MBL93D-U Module Overview 2014

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Module overview 2014

Corporate StrategyMBL93D-U

Year module

IMPORTANT INFORMATION:

This module overview contains important informationabout your module.


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CONTENTS

Page

CONTENTS ......................................................................................................................... 2

1 INTRODUCTION ...................................................................................................... 3

2 PURPOSE AND BROAD AND SPECIFIC OUTCOMES FOR THE MODULE .......... 3

2.1 Purpose .................................................................................................................... 3

2.2 Broad and specific outcomes .................................................................................... 3

3 LECTURER(S) AND CONTACT DETAILS ............................................................... 4

3.1 Lecturer(s) ................................................................................................................ 4

3.2 Area ......................................................................................................................... 43.3 University ................................................................................................................. 4

4 MODULE-RELATED RESOURCES ......................................................................... 4

4.1 Prescribed books ...................................................................................................... 4

4.2 Recommended books ............................................................................................... 4

4.3 Electronic reserves (e-reserves) ............................................................................... 4

5 TOPICS .................................................................................................................... 5

6 STUDY SCHOOL PLAN ......................................................................................... 18

7 MODULE-SPECIFIC STUDY PLAN ....................................................................... 18

8 ASSESSMENT ....................................................................................................... 18

8.1 Assessment plan .................................................................................................... 18

8.2 General assignment numbers ................................................................................. 18

8.2.1 Due dates for assignments ..................................................................................... 18

8.3 Submission of assignments .................................................................................... 19

8.4 Assignments ........................................................................................................... 19

9 OTHER ASSESSMENT METHODS ....................................................................... 20

10 EXAMINATION ...................................................................................................... 21

11 FREQUENTLY ASKED QUESTIONS..................................................................... 21

12 SOURCES CONSULTED ....................................................................................... 21


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1 INTRODUCTION

Dear Student

A perennial question for the corporate office is How can we add value? For manysenior executives, the Hippocratic oath of corporate management seems to be the

answer: First, do no harm. Divisional autonomy has gone from managerial principleto mantra. The corporate office is there simply to set and enforce performancetargets. But in a world increasingly obsessed with private equity, the power of focus,and the discipline of debt, is there really a role for even the most mildly diversifiedfirm and the corporate layer of management that such diversification necessarilycreates?

What, then, is corporate strategy? The most widespread view is that improving thecompetitive strategies of the operating units is the essence of corporate strategy. Thecorporate office should be focused on, for example, the identification and capture ofsynergies between operating units. There remains considerable debate about howbest to do this.

(Raynor, 2007:1)

2 PURPOSE AND BROAD AND SPECIFIC OUTCOMES FOR THE MODULE

2.1 Purpose

The purpose of this module, Corporate Strategy, is to enable the student to gaininsights into what drives strategy in a multi-business corporation.

2.2 Broad and specific outcomes

The student needs to have a thorough understanding of the unique context in whichcorporate strategy takes place, and the variables thus applicable.

The specific outcomes for each topic in this module are as follows:

(1) Corporate parenting: creating value in the multi-business company

Evaluate corporate strategic decisions from a value creation perspective. Incorporatethe latest corporate strategy theories in corporate strategic decision making.

(2) The firm as a complex adaptive system: the influence of complexity and chaostheory

Incorporate this corporate strategy theory into corporate strategic decision making.

(3) Co-opetition and game theory in corporate strategy

Incorporate the latest corporate strategy theories in corporate strategic decisionmaking.

(4) The role of knowledge and distinctive capabilities in corporate strategy

Evaluate corporate strategic decisions from a value creation perspective.

Incorporate the latest corporate strategy theories in corporate strategic decision

making.

(5) Strategy as risk management


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(6) The role of innovation in corporate strategy



3 LECTURER(S) AND CONTACT DETAILS

3.1 Lecturer(s)

Dr F du Toit

E-mail: [email protected]

Office: +27 11 652 0326Cell: +27 82 925 3575

3.2 Area

Strategy

3.3 University

Unisa School of Business Leadership

4 MODULE-RELATED RESOURCES

4.1 Prescribed books

Goold, M, Campbell, A & Alexander, M. 1994. Corporate-level strategy. New York:Wiley.

Brown, SL & Eisenhardt, KM. 1998. Competing on the edge. Boston: HarvardBusiness School Press.

4.2 Recommended books

Richard Branson and the Virgin Group of Companies in 2004 (Grant casebook, p308)

General Electric: Life after Jack (Grant casebook, p 336)

4.3 Electronic reserves (e-reserves)

Baldoni RJ. 2004. The journey to successful enterprise-wide risk management,

Directorship, 30(3): 10 - 15

Ballou B. & Heitger DL. 2005.A building block approach for implementing COSOs

Enterprise Risk ManagementIntegrated Framework, Management Accounting

Quarterly, 6 (2): 1 - 10
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Barbee , G & Rubel, T. 1997. Co-opetition in action, The Journal of Business

Strategy,18(5):7-8.

Caldart, AA & Ricart, JE. 2004. Corporate strategy revisited: A view from

complexity theory, European Management Review,1(1):96-104

Eisenhardt, KM & Galunic, DC. 2000. Co-evolving: At last a way to make synergies

work,Harvard Business Review,78(1):91-101.

Grant, R. 1991. The resource-based theory of competitive advantage: Implications

for strategy formulation, California Management Review,33(3):114-135.

Grant, RM. 1996. Toward a knowledge-based theory of the firm, Strategic

Management Journal,17, Winter Special Issue: 109-122.

