Managing the Corporate Enterprise

Professor Michael A. Roberto Spring 2009

Michael A. Roberto Associate Professor, Trustee Professor of Management Faculty Suite J-143 Email: mroberto@bryant.edu Phone: 401-232-6155 Website: http://bryant2.bryant.edu/~mroberto/ Course Overview Why are some firms more successful than others? This is the fundamental question that we will tackle in this course. Successful management of a corporate enterprise begins with a coherent, well-defined strategy. This course develops the knowledge and skills necessary to analyze, formulate and implement strategy effectively. We will take the perspective of the general manager, learning how to assess the external environment, as well as the firms internal resources and capabilities, so as to create a successful strategy. We will learn how the general manager makes the parts of the firm (functional areas, product lines, and/or geographic units) work in harmony to support the strategy and create a whole which is greater than the sum of its parts. Throughout the course, we will address the complexity of leading a business in this era of globalization, social and technological change, and dynamic firm and industry boundaries. Course Objectives Develop and practice the ability to think strategically by learning the concepts, models, and tools of strategic analysis and by applying them to actual competitive situations. Develop an understanding of the sources of profitability differences among firms, as well as how firms can either sustain or lose their competitive advantage over time. Learn how general managers achieve the critical task of alignment/integration among the various parts of the firm so as to compete successfully. Develop two critical perspectives: first, a global perspective on how markets function and firms compete; second, a general managers view of an organization and its environment. Build your skills at communicationlearning to present ideas concisely and persuasively and at working collaborativelyobtaining better results by drawing on everyones knowledge and experience and building working relationships despite differences in opinions and priorities.

Desired Outcomes By the end of the course, you should be able to: 1. Evaluate the structure of an industry, domestically and globally. 2. Assess the internal resources and capabilities of a firm from a systemic perspective, and the extent to which that system creates a sustainable competitive advantage. 3. Perform various forms of quantitative analysis to evaluate the extent of a firms competitive advantage or disadvantage. 4. Conduct a thorough competitor analysis and project how a rival might react to a firms strategic moves. 5. Evaluate how and why firms might create or destroy value by expanding their scope horizontally, vertically, and/or geographically. 6. Analyze the multiple mechanisms (contracts, long term relationships, joint ventures, alliances, mergers, etc.) that firms might employ to achieve economies of scale and scope. 7. Assess the quality of a firms strategic process, as well as the efficacy of the leadership of that process. Required Books 1. Robert M. Grant. 2007. Contemporary Strategy Analysis. 6th Edition (paperback). 2. Michael A. Roberto. 2005. Why Great Leaders Dont Take Yes For An Answer: Managing for Conflict and Consensus. Wharton School Publishing. 3. MBA 520 Customized Course-pack (cases and readings) available only as an ebook

Class

Topics and Reading Assignments MODULE 1: Fundamentals of External and Internal Analysis Introduction Readings: Robert M. Grant, Chapters 1 & 2 Michael E. Porter. 1996. What Is Strategy? Harvard Business Review. Michael A. Roberto. 2006. Learning by the Case Method. (Blackboard) Michael A. Roberto. 2005. Why Great Leaders Dont Take Yes For An Answer. Chapter 1. Case: Matching Dell (A)

Jan. 28

Feb. 4

External Analysis Readings: Grant, Chapter 3 & 4 Cases: Bally Total Fitness Cola Wars Continue: Coke and Pepsi in 2006

Feb. 11

Internal Analysis and Competitive Advantage Readings: Grant, Chapters 5 & 7 P. Healy and J. Cohen. Financial Statements and Ratio Analysis. HBS Note 9101-029. W. Bruns. Basic Capital Investment Analysis. HBS Note 9-198-004. Cases: Wal-Mart Stores in 2003 Wal-Mart 2007

Feb. 18

MODULE 2: Business-Level Strategy Competitive Positioning: Cost Advantage Readings: Grant, Chapter 8 Case: Airborne Express

Feb. 25

Competitive Positioning: Differentiation Readings: Grant, Chapter 9 Case: Edward Jones in 2006: Confronting Success

Mar. 4

Competitive Dynamics Readings: Peter Coughlan, et al. Competitor Analysis: Anticipating Competitive Actions. HBS Note 9-701-120. Adam Brandenburger and Barry Nalebuff. 1995. The Right Game: Use Game Theory to Shape Strategy. Harvard Business Review. Cases: Dogfight over Europe: Ryanair (A) Sony PlayStation 3: Game Over?

