CALIFORNIA STATE UNIVERSITY,BAKERSFIELD

School of Business and Public Administration

BA 490.0Senior Seminar

Cases in Policy & Decision Making

Spring Quarter 2000Don Harvey, Ph.D.

DDH-C113664-2388(office)

Email dharvey@csub.eduOffice Hours:Tuesday and Thursday, 5:00 - 6:00 p.m. 10:15 - 10:45 p.m.

and by appointment

BA 490. Senior Seminar in Business Administration. A terminal integrating course. Analysis of a wide range of policy decisions, with focus on the role of the executive in planning and implementing programs. Integrative analysis of cases in business policy from the point of view of the top management of an organization. Emphasis is on integrating the subject matter of all previous courses in dealing with key strategy and policy issues affecting the organization’s future performance.

Prerequisites: Graduating senior standing. Completion of all courses in the Pre-Business core and all other courses in the Upper Division core.

Course Outline

Overview

You are almost there! This Senior Seminar capstone, or Strategy and Policy course as it is often called elsewhere, is designed to help you bring it all together. In this course, we make a concerted effort to view real business situations drawing from everything you know, whether learned in Finance, Marketing, Accounting, or from outside reading or from real life. The key word is integrative. Presumptuous or not, in this course we will do our best to help you learn to tie it all together. Traditionally, managers have been expected to integrate and coordinate the activities of the firm, including its marketing, production, personnel, and finance functions. As a result, they have tended to orient their thinking primarily toward the internal activities of the firm.

Today, however, the general concept of management is proving to be inadequate. Managers are becoming increasingly aware of the importance of complex, ever changing external forces that significantly affect the performance of their organizations. Accordingly, they must expand their concept of management in order to cope better with those outside forces that influence their managerial lives.

In recognition of and in response to the expanding demands on contemporary managers, the traditional capstone course has evolved into an integrative course in strategic management. Strategic management is the decision process that links an organization’s internal capabilities with the external opportunities and threats it faces in its environment. It is an ongoing process of analysis, planning, and action that attempts to keep a firm aligned with its environment while capitalizing on organizational strengths and environmental opportunities while minimizing or avoiding organizational weaknesses and environmental threats. Strategic management creates, forms, and specializes the firm in terms of the products it produces, the processes it uses to produce them, the markets it serves, and the policies that guide its activities. Strategic management is the decision-making process that formulates strategic plans, acquires resources, allocates resources to organizational units, and uses strategic control to ensure that the plans are carried out and that the goals and objectives are achieved. As a forward-looking approach, strategic management provides the basis for adapting the organization to the vagaries of an unpredictable, turbulent environment and for more effectively and efficiently achieving the firm’s performance objectives.

Course Objectives

BA 490 - Senior Seminar - is intended to be a challenging and exciting capstone course for the undergraduate business school curriculum. It is first and foremost a course about strategy and about managing success. The course centers around the theme that a company achieves sustained success if and when any of its manager (1) develop, and

revise as needed, an action-oriented strategic plan, and (2) implement and execute the plan with some proficiency. We shall stress how and why a well-formulated, well-executed strategy nearly always produces good business performance.

This course is multidisciplinary and highly integrative. After the more definitive subjects you have been studying in previous quarters, you will probably have to make large adjustments in both how you approach this course and how you approach and absorb its concepts. Indeed, this course not only serves the function of trying to integrate much of the knowledge gained in other business courses, but it is also a big picture course, a trait that makes it a truly business administration courses. Virtually all of the other required and elective (e.g., specialized body of knowledge (e.g., economics, statistics, business law). In contrast, the problems and issues of strategy formulation and strategy implementation cover the whole spectrum of business and management. Many variables and situational factors must be dealt with simultaneously. Weighing the pros and cons of strategy entails a total enterprise perspective and a talent for judging how all of the relevant factors add up.

