University of Alberta Department of Rural Economy
AREC 484 (Section B1)
Strategic Management in Food and Resource Businesses Course outline, Winter term 2010
Instructor: Bodo Steiner Course Prerequisites:
One of AREC 200, AREC 323, AG EC 200, AG EC 323, INT D 365, or equivalent.
How and when to contact the instructor You can contact me anytime:
Oce: 525 General Services Building Phone: 492-0819
Email: [email protected]
Class: Monday, Wednesday & Friday 12:00-12:50, GSB 559 Oce hours
Oce hours are after class Monday, Wednesday & Friday, from 1:30-2:30pm. Please make an appoint- ment for personal visits outside the oce hours, and do not hesitate to ask to meet with me any time.
1 Course objectives
This course is designed to provide a comprehensive introduction into strategic management and the economics of strategy. The course has two main objectives:
(i) The scholastic objective is to oer a sound theoretical appreciation and understanding of the concepts that underlie the vertical boundaries of the rm, vertical integration and its alternatives, supply-chain performance and measurement, diversication, and strategic positioning for competitive advantage.
(ii) The applied objective is to give students a realistic and exciting understanding of how the above concepts work in agri-food and resource industries. An invited industry speaker will contribute to achieving this objective.
2 Course requirements
2.1 Texts and course material
There is no required textbook. The recommended textbook (which is on reserve in the E. Berg library in Rural Economy) is:
The Economics of Strategy: Fifth Edition by David Besanko, David Dranove, Mark Shanley and Scott Shaefer, Published by John Wiley, 2009. Why this book? It is one of the few standard texts in strategic management that combines a strong disciplinary grounding, an up-to-date theoretical breadth and an exciting illustration of enduring strategic management fundamentals through real-world applications (including applications from Canada).
Aside from this textbook, students are required to prepare and discuss a set of case studies. These will be distributed at the outset of the class. It is highly recommended that students consult The Case Study Handbook by William C. Ellet, Harvard Business School Press, Boston, MA, ISBN: 9781422101582 (http://ww.mcgraw-hill.co.uk/html/1422101584.html). This book will also be available on reserve in the E. Berg library. Further instructions on specic cases will be distributed during the rst week of class.
2.2 Supplemental material
It is recommended that students keep up to date with strategic management issues through these sources: (i) The Economist Magazine (www.economist.com), and (ii) Canadian Business Magazine (www.canadian business.com) and (iii) Alberta Venture (www.albertaventure.com). All of the above sources are available in hard copies at the E. Berg library in GSB, or in the Rutherford library.
3 Course outline
1. Concepts for strategy (Besanko et al.: Introduction) 2. The evolution of the modern rm (Besanko et al.: chp.1) 3. The vertical boundaries of the rm (Besanko et al.: chp.3)
? the rm's make-versus-buy decision
? costs of using the market
? economic foundation of contracts
4. Vertical integration and its alternatives (Besanko et al.: chp.4)
? strategic alliances and joint ventures
5. agency and performance measurement (Besanko et al.: chp.14)
? the downside of pay-for-performance
6. Strategic positioning for comparative advantage (Besanko et al.: chp.11)
? Value creation and protability
? Dening a rm's strategic position
? Value Creation and Value Redistribution: the Value Chain
4 Class participation and assignments
4.1 Class participation and attendance policy
You are strongly encouraged to read the case studies ahead of each class, since each student is expected to participate in class (participation makes up 5% of your total course grade). Naturally, attendance is required for tests (you will receive a zero percentage for a missed test for other than medical reasons).
