University of Alberta School of Business Department of Strategic Management and Organization
SMO 441
BUSINESS STRATEGY:
Competition and Cooperation
WINTER TERM 2008, LEC B2
Instructor: Rick Hinton Class Time: Tues/Thurs 2:00-3:20 pm
Office: 9200 HUB Classroom: BUS B-09
Email: [email protected] Office Hours: Mon/Fri 10:00-11:20 am ____________________________________________________________________________________
COURSE OUTLINE
Required Materials: Capstone® Simulation available at http://www.capsim.com SMO 441 Readings Package
Blackboard Course Web Site: https://ulearn.ualberta.ca/webapps/login Prerequisites: Normally, all required first year undergraduate courses
COURSE GOALS
• To analyze how organizational leaders make strategic decisions to create competitive advantage.
• To learn more about not only competitive strategies, but cooperative strategies.
• To improve your ability to work in teams in charge of implementing strategies.
• To help you develop as a guru of strategy.
DESIGN OF THE COURSE
Business Strategy is one of the capstone courses in the B.Com. curriculum. It focuses on strategic decision making by organizational leaders in different situations. The strategic
decisions include the assessment of the situation, the development of alternatives, and then the selection and implementation of those decisions. “Organizational leaders” refers to chief
executive officers and presidents, division managers and directors, as well as Deputy Ministers, Assistant Deputy Ministers and Directors General. The situations range from the highly
competitive one of intra-industry competition among small, equal manufacturing companies to the highly cooperative one of strategic alliances and the highly constrained one of
environmental regulation.
The overall aim of the course is to improve your ability to make strategic decisions in a wide variety of situations that you are likely to face as a manager and leader. There is an inherent tension in strategy between how strategic leaders should assess and respond to highly
competitive versus more cooperative situations, one which we have built into the design of the course. The first two-thirds of the course is explicitly devoted to intra-industry competitive dynamics; the last third to cooperative strategy inside and out of the firm. Strategic responses often involve hard decisions and ethical stances, something we try to address along the way, if never in sufficient depth.
To achieve our goals, we rely on an experiential approach to learning that involves reading or hearing, practicing, then reflecting. More specifically, you will first read about different strategic decision situations in cases or articles on strategy and discuss these ideas in class. Then you will try these ideas in the computer simulation, Capsim®, where you make decisions about your own company strategy or in your final project on improving a local organization’s strategic decisions. You then will be asked to reflect on the results of your decisions and how they might be improved in the future. And you will be expected to bring current issues to class for
discussion.
While this course design is considered by past participants to be useful for learning, it is also considered to be quite intense in terms of personal commitment and workload. While this should not be surprising, given that this is the capstone course for your degree, it does mean that you should set your expectations accordingly.
DESIGN OF CLASSES
Classes are designed for variety. We use cases, exercises, and student participation tools in order to facilitate learning. Later in the course we tend to put more emphasis on key topics, like culture clash in mergers or corporate social responsibility, which require less reading and more discussion.
Participation and personal contributions are important and welcome; they add substantially to variety in each class and help you sharpen your own voice on strategy and organization.
Students often volunteer to present on topics they know about or on some critical strategic issue in organizations in which they have worked. Although some limited use will be made of
powerpoints, they will not be posted on Blackboard for copyright reasons.
EVALUATION
The value of the various assignments can be seen in the grid below. Detailed descriptions of the assignments follow the Outline of Classes.
1. Competitive Strategy with Capsim®
(a) Mini-Strategic Plan 20%
(b) Team’s Capsim® Performance 25%
(c) Presentation of Plan & Capsim® Results 20%
Total Part 1: 65%
2. Beyond Competitive Dynamics – Cooperative Strategy*
Case memo or presentation on coop. strategy 15%
3. Final Paper: GURU on Competitive and Cooperative Strategy*
Seven to ten page paper 20%
Course Total 100%
Grading
Because this is a capstone course, all of the grading will be done by the instructor. In
accordance with the university’s guidelines, the final grading will be generally on a distribution curve. I am quite willing to adjust that distribution if warranted by the quality of your
contributions, including contribution to in-class discussion.
