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Course Code & Title: BUAD 836: Business Policy and Strategy
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COPYRIGHT PAGE
All rights reserved. No part of this publication may be reproduced in any form or
by any means, electronic, mechanical, photocopying, recording or otherwise
without the prior permission of the Ahmadu Bello University, Zaria, Nigeria.
ISBN:
Tel: +234
E-mail:
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COURSE WRITERS/DEVELOPMENT TEAM
Salisu Umar & Halima Shuaibu: Subject Matter Experts
Prof Awosika: Subject Matter Reviewer
Enegoloinu Adakole: Language Reviewer
Nasiru Tanko & Ibrahim Otukoya: Instructional Designers/Graphics
Prof. Adamu Z. Hassan: Editor
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QUOTE
“Open and Distance Learning has the exceptional ability of meeting the challenges of the three
vectors of dilemma in education delivery – Access, Quality and Cost”
– Sir John Daniels
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TABLE OF CONTENT
Title Page
Acknowledgement Page
Copyright Page
Course Writers/Development Team
Table of Content
INTRODUCTION
Preamble
i. Course Information
ii. Course Introduction and Description
iii. Course Prerequisites
iv. Course Learning Resources
v. Course Objectives and Outcomes
vi. Activities to Meet Course Objectives
vii. Time (To Complete Syllabus/Course)
viii. Grading Criteria and Scale
ix. Course Structure and Outline
STUDY MODULES
1.0 Module 1: General Overview and Assessing the Business Environment
Study Session 1: Concept, Definition, objectives and importance of Business Policy and
strategy
Study Session 2: Strategic management decision making
Study Session 3: The internal and external environment of business
Study Session 4: Company vision, mission and purpose
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INTRODUCTION
i. COURSE INFORMATION
Course Code: BUAD 836
Course Title: Business Policy and Strategy
Credit Units: 3
Year of Study: 2
Semester: 2nd
Getting somewhat more specific, the primary aim of this course is to review,
deepen, and broaden your understanding of Business Policy &Strategy, and to
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allow you to gain experience in applying these to real world problems. Since the
overriding objective of an MBA program is to develop decision-makers.
In addition, the course strives to develop your conceptual and team skills, and to
help develop inter-personal skills that will serve as an added value, throughout
your life and career.
The study takes you through the functions and responsibilities of top management,
relating to those organisational problems, which affects the success of the entire
organisation. It also involves determination of the character and identity, resources
to be utilised, and future course of action of an organisation.
This course is designed to equip and expose you to an array of concepts, theories,
skills and different approaches and shows how best to take strategic decisions in
order to solve and overcome organisational problems and challenges.
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v. COURSE OUTCOMES
After studying this course, you should be able to:
Critique theories, concepts, scope and developments in policy and strategy
management in business organisation.
Synthesise the internal and external environmental factors of business.
Describe the ethical issues in business and the quest for sustainable business
strategy.
Explain the strategy formulation in business organisation.
Analyse the implementation and evaluation of strategy in business
organisation.
You should understand right from the onset that the contents of the course are to
be worked at and understood step by step and not to be read like a novel.
The best way is to read a study session quickly in order to see the general run of
the contents and then to re-read it carefully, making sure that the contents
are understood step by step. You should be prepared at this stage to spend a
much longer quality time on some study sessions that may appear difficult. A
paper and pen may be necessary. Ensure that you make necessary notes and
summaries where necessary for future reference.
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Moreover, the key to success in this course is to study each topic slowly in order to
ensure full apprehension before moving onto the next one. In the event any topic is
not fully understood, there is every need to go through it over and over again by
reworking illustrations in the topic. This is based on the fact that practice plays
significant role in understanding subjects that deal with computation issues. Also,
there will be series of group and individual assignments that you are expected to do
and submit within the defined time limit which will serve as part of your
assessment.
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viii. GRADING CRITERIA AND SCALE
Grading Criteria
A. Formative assessment
Grades will be based on the following:
Individual assignments/test (CA 1,2 etc) 20
Group assignments (GCA 1, 2 etc) 10
Discussions/Quizzes/Out of class engagements etc 10
D. Feedback
Courseware based:
1. In-text questions and answers (answers preceding references)
2. Self-assessment questions and answers (answers preceding references)
Tutor based:
1. Discussion Forum tutor input
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2. Graded Continuous assessments
Student based:
1. Online programme assessment (administration, learning resource,
deployment, and assessment).
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ix. COURSE STRUCTURE AND OUTLINE
Course Structure
WEEK/DAYS MODULE STUDY SESSION ACTIVITY
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https://goo.gl/6Xk3He & https://goo.gl/WY6hwN )
4. View referred Animation (Address/Site
https://goo.gl/nMGKBh
6 Study Session 2 1. Read Courseware for the corresponding Study Session.
STUDY 2. Listen to the Audio on this Study Session
Business level strategies 3. View any other Video/U-tube (address/site
MODULE 2 https://goo.gl/aMA4iM, https://goo.gl/SZETbJ &
https://goo.gl/aMA4iM )
7 Study Session 3 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Functional plans and policies 3. View any other Video/U-tube (address/site
https://goo.gl/1ZwJJS & https://goo.gl/btziee )
4. View referred Animation (Address/Site
https://goo.gl/btziee )
8 Study Session 4 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Strategic analyses and choice 3. View any other Video/U-tube (address/site
https://www.youtube.com/watch?v=tBW-Kux1EeQ )
4. View referred Animation (Address/Site
https://goo.gl/tPQK4S )
9 Study Session 1 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Nature of strategy implementation 3. View any other Video/U-tube (address/site
https://goo.gl/36QWZL & https://goo.gl/Ac2ume )
4. View referred Animation (Address/Site
https://goo.gl/PVjVx4 )
10 Study Session 2 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
STUDY Structural design and change 3. View any other Video/U-tube (address/site
MODULE 3 https://goo.gl/3evHVn & https://goo.gl/YoEnnM )
4. View referred Animation (Address/Site
https://goo.gl/NA7BHE )
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11 Study Session 3 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Corporate Governance, Social 3. View any other Video/U-tube (address/site
Responsibility and Business Ethics https://goo.gl/zv4wRA )
4. View referred Animation (Address/Site
https://goo.gl/5bBvQp )
12 Study Session 4 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Strategic Evaluation and Control 3. View any other Video/U-tube (address/site
https://goo.gl/GGeH7T )
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Course Outline
MODULE 1: General Overview and Assessing the Business
Environment
Study Session 1: Concept, Definition, objectives and importance of
Business Policy and strategy
Study Session 2: Strategic management decision making
Study Session 3: The internal and external environment of business
Study Session 4: Company vision, mission and purpose
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STUDY MODULES
1.0 MODULE 1: General Overview and Assessing the Business
Environment
Contents:
Study Session 1: Concept, Definition, objectives and importance of
Business Policy and strategy
Study Session 2: Strategic management decision making
Study Session 3: The internal and external environment of business
Study Session 4: Company vision, mission and purpose
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STUDY SESSION 1
Section and Subsection Headings
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Evolution of Business Policy
