Administrative Policy and Strategy - Professor John L. Keifer Ohio State University

Course Description and Objectives

The point of this portion of the cluster is for you to begin viewing organizations as integrated systems based on all the knowledge you have accumulated during your degree program. This will require you to draw on the material from your previous courses, and to think about organizations and their problems from a more holistic perspective. By the end of this quarter, you should have a better idea of how to interpret and influence an organization's overall direction. You will also have the opportunity to improve your decision-making skills and to practice justifying your opinions to others.

Upon completion of this course, you will be able to:
1. Apply a holistic perspective of business and the global environment in which business operates.
2. Apply key concepts from other disciplines (e.g., accounting, finance, management, marketing, and operations) to complex business situations.
3. Analyze complex, dynamic business situations and identify critical issues that need to be addressed.
4. Analyze an industry and forecast likely events in an industry's future.
5. Analyze a firm and identify its important competencies and weaknesses.
6. Identify acceptable alternative strategies for a firm in its pursuit of competitive advantage.

Grading

NOTE: All written assignments must be submitted (by the due date/time) to www.turnitin.com. Please see the common cluster syllabus for a detailed discussion of this process.

INDIVIDUAL GRADES

Class Participation

You will be graded on both the quality and quantity of your involvement in class activities and discussions. This is a class that relies heavily on your willingness to ask questions, state opinions, and challenge the opinions of others. Attendance will be taken, and will be factored into this portion of your course grade, but please note: perfect attendance alone will not earn you an A (or even a B or C) for participation.

Quizzes

One time during the quarter you will be quizzed on your knowledge of the Capstone simulation and its supporting materials. This will be a brief (30 minute) multiple-choice quiz.

Three times during the quarter I will give a quiz (one on -situation analysis,- one on -business strategy,- and one on -corporate strategy-). This is intended to encourage regular reading of the course material, and should help you prepare well for the final exam. These quizzes will be designed to take no more than 30 minutes to complete. Please note: each quiz will also contain items relating to the case study you've prepared for class that day.

Individual Industry Analysis

You are required to do an industry analysis in connection with the mutual fund project (see your finance syllabus). Industry analyzes are done to determine the relative attractiveness of different industries. For instance, firms operating in the pharmaceutical industry consistently have much higher returns than firms in the computer hardware industry. Industry analysis is done to determine why that might be the case.

You will need to apply the following analytical techniques and provide the following information:

(1) Demand Analysis (What factors drive demand for industry's product or service and what is the industry's growth rate?);
(2) An industry analysis using Porter's Five Forces Model to determine the industry's attractiveness;
(3) A statement of the key success factors for the industry (What is it that firms must be able to do well or which capabilities must they possess in order to be successful in this industry?); and,
(4) A projection of the future state of the industry using Trend Analysis

This paper is to be contained in your mutual fund prospectus (see finance syllabus) and is limited to 3 pages maximum (single-spaced) using the standard cluster format (excluding exhibits). A key part of your grade will be based on your ability to identify what you consider to be the most important industry factors (and explain why you have made this judgment). What does a firm needs to consider when deciding whether to enter the industry, and how should it position itself in the industry. You need to use at least five references and you will need to cite them in the body of your paper (using approved formats).

Final Exam

The final will test your knowledge of all the material we cover during the quarter. All material in the course is fair game for questions, including readings, the simulation, lectures, and class discussions.

GROUP GRADES

The group projects provide you with the opportunity to practice strategizing. I hope that each group can maximize the benefit derived from these exercises by taking advantage of each others' individual strengths and balancing out the weaknesses. Professionalism is expected of every group in its written work and presentations. Assign responsibilities based on each member's interests and skills. Devise a schedule of regular meetings. I suggest you elect a team captain to keep track of your tasks and work schedule. The purpose of these exercises is to allow you to use and integrate the concepts and skills you have developed in this and other classes. Your team is encouraged to meet with me whenever necessary, but meetings are arranged at YOUR discretion.