Details on Evaluated components
1. Competitive Dynamics with Capsim®
Our class will be organized into two industries of four or five companies per industry with four or five individuals (but no more than five) per company team. Each week, your team’s company will make a set of R&D, production, marketing, and financial decisions in order to complete one or two Capsim® “rounds” (see the Class Outline). There will be two official rounds in the
Practice Simulation in the second week of the course. There will be six official rounds in the second, Tournament, simulation. As the simulation progresses, the game will become more involved as more decision activities are added (e.g., Marketing, HRM & TQM choices). A simulation Student Guide and web tutorials are available to help you learn the simulation.
In the Practice Game, you will be encouraged to form your company teams yourselves. In the Tournament Game, in order to be fair, I will form teams by random assignment. This means that your practice and tournament teams will not be the same, though you might have some of the same members in each.
During the simulation, I will have several roles: I will be your guide, leading you through the basics of the simulation; I will be your Capsim® monitor, making sure that you have hit the milestones in the simulation and syllabus; I will be your course evaluator, offering feedback on your Capsim® strategic plans and your performance; I will be your team facilitator, making sure that the game is played fairly by teams and that you have access to information in a timely manner, and, finally, I will be your unofficial partner, providing ideas and readings and some experience to help your team learn more about strategy. However, one role that I cannot take on is that of technical manager. For technical assistance, please submit a support ticket to MSI® or call them at their toll-free number 888-472-7554.
(a) Mini Strategic Plan for Capsim®
Each team will write a Mini Strategic Plan (about 4-7 pages text plus appendices if needed) that it will submit at the start of the Tournament Game (the full simulation). The plan that is
requested does not have to follow a strict script or recipe. It should reflect your team and your team’s strategy, both in form and content. Nevertheless, each plan should cover some key strategic questions: 1) “what are your objectives?”, 2) “what is your over-arching strategies for achieving them?” and 3) “how do you intend to implement your strategies through six rounds of play?” Your answers should follow a logic that is both coherent and convincing. I encourage you to consult the readings on strategic plans to see if you want to adopt one of their particular frameworks, running from the more formal one suggested in “Are You Sure You Have A Strategy?” to a less formal one in “Strategic Stories.” I also encourage you to clip in various Capsim® charts and tables to help bolster your arguments. Try to make the piece tight.
The format of the plan should be 11-point font, double-spaced with one inch margins all around.
You may insert diagrams and tables directly in the body of the plan or use an appendix. But the total plan should be no more than seven pages (title page not included). References should be cited using APA format. The Mini Strategic will be evaluated using the template below:
Objectives and Strategies Strategic Content
Score Comments
Objective(s) Clear (10%) Creative/Clever Strategy (10%)
Strategies Clear and Linked to Objective(s) (10%) Tactics/Implementation
Plan clearly linked to strategies via separate components/functions of the company (20%)
Details in key items, e.g., via figures and diagrams (15%)
Creative (10%)
Team’s Organization Discussed (10%) Writing (10)%
Organization clear (5%)
Great grammar (5%)
Good flow (5%)
(b) Capsim® Tournament Performance
To score your team’s Capsim® performance, I will use one of the Capsim® reports. I will rely on the Capsim® “Star Report”. The five measures in the report are common internal and external performance measures. Each is discussed in detail in Capsim®. A sample is below:
Star Summary Report
Total of stars through round 6.
Company Profit Margin Emergency Loan Inventory Stock Price Grand Total
Andrews 9 9 9 0 7 34
Baldwin 9 9 8 0 5 31
Chester 9 9 8 0 4 30
Digby 9 7 5 0 7 28
At the end of the Tournament game, your grade will be computed based on the “Grand Total” of stars that you have received across all rounds. The average number of stars in an industry (e.g., (34 + 31 + 30 + 28) = 123/4 = 30.75 in the above example) will be used to form the benchmark for an average grade. The range of grades will then be based on how much better (or worse), in the instructor’s opinion, the other teams have done relative to this average. Normally, the top team in each industry receives some form of A, and occasionally, for a brilliant performance, an A+; the bottom performer, a B+ or C-.
(c) Presentation of Your Capsim® Strategy and Results
Following the last round of Capsim®, each team will present briefly on what their strategic plan has been and their actual results in Capsim®. You will present to me as the Chair of your company’s board and to the other members of class as if they were outside minor shareholders.