2.2 Concept of Business Policy
2.3 Strategic Management
2.3.1 What is a strategy?
2.3.2 What is management?
2.3.3 Strategic Management Defined
2.4 Stages of Strategic Management
2.4.1 Strategy formulation
2.4.2 Strategy implementation
2.4.3Strategy evaluation:
2.5 Benefits of Strategic Management
2.6 Guidelines for Effective Strategic Management
3.0 Tutor Marked Assignments (Individual or Group assignments)
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions and Answers
6.0 Additional Activities (Videos, Animations & Out of Class activities)
7.0 References/Further Readings
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Introduction:
This study session introduces you to the concept of business policy and
strategy. You will appreciate the fact that business
policy is a guide and road map to create awareness
and direction to the management of an
organisation. Business policy was the term
formally used, as new titles for the course have
begun to be introduced, in recent years; one of such
titles is strategic management. You will understand
that the ultimate aim of strategic management is to
save the company’s business products and services so that they achieve
targeted profits and growth. You will appreciate the fact that strategic
management is all about gaining and maintaining competitive advantage.
This study session will also provide you with the foundation of what will
be discussed in the subsequent study sessions.
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2.0 Main Content
2.1 Evolution of Business Policy
The origins of business policy as stated by Kazmi (2006) can be traced
back to 1911, when Harvard business school introduced an integrative
course in management, aimed at the creating general management
capability. Since 1908, the course was used as an instructional purpose
based on interactive case studies. However, the introduction of business
policy in the curriculum of business schools/ management institute came
much later. In 1969, the American Assembly of collegiate schools of
business, a regulatory body for business schools, made it business a
mandatory requirement for the purpose of recognition.
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Business policy is a guide and roadmap to create awareness and direction
to the management of any organisation, it ensures that organisations
deliver better end product within a framework.
You should also know that, Rama Rao (2010) define Business Policy as
follows:
(3) A business policy is the study of the nature and process of choice
about the future of independent enterprises by those responsible for
decisions and their implementation.
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(a) The formulation of mission and vision statement of the organisation.
(d) Better management and the provision of better products and services.
For you to gain an insight of what strategic management is all about, you
need to understand each concept separately.
What is a strategy?
The term strategy was derived from a Greek word “strategos” which
means generalship. “Strategy can be defined as the determination of the
basic long-term goals and objectives of an enterprise and the adoption of
courses of actions and the allocation of resources necessary for carrying
out those goals”. (Alfred D. Chandler). The term “strategy” is intended
to focus on the interdependence of the adversaries’ decisions and on their
expectations about each other’s behaviour” (Thomas Schelling)
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strategy, the organisation is like a ship without a rudder. (Joel Ross and
Michael Kami).
What is management?
You should know that the term management could be used in two major
contexts. (a) It is used with reference to a key group in an organisation in-charge
of its affairs. In relation to an organisation, management is the chief organ
entrusted with the task of making it a purposeful and productive entity, by
undertaking the task of bringing together and integrating the disorganised
resources of manpower, money, materials, and technology into a functioning
whole.
b) The term is also used with reference to a set of interrelated functions and
processes, to a field of study or discipline in social sciences and to a vocation or
profession. The functions and processes of management are wide-range but
closely interrelated. They range all the way from design of the organisation,
determination of the goals and activities, mobilisation and acquisition of
resources, allocation of tasks and resources among the personnel and activity
units. The survival and success of an organisation depend to a large extent on the
competence and character of its management. Management has to also facilitate
organisational change and adaptation.
ITQ 2: In relation to an organisation, what is the term used to describe the chief
organ entrusted with the task of making it a purposeful and productive entity, by
undertaking the task of bringing together and integrating the disorganised
resources of manpower, money, materials, and technology into a functioning
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Strategic management defined
Fred, R David (2011) define Strategic managementas the art and science
of formulating, implementing, and evaluating cross-functional decisions
that enable an organisation to achieve its objectives. As this definition
implies, strategic management focuses on integrating management,
marketing, finance/accounting, production/operations, research and
development, and information systems to achieve organisational success.
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(D) Stages Of Strategic Management
(1) Reviewing external and internal factors that are the bases for current
strategies.
(2) Measuring performance.
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13. It encourages a favourable attitude toward change.
14. It gives a degree of discipline and formality to the management of a
business.
3.0 Conclusion/Summary
This study session introduced you to the concept of strategic
management, the conceptual framework for the development of strategic
management as well as the stages in strategic management. You also
learnt the benefits for strategic management and the guidelines for
effective strategic management.
ITA 1: (1) A business policy represents the best thinking of the company management as to
how the objectives may be achieved in the prevailing economic and social conditions.
(2) A business policy is the study of the nature and process of choice about the future of
independent enterprises by those responsible for decisions and their implementation.
(3) A business policy is one, which focuses attention on the strategic allocation of scarce
resources. Conceptually speaking strategy is the direction of such resource allocation, while
planning is the limit of allocation.
ITA 2: Management
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References/Further Readings
Azhar K (2002) Business Policy and Strategic Management 2nd Edition:
Tata McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th
Edition: New Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th
Edition: New Delhi; Tata McGraw Hill Publishing Company,
India.
Thomas L Wheelen and J. David Hunger (2002) Strategic management
and business policy Towards Maintaining a global sustainability
13th Edition. Pearson Publishing Company.
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STUDY SESSION 2
Strategic Decision Making
2.2.1 Rare
. 2.2.2 Consequential
2.2.3 Directive
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6.0 Additional Activities (Videos, Animations & Out of Class activities)
7.0 References/Further Readings
Introduction:
In the previous study session, you have learnt much
about strategic management. In this study session,
you will understand that decision making is a
managerial process and function of choosing a
particular course of action out of several alternative
courses, for the purpose of accomplishment of
organisational goals. You are going to learn that decision might be minor
or major; they may relate to general day to day operations and as well be
strategic in nature.
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strategic choice perspective mentioned earlier, this course proposes a
strategic decision-making framework that can help people make these
decisions, regardless of their level and function in the corporation.
What are the strategic decisions facing a business and therefore deserve
strategic management attention?
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2.2 What makes a decision strategic?
Unlike many other decisions, strategic decisions deal with the long-run
future of an entire organisation and have three characteristics:
1. Rare: Strategic decisions are unusual and typically have no
precedence to follow.
Research indicates that the planning mode is not only more analytical and
less political than are the other modes, but it is also more appropriate for
dealing with complex, changing environments. Eight-step strategic
decision-making process is therefore proposed to improve in the
making of strategic decisions:
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1. Evaluate current performance results in terms of (a) return on
investment, profitability, and so forth, and (b) the current mission,
objectives, strategies, and policies.
2. Review corporate governance—that is, the performance of the firm’s
board of directors and top management.
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ITQ 2: What do you understand by strategic decision making?
3. Strategic issues are likely to have a significant impact on the long term
prosperity of the firm: Generally, the results of strategic implementation are seen
on a long term basis and not immediately.