Mar. 18

MODULE 3: Corporate-Level Strategy Expanding the Scope of the Firm Reading: Grant, Chapters 13 and 15 Roberto, Markets vs. Firms: A Framework for Evaluating Corporate Strategy (Blackboard) Case: The Walt Disney Company: The Entertainment King

Mar. 25

Vertical Integration Reading: Grant, Chapters 14 & 16 Roberto, Note on Agency Costs and Corporate Governance (Blackboard) Case: ZARA: Fast Fashion

Apr. 1

Diversification in a Developing Economy Reading: No supplemental readings for this class. Cases: House of Tata 1995 House of Tata: Acquiring a Global Footprint Recommended: India on the Move

Apr. 8

Mergers & Acquisitions Reading: No supplemental readings for this class. Cases: Proctor and Gambles Acquisition of Gillette The Best Deal Gillette Could Get? Proctor & Gamble's Acquisition of Gillette MODULE 4: The Strategic Process - From Creation to Execution The Decision-Making Process Reading: Roberto. Why Great Leaders Dont Take Yes For An Answer. Chapter 2-5. Case: Film: Orientation for Viewing "Path to War"

Apr. 15

Apr. 22

Path to War. 2002. HBO Movie. The Strategic Planning Process Reading: Charles Knight. 1993. Emerson Electric: Consistent Profits, Consistently.

Harvard Business Review. Roberto, Chapters 6-9.

Case: GE's Two-Decade Transformation: Jack Welch's Leadership Apr. 29 Final Presentations Team Projects

Teaching Philosophy I believe strongly in teaching by the case method, rather than purely by lecture. The case method of learning is based on the philosophy that management is a skill more than it is a collection of techniques and concepts. The cases in this course will provide a description of a management situation. I ask that you put yourselves in the shoes of the general manager or management team in the case, who often will have an important decision or set of decisions to make. Sometimes, those decisions will be discussed explicitly in the case; on other occasions, you will have to infer the key problems, opportunities, and decisions facing the organization. We will learn primarily in an inductive fashion in this method of learning and teaching. While I have assigned a text and some supplemental readings, I will not begin most classes by outlining a set of theories and principles, and then asking you to apply those ideas to the case study. Instead, we will dive right in and discuss the issues facing the organization in the case, and principles and hypotheses about how to manage that situation effectively will emerge from the class deliberations. Naturally, the text and readings will offer you a starting point as to the frameworks and models that might be useful for analyzing the case in a thoughtful and rigorous manner. For more on my philosophy of learning and teaching, please read the note entitled Learning by the Case Method. (You may download the note from Blackboard). Class Participation Class participation plays an integral role in the learning process in this course. Everyone must prepare the assigned material before class and participate in class discussion. You should expect me to "cold-call" frequently during class. A substantial portion of your grade will depend on your ability to contribute productively to our collective learning experience. We will be making extensive use of real business cases that provide a forum for you to apply concepts and analytical tools. The goals for each case discussion are to understand the strategic nature of the situation, define key issues, recognize critical assumptions and tradeoffs, and propose sensible recommendations. In order to fully benefit from case discussion, you should:

Come to class well prepared. Analyze the case using the tools you have learned in class, and come prepared to answer the case assignment questions in class. (The case assignment questions will be posted on Blackboard several days prior to class). If tables and figures are provided, perform basic analysis to uncover trends and issues that may not be explicitly mentioned in the case. Probe beyond what is written to what you think may really be going on, using the course lectures and readings as a guide. Given the complexities of the real world, there is no single right answer, although some answers are better than others. To find those, use strategic concepts and tools to analyze a situation.

On any given day, you may be called upon to state your major conclusions and then to provide evidence and analysis in support. Even in the most ambiguous situations, it is important to examine data, reasons, and assumptions that make some answers better than others. For class discussion you will be expected to draw from all the relevant readings and class discussions to date. In addition, please remember to listen carefully and respectfully to your classmates and suggest supporting or alternative views. Thoughtful debate is highly encouraged. Attendance Policy We will be very demanding with regard to class attendance and on-time arrival in this course, because our collective learning is maximized with full participation and commitment on the part of everyone. Please remember that late arrivals are very disruptive to your fellow students and to the learning process. Your grade will be adversely affected if I discover a problem with regard to tardiness or absences. Moreover, late arrival greatly enhances the likelihood that you will be cold-called during the class session. When absences must occur, please notify me by email in advance whenever possible. If you must be absent for any reason, you also must submit a memo (three page limit, single spaced, 12 point font) detailing your responses to the assignment questions for that class session. Those memos are due no later than 24 hours after the class session ends. Please do not consult with anyone who attended class when you draft your memo. Please note that while submitting written memos will help offset any detrimental impact on your grade due to your absence, it should not be considered a substitute for participation in the class discussion. Vigorous participation in a class discussion will always earn you more credit than a memo submitted in lieu of attending a session. Academic Integrity In order to maintain a vigorous learning community in the classroom, it is critical that we, as a class, do not tolerate academic fraud (cheating, plagiarism, lying). As a matter of personal and professional respect for each other, and ourselves, we should expect the highest standards of conduct from our peers and ourselves. Violating these standards takes away the value and meaning of the educational environment for all of us, and in the event that such a violation occurs, the individual(s) responsible will be subject to University sanctions that may include failure from the course, suspension, or expulsion. Please keep in mind that using notes, past exams, and other materials handed down to you by one of my former students violates the

standards of academic integrity for this course. Students will be subject to serious sanctions if they employ these types of materials during the completion of their coursework. The Global Perspective We, the faculty at Bryant, have committed to providing our students with the ability to excel in an increasingly global business environment. In this course, all the firms that we study will face global competition, and a number of them are headquartered outside the United States. The case studies that will focus a great deal of attention on international markets include: o Wal-Mart 2007 a case study that chronicles Wal-Marts attempts to grow internationally o Dogfight Over Europe: Ryanair a case study about a European low-cost airline headquartered in Ireland o Sony PlayStation 3: Game Over? A case study about two Japanese firms battling an American firm in the global video game industry o Zara: Fast Fashion A case study about a global apparel retailer headquartered in Spain o The House of Tata a case study about a conglomerate in India In addition to the work that we will do in this course, I highly recommend that you begin reading a book entitled The World is Flat by Thomas Friedman. You should examine this book at some point during your first few months here at Bryant. Friedman, the Pulitzer-Prize winning columnist from the New York Times, provides a unique and insightful exploration of how global competition is transforming markets and firms in the United States and abroad. Course Grading Grading will be based on the following: Tests (two 75 minute tests) Class Participation Team Project 50% 25% 25%

Tests There will be two 75 minute tests to evaluate your mastery of the content of the course, with each test worth 25% of your grade. If you must miss a test, you should contact me at least one week in advance to make arrangements to take it early. If you miss a test unexpectedly, you should contact me immediately to discuss your options for making up the work. The tentative schedule for the two tests is as follows: First Test: February 25th

 Second Test: April 8th Participation Your participation grade will be based on a combination of: Individual contributions during class Group presentations during class Three one-page memos. They will be due immediately prior to our case discussions in class (due at start of class on February 11th, March 4th, and March 25th). Team Project Each student group must complete a project about a particular company during this course. At the start of the semester, I will assign each group to study the strategy of a particular firm. Your group will be asked to put yourselves in the shoes of the top management team of that company as it evaluates the competitive landscape and considers the strategic issues confronting them. All groups will have to evaluate the overall industry landscape, including a structural analysis of the industry in which the firm competes, as well as an understanding of market trends, social and technological changes, major threats and opportunities, etc. Each group then must evaluate their particular firms strategy for succeeding in this industry and make recommendations for the firm moving forward. As part of this comprehensive analysis, each group will have to evaluate its competitors in the industry. Near the end of the semester, each group must hand in a 10-15 page paper (page count excludes references and exhibits) detailing its comprehensive strategic analysis of the industry and the firm to which it has been assigned. The document should be single-spaced, 12 point Times New Roman Font, with 1 inch margins all around. Each group also will have to make a brief presentation in class, summarizing its analysis and recommendations. I will invite a panel of outside experts to class (faculty, alumni, etc.), and together with me, the panel will evaluate the presentations. The papers will be due in class on April 22nd. The presentations will take place during our final class session on April 29th. During the first few weeks of the semester, I will provide additional detail about the group project. These instructions will include a detailed set of guidelines regarding the required contents of the final written report and oral presentation. At the start of our final session on April 29th, each team should submit a brief memo (no more than 2 pages) that evaluates how well your team functioned as it worked on the course project. The memo should examine the group dynamics, and in particular, it should evaluate the strengths and weaknesses of your teams decision-making process. Finally, at the end of the semester, each individual will be asked to evaluate your own and your peers contributions to the group project. That evaluation will be used as part of the grading process for the group project. Office Hours

My door is always open. I look forward to getting to know each of you over the course of the semester. My office hours will be: Wednesdays, 2:30-5:45pm Wednesdays, after class by request

If you would like to speak with me, and you cannot meet during office hours, please feel to email (mroberto@bryant.edu) or call me (401-232-6155) to schedule an individual appointment. I will definitely be available after class in the evening as well. Naturally, you can always reach me by email or phone if you simply have a quick question about the course that does not require an inperson meeting. I am on email quite regularly and will respond no more than 24 hours after receiving your message. Over the course of the semester, I also will be scheduling at least one informal evening gathering (typically after class). These gatherings will not be required. I am offering these opportunities simply as a way for us to get to know one another better, as well as to talk about issues that are beyond the scope of the course.