All teams will receive a -base grade- for their projects. This base grade will be scaled for each teammate based on their individual contribution to the team's efforts. See the common cluster syllabus for a detailed discussion of this policy.

Capstone^®; Simulation

You and your teammates will be assigned to a fictitious firm in the electronic sensors industry. It is your job to make a wide array of decisions about how to position your firm, including: which market segments to emphasize, what type of R&D to conduct, how to market your products, how to staff your facilities and your sales force, how to finance your operations, and how to produce your products (and manage your production facilities). See the Capsim website for suggestions on how to divide the labor.

There are three ways in which I judge the level of insight you've attained with respect to the simulation:

Initial Memo (25% of Capstone grade)

The initial memo explains the business strategy that you will pursue during the simulation, as well as the specific functional strategies you will use to support this business strategy (1.5-2 pages single-spaced). In addition to describing your strategies, you shall complete: 1) a demand analysis for each segment for all eight years of the simulation, 2) your market share goals for each segment, 3) production targets for each segment for all eight years, 4) your plans for increasing or decreasing your capacity in each segment, and 5) your plans for managing automation levels for each segment.

Memos should be single-spaced and meet the cluster format guidelines. Tables/exhibits can be single-spaced. Late papers will be penalized ten points for each day (or fraction of a day) late.

Capstone Final Report (50% of Capstone grade)

You are to write a 3-4 page paper (single-spaced) discussing your Capstone experience in detail. As with all work, late papers will be penalized ten points for each day late. You should address the following questions (section headings in boldface type):

1. Performance Summary/Explanation of Performance: Summarize your team's performance in the game. What do you think explains your team's level of performance?
2. Initial Strategy: Provide a brief summary of your initial strategy.
3. Changes to Strategy: To what extent did this strategy evolve/change over time?
(If it did change, how did it change?)
4. If We Could Do It Over: If you could change the way you played the game, what would you change and why? (This is the part of the paper where you can really show me what you've learned.)

Group Performance (25% of Capstone grade)

Your standing will determined according to your industry rank in gross margin, cumulative profits, and stock price (one-third each). Based on your firm's standing at the end of the game, you will get the following grade:

A: first place B: fourth place
A-: second place B-: any other team with positive cumulative profits
B+: third place D: any team with negative cumulative profits

NOTE: These grades assume an industry of five or six firms. For smaller industries, we use a different scale.

It is essential, no matter how poorly your team is performing, that you continue to make a good faith effort to improve your performance. In cases of extremely poor performance, or in cases where I feel a team has not approached the game in good faith, I reserve the right to reduce all team members' COURSE grades by one full letter grade (10%). In most cases you can avoid this fate by maintaining at least a $5 per share stock price, an 8% market share, AND positive cumulative profits.

Strategic Financial Audit

For this group project you will act as consultants hired to help a firm position itself for the future. The faculty will assign a firm to you.

There will be one interim report (20% of SFA grade). This will be a written memo to the project leader (faculty) analyzing the current industry (you should follow the requirements for an industry analysis stated above). Your analysis should conclude with some initial ideas about how to turn around this company. This report also needs to include a ratio analysis consisting of a trend analysis and a comparison to the two competitors that you have selected for the past three full years. You need to include a written explanation of what you found regarding your ratio and trend financial analysis and its importance from an analytical standpoint.

The final report (60% of SFA grade) is a complete strategic audit of the firm, including your analysis of the firm's poor performance and your recommendations to improve this performance, with supporting justification. Your recommendations will be graded in part on creativity and you are urged to find a way to reposition the firm in terms of its customers, products and/or technology choices that has a reasonable chance of success. This report can include elements of your interim report, which would be rewritten based on what you've learned since then. This final report also needs to include in its appendices pro-forma balance sheets and income statements for the next three years. They must incorporate the changes you have made to the strategy. A written explanation needs to explain your assumptions and projections. Such explanation should appear in the right-hand column of the spreadsheet containing your pro-formas next to the items affected by your recommended changes. The body of the paper (excluding appendices) cannot exceed 4 single-spaced pages. You must use the format prescribed by the PRCM faculty.