4. Strategic issues are future oriented: Strategic thinking involves predicting the
future environmental conditions and how to orient for the changed conditions.
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Mintzberg’s Modes of Strategic Decision Making
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4. Logical Incrementalism: This mode is viewed as the synthesis of the
planning and adaptive to a lesser extent. In this mode, top management
has a reasonably clear idea of the corporation’s mission and objectives.
Both in its development of strategies, it chooses to use an interactive
process in which an organisation probe the future experiments and learn
from a series of partial commitments rather than through
global formalities of total strategies. This approach
appears to be useful when environment is changing
rapidly, and when it is important to build consensus and
develop the needed resources, before committing an entire
corporation to a specific strategy.
4.0 Conclusion/Summary
In this study session you have learnt how a strategic decision is being
made, what makes a decision strategic, dimensions of strategic decisions
and Mintzbergs modes of strategic decision.
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strategic management approach to decision making?
3. In your opinion, what is the single major benefit of using a
strategic management approach in decision making? Justify
your answer.
4. What is strategic decision making? What makes a decision
strategic?
5. Explain the dimensions of strategic decision.
6. Discuss Mintzbergs modes of strategic decision making.
13.
ITA 2: Strategic decision making or strategic planning describes the process of creating the
company’s mission and objectives and also deciding upon the course of action a company
should pursue.
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7.0 References/Further Readings
Azhar K (2002), Business Policy and Strategic Management 2nd Edition,
Tata McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th
Edition:New Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th
Edition: New Delhi; Tata McGraw Hill Publishing Company,
India.
Thomas L Wheelen and J. David Hunger (2002) Strategic Management
and Business Policy: Towards maintaining a global sustainability.
13th Edition. Pearson publishing company.
STUDY SESSION 3
Environment of Business
2.3.3 Opportunities
Summary
Discussion Questions
Introduction:
In this study session, you are going to learn both the internal and external
environment of business. Understanding the environmental context of a
company is of immense significance. Successful strategies are based on
the proper understanding and analysis of the business environment.
Therefore, company has to adapt to its environment. Companies that fail
to adapt to their environment are unlikely to survive in the long run.
The formula for business success requires two elements; the individual
and the environment, remove either of the values and success becomes
impossible. Business environment influence the functioning of the
business system. Thus, business environment may be defined as all those
conditions and forces which affect the business, it consist of all the
factors that has a bearing on the business.
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Internal Qualities
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strengths and weakness can be determined by elements of being rather
than performance.
External circumstances
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factors presented by the business, more or less desirous to operate in the
said environment.
Opportunities are qualities that make fulfilling the aim desirable for the
business most often, chances to earn profit, such as untapped markets or
weak competition.
Threats are qualities that render the aim less desirable, things such as
strong and entrenched competition already present in a possible market.
4.0 Conclusion/Summary
Discussion of this study session was centred on the external and internal
environment of business. Identifying the organisations strengths,
weakness, opportunities and threats is very vital to move the organisation
forward and this is what we have achieved in this session.
ITA 1: Internal environment includes all those factors which influence business and which
are present within the organisation itself and can be controlled by the organisation.
ITA 2: The external environment includes all those factors which influence business and
exist outside the business and the business does not have control over.
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STUDY SESSION 4
COMPANY MISSION AND VISION
Introduction:
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In the previous study session, you learnt the internal and external aspects
of the organisation. In this study session, we will be discussing the
mission and vision of an organisation, where you will appreciate the
reason(s) why many organisations develop both a mission statement and
a vision statement. You will understand why a mission statement answers
the question; what is our business? And a vision statement answers the
question; what do we want to become or where are we headed?
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7. Discuss how clear vision and mission statements can benefit other
strategic management activities.
-To provide a basis for motivating the use of the organisation's resources.
-To serve as a focal point for those who can identify with the organisation's
purpose and direction, and to deter those who cannot form participation further in
the organisation's activities.
-To facilitate the translation of objective and goals into a work structure,
involving the assignment of tasks to responsible elements within the organisation.
-To specify organisational purposes and the translation of these purposes into
goals in such a way that cost, time, and performance parameters can be assessed
and controlled.
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1. To ensure unanimity of purpose within the organisation.
2. To provide a basis, or standard, for allocating organisational
resources.
3. To establish a general tone or organisational climate.
4. To serve as a focal point for individuals to identify with the
organisation’s purpose and direction, and to deter those who cannot from
participating further in the organisation’s activities.
5. To facilitate the translation of objectives into a work structure
involving the assignment of tasks to responsible elements within the
organisation
6. To specify organisational purposes and then to translate these purposes
into objectives in such a way that cost, time, and performance parameters
can be assessed and controlled.
Vision describes what the organisation would like to become. The three
elements of a strategic vision:
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2.5 How to Develop a Strategic Vision
2. Provide a basis for all other strategic planning activities, including the
internal and external assessment, establishing objectives, developing
strategies, choosing among alternative strategies, devising policies,
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establishing organisational structure, allocating resources, and
evaluating performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
4.0 Conclusion/Summary
In this study session, you discussed that the mission is a statement which defines
the role that an organisation plays in the society, while the vision statement gives
focus, direct, motivate and even excite a business into superior performance. You
also learnt how to develop a vision and a mission statement and also the benefits
of a mission and vision statements.
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6.0 Additional Activities (Videos, Animations & Out of Class
activities) e.g.
a. Visit U-tube: https://goo.gl/xeSn9H, https://goo.gl/n7xpvJ &
https://goo.gl/XtXUx2. Watch the video & summarise in 1 paragraph
b. View the animation on: ??????? and critique it in the discussion forum
ITA 2: The term goals and objectives are often used interchangeably; goals are
statements you make about the future of your business while objectives are the exact
steps your company must take in order to reach its goals.
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Study Session 1: Corporate Level Strategy
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STUDY SESSION 1
Corporate Level Strategy
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Corporate Level Strategy
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To arrive at such an objective-strategy design is the basic burden of corporate
strategy formulation. You will learn the nature, scope and concerns of corporate
level strategy, strategy alternatives, characteristics and importance of corporate
level strategy.
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2.2 Nature, Scope and Concerns of Corporate Strategy
-It is the design for filling the firm's strategic planning gap.
-It is concerned with the choice of the firm's products and markets; it actually
denotes the changes / additions / deletions in the firm's existing product-market
postures. It spells out the businesses in which the firm will play; the markets in
which it will operate and the customer need(s) it will serve.
-It ensures that the right fit is achieved between the firm and its environment.
-It helps build the relevant competitive advantages for the firm.
-Corporate objectives and corporate strategy together describe the firm's concept
of business.
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Expansion Strategies
The corporate strategy of expansion is followed when an organisation
aim at high growth, by substantially broadening the scope of one or more
of its businesses, in terms of their respective customer groups, customer
functions and alternative technologies singly or jointly, in order to
improve its overall performance.
Stability Strategies
The corporate strategy of stability is adopted by an organisation, when it
attempts an incremental improvement of its performance by marginally
changing one or more of its businesses in terms of their respective
customer groups, customer functions and alternative technologies
respectively.