Accomplishing this objective entails introducing you to how an enterprise must in fact deal with all of the complexities and constraints of the environments in which it operates, why these cannot be assumed away or ignored, and how they affect strategic decisions. It means giving you exposure to and some experience in trying to grapple with the many frustrating administrative dilemmas of managing the total enterprise. It means drilling you thoroughly in the tools of strategy analysis and exercising you in the managerial task of sizing up a companyÕs strategic position. It means teaching you how to use your knowledge of the various functional disciplines as tools for analysis and evaluation, and to do so in ways which meet the needs of strategic management. It means systematically exposing you to the rigors of industry and competitive analysis, to the process of formulating an attractive strategic plan, and to the varied administrative tasks associated with implementing and executing the chosen strategy as well as circumstances permit. It means helping you learn to assess strategic pluses and minuses and develop a stronger sense of business judgment. It means giving you some practice in putting all the pieces of the business puzzle together and in looking at things from an overall company point of view. In charting a firm’s course for long-term success, you will find that there are no right answers -- only difficult choices.

Objectives

To appreciate the perspective and responsibilities of the Chief Executive Officer (CEO) of a large, medium-sized, or small company, and how they differ from those of functional managers; additionally, to be able to reach and make strategic decisions from a top manager’s viewpoint.

2. To be able to integrate the knowledge gained in earlier business administration courses and to apply the concepts and tools learned in previous quarters, as well as in this one, in identifying an organization’s strengths and weaknesses and in

diagnosing the real threats and opportunities facing an organization in an increasingly turbulent environment.

3. To increase your understanding of what managers must do to make a business succeed over the long haul.

4. To learn how to manage strategically as opposed to functionally or operationally.

5. To build your skills in conducting strategic analyses in a variety of industries and competitive situations; to be able to formulate or critically evaluate a strategic plan for an organization, and to carry out a strategic analysis of a company and recommend a viable course of action given its circumstances.

6. To appreciate the difficulties and realities of formal strategic planning and implementation in small, larger, or multinational corporations; to understand that strategic planning is a process, and to improve both individual and group decision-making skills while engaged in that process.

7. To demonstrate an ability to cope with and use incomplete, partial, or conflicting information; recognize and assess contradictory data; identify unreliable data; separate symptoms and causes from problems; make realistic assumptions and collect relevant diagnostic information; and develop complicated reasoning chains supported by assumptions and evidence.

8. To develop your capacity to identify strategic issues, to sort out irrelevant issues while focusing only on the most relevant ones, to reason carefully about strategic options, and to adequately assess the likely consequences of alternative actions.

9. To improve your ability to present and defend recommendations, to use your intuition to reach defensible assessments and interpretations, or argue persuasively for a point of view, recognizing that no set of strategies is necessarily Òcorrect.Ó

10. To better prepare you for a successful career applying the skills you have acquired.

Text and Materials

The required texts, materials, and resources for this course are:

Thompson and Strickland, Strategic Management. 11th edition. Irwin, 1999.

Harvey & Brown, An Experiential Approach to OD., 5th edition, 1996.

Access to an IBM-compatible microcomputer with hard drive and floppy disk

drive (3 1/2Ó)

Fortune or Business Week or the Wall Street Journal (recommended). Subscription to these periodicals is totally optional. However, this course is geared to help you make the transition from academic life to the real world so you should be getting accustomed to using the source materials of the real world. Just a hint: the real world rarely reads textbooks. With this in mind, assignments will require you to dig into current business publications. Judging from past experience, you will enjoy this digging and the insight it gives you.

Readin2 Assignments

The reading assignments for each week are shown in the accompanying schedule of topics, assignments, and activities. Not surprisingly, those who take the reading seriously understand the course material better and have less difficulty in the other elements of the course. Reading assignments and the course material contained within the texts are the responsibility of the students as part of their contractual obligation in the learning experience of this course. Lectures and discussions are designed to supplement and elaborate upon the assigned readings and textbook content; do not expect lectures or discussions to merely be a re-hash or restatement of the contents of the text. Discussions of current events and issues are an integral part of the course.

Participation and Attendance

To the extent possible due to the size of the class, this course will be structured as a seminar. The success of the seminar is dependent upon each student being prepared and actively contributing to the discussion, much like a Board of Directors. Therefore, it is imperative that each student attend class fully prepared, willing and able to offer constructive criticism, analytical insights, and encouraging support.