4.2 Term paper or term project
4.2.1 Term paper
The purpose of the term paper is to demonstrate your understanding of core concepts, their intercon- nectedness, and the applied issues that are related to the economics of strategy and the realization of strategic management. You are asked to individually prepare a thorough and concise presentation on a topic that is directly related to the class topics covered. Therefore, you are strongly encouraged and expected to directly refer to certain concepts and authors that we cover during the course, and cite correspondingly. You may elect to choose a topic based on educational, personal, or professional interests (examples from previous classes: Diversication at McDonalds; Value chains in the Canadian beef industry; strategic positioning in organic food value chains; vertical integration in the pork industry; employee incentive structure and performance measurement in the hospitality industry; strategic choices in the global coee value chain). To emphasize, your topic should to draw directly from one or several themes and concepts of the course outline (see section (3)). Magazines and newspapers such as The Economist and the Wall Street Journal do not count as references but may be used as additional references. A minimum of 10 relevant references needs to be cited in your nal list of references (and of course integrated into your term paper) to get a passing grade.
In order to make the term paper a continuous, eective and enjoyable exercise, a paper proposal (maximum 300 words) is to be submitted for feedback from me in electronic format (word document via email) before or by January 20, 12:00am. Late submission of the proposal, which should contain at least two relevant references as dened above, will result in a 5% deduction from your nal course grade. The written term paper brings 27% to your nal course grade, and is to be submitted by March 29, 12:00am in both electronic and written format (you can just submit your printed copy in class).
Late submissions receive a 1% deduction from the total term paper grade for every hour submitted late.
A class presentation (powerpoint) that summarizes your term paper is also required towards the end of term (it is worth 5% of your total course grade). Image you present your powerpoint to a council of advisors or company executives - it will be graded accordingly. Students will be given 10 minutes for this in-class presentation. The order and dates of presentations will be determined right after the course drop-date. All ppoint presentations are to be emailed to me by 11:00am of that day during which the rst powerpoints will be presented (March 31). If you are unable to email me your powerpoint by 11:00am March 31, you will loose your entire presentation mark. The ppoint le that you present in class has to be identical to the one that you submit to me on March 31 (on the day of your presentation I will simply upload the le that you emailed to me). If you are unable to attend the presentations of your fellow students (for other than medical reasons, attested with a doctor's form), you will also loose your presentation mark.
The required format for the term paper is as follows: Cover sheet/title page with name, date, email, title of class, and title of assignment. Binders of any kind are unnecessary. The recommended paper length is 10-14 pages, excluding cover page, appendices and references (12 point spacing, double-spaced, margins: left & right: 1.25, top & bottom: 1, numbered pages). The term paper must include
at least the following elements: (1) Executive summary (writing guidelines will be provided through WebCT), (2) Introduction and problem statement [what are the underlying key questions that need to be asked, why should we care about the issue/problem identied?], (3) Analysis [distill the relevant literature and demonstrate their relevance to the problem statement; point to critical issues and provide recommendations where appropriate], (4) Conclusions, (5) References (should begin on a separate page, guidelines will be provided via WebCT [Chicago style]), (6) Appendices (optional, should begin on a separate page).
Your term paper will be graded according to the following criteria: identication of a relevant prob- lem (relevant questions identied), integration of course concepts, use of the literature cited, clarity, concision, and grammar.
4.2.2 Term project
As an alternative to the term paper, you have the option of doing a term project as a group or by yourself. You have two options: the Farm Credit Canada Business plan competition, and participation in the VCIABLE program (Value Chain Initiative Experiential Learning program). These options and their detailed requirements will be discussed in class.
For the above two alternatives, you are asked to submit a project report (i.e. your FCC business plan or your VCIABLE project report). In order to make your report a continuous, eective and enjoyable exercise, a paper proposal (maximum 300 words) is to be submitted for feedback from me in electronic format (word document via email) before or by January 20, 12:00am. Late submission of the proposal will result in a 5% deduction from your nal course grade. The report brings 27% to your nal course grade, and is to be submitted by March 29, 12:00am in both electronic and written format (you can just submit your printed copy in class). Late submissions receive a 1% deduction from the total term paper grade for every hour submitted late.