Retrenchment Strategies
The corporate strategy of retrenchment is followed when an organisation
aim at contraction of its activities, through a substantial reduction or
elimination of the scope of one or more of its businesses, in terms of their
respective customer groups, customer functions or alternative
technologies, either singly or jointly in order to improve its overall
performance.
Combination Strategies
The combination strategy is followed when an organisation adopts a
mixture of stability, expansion and
retrenchment strategies either at the same
time in its different businesses, or at different
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times in one of its businesses, with the aim of improving its performance.
ITQ 1: What is the meaning of corporate level strategy and what are the alternatives?
5. It is formulated at the top management level, though middle and lower level
managers are associated in their formulation and in designing sub-strategies.
7. It flows out of the goals and objectives of the enterprise and is meant to
translate them into realities.
ITQ 2: Give one characteristic and Importance each of a corporate strategy respectively
4.0 Conclusion/Summary
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1. Analyse the different types of strategy under stability and
expansion strategies and identify the best situation to use each.
2. Provide reasons as to why these corporate strategies are
adopted; retrenchment, stability, combination and expansion.
Discuss the nature, scope and concerns of corporate level
strategy.
ITA 1: Corporate strategy defines the market and businesses in which an organisation
chooses to operate. The alternatives are: expansion, stability, retrenchment and
combination strategies.
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STUDY SESSION 2
BUSINESS LEVEL STRATEGY
2.3.2 Differentiation:
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2.4 Five Types of Business-Level Strategies
Introduction:
In the previous study session, you considered how an organisation can
use corporate level strategies to achieve their organisational objectives. In
this study session, you will see how organisations can use business level
strategy to create competitive advantage.
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4. Differentiate between the main types of business level strategies,
and explain how they are used to strengthen a company’s business
level strategy and competitive advantage.
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2. Implement those business level strategies which also involve the
use of functional level strategies to increase responsiveness to customers,
efficiency, innovation and quality.
ITQ 1: What must strategic managers do in order to create a successful business model?
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ii. Focused Cost leadership: A cost leader is not always a large national
company that targets the average customer. Sometimes, a company can
target one or a few market segments and successfully pursue cost
leadership, by developing the right strategies to serve those segments.
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2.4 Five Types of Business-Level Strategies
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5. Monitor Product Strategies
4.0 Conclusion/Summary
This study session covers the discussions on business level strategy. We
learnt that business level strategy is a plan that indicates specific
methods, which an organisation will use to compete effectively against its
rival in the industry. We also discussed the key strategies adopted in this
level and also the types of business level strategy.
77
achieved?
2. Identify any firm in any of the service industry and explain the
areas of its competitive advantages.
3. Explain these types of business strategies: cost leadership,
differentiation and focus.
4. Discuss why it is not advisable to pursue too many strategies at
once.
5. How does strategic management differ in profit and nonprofit
organisations?
6. Discuss how the levels of strategy differ in a large firm versus a
small firm.
7. Discuss the business of offering a BBA or MBA degree online.
8. How would application of the strategy formulation frame work
differ, from a small to a large organisation?
9. Explain why cultural factors should be an important
consideration in analysing and choosing among alterative
strategy.
10. What do you think is the appropriate role of a board of directors
in strategic management? Why?
11. Discuss how would profit and nonprofitoriginations differ in
their application of the strategy formulation framework?
78
b. View the animation on: ??????? and critique it in the discussion forum
ITA 1: Strategic managers must formulate and implement business level strategies in order
to create successful business model.
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STUDY SESSION 3
Functional Plans and Policies
Introduction:
When you have a plan, it means that you have set a course for yourself on
how to achieve your set goals. It is important that you look at how to
strategise and focus on those areas that achievable. Functional plans and
policies is an approach taken by a functional area to achieve corporate
and business unit objectives, and strategies by maximising resource
80
productivity. You will appreciate the fact that it is concerned with
developing and nurturing a distinctive competence, to provide a company
or business unit with a competitive advantage.
81
simple term, functional plans tell the functional managers what has to be
done, while functional policies state how the plans are to be
implemented.
82
(B) Need for Functional Plan and Policies
I. To implement strategic decision by all departments of the
organisation.
II. To control activities in different functional areas of the business.
III. To reduce the time spent by functional managers in decision
making.
IV. To handle similar situations occurring in different functional area
in a consistent manner.
V. To enable coordination across the different functions.
VI. Plan and policies can be used to control managers within an
organisation.
VII. It is necessary to give an organisation a sense of direction and
purpose.
VIII. It serves as a useful way of getting managers to participate in
decision making, about the appropriate goals and strategies for an
organisation.
4.0 Conclusion/Summary
This study session discussed the functional plans and policies, the need
for functional plans and policies, and also the responsibilities of
functional managers in the organisation.
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2. A bank wishes to review its marketing plan and policies in order to
make them compatible with its business strategy of focused
differentiation on corporate customers and high net worth
individuals in urban centres in Nigeria. Suggest the major elements
of the marketing plans and policies the bank should consider
implementing.
3. Describe the major concerns of financial, marketing, personnel,
production and research and development plans and policies. Point
out the significance of each functional plans and policies for
strategy implementation.
4. Discuss the relationships between annual objectives and policies.
5. What are the advantages and disadvantages of decentralising the
wage and salary functions of an organisation? How can this be
accomplished?
6. Identify and discuss three policies that apply to your present
business class.
7. Discuss the advantages and disadvantages of a functional versus a
divisional organisational structure.
8. Discuss the need for functional plans and policies.
9. Functional plan and policies are the plan or tactics used to
implement business strategies. Do you agree? Discuss the reason
for your answer.
ITA 1: Functional plans and strategies make it possible for a strategy to work.
ITA 2: Functional-level managers are responsible for the specific business functions or
operations (human resources, purchasing, product development, customer service, and so on)
that constitute a company or one of its divisions.
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STUDY SESSION 4
STRATEGIC ANALYSIS AND CHOICE
Introduction:
In the last study session, the functional plans and policies of an organisation was
the focus of discussion. In this study session, you will learn the strategic analysis
and choice which largely depend on making subjective decisions, based on
objective information.
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1.0 Study Session Learning Outcomes
After studying this study session, I expect you to be able to:
1. Explain how strategic analysis and choice is done.
2. Discuss the process of generating and selecting strategies.
3. Discuss portfolio analysis and corporate parenting.
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external audit, and conducted the internal audit. Representatives
from each department and division of the firm should be included in this process,
as was
the case, in previous strategy-formulation activities. Strategists never consider all
feasible alternatives that could benefit the firm because there
are an infinite number of possible actions and an infinite number of ways to
implement those actions. Therefore, a manageable set of the most attractive
alternative strategies must be developed. The advantages, disadvantages, trade-
offs, costs, and benefits of these strategies should be determined.
All participants in the strategy analysis and choice activity should have the firm’s
external and internal audit information by their side. This information, coupled
with the firm’s mission statement, will help participants crystallise in their own
minds, particular strategies that they believe could benefit the firm most. Creativity
should be encouraged in this thought process.
