat on strategic alliances [288-291]
- Strategic alliances and sustained CA [292-293]
- Organizing to implement strategic alliances [297-299]
- Joint ventures and trust 301-302].
3-23 Read Ch 10: Mergers and Acquisitions (pp. 308-342)
Particularly important to study are:
- Defining mergers and acquisitions [310-311]
- Sources of strategic relatedness and reasons for engaging in M&As [p. 315]
- Mergers and acquisitions and sustained CA [322-325].
3-25 Student Presentations
Student presentations on a topic agreed upon with the instructor.
3-30 NO CLASS Spring recess
4-1 NO CLASS Spring recess
4-6 DUE: “Consulting” Group Reports on Case 1-5
Pursuing and concluding class discussion of Case 1.5, Nucor in 2005.
PART IV: SUMMING IT UP
4-8 Intra-Group Workshop on case writing.
Prepare your report for the next case (Case 3-5: Extending the “Easy” Business Model).
4-13 Review of Corporate Strategy
Reviewing and complementing the treatment of corporate strategy presented in Barnet & Hesterly.
4-15 Open Agenda
Most likely a speaker session.
4-20 Student Presentations
Student presentations on a topic agreed upon with the instructor.
4-22 DUE: “Managerial” Group Reports on Case 3-5
First class discussion of Case 3-5, Extending the “Easy” Business Model.
4-27 Review of Corporate Strategy
Review of Corporate Strategy and how well it makes use of business-level strategy,
4-29 Open Agenda
Most likely a speaker session.
5-4 DUE: “Consulting” Group Reports on Case 3-5
Pursuing and concluding discussion of Case 3-5, Extending the “Easy” Business Model.
5-9 Concluding Session
Post-mortem analysis of the course.
Business Policy Group # Full Name
W. Acar
TEAMMATE EVALUATION
You are to evaluate your team members three different ways. You also can provide individual or personal comments. When evaluating your colleagues, you need to be careful, fair and objective. Base your evaluation on: personal effort/hard work, team cooperation (being present at meetings, working together), leadership, quality of ideas, analytic methodology and teaching teammates.
Evaluation Framework
A. Distribute a pie of 1.00 point among your team members, including yourself, down to the second decimal of a point. Points are to be given on the basis of performance on the joint project work.
B. Rank-order each team member on the basis of the project work (1 the best, 4 the worst). Note: no two members can receive the same ranking.
C. Rank each member’s class participation on a scale of 0-10 (with 10 being high). This time, performance evaluation is relative to all teams and individuals in this class; here it is possible to score everyone high or low or mixed.
E X A M P L E
Team Members: A B C
|
1. Harriet SMITH |
.30 1 9 |
|
2. Jody BROWN |
.21 4 5 |
|
3. Dow JONES |
.23 3 6 |
|
4. |
|
|
5. (self) John DOE |
.26 2 7 |
Score of relative Tie-breaking
performance in group ranking on Contribution
project work. project work. to class.
This is an example of a “peer review” or “teammate evaluation” sheet, which will serve to determine each student’s personal multiplier. This multiplier will transform the student’s group grade into his or her personal grade for the group projects.)
