MBA* 534, STRATEGIC MANAGEMENT

Summer, 2003

Catalog Description:

The analysis, formulation, and implementation of a firm’s strategy are studied from a general management perspective. Interrelationships between the firm and its external environment, and between the firm’s corporate, business, and functional strategies are emphasized. Prerequisites: MBA 531; completion of core courses; consent of program director.

Dr. Joseph F. Michlitsch

Box 1100, FH 2125

Department of Management & Marketing

Southern Illinois University

Edwardsville, IL 62026-1100

Voice: 618-650-2708

Fax: 618-650-2709

e-mail: jmichli@siue.edu

Web: http://www.siue.edu/~jmichli/

*MBA and all programs in the School of Business are accredited by AACSB International

TEXT AND READINGS

· Packet of articles. (Purchase)

· Packet of cases. (Purchase)

· Capstone simulation. I will deliver the manuals for this simulation at the introductory meetings. Then you must register on-line. Details at the introductory meeting.

· Check my home page on the web for notes to download.

COURSE OVERVIEW

This is a comprehensive and integrative course. We will learn how to pull together all of your past learning through the concept of overall strategy. In doing so, we will take the role of top management whose primary concern is the overall and long run success of the organization. Since the job of top management necessarily cuts across all functional areas, we will learn to coordinate all of the areas into an overall successful strategy.

In addition to reinforcing and integrating previous coursework in a managerial setting, a primary objective of this course is to become proficient in analytical thinking and the use of analytical tools. We will use articles, cases, the text, videos, and classroom discussions and lectures to learn how to systematically analyze the structure of industries, how to assess and choose the best, or at least better, strategies for various organizations, and how to ensure that the various functional area decisions follow from and facilitate, rather than obstruct, the overall strategy.

A final objective of the course is to become familiar with current issues and managerial techniques. You will be encouraged, and required, to critically analyze these issues and techniques. Discussions and presentations of readings will provide opportunities to supplement theory and case analysis with current information that successful managers consider when planning and designing strategies for success of their organizations.

COURSE REQUIREMENTS AND GRADING

Participation. This course simulates taking the role of a member of a top management team. As such, it requires participation and thinking on one’s feet. Much of class time will be devoted to discussion of cases and related material representing a managerial situation. Consequently, it is essential for you to have read and analyzed each day’s material before coming to class. Bring your notes, especially for each case that is discussed. I will expect and encourage active participation from everyone in class discussions. Also be prepared when called upon at random.

There are many forms of participation in a class. One form, active, oral participation in class will be evaluated for your participation grade. I will focus on the quality of your participation in class. Of course, the quality is related, at least to some extent, to quantity but quantity by itself is irrelevant or even negative. If quality is not there, then quantity helps point that out. A general guideline: One good quality participation every two hours would earn a grade of C. At about mid-term, I will estimate your grade. I will also ask you to estimate your grade. Then I will compare the two and, in cases of disagreement, will send you a note and/or discuss it with you.

Attendance does not count for participation. Would you get much credit for “just being there” in your organization? Would your performance evaluation be high if you just stood there when your supervisor asked you a question, especially one that required evidence and reasoning?

You will be assigned to ad-hoc groups for discussion/presentation of cases and/or articles in class. This will provide opportunities for development of team-work skills and for improved analysis through exchange and critique of ideas. Your participation here is part of the participation grade.

In-class group presentations and discussions will vary. An example: A team will be given thirty minutes to prepare a summary of the main forces in the industry of one of the cases assigned for discussion. Then a spokesperson will present the summary in a few minutes.

Exam. The mid-term exam will consist of essay type questions, and possibly some multiple-choice questions, covering all topics read or discussed up to the date of the exam. There may be one case analysis type question. The exam will be designed to be completed in approximately one to one and a half hours. Essay-type questions are written so that they can be answered in approximately one half page. Details, including examples of questions, will be discussed in class.

Individual Report. One individual written assignment is required – assignment coming.

Simulation. Teams of four or five people will manage a computer-simulated company. Instructions are in the simulation manual, handouts, and discussions. Your contribution to this team will not be graded by me. You will use a peer evaluation for to do this. The form is attached to the syllabus on the web site under “Eval.” In severe cases, the other members can remove you from the team. If you are removed, you will earn zero points for the simulation and for the strategic plan.

Strategic Plan. On the last class day, your management team will discuss the results of your simulated company (with the Board of Directors) and will outline your future plans for the next several years. A written strategic plan is due at this time. Members of the Board are interested in your future strategy and the external and internal analysis that supports it. They want to know the reasoning for your conclusions. Details will be discussed in class.

Format for the strategic plan:

· Title page: Name of your company, a title such as “Strategic Plan” or similar title, your individual names.

· Executive summary – 1 page. Please remember, this is an executive summary, not an introduction to the paper. An executive reader must get all of the points in your paper from this summary. S/he should not have to read the rest of the paper!

· Introduction: (Start on a new page after the executive summary.)

· First paragraph: This must be a true introduction to your paper. Tell the reader what s/he will find in your paper.

· Second paragraph: This consists of a brief description of your strategy, the success of ti, and the reasons for the success. Mention your product, the overall strategy, and the main components of the strategy (functional strategies). This should lead directly to the next section, in which you explain the important factors in the industry, and their interactions and consequences.

· External analysis, probably including these sections:

· Markets/industry.

· Competition.

· Economy.

· Other.

· Internal analysis, including:

· Strategy.

· Marketing.

· Production/operations.

· Human resources.

· Finance.

· The plan:

· Plan for the next year: Be very specific. What are your goals? How much are you going to produce in each product area? What is the price, etc.?

· Plan for about the next two years.

· Plan for about the next 2 years.

· Appendix: Graphs to back up analysis. Present them in order. Cite every one. Label them properly.