Alternative strategies proposed by participants should be considered and discussed
in a meeting or series of meetings. Proposed strategies should be listed in writing.
When all feasible strategies identified by participants are given and understood, the
strategies should be ranked in order of attractiveness by all participants, with 1 =
should not be implemented, 2 = should possibly be implemented, 3 = should
probably be implemented, and 4 = should definitely be implemented. This process
will result in a prioritised list of best strategies that reflects the collective wisdom
of the group.
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a firm’s portfolio. It is primarily used for competitive analysis and strategic
planning in multiproduct and multi-business firms. They may also be used in less
diversified firms, if these consist of a main business and other minor
complementary interests. The main advantages in adopting a portfolio approach in
a multi-product, multi-business firm is that, resources could be targeted at the
corporate level to those businesses that possess the greatest potential, for creating
competitive advantage.
Corporate Parenting
This refers to the strategy employed by highly centralised and diversified
firms, with large resource pools. It views the corporation in terms of resources
and capabilities that can be used to build business units value, as well as generate
synergies across business units. Corporate parenting generates corporate strategy,
by focusing on the core competencies of the parent corporation and on the value
created from the relationship, between the parent and its businesses;
1. If there is a good fit between the parent’s skills and resources and the needs
and opportunities of the business unit’s corporation is likely to create value.
2. If there is not a good fit corporation is likely to destroy value.
ITQ 3: What is corporate parenting?
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4.0 Conclusion/Summary
The discussion of this study session was based on the nature of strategic analysis
and choice, the process of generating and selecting strategy, corporate portfolio
analysis and corporate parenting.
6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: https://www.youtube.com/watch?v=tBW-Kux1EeQ. Watch the
video & summarise in 1 paragraph
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c. Take a walk and engage any 3 students on: ???????????; In 2 paragraphs
summarise their opinion of the discussed topic. Etc.
ITA 1: Strategic analysis and choice are the two most important components of the
implementation stage of the strategic management plan.
ITA 2: corporate financial planning is a portfolio analysis which is used for competitive
analysis and strategic planning which help to create competitive advantage.
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3.0 MODULE 3: Strategy Implementation, Evaluation and Control
Contents:
Study session 1: Nature of Strategy Implementation
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STUDY SESSION 1
Nature of Strategy Implementation
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Nature of Strategy Implementation
i Shared know-how
ii Coordinated strategies
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Introduction:
In this study session, we will discuss the nature of strategy implementation. You
will understand that strategic management process does not end, when the firm
decides what strategy or strategies to pursue, rather,there must be a translation of
strategic thought into strategic action. You will also realise that strategy
implementation is fundamentally different, from strategy formulation.
Implementation of strategy affects the organisation from top to bottom; it affects
all the divisional areas of a business.
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use and combine organisational structure control systems and culture to pursue a
business model successfully.
Strategy implementation is a process by which strategies and policies are put into
action, through the development of programmes to create series of new
organisational activities, budgets to allocate funds to the new activities and
procedures to handle the day to day activities. This process might involve
changes within the overall culture, structure, and/or management system of the
entire organisation.
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Procedures, sometimes termed Standard Operating Procedures (SOP), are a
system of sequential steps or techniques that describe in detail, how a particular
task or job is to be done.
They typically detail the various activities that must be carried out, in order to
complete the corporation’s programme.
Who are the people that will carry out the strategic plan?
What must be done to align the company’s operations in the new intended
direction?
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These questions and similar ones should have been addressed initially when the
pros and cons of strategic alternatives were analysed. They must also be addressed
again before appropriate implementation plans can be made. Unless top
management can answer these basic questions satisfactorily, even the best planned
strategy is unlikely to provide the desired outcome.
Therefore, every operational manager down to the first-line supervisor and every
employee are involved in some way in the implementation of corporate, business,
and functional strategies.
Many people in the organisation who are crucial to the successful strategy
implementation, probably, had little to do with the development of the corporate
and even business strategy. Therefore, they might be entirely ignorant of the vast
amount of data and work that went into the formulation process. Unless changes in
mission, objectives, strategies, and policies and their importance to the company
are communicated clearly for all operational managers,
there can be a lot of resistance and foot-dragging.
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Managers might hope to influence top management into abandoning its new plans
and returning to its old ways. This is one reason why involving people from all
organisational levels in the formulation and implementation of strategy tend to
result in better organisational performance.
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alliance between Renault and Nissan allowed it to build new factories that would
build both Nissan and Renault vehicles.
Pooled negotiating power: Combined units can combine their purchasing to gain
bargaining power, over common suppliers to reduce costs and improve quality.
The same can be done with common distributors. The acquisitions of Macy’s and
the May Company, enabled Federated Department Stores (which changed its name
to Macy’s in 2007) to gain purchasing economies for all of its stores.
New business creation: Exchanging knowledge and skills can facilitate new
products or services by extracting discrete activities, from various units and
combining them in a new unit or by establishing
joint ventures among internal business units.
Oracle, for example, purchased a number of
software companies in order to create a suite of
software codenamed “Project Fusion” to help
corporations run everything from accounting
and sales to customer relations and supply-chain
management.
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4.0 Conclusion/Summary
This study session focused on the nature of strategy implementation, you have
learnt the need to develop programmes, budget and procedures in strategy
implementation. Who should implement strategy and also the need to achieve
synergy in strategy
ITQ 2: What is strategyimplementation was
implementation all enumerated.
about?
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9. How can strategists’ best ensure that strategies will be effectively
implemented? Elucidate.
10. Discuss the major pitfalls in strategic management implementation.
6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: https://goo.gl/36QWZL & https://goo.gl/Ac2ume. Watch the video
& summarise in 1 paragraph
ITA 1: A programmeis a statement of the activities or steps needed to accomplish a single-use plan
while a budget is a statement of a corporation’s programmes used in planning and control, a
budget lists the detail cost of each programme.
ITA 2: Strategy implementation is the translation of chosen strategy into organisational action, so
as to achieve strategic goals and objectives.
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7.0 References/Further Readings
Azhar K (2002) Business Policy and Strategic Management. 2nd Edition: Tata
McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th Edition: New
Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th Edition: New
Delhi; Tata McGraw Hill Publishing Company, India.
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STUDY SESSION 2
Structural Design and Change
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Structural Design
2.2 Basis of designing organisation structure
Introduction:
In the previous study session we talked about the nature of strategy
implementation. In this session, you will understand the impact of structural design
and change in the strategy implementation.
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1.0 Study Session Learning Outcomes
After studying this study session, I expect you to be able to:
1. Discuss the structural change.
2. Explain the basics for designing organisational structure.
3. Differentiate between organisational change and strategic change.
4. Explain the causes of structural change within the organisation.
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These internal barriers can trap capable people who eventually become cynical and
disheartened by their inability to change or influence obvious gaps,
inconsistencies, or burdensome constraints within the organisation.