Hamel, G. 1998. Strategy innovation and the quest for value, Sloan Management

Review,39(2):7-14.Harris, L, Coles, AM & Dickson, K. 2000. Building innovation networks: Issues of

strategy and expertise, Technology Analysis and Strategic Management,12(2):229-

241.

Krinsky, R & Jenkins, AC. 1997. Collide: The uneasy fusion of strategy and

innovation.,Strategy and Leadership,25(4):37-41

McAfee, RP & McMillan, J. 1996. Competition and game theory. Journal of

Marketing Research,33(3):263- 267.

Merna, A & Merna, T. 2004. Development of a model for risk management at

corporate, strategic business, and project levels. The Journal of Structured and

Project ,10(1):79-85.

Nalebuff, BJ & Brandenburger, AM. 1997. Co-opetition: Competitive and co-

operative strategies for the digital economy, Strategy and Leadership,(6):28 -35.

Pascale, RT. 1999. Surfing the edge of chaos, Sloan Management Review ,

40(3):83-94.

Porter, M. 1987. From competitive advantage to corporate strategy, Harvard

Business Review, 65(3): 43-59 or Management Today, 19(5):4-10. (Use thereference to find the article as HBR does not allow linking to this article)

Schoenberg, R. 2003. An integrated approach to strategy innovation, European

Business Journal,15(3):95-103.

5 TOPICS

5.1 Corporate parenting: creating value in the multi-business company

5.1.1 Tuition period

Time allocation: before study school 1
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5.1.2 Specific outcomes

Evaluate corporate strategic decisions from a value creation perspective. Incorporatethe latest corporate strategy theories in corporate strategic decision making.

5.1.3 Critical questions

Examine any business publication and you will see phrases such as "mergers","acquisitions", "hostile takeovers", "joint ventures", "unlocking shareholder value" and"unbundling". This is the language of corporate strategy. It is all about howcorporations are trying to create value for their shareholders by making decisionsrelating to the vertical, horizontal and geographical scale, as well as the scope of thecorporation.

Take a moment to reflect on the following questions:

Are there reasons other than the creation of shareholder value that could give rise tocorporate strategic decisions? What are they?

What are the factors that could positively influence the success of corporate strategicdecisions?

What are the factors that could negatively influence the success of corporate strategicdecisions?

Michael Porter (2003) points out that a disappointingly large number of corporatestrategic decisions are failures and do not add value to the corporate portfolio,because most corporations do not think about how they really add value to theirsubsidiaries. The potentially devastating effects of poor corporate strategic decisionmaking were recently evident in the globally publicised reversal of the merger ofDaimler-Benz and Chrysler.

In this topic, we will investigate the following questions:

How do corporate "parents" add value to their subsidiaries?

How is corporate strategy developed?

What corporate strategies may be successful?

What factors could result in poor corporate strategic decision making?

5.1.4 Learning through activities

The main source of information for this topic is the prescribed book by Goold,Campbell and Alexander (1994).

The primary decisions in corporate strategy (according to Goold et al 1994) are thefollowing:

In what businesses should the corporation invest its resources and what model ofownership or investment should be used?

How should the parent company influence and relate to the businesses under itscontrol?

The Virgin Group, under the leadership of Richard Branson, for example, haveinvested (by way of joint ownership) in a wide range of extremely diverse businesses --- from Virgin Cola to the Virgin Atlantic airline. In this process, Virgin brings certain


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competencies to bear, but always treats the businesses as "stand-alone" entities,allowing a great deal of strategic freedom. In some respects, Virgin acts as aninvestment bank rather than a corporate parent.

In the prescribed book, the first section (chs 1 to 4) provides an overview of the idea ofcorporate parenting advantage. Chapter 4 specifically provides an overview of the

development of corporate strategic thinking and the key contributions andshortcomings of each (see exhibit 4-1, p 61, for a useful summary of the key issuesand concepts of every phase).

Part 2 of the prescribed book (chs 5 to 11) deals with examples of successfulcorporate strategies in the following four categories:

(1) stand-alone influence

(20 linkage influence

(3) functional and services influence

(4) corporate development

Each of the chapters contains various examples of successful corporate strategies.

Part 3 of the prescribed book focuses on the development of corporate strategy. In thisregard, chapter 13 contains a step-by-step example of how this was done for aconstruction company. Exhibit 13-8 (p 338) contains an example of a parentingadvantage statement.

The appendixes (pp 387-442) should not be ignored. They also contains usefulinformation on the parenting advantage concept, particularly appendix C (p 411),which examines the different corporate parenting styles.

The prescribed article by Michael Porter (2003) is an excellent summary of some keyprinciples of corporate strategy. Your first assignment requires you to do moreresearch on this subject.

Read the prescribed book by Goold et al (1994) and the article by Michael Porter(2003).

5.1.5 Self-assessment

Develop a statement of parenting advantage for the organisation you work for (or forany organisation of your choice).

5.1.6 Reflection

Now that you have assessed yourself on this topic, the following questions may helpyou to reflect on your learning so far:

What, in your opinion, are the key factors that determine the success of corporatestrategic decisions?

To what extent should shareholder value be the key driver of corporate strategicdecision making?

How relevant is the notion of parenting advantage in the African context?


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5.1.7 Conclusion

Thus far we have examined how a corporate parent can create shareholder value bybeing a "good corporate parent". This is an important issue, since the cost of corporatefailure is high. Think of the money lost by Daimler-Benz and Chrysler shareholders intheir failed merger. Poor corporate decision making can also impact negatively on

market image, share price and general business performance. In the next topic wefocus on strategy in conditions of flux.

5.2 The firm as complex adaptive system: the influence of complexity andchaos theory


Time allocation: before individual Assignment 02




Looking at the