Because we have many teams and limited time, we shall have to have some stricter procedures than in some other class periods. More specifically:
o Please load whatever software you will use prior to class. Check whether your laptop will or will not work with our machine. Note that the university machine’s PowerPoint software often does not catch all of the fancy fonts and sounds from other machines or packages.
o At the start of class, I shall announce the random assignment of presentation by teams within that day’s industry.
o You will have 2 minutes to check your setup before starting your presentation o Your presentation will be only ten minutes with one minute overage (with a -4% on
grade penalty) before I, unfortunately, will have to cut you off. I will warn you in the 9th minute that you have 1 minute to go.
o Your presentation should address key critical questions, such as:
o What was your original team strategy and how did you intend to implement it across the six rounds?
o How did your team actually perform?
o What were some critical moments or decisions that affected your performance?
o What you would do next, assuming, for example, that you had four more rounds to play?
o You are limited to no more than nine PowerPoint slides because, on average, we budget about 1 minute/slide in a presentation. Moderate hyperlinking within slides to other slides or figures is allowed, but only as long as the linked slide can be seen on the screen from the middle row of class without being expanded. That means you might be able to fit up to two diagrams/figures on a slide and just expand each slightly as you discuss it; but you won’t be able to flip to new/linked slides.
o Everyone on the team does not need to speak; you won’t be penalized if they don’t. But using only one person to speak will not be rewarded as much as using more speakers, because multiple speakers normally generate more energy and are more difficult to coordinate.
o Each team will have three minutes to field one to three questions asked by the
Instructor and the class). The grading criteria will be similar to any presentation criteria, but the question period will be weighed in a bit more. The template for grading is below.
Note that showing that you understand where you went wrong (and where right) carries more weight than doing well in the competition. This is a teaching exercise, after all.
Performance Appraisal of Your Capsim® Team Members:
After completion of both the Capsim® simulation and the presentation, each team member will be asked to submit a grading sheet to the instructor grading the contribution of themselves and their team mates on an A, B, C, D and F scale. These sheets will be kept confidential by the instructor. If you feel that anyone on the team deserves a different (higher or lower) grade than everyone else, then assign some difference in weight based on your form’s scoring system, provide a rationale for your difference, sign the form, and hand in a hardcopy for me. I shall use your form (and those of the other teammates) to adjust a member’s grade, if appropriate.
Component Score Comments Content:
Tells A Good Story (10 Uses Org. Strategy Concepts Well (15%)
Consistent Logic about Strategy and Implementation (10%) Has Relevant Details (10%)
Form (40%):
Professional (10%) Creative Format (10%) Within Time (10%) Number of Slides (10%)
Questions (15%):
Question1 Question 2
Other
2. Beyond Competitive Dynamics - Cooperative Strategy
In order to go beyond the competitive dynamics of intra-industry competition, I will introduce you to several topics in strategy and organization that involve cooperation and constraint, such as strategic alliances and regulatory strategy. I also will ask you to develop your own thoughts on such topics and the tension between competition and cooperation in the discipline of strategy.
(a) Alternative 1: Case Memo on Cooperative Strategy
In this assignment you are requested to select a case from the last third of the course on which to write up a memo addressing the issues in the case. I shall be pleased to outline for you those issues once you have selected your case. You can write this memo in a team of one to three people. It is to be handed in prior to the class in which the memo is to be addressed. The format for the case memos that I prefer is shown below.
Standard Memo Format
To: Senior decision maker outlined in case (name the person from the case) From: Memo Author (This would be you)
Subject: Case Name or topic summary Date: Memo date
A case is designed to present an actual business situation and will not contain all of the
information in order to perform a full analysis. It is important to remember that there is no right answer to the cases and each student will take a different approach in his or her analysis and recommendations.
Your write-up should address the following areas:
1. Issues: important problems, decisions or issues.
2. Analysis: analysis of underlying causes of issues, and alternative actions considered, supported by concepts, frameworks and other materials from readings.
3. Recommendations: a set of clear recommendations, supported by your analysis.
All elements should be reasonably specific, using case events, data and names for clarity.