There are a number of ways to set up the design process. Senior leadership can
sponsor and lead the change process using the conference model, where large
numbers of people from a cross-section of the organisation participate real-time in
analysis, design, and implementation sessions. The advantage of this model is that
a significant number of employees, if not the entire organisation, can be directly
involved in the change process. This builds a strong sense of commitment and
ownership to new design decisions and directions. Another advantage to the
conference model sessions is that, problems can be identified and design and
implementation decisions can be made quickly, without drawing out the process
over extended period of time.
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leadership, and the rest of the organisation for approval and adjustment. The
advantage of this model is that the design team creates continuity throughout the
process, and can drill deeper in some of the analysis, design and planning tasks.
The design team model also fosters commitment and ownership throughout the
organisation, but requires more ongoing communication to the rest of the
organisation, and tends to take a little more time, to get through design and
planning and on to implementation. With either the conference model or the design
team model, the design process, from chartering to implementation, can take from
six weeks to eighteen months, depending on the size, motivation, and resources of
the organisation.
The following basic aspects which require a strategist’s attention while designing
structure include;
Differentiation.
Integration.
Bureaucratic cost.
Allocating Authority and Responsibility.
ITQ 1: What are the challenges faced during a structural design process?
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Change in Organisations
Structural Change
Structural changes are those changes made to the organisation's structure that
might stem from internal or external factors, and typically affect how the company
is run. Structural changes include things such as the organisation's hierarchy, chain
of command, management systems, job structure and administrative procedures.
Circumstances that usually create the need for structural change include mergers
and acquisitions, job duplication, changes in the market and process or policy
changes.
For example, let us assume that MTN Communication decided to merge with Glo
Communication. As a part of that merger, duplicate departments need to be
eliminated, employees from both companies need to be reassigned to new positions
or terminated, managers acquire new employees, duplicate management positions
are eliminated, new policies and procedures need to be created (and old ones
retired) and job functions need to be realigned to fit the new company structure.
Likewise, if the merger was a result of changes in the marketplace, structural
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changes might also need to be made to respond to the market shift, such as creating
new departments that can produce whatever the market is demanding from
communication providers.
Strategic Change
Strategic change involves making changes to the overall goals, purpose, strategy or
mission of an organisation. It is a major upheaval to how the organisation conducts
business. The external environment of an organisation can, at times, place
significant demands on an organisation that it must rethink its fundamental
approach to business. Changes to things such as what products or services it offers,
the target customer segments or markets it tries to reach, how the company
distributes its products or services, its position in the global economy and who it
will partner with for manufacturers, distributors and other logistical needs, are just
some examples of strategic changes.
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business model of the company, and management positions may be eliminated as
well.
2. Job Duplication
Multiple managers or executives within an organisation may create the need for
change, according to JobDig.com. Employees can either become frustrated with
trying to please more than one manager, or employees may find ways to use
opposing views by multiple managers to get what the employee needs. When
employees encounter duplicate management positions, the structure of the
organisation needs to be altered to eliminate the excess positions and bring
departments into line with the proper individual manager.
3. Marketplace Changes
4. Process Changes
Changes to the way the company does business can cause structural changes. If
your company was used to allowing departments to be autonomous, then a change
to a centralised way of doing business will create changes in company structure. If
a new department has been created to address a company demand, the company
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structure must change to accommodate the new group. For example, if the backlog
of archived files becomes so large that an archiving department needs to be
created, that can change the flow of information in your company and have a
significant effect on corporate structure.
4.0 Conclusion/Summary
In this study session, we have learnt the structural design, the basis for designing
organisational structure, structural change and the causes of structural change.
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6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: https://goo.gl/3evHVn & https://goo.gl/YoEnnM. Watch the video
& summarise in 1 paragraph
ITA 1: Creating a streamlined and effective organisation that is aligned with the strategy and
desired results of the organisation. Another challenge is to get buy-in from the entire
organisation and implement the new design, so that it dramatically and positively changes the
way the business operates.
ITA 2: Structural changes are those changes made to the organisation's structure that might
stem from internal or external factors, and typically affect how the company is run. Strategic
changes involve making changes to the overall goals, purpose, strategy or mission of an
organization.
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7.0 References/Further Readings
Azhar K. (2002) Business Policy and Strategic Management. 2nd Edition: Tata
McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th Edition: New
Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th Edition: New
Delhi; Tata McGraw Hill Publishing Company, India.
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STUDY SESSION 3
Corporate Governance, Social Responsibility and Business Ethics
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Corporate Governance
2.2 Responsibilities of the Board
2.3.1 Monitor:
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Introduction:
In this study session, we are going to discuss corporate governance, social
responsibilities and business ethics of an organisation.
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however, the right to elect directors who have a legal duty to represent the
shareholders and protect their interests.
The term corporate governance is all about determining the direction and
performance of the corporation. Corporate Governance involves a set of
relationships amongst the company’s management; its board of directors,
shareholders and other stakeholders. These relationships which involve various
rules and incentives provide the structure through which the objectives of the
company are set and the means of attaining the objectives and monitoring
performance are determined.
As representatives of the shareholders, directors have both the authority and the
responsibility to establish basic corporate policies and to ensure that they are
followed. The board of directors, therefore, has an obligation to approve all
decisions that might affect the long-run performance of the corporation. This
means that the corporation is fundamentally governed by the board of directors
overseeing top management, with the concurrence of the shareholder.
Laws and standards defining the responsibilities of boards of directors vary from
country to country. Interviews with 200 directors from eight
countries (Canada, France, Germany, Finland, Switzerland, the Netherlands, the
United Kingdom, and Venezuela) reveals strong agreement on the following five
boards of directors responsibilities, listed in order of importance:
1. Setting corporate strategy, overall direction, mission, or vision.
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3. Controlling, monitoring, or supervising top management.
How does a board of directors fulfill these many responsibilities? The role of the
board of directors in strategic management is to carry out three basic tasks:
Monitor: By acting through its committees, a board can keep abreast of
developments inside and outside the corporation, bringing to management’s
attention developments it might have overlooked. A board should at the minimum
carry out this task.
Initiate and determine: A board can delineate a corporation’s mission and specify
strategic options to its management. Only the most active boards take on this task
in addition to the two previous ones.
ITQ 1: What does corporate governance involve?
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Why should business be socially responsible?
Public image.
Government Regulation.
Survival and growth.
Employee satisfaction.
Consumer Awareness.
What are the responsibilities of a business firm and how many of them must be
fulfilled?
Milton Friedman and Archie Carroll offer two contrasting views of the
responsibilities of business firms to society.
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responsibility. A business person who acts “responsibly” by cutting the price of the
firm’s product to prevent inflation, or by making expenditures to reduce pollution,
or by hiring the hard-core unemployed, according to
Friedman, is spending the shareholder’s money for a general social interest.
A business firm must first make a profit to satisfy its economic responsibilities. To
continue in existence, the firm must follow the laws, thus fulfilling its legal
responsibilities. There is evidence that companies found guilty of violating laws
have lower profits and sales growth after conviction.
Archie Carroll proposes that the managers of business organisations have four
responsibilities: economic, legal, ethical, and discretionary. Carroll lists these four
responsibilities in order of priority.