· Use 12 point type and at least 1 inch margins all around. Single-space the executive summary. Usually strategic plans are single-spaced throughout. Consider double-spacing the body of the plan to make it easier to read and to leave room for comments. If you single-space, please do not go over 10 pages, counting only the body; 20 pages if double-spaced.

SUMMARY OF GRADED WORK:

Each of the five graded works is 20% of the course grade: Mid-term exam, participation, individual report, simulation financial results, and the strategic plan.

OTHER INFORMATION.

I expect you and me to attend all scheduled classes. If absent, we are responsible for our respective roles.

Please contact me if you have questions. Also let me know if you have business travel or emergencies. We will try to work assignments around these.

Since the case method involves student-centered learning, my role is to facilitate that process. I will present theory relevant to the case analysis when appropriate and will attempt to broaden and deepen understanding on related issues. I may summarize at various points, especially at the end of the case presentation and class discussion in order to emphasize different ways to approach the case analysis. My job also consists of asking questions and requiring that your conclusions be explained and defended.

Grades are based upon the degree to which the main issues have been identified and explained in a case/question, the reasonableness and depth of analysis, and the support for conclusions. The quality of writing and oral work is an integral part of these assignments since points and arguments must flow and be supported.

As a general rule, I will not accept assignments late. If you have an emergency or very important travel, please let me know as soon as possible. We will work something out, especially when there is a test or paper due.

You may wish to download a Word file that contains an overall outline that can be used to guide analysis of cases. It is a fairly comprehensive set of questions that is intended to encourage and prompt search for information when analyzing an industry and organization. This outline is intended to be used to prepare the analysis of a case or your simulated industry and company. It is not the outline for your strategic plan. Please use the format in this syllabus for your strategic plan. The file is called (Outline).

SCHEDULE

· For each case that is assigned, be ready to actively participate in the case discussion. Prepare a complete analysis: Analyze the external factors, internal strengths, weaknesses, strategy(ies), and alternative potential overall strategies. Of course, also be ready to discuss the concepts and tools discussed in the readings.

· “Visual aids” in the third column refers to PowerPoint files attached to this syllabus on my homepage.

May 30: Introduction. we need to get set up for a lot of work between this time and the first class in three weeks. Also, there is a practice decision for the simulation due at noon on June 9, the first “real” decision for the simulation is due at noon on June 20. We will have to get set up for the simulation. Start forming your team of 5 people for the simulation.

June 20-22:

Topics/Assignments		Readings/Cases	Visual Aids
Strategic management. Mission, vision.		Are you sure you have a strategy? (Hambrick) On a mission. (Ellingwood) Service with a smile. (Romine) Company Philosophy. (Bower)	Model Mission Vision
External analysis; industry, markets, competitors, economy, etc.		Power grid. (Wysocki) Disruptive technologies. (Bower) Headwinds. (Wysocki) Pair braves the odds in bid to build an airline. How competitive forces shape strategy. (Porter) Case: Ready-to-eat breakfast cereal industry.	Ext Industry
Internal analysis; competencies, strategy, competitive advantage, value chain.		Looking inside... (Barney) EVA & MVA (Lehn) How fast can your company ... grow? (Churchill) Case: Airborne Express.	Internal Position Valuechain
Implementation of strategy, sustainable competitive advantage.	Using the balanced scorecard as a strategic management system. (Kaplan) Place vs. product. (Lublin) The anti-control freak. (Colvin) Well-trained, motivated employees are crucial… (Potochny) If you can’t get this right. (Alsop) Case: Nissan Motor Co.		Implement SCA Impl2
Business level strategy; matching strategy to situation.	Generic competitive strategies. (Porter) Differentiation versus low cost or differentiation and low cost? (Hill) Porsche goes soccer mom. (Meredith) Spending soars on drug ads that target public. (Johnson) Case: Apple Computer 2002.		Bus.Level
Simulation	First decisions due Friday noon. Second decisions due Saturday, 10 a.m. Third decisions due Sunday, 10 a.m.
Individual Report	Due Sunday a.m.
Mid-term Exam	Sunday, mid-afternoon.

July 1: Fourth decisions due by noon. We’ll talk about this.

July 11-13

Competitive dynamics		Review of all before. Luv, Colleen. (Shinn) King of the hill. (Smith) The price is not always right. (Revell) Best beats first. (Collins) The last-mover advantage. (Chen) Case: Atheros Communications.
Corporate level strategy; diversification, acquisition, restructuring, alliances. Managing the portfolio.		Psst… The mergers mavens still have it wrong! (Lubatkin) Not all M&A’s are alike. (Bower) They shopped – now they’ve dropped. (BusinessWeek) We control the vertical. (Berlin) A merger’s bitter harvest. (BusinessWeek) Case: Newell Company. Case: Vivendi.	Corp.Level
Global strategy.		Case: Lincoln Electric.	Global
E-business.		Strategy and the Internet. (Porter) Driving e-business excellence. (Barua) Sucker prices. (Weisul) Smart mover, dumb mover. (Hamel) How Amazon cleared that hurdle. (Hof)
Tying it all together.		I am a consultant… (Woellert) The envelope, please. (Colvin) Enron electrified. (Zellner) Why Enron went bust. (McClean) The best and worst boards. (Lavelle) Ouch! Real numbers. (Henry) Annual reports: (McNamee) Oh, for heaven’s sake! (Stross)
Simulation.		Fifth decisions due Friday noon. Sixth decisions due Saturday, 10 a.m. Seventh decisions due Sunday, 10 a.m.
Final Exam.	Written strategic plan and discussion of the plan and the underlying analysis. Sunday, mid afternoon. Write the strategic plan after the fourth set of decisions. The discussion on Sunday afternoon must include information through the last results.		Eva