A class presentation (powerpoint) that summarizes your term paper is also required towards the end of term (it is worth 5% of your total course grade). Image you present your powerpoint to a council of advisors or company executives - it will be graded accordingly. Students will be given 10 minutes for this in-class presentation. If you choose to work as a team on your project, all members from a given group receive the same presentation mark (all are required to present). The order and dates of presentations will be determined right after the course drop-date. All ppoint presentations are to be emailed to me by 11:00am of that day during which the rst powerpoints will be presented (March 31). If you are unable to email me your powerpoint by 11:00am March 31, you will loose your entire presentation mark. The ppoint le that you present in class has to be identical to the one that you submit to me on March 31 (on the day of your presentation I will simply upload the le that you emailed to me). If you are unable to attend the presentations of your fellow students (for other than medical reasons, attested with a doctor's form), you will also loose your presentation mark.
The recommended format for the business plan is as follows, but may vary according to the nature of the project: Cover sheet/title page with name, date, email, title of class, and title of assignment.
Binders of any kind are unnecessary. The paper should have 12 point spacing, be double-spaced with margins: left & right: 1.25, top & bottom: 1, and numbered pages. The business plan could include the following elements: (1)Executive Summary (what you are planning, who for - both the rm and the buyers, and how long this plan will take), (2) Mission Statement and Objectives, (3) Company History, (4) Ownership and Management (who owns the rm- expertise and experience, who will be managing the rm - experience and expertise), (5) Products and Services (what your product is), (6) Industry Analysis (current and projected), (7) Target Market Prole (who is your target market? Age, location, ethnicity, etc), (8) Competition (who your competitors are, strengths, weaknesses, market placement,
etc), (9) Marketing Strategy and Sales Plan, (10) Research, Development and Technology (what R and D has this rm undertaken? What projects will be funded, what technology is being employed), (11) Operational and Manufacturing Plans (timelines, physical and processing capabilities, supply sources, labour requirements at every stage of the marketing plan), (12) Human Resource (HR) Plan , (13) Sources and Use of Funds, (14) Financial Position and Projections (sales forecasts, price); and (15) Appendix and references.
Your project reports will be graded based on clarity, understanding of the product and market, problem denition, future expectations, practicality. They will also be graded based on grammar, concision and use of literature cited.
Further information on the FCC competition and some business plan examples can be found at:
http://www.fcc-fac.ca
http://www.agric.gov.ab.ca/app21/selcat?cat1=Business
+%26+Economics &cat2 =Business+Management&subj=179&head=General
See http : //www.longenecker3e.nelson.com/student/plans.html/ for recommendations on how to write a business plan and further electronic links; printed version of this text (on reserve in the E. Berg library in GSB) contains Appendix A for a good sample business plan. More business plan examples will be distributed in class. For more details on VCIABLE, please check the following website:
http://www1.agric.gov.ab.ca/$department/deptdocs.nsf /all/agp12158
4.3 Test 1
The rst test is on February 1, 12:00am. It is worth 20% of your course grade and will be a mix of short essay-type questions (for examples of questions for this and the subsequent tests, please check the e-class site). Students who are unable to write this test because of illness or any other legitimate reason should contact the instructor as soon as possible prior to the exam. For students who miss Test 1 for reasons other than substantiated illness (with attestation form from your doctor), the weight of this test will transfer to Test 2 (there will be no make-up Test 1). The university regulations regarding exam deferrals apply (See section 23.5.6 in the University Calendar).
4.4 Test 2
The second test is on March 10, 12:00am. It is worth 20% of your course grade and will be a mix of short essay-type questions. Students who are unable to write this test because of illness or any other legitimate reason should contact the instructor as soon as possible prior to the exam. For students who miss Test 2 for reasons other than substantiated illness (with attestation form from your doctor), the weight of this test will transfer to Test 3 (there will be no make-up Test 2). The university regulations regarding exam deferrals apply (See section 23.5.6 in the University Calendar).