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2. Legal responsibilities are defined by governments in laws that management is
expected to obey. For example, U.S. business firms are required to hire and
promote people based on their credentials rather than to discriminate on non-job-
related characteristics such as race, gender, or religion.
Having satisfied the two basic responsibilities, according to Carroll, a firm should
look to fulfilling its social responsibilities. Social responsibility, therefore, includes
both ethical and discretionary, but not economic and legal, responsibilities.
A firm can fulfill its ethical responsibilities by taking actions that society tends to
value but has not yet put into law. When ethical responsibilities are satisfied, a firm
can focus on discretionary responsibilities—purely
voluntary actions that society has not yet decided are important. For example,
when Cisco Systems decided to dismiss 6,000 full-time employees, it provided a
novel severance package. Those employees who agreed to work for a local
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nonprofit organisation for a year would receive one-third of their salaries plus
benefits and stock options and be the first to be rehired.
Nonprofits were delighted to hire such highly qualified people and Cisco was able
to maintain its talent pool for when it could hire once again.
Their environmental concerns may enable them to charge premium prices and gain
brand loyalty.
-They can attract outstanding employees who prefer working for a responsible
firm.
They can utilise the goodwill of public officials for support in difficult times.
-They are more likely to attract capital infusions from investors, who view
reputable companies as desirable long-term investments.
ITQ 2: What are the four responsibilities proposed to managers from Archie Carroll’s view
of business responsibility?
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2.7 Business Ethics
This widely used phrase has two meanings, which are related but can lead to
confusion. The first meaning is simply the area of work we have called
‘organisational ethics’, but with the added stipulation of a competitive market
environment, that is, we are referring to the ethics of people working within a
‘business’ in the accepted sense of the word. Where the issues to be discussed are
common to competitive and non-competitive contexts, it is more useful
to talk about organisational ethics. If we are talking about ethical dilemmas which
only arise within a competitive environment, then
we can signal this by using the phrase ‘business
ethics’.
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-to describe and categorise (that is, provide a language for) the process of value
formation in organisations and in the free market economy;
-to describe and categorise, as moral or otherwise, how decisions are made in
organisations;
-to provide a critique of the process of value formation, in organisations, and in the
free market economy. Some writers argue that business ethics has become far too
‘owned’ by the business community to be incisively critical;
-to prescribe the values which should hold in organisations,
presumably in combination with experience, and the findings of the
social sciences. It should be noted that this presumption is not
obvious in some approaches;
-to prescribe how decisions should be made, in line with sound moral
principles (and with the above presumption)
4.0 Conclusion/Summary
In this study session, we had a discussion on corporate governance, social
responsibility and business ethics.
123
different phases in the strategic management process.
ii. Use Agency theory and Stewardship theory to explain the relationship
between management and stakeholders.
iii. Discuss the role that ethics play in strategic management process.
iv. Why is social responsibility a contentious issue?
v. What do you feel is the relationship between personal ethics and business
ethics? Are they or should they be the same?
vi. If you own a small business, would you develop a code of business conduct?
If yes, what variables would you include? If no, how would you ensure that
ethical standards were being followed by your employees?
vii. Discuss the ethics of gathering competitive intelligence.
viii. What are the ethics of cooperating with rival firms? Discuss them.
ix. What is social responsibility? Does it affect the overall performance of the
organisation? Discuss.
x. Discuss why it is necessary to have a code of ethics? Give a comprehensive
guideline on how to write a code of ethics.
6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: https://goo.gl/zv4wRA. Watch the video & summarise in 1
paragraph
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ITA 1: Corporate governance essentially involves the balancing of interest of many stakeholders
of the company, which include its shareholders, management, customers, suppliers, financiers,
government and the community.
ITA 3: Business ethics (also corporate ethics) is a form of applied ethics or professional ethics
that examines ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations.
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STUDY SESSION 4
Strategic Evaluation and Control
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Strategic Evaluation and Control
3.0 Tutor Marked Assignments (Individual or Group assignments)
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions and Answers
6.0 Additional Activities (Videos, Animations & Out of Class activities)
7.0 References/Further Readings
Introduction:
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Strategy evaluation is vital to an organisation’s well-being; timely evaluations
can alert management to problems or potential problems before a situation
becomes critical.
Strategy evaluation includes three basic activities: (1) examining the underlying
bases of a firm’s strategy, (2) comparing expected results with actual results, and
(3) taking corrective actions to ensure that performance conforms to plans.
Evaluation and control mechanisms are set in place to inform every stage of the
strategic management process. They are a means of collecting whatever
information we may need to compare plans against actual events, to ensure that
things are working well, and to anticipate, or correct, any faults or weaknesses in
the system. Effective evaluation and control can tell us what we are doing well and
what we are not.
127
actual performance can be compared with desired performance.
Managers at all levels use the resulting information to take corrective action and
resolve problems. Although evaluation and control is the final major element of
strategic management, it can also pinpoint weaknesses in previously implemented
strategic plans and thus, stimulate the entire process to begin again.
4.0 Conclusion/Summary
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6. As the owner of a local independent supermarket, explain how you would
evaluate the firm’s strategy.
7. Discuss under what conditions corrective actions are not required, in the
strategy evaluation process.
8. Identify and discuss some key financial ratios that would be important in
evaluating a bank's strategy.
9. As executive director of the state forestry commission, in what ways and
how frequently would you evaluate the organisation’s strategy?
10. Identify types of organisations that may need to frequently evaluate
strategy more than others. Justify your choices.
6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: https://goo.gl/GGeH7T. Watch the video & summarise in 1
paragraph
b. View the animation on: ??????? and critique it in the discussion forum
129
7.0 References/Further Readings
Azhar K. (2002) Business Policy and Strategic Management. 2nd Edition: Tata
McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th Edition: New
Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th Edition: New
Delhi; Tata McGraw Hill Publishing Company, India.
130
STUDY SESSION 5
Case Analysis
Introduction:
This study session will introduce you to strategic management case analysis. The
purpose is to help you understand strategic management case, the guidelines and
the steps involved in preparing a case.
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2.0 Main Content
2.1 Case Analysis
A case study is a description of an actual administrative situation, involving a
decision to be made or a problem to be solved. It is a real situation that actually
happened just as described, or portions have been disguised for reasons of privacy.
Most case studies are written in such a way that the reader takes the place of the
manager whose responsibility is to make decisions to help solve the problem. In
almost all case studies, a decision must be made, although that decision might be to
leave the situation as it is and do nothing.
Do not prepare a case analysis that omits all arguments and information not
supportive of your recommendations. Rather, present the major advantages and
disadvantages of several feasible alternatives. Try not to exaggerate, be tereotype,
prejudge, or over dramatise. Strive to demonstrate that your interpretation of the
evidence is reasonable and objective.
Do not make broad generalisations such as “The company should pursue a market
penetration strategy.” Be specific by telling what, why, when, how, where, and
who. Failure to use specifics is the single major shortcoming of most oral and
written case analyses.