This is a performance-based capstone course in which the student is evaluated on his or her ability to unequivocally demonstrate the skills, understanding, and competence expected and required of someone about to graduate with a bachelor’s degree in Business Administration. Due to the fact that participation in class discussion of the concepts, issues, and cases counts for a portion of your course grade, each student must contribute significantly to in-class analysis of the cases and the day’s scheduled topics. Each student is expected to be an active participant and to make meaningful comments on the cases and topics being discussed. Your grade on class participation is something to be earned via consistent, daily contribution to class discussion. You should, therefore, make a conscientious effort to attend every class and to be sufficiently prepared to contribute. Merely coming to class is not sufficient! Simply put: Don’t miss class! Understandably, there are circumstances (e.g., job interviews, family matters, etc.) that may cause you to miss class; nevertheless, excessive absences will reduce your class participation grade.

The quality of class participation is more important than the quantity, and the following points tend to characterize effective participation:

1. Are the points made substantive and relevant to the discussion? Are they linked to the comments of others?

2. Do comments show the participant has been listening?

3. Do comments clarify and highlight the important aspects of earlier comment and lead to a clearer statement of the concepts being covered?

4. Is the participant willing to interact with other class members?

5. Do comments show evidence of analysis?

6. Do comments add to our understanding of the situation?

7. Does the participant distinguish among different kinds of data (i.e., facts, opinions, beliefs, etc.) and between positive and normative analysis?

8. Is there a willingness to test new ideas or are all comments safe?

Unless you participate, you will not learn as much. Since true learning comes from discovery, you will learn much more by taking personal risks and continually testing your ideas. I would much rather you made poor arguments (at first) than none at all; that way you will at least learn from others’ comment and improve the next time around. You will also find that the more prepared you are, the easier it will be to participate more effectively. Everything is discussed in class is proper grist for your participative mill, and open to question, dissection, challenge, debate, and (perhaps) even laughter. To help you become a more productive participant in class discussions of a case, please consult on a continuing basis the Appendix, Preparing a Case Analysis.

Case Presentation Leaders

You will have the opportunity to apply the concepts studied in the course to actual business situations in the form of case analyses. The cases discussed in this course will introduce you to a variety of industries, companies, and managerial styles, and they will broaden your experience of business strategy and policy. Each team will assume the role of Case Presentation Leader one time during the quarter. The Case Presentation Leaders are charged with presenting a brief (i.e., approximately 30-minute) oral case presentation to the seminar. The case analysis should follow the general guidelines presented in the Appendix, Preparing a Case Analysis.

Class Discussion of Cases

You should prepare each assigned case thoroughly and be ready to make significant contributions during class discussions. Be prepared to identify, discuss, analyze, and debate the issues raised in each case; additionally, be able to link the case with the issues and concepts discussed in class and in the text. Needless to say, you should prepare each case thoroughly and be ready to make significant contributions during class discussions. To help you prepare for class discussions of the cases, please consult on a continuing basis the Appendix, Preparing a Case Analysis.

Written Case Analyses

During the course, each student will be required to submit written (i.e., typewritten or word processed only -- no handwritten papers) prior to each case discussion. These assignments will focus on particular questions, issues, or problems raised in the case. Learning from cases is a three-step process: (1) your own analysis of the case; (2) class discussion of the case, during which other views and potential solutions are presented and argued; and (3) critique comments. Taken together, the three steps powerfully contribute to your learning and understanding of this complex subject. To help you prepare a better written case analysis, please consult on a continuing basis the Appendix, Preparing a Case Analysis.

Team Project Presentations

Each team will contact a local organization and prepare a Strategic Analysis and five-year strategic plan. Each member must visit the site and interview a manager. The owners/managers will be present at the presentation and receive a copy of the written report.

Each student will participate in a team project analysis and presentation. ProfessionalBusiness Attire will be required, professional analysis and presentation is expected.Especially for the team presentations, assume you are addressing the CEO or Board ofDirectors.

For team presentations, plan for a twenty-minute oral presentation, with presentation method as important as content. If you put your audience to sleep, no way will your recommendations receive serious consideration. Turn, in a comprehensive case analysis including a BCG, CAPM, financial analysis, plus whatever else you believe appropriate. Most written team case analyses will be about 10 typed pages. (See sample reports.)

Note: Each individual can pick up bonus points by preparing for every case presentation and bringing out key points in class. These are known as slam dunks and do not take any credit from the presenting team.

In all instances, written assignments are due in person at the beginning of class on the day that the case is scheduled for class discussion. Under no circumstances will late assignments be accepted.

For the written briefs, grades will be based on the paper’s (and analyst’s) ability to capture the essence of the identification and resolution of the strategic issues in the case. Grammatical errors, misspellings, typographical errors, or other similar unprofessionalluncraftsmanlike gremlins are inexcusable and will necessarily result in grading penalties.

Strategic Management Simulation

This course allows graduating seniors to demonstrate how well they have mastered the art and science of business administration by providing them with an opportunity to administer a business in a simulated competitive environment. This business simulation

experience is designed to provide participants with the opportunity to integrate the concept and skills learned within our Business Administration program.

A first-class, rigorous microcomputer-based simulation is an ideal way to create and implement an integrative, sequential decision-making learning environment. Moreover, it will challenge students to demonstrate what they have made of themselves (and what we have helped them to become) as business professionals. This experience is intended to be action-- and results-oriented, and students will be required to take responsibility for their strategic plans, actions, and recommendations in a way that could not be matched by more traditional pedagogy.

Participants need to utilize their knowledge and experience in order to make certain deductions about the economy in which they are operating and about general relationships which exist within the simulation. These deductions must be combined with knowledge about specific relationships and with the participant’s beliefs about the actions that competitors are likely to take. A set of decisions ideally would follow from utilizing a combination of different types of data analysis and forecasting techniques, and from the development of strategies and policies to meet the goals and objectives of the firm.

Midterm Examination

One objective-type, primarily multiple-choice midterm examination will be administered, and this examination will cover subject matter and materials included in the textbook (Chapters 1-5), lectures, and discussions. The only excuse permitted for missing the midterm examination is illness requiring a doctor’s care. The midterm examination can be made up only after presentation of written verification of illness by an attending

physician; in every case, a make-up examination must be completed within one week of the originally scheduled exam.

Final Examination

The final examination will be similar in format to the midterm examination, and it will cover subject matter and materials included in the textbook, lectures, and discussions. The final examination will primarily address the subject matter and materials covered since the midterm examination.

Evaluation and Grading

As stated in the University catalog:

A = superior work; achievement so outstanding that it is normally attained by relatively few students.

B = very good work; achievement clearly better than adequate competence in the subject matter/skill, but not as good as the superior achievement of students A’s.

C = adequate work; achievement indicating adequate competence in the subject matter/skill. This level will usually be met by a majority of the students.

D = minimally acceptable work; achievement which meets the minimum requirements of the course.

F = unacceptable work; achievement that fails to meet the minimum requirements of the course.

An inevitable part of this and any university course is the evaluation, and the grade. Actually, the most important evaluation is your self-evaluation. Did you think about new things, and about old topics in new ways? If so, your efforts here will have paid off. Although your self-evaluation is the most important evaluation, there is another procedural matter: the University, as a matter of tradition, demands grades. Grading is an art, not a science, but I will try to base your course grade more or less on the following:

Midterm 20% Final 20%

Class Exercises/Participation 20% Team Project 20% Case Analysis 20%

TOTAL 100%

The top 5 percent are guaranteed A’s, but most likely there will be a few other A’s also. The median grade will probably be a B.

Please note that grades are assigned on the basis of achievement and performance, and not on the basis of effort. It would not be unusual if the class-average GPA for this course ranges from 2.7 (B+) to 3.7 (A-).