4.5 Test 3
The second test is on April 12, 12:00am. It is worth 23% of your course grade and will be a mix of short essay-type questions. Students who are unable to write this test because of illness or any other legitimate reason should contact the instructor as soon as possible prior to the exam. For students who miss Test 3 for reasons other than substantiated illness (with attestation form from your doctor), a make-up examination will be available. The university regulations regarding exam deferrals apply (See section 23.5.6 in the University Calendar).
4.6 Grade Evaluation
Points will be awarded for each test (and your in-class participation), and an overall course score will be calculated from the percentage scores given below. Your overall course score will then be translated into a letter grade (that is based on the published University grade distributions) on the basis of `natural breaks' in the distribution of class grades. The following grade evaluation applies:
Test 1: 20%
Test 2: 20%
Test 3: 23%
Written term paper/project: 27%
Ppoint presentation of term paper/project: 5%
In-class participation: 5%
In grading throughout this term I hope to create the conditions for a positive learning experience and to enable you to do as well as possible in this course. While I consider grades and written comments to be a mechanism for assessing your accomplishments, they should also be considered as a form of feedback throughout the term that can help you to improve your standing as we progress in the course. If you have a criticism of the course, the material, or my teaching, I hope you will let me know immediately.
Critical thinking and constructive criticism are the backbone of the educational process. It is your right, indeed your responsibility, to suggest ways in which we can work together to improve your educational experience, maximize your personal returns from your educational investment, and still have fun in the classroom.
5 Academic integrity
Please check out this website for more details on academic integrity, plagiarism, the code of student behavior, and other useful student resources:
http://www.uofaweb.ualberta.ca/TIE/nav01.cfm?nav01=22064&
This class should be considered similar to a job responsibility. Therefore I will hold you to the same standards for ethics and for timeliness that can be expected from an employee. Distracting behavior such as uninvited casual talk among students, use of cellular phones and beepers, eating snacks, drinking beverages, sleeping, or inappropriate behavior toward fellow students or faculty will not be tolerated any more than they would be in a business setting. Faculty have the right and the responsibility to maintain a classroom free of such distractions. Students who persist in such behavior may be asked to leave the class or it may result in withdrawing the student from the course. Students maintain academic integrity by doing their own work, by refusing to assist others in deception, and by being honest with themselves and others. Academic dishonesty violates the academy integrity expected of all students.
Academic dishonesty is dened as, but not limited to, the following:
1. Cheating - Using or attempting to use unauthorized materials, information, or study aids in any academic exercise, including copying form another person's work or preparing work for another that is to be used as that other person's work.
2. Fabrication - Furnishing false information to a University ocial relative to academic matters, includ- ing, but not limited to, misrepresentation of written information provided in the student's admission documents.
3. Plagiarism - Representing the words or ideas of another as one's own in any academic exercise.
4. Facilitating Academic Dishonesty - Helping or attempting to help another to violate any provision of this Code.
For this course, the bottom line is: Any violations of points 1. to 4. will result in my awarding a failing grade in the class, and all violations will be reported to the appropriate university ocials.
Please consult with section 30.3.2 of the University of Alberta Code of Student Behaviour for more information, and consider also the following:
(1.) Policy about course outlines can be found in Section 23.4(2) of the University Calendar. (2.) 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 www.ualberta.ca/secretariat/appeals.htm) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresenta- tion of facts and/or participation in an oence. Academic dishonesty is a serious oence and can result in suspension or expulsion from the University. (GFC 29 September 2003)
6 Key dates
Term/project paper proposal due: January 20, 12:00am
Test 1: February 1, 12:00am
Test 2: March 10
Term paper/term project due: March 29, 12:00am
Test 3: April 12
Oral presentations of term/project papers: March 31 onwards Due date for emailing me your ppoint presentation March 31, 12:00am
7 Electronic devices
No electronic devices, including programmable watches, cell phones, calculators, hand-held organizers and computers, are allowed during the exams.