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The Need for Originality
Do not necessarily recommend the course of action that the firm plans to take or
actually undertook, even if those actions resulted in improved revenues and
earnings. The aim of case analysis is for you to consider all the facts and
information relevant to the organisation at the time, to generate feasible alternative
strategies, to choose among those alternatives, and to defend your
recommendations.
ITQ 2: Why is the need for justification important for case analysis?
In preparing a written case analysis, you could follow the steps outlined here,
which correlate with the stages in the strategic-management process.
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Step 1 Identify the firm’s existing vision, mission, objectives, and strategies.
Step 2 Develop vision and mission statements for the organisation.
Step 9 Recommend specific strategies and long-term objectives. Show how much
your recommendations will cost. Clearly itemise these costs for each projected
year. Compare your recommendations to actual strategies planned by the company.
Step 10 Specify how your recommendations can be implemented and what results
you can expect. Prepare forecasted ratios and projected financial statements.
Present a timetable or agenda for action.
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4.0 Conclusion/Summary
In this study session, you learnt what strategic management case is all about,
guidelines in preparing a case and the steps involved in preparing a comprehensive
case.
6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: ???????????????? . Watch the video & summarise in 1 paragraph
b. View the animation on: ??????? and critique it in the discussion forum
ITA 1: This helps an organisation to understand more about its strategic position and
construct answers such as what do we need to know about our customers, what new options
should we consider, how can we develop our competence to meet all the changes in the
business environment etc.
Azhar K. (2002) Business Policy and Strategic Management. 2nd Edition: Tata
McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th Edition: New
Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th Edition: New
Delhi; Tata McGraw Hill Publishing Company, India.
Thomas L.Wheelen and J. David Hunger (2002) Strategic Management and
Business Policy; towards maintaining a global sustainability 13th Edition:
Pearson Publishing Company.
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FURTHER READING
Bennet, R. (2006)Corporate Strategy and Business Planning. Glasgow:Bin and
Bill Ltd.
Wheelen, T.L. and Hunger, J.D. (2008) Strategic Management and Business
Policy. 11th Edition: New Jersey; Pearson International.
138
11.0 GLOSSARY
1. Authority: For Managers at all levels the organisationally granted right to
influence the actions and behaviour of the workers they managed.
2. Autonomy: The degree to which the job provides substantial freedom and
discretion to the individual in scheduling the work and in determining the
procedure to be used to carry out the job.
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7. Break Even: To make enough money to cover costs. In business, the point
at which sales equals costs, i.e. to make neither a profit nor loss.
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11. Business Plan: The business’s proposal that maps out its business strategy
for entering markets and that explains the business to potential investors.
16. Competitor: A business rival, usually one who manufactures or sells similar
goods and/or services.
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17. Competitor Analysis: Also called Competitive Analysis. A company's
marketing strategy which involves assessing the performance of competitors
in order to determine their strengths and weaknesses.
20. Consumer: An individual who uses goods and services but who may not
have been the purchaser.
22. Corporate level strategy: The corporation’s overall plan concerning the
number of businesses the corporation holds, the variety of markets or
industries it serves, the distribution of resources among those businesses.
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23. Corporate Social Responsibility: CSR. An obligation of a company to
adhere to legal guidelines in order to meet the needs of its employees,
shareholders and customers, and also to be concerned about social and
environmental issues.
24. Customer: An individual, company, etc., who purchases goods and/or
services from other individuals, companies, stores, etc.
26. Departmentalisation: The horizontal basis for organising jobs into units in
an organisation.
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28. Differentiation strategy: Delivering products and services that customers
perceive as unique. The act or strategy of growing a business/brand by
developing its range of products, services, investments, etc. into new market
sectors, horizontally or vertically.
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services, etc. and usually to receive certain support, in a particular town, area
of a country, or international region.
36. Insolvency: Not having enough finances or assets available to pay all your
debts.
37. Leadership: a widely applied term that usually refers to the personality,
characteristic and the behaviour of people with authority and influence and
responsibility for leading group.
39. Market: A situation where buyers and sellers are in communication with
each other.
40. Marketing: the series of process by which demand for goods and services is
identified, supplied, anticipated or manipulated, it relies heavily on such
functions as advertising and market research.
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41. Marketing concept: a philosophy of marketing that emphasises the supreme
importance of the custom, fundamental to this philosophy is an
understanding of what the customer wants in any given market, and this is
usually ascertain by the extensive market research.
42. Marketing environment: the set of external factors that affect the market
in which an organisation operates i.e. cultural, economic, legal, political,
geographical etc.
44. Market leader: The organisation with the largest share in a given market.
46. Market Research: Research carried out in the course of marketing, either
by an organisation itself or by specialists from an external consultancy, to
determine the likely market for a product or the effects of past or prospective
adverting on consumers.
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47. Market Segment: A subgroup within a larger market in which people share
certain characteristics and require similar products or services.
50. Mission Statement: A brief statement which sets out the activities and
objectives of a company or organisation.
51. Penetration Pricing: The practice of charging a low price for a new product
for a short period of time in order to establish a market share and attract
customers.
53. Price Control: Maximum and minimum price limitations, often during
periods of inflation, which a government puts on essential goods and/or
services.
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54. Price Discrimination: The practice of a provider to charge different prices
for the same product to different customers.
55. Price Mechanism: Describes the way prices for goods and services are
influenced by the changes in supply and demand. Shortages cause a rise in
prices; surpluses cause a fall in prices.
56. Price Taker: A company or individual who’s selling or buying of goods and
services has little or no influence over prices.
57. Pricing: To evaluate the price of a product by taking into account the cost of
production, the price of similar competing products, market situation, etc.
58. Product Life Cycle: This refers to the (generally very usual and
unavoidable) stages that a product/service passes through from
invention/development to maturity to decline until it becomes obsolete,
usually because it has been superseded by competitive/replacement
offerings, and/or to a lesser degree the product/service has saturated the
market, i.e., everyone who wants it has purchased it. Product life cycle is
often shown as a graph of sales volumes or market-share over time.
59. Strategic intent: the firm’s internally focused definition of how the firm
intends to use its resources, capabilities, and core competencies to win
competitive battles.
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60. Strategic Managers: the firm’s senior executives who are responsible for
overall management.
62. Strategic Mission: the firm’s externally focused definition of what it plans
to produce and market, utilising its internally based core competence.
63. Strategising: the management skills of focusing on the firm’s key objectives
and on the internal and external environments and responding in an
appropriate and timely fashion.
65. Tactical decisions: decisions that have a short- term perspective of one year
or less and focus on subunits of the organisation such as departments or
project teams.
66. Tactical Managers: the firm’s management staff who are responsible for
translating the general goals and plan developed by strategic managers into
specific objectives and activities.
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67. Tactical Planning: Short to middle - range business planning that
addresses issues associated with the growth of current or new operations, as
well as with any specific problems that might disrupt the pace of planned
growth. Also known as operational planning.
68. Vertical Disintegration: A situation in which a company that previously
produced parts and materials is now buying them from other suppliers.
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