You will find that I go out of my way to assist those students who genuinely want to learn, who are not afraid of making mistakes in an effort to learn, and who come to class prepared. In my experience, people who do the minimum just to get by in fact do not learn much and do not receive a very good grade. If you need a certain grade in this course in order to graduate -- or even preserve an honors level grade-point average --you will have to put in the extra effort from the beginning of the quarter to assure yourself of getting it, rather than hoping that you have done well enough by the end of the quarter to get the grade that you need.

Any way that you look at it, the workload in this course is heavy. The time requirements are substantial (that part of the local folklore about the course is very accurate!). It all adds up to a bunch of hours--probably more than for most other courses you have taken. But don’t let the hours/time intimidate you. I sincerely believe that the workout will be well worth it in terms of what you learn that you can take with you out into the real world. You will find very little busy work involved; each assignment is designed to be productive and worthwhile.

As a general approach, you will find that the opportunity and responsibility for learning are in your hands. The instructor will suggest ideas, serve as a resource, and provide extensive feedback, but if learning takes place, it will be because you decide to make it happen. You, should identify your learning goals (beyond the general overview suggested here), pursue them in various ways, and develop a means to communicate the learning to the class.

Ethical Standards and the Honor Code

California State University, Bakersfield, has a tradition of respect for students’ integrity in academic work. The Code of Student Rights and Responsibilities delineates standards and policies of behavior. Faculty expect students to maintain a high standard of academic integrity. If you are unclear about a specific situation, ask! I will explain what is and is not acceptable in my class. A summary of University guidelines appears in the latest edition of the Catalog.

You are encouraged to work together in preparing for class, but it is a violation of the honor code to secure and use another person’s notes or papers to prepare for class or written assignment unless the assignment specifically calls for (and is intended to be) a

group effort, submitted by a group, and to be evaluated as a product of a group. Sorting out the issues for yourself is an important value-adding experience; sharing your ideas and synthesis with others after doing the basic work, but before class, is also an important component of the learning experience. On all non-group assignments (e.g., written case analyses), however, you may discuss general issues and problems with your colleagues, but you are to develop your own analysis and write your paper on an individual basis.

WeekDate1March 28, T2April 4, TApril 6, Tb

Topic/Assignment

Strategic Management: An OverviewCourse Introduction

March 30, ThPART ONE: The Concepts and Techniques of StrategicManagementRead: (STR) Chapter 1: The Strategic Management ProcessÑ The Five Tasks of Strategic ManagementÑ Developing a Strategic vision and Business MissionÑ Setting ObjectivesÑ Crafting a StrategyÑ What Does a CompanyÕs Strategy Consist Of?Ñ Implementing and Executing the StrategyÑ Evaluating Performance, Monitoring New Developments,and Initiating Corrective AdjustmentsOD Chapter 1: Organization Development, An OverviewPrepare: Sim. 1.1 Guest Host p. 19 -Form teams - selectcases

How to Analyze a Case - Note Cases to be assigned video Case 1 - DisneyStrategic VisionRead: (STR) Chapter 2: The Three Strategy-Making Tasks:Developing a Strategic Vision, Setting Objectives, and Crafting a StrategyÑ Developing a Strategic Vision and Mission: The First Direction-Setting TaskÑEstablishing Objectives: The Second Direction-Setting TaskÑ Crafting a Strategy: The Third Direction-Setting TaskÑ The Strategy-Making Pyramid

Read: (OD) Chapter 2: Organization Renewal and PlannedChange

Prepare: OD Simulation 2.1 Profile p. 50, Hand-in

Prepare: Case 1 - (Team 1) __________________________Video Case 2 - Apple Computer

Week

Date3April 11,TApril 13, Th4April 18, TApril 20, Th5April 25, TApril 27, Th

Topic/Assignment

Strategic Issuesuse Fig. 1.2, Fig. 2.2, Fig. 2.4Read: (STR) Chapter 3: Industry and Competitive AnalysisÑ The Methods of Industry and Competitive AnalysisÑ What Are the IndustryÕs Dominant Economic FeaturesÑ What is Competition Like and How Strong Are Each of the

Competitive Forces?