Although company web-sites and other outside sources may be used to gain a better understanding of the industry or company, your memo must primarily rely on the information given in the case. Try not to reverse-engineer your solution and recommendations by obtaining more current information from outside sources such as the internet. Instead, try to put yourself in the decision maker’s shoes, looking forward from the time of the case to the present day. You will learn more that way.
While I recommend the format just discussed, the only required elements for each memo are a maximum of 1000 words (not including your name, a title page or an appendix); double-
spacing, 1 inch margins, 11 pt. font, and a maximum of one page for an appendix. All memos should be e-mailed to me or submitted in the course assignment submission box or handed to me prior to the start of the class in which that case is to be discussed.
Late memos will be docked 25% for the first day, an additional 25% for the second day and a full 100% if more than two days late. Memos that are too long will be docked 5% points for minor infractions, and 10%+ for more major ones. If you cannot get your memo to me on time, please let me know this and try to provide a reason why not.
(b) Alternative 2: Group Presentation on a Cooperative Strategy Case
You may opt to do an 8-10 minute presentation on a case. If choose this option, you should form a two to four person team and then decide on how you want to contribute to the case. This assignment is very open-ended: You can present your view of how to answer the case memo questions or add some new materials to the case that have not been considered before. Due to time constraints, normally, only one team can present per case day, so we will have to allocate teams across the five classes in which we have cases on a first-come, first-served basis.The format for grading the presentation will be as follows:
Component Comments CONTENT (50%):
Good Theoretical/
Conceptual Material for Day’s Case & Topic Details/Description Were Rich and Informative FORM (50%):
Entertaining, Professional, &
Stimulated Questions Mechanics Were Good (Timing, Good
Questions, Answers, etc.)
3. Final Paper: Guru on Competitive and Cooperative Strategy
The final assignment is to be done in teams of one to three. You should first choose a “guru”
and some of his or her work(s) to examine. I’ve had students use several different types of gurus; these include Richard Branson, Oprah Winfrey, Anita Roddick, Jack Welch and David Suzuki.
You should then write a ten-page paper assessing that guru’s views of competitive and / or cooperative strategy and how (if) these strategies should be balanced. Try to be concrete and use real examples. After assessing the guru’s views, inject your own views about strategy, building on what you’ve learned. Again, try to be concrete. The grading scheme will be based on the following template:
Component Score Comments
Guru’s Views (60%):
• Main view of Competitive and Cooperative were Clear (40%)
• Concrete and Relevant Examples (20%) Your Views (25%):
• Assessment of Pros and Cons Clear (10%)
• Gurus Ideas Were Extended (5%)
• Concrete and Relevant Examples (10%) Writing (15%):
• Well-Organized (5%)
• Good Flow (5%)
• Entertaining (5%)
UNIVERSITY COURSE PROCEDURES AND POLICIES
Course Standing and Grade Distributions: You are welcome to discuss your class performance and standing in the course with me. The official University grading system will be implemented for this particular section of this course using the distribution method. Section 61, 29 SEP 2003, or online at http://www.ualberta.ca/~unisecr/policy/sec61.html#4).
Missed Assignments: Based on the material in the University of Alberta Calendar for exams (section 23.5.6), any student who is incapacitated because of illness, is suffering from severe domestic affliction, or has other compelling reasons (including religious conviction) may apply for an excused absence for a missed assignment. The guidelines say that an excused absence for a missed assignment is a privilege, not a right, and is granted at the discretion of the
instructor or the Faculty, depending on the circumstances.
Appropriate conduct: My goal in this course is to create a supportive environment for learning based on open, constructive debate. This requires all of us to be engaged with the material and with each other in a professional manner, with courtesy and respect for each other’s
individuality. Discrimination, malicious criticism, and disruption of class are examples of conduct that is not really acceptable. For other examples, see the Code of Student Behavior [pp. 710- 730 of the university calendar, or at http://www.ualberta.ca/~unisecr/gfcPM.htm#30].
Academic Integrity: Finally, as a reminder, by University procedures (GFC PM Section 61, 29 SEP 2003): “The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online at http://www.ualberta.ca/secretariat/appeals.htm) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in
suspension or expulsion from the University.”