During the -SFA Preliminaries- you will meet with me to discuss your work and to ask any questions you might have as you prepare for your final presentation. Your final presentation should answer the following questions:

(1) How has the firm been positioned historically?
(2) What factors are responsible or explain the deterioration in the firm's financial condition, and, how do the financial ratios support your analysis?
(3) How should the firm be repositioned for the future?
(4) What are your justifications for repositioning the firm in the suggested way?
(5) How are the suggested changes in the firm's positioning reflected in the pro forma financial statements?

Your final SFA presentation (20% of SFA grade) must be polished, practiced, professional, and done with PowerPoint. All members of the group must participate in the formal presentation. The recommended format for the report is an executive summary, a copy of your PowerPoint slides and written out recommendations.

John L. Keifer"Lecturer, Strategy, International Business and Comparative Management. He serves as Director of the Center for International Business Education and Development in the College of Business. The Center runs different programs including MBA programs in India, Brazil and China, the Global Competitiveness Programs for undergraduate students in Spain, Germany, France and Hungary, China and Italy and a study abroad program for primarily freshmen and sophomores in London, England and an executive development program for Brazilian managers.

TENTATIVE COURSE SCHEDULE

Date Topic Assignment/Remarks Capstone Event

Sep 9 Introduction/Review of Syllabus HW: Chapter 1CS: Team mbr. guide lesson 1 (web)

10 Overview of Strategic Management AE: article 3RR: Mintzberg 1987 (1)CS: Team mbr. guide, Chapter 1

12 Industry Analysis HW: Chapter 3AE: 2CS: Team mbr. guide lesson 2 (web)

16 Industry Analysis (cont'd) AE: 5CS: Team mbr. guide, Chaps. 2 & 3

17 Capstone Overview CS: Team mbr. guide, Chaps. 4 & 5

23 Organizational Analysis HW: Chapter 4AE: 8, 42

24 Performing industry/org'l analysis RR: KmartQuiz

26 Individual Industry Analysis due

30 Capstone Session (Discussion of Practice Rounds) Capstone Quiz today Upload Practice 1 by 5pm today

Oct 1 Upload Practice 2 by 5pm today

8 Launch the SFA Project Upload Practice 3 by 5pm today

14 Capstone Session (Discussion of Practice Rounds)

17 Business strategy HW: Chapter 5AE: 25, 26 Upload Practice 4 by 5pm, Thurs.

21 Business strategy (cont'd) RR: Porter 1996 (only pp.61-70)SFA Interim Report Due

22 The Icarus Paradox AE: 31RR: Miller, 1992 7pm, today, Peer Evaluation due

23 Capstone Initial Memo due, 5pm Upload Round 1 by 5pm, today

24 Assessing business strategies RR: Vermont Teddy Bear Co.Quiz Upload Round 2 by 5pm, today

25 Upload Round 3 by 5pm, today

28 Upload Round 4 by 5pm today

29 Corporate strategy HW: Chapter 6 Upload Round 5 by 5pm today

30 Upload Round 6 by 5pm today

31 Upload Round 7 by 5pm today

Nov 1 Upload Round 8 by 5pm today

4 Corporate strategy (cont'd) 7pm, today, Peer Evaluation due

6 Capstone Final Report due, 5pm

7 Assessing corporate strategies RR: Tyco InternationalQuiz

13 SFA Preliminaries (by appt.)

14 BP Final ExamCapstone Final Debrief/Discussion

18 SFA Final Report due, 5pm

TBD SFA Final Presentations (by appt.)

TBD Holistic Debrief 7pm today, Final Peer Evaluation due.

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