Ñ What are the Drivers of Change in the Industry and What Impact Will They Have?

Ñ Which Companies are in the Strongest/Weakest PositionsÑ What Strategic Moves Are Rivals Li kely to Make NextÑ What are the Key Factors for Competitive SuccessPrepare: Case 2: (Team 2)

Read: OD Chapter 3: Organizatyional Renewal: Changingthe Corporate CulturePrepare: Case 3: Dim LightingSim. 3.1 RIF, p. 101Video Case 3 - Federal Express

Competitive Advantage, NOTE: Final Project Outline Due Read: (STR) Chapter 4: Evaluating Company Resources and Competitive Capabilities

How Well is the Present Strategy Working?Ñ What are the CompanyÕs Resource Strengths andWeaknesses, and its External Opportunities and Threats?Prepare: Sim. 4.1 Style Matrix, p. 109Video Case 4 - 3M; Case 3 - (Team 3) _________________

Read: OD Chapter 4: The OD Consultant: Role and StylePrepare: Sim. 4.1, Case 4: (Team 4) ________

Strategic AlternativesRead: STR Chapter 5: Strategy and Competitive AdvantageÑ Five Generic Competitive StrategiesÑ Low-Cost Provider StrategiesÑ Differentiation StrategiesÑ Strategy of Being a Best-Cost ProviderÑ Focused or Market Niche StrategiesÑ Using Offensive Strategies to Secure Competitive Advantage

Read: OD Chapter 5: The OD Consultant: DiagnosticProcess

Prepare: Sim 5.1 Acquisition, p. 141Case 5: (Team 5) ______________________________

Video Case 5 Ñ Next

WeekDate6May 4, Th7May 9, TMay 11, Th8May 16, TMay 18, Th

Topic/AssignmentMay 2, T MID-TERM EXAM (Chapters 1-5, 8)

Strategy AnalysisRead: STR Chapter 6: Matching Strategy to a CompanyÕsSituationÑ Strategies for Competing in Emerging IndustriesÑ Strategies for Competing in Maturing IndustriesÑ Strategies for Firms in Stagnant or Declining IndustriesÑThirteen Commandments for Crafting Successful Business StrategiesCase 6, (Team 6) ____________________________________

Prepare: Sim. 6.1, Enigma, p. 167Read: OD Chapter 6: Overcoming Resistance to ChangeVideo Case 6 - LotusStrategic Decisions

Read: STR Chapter 7: Strategy and Competitive Advantagein Diversified CompaniesÑ When to DiversifyÑ Diversification StrategiesÑ Related Diversification Strategies

Read: STR Chapter 8: Evaluating the Strategies of Diversified CompaniesÑIdentifying the Present Corporate StrategyÑ Evaluating Industry Attractiveness: Three TestsÑ Using a Nine-Cell Matrix to Simultaneously Portray Industry Attractiveness and Competitive StrengthÑ Cash Hogs and Cash Cow Businesses Prepare: Case 9 - Team 8 Read: OD Chapter 15: Organization Transformation:Strategy InterventionsPrepare: Sim. 15.1, GenTech, p. 418 Video Case 7 Ñ Challenger

Strategy ImplementationRead: STR Chapter 9: Implementing Strategy: Building Resource Capabilities and Structuring the OrganizationÑ A Framework for Implementing Strategy Read: STR Chapter 10: Implementing Strategy: Budgets, Policies, Best Practices, Support Systems, and RewardsÑ Linking Budgets to Strategy OD Chapter 16: Organization Development: The Challenge and the FuturePrepare: Sim. 16.1

Week 9Date

May 23, T14

May 25, Th10June 1, TJune 3, Th

June 6, T June 7, Wed

Topic/Assignment

Team Presenations I & 2

1.2.

Team Presentations 3 & 4

3.4.

Happy Memorial Day!

Team Presentations 5 & 6

5.6.

Team Presentations 7 & 8

7.8.

Final Exam Review

FINAL EXAM8:00 pm Ñ 10:30 pm

HASTA LAYISTA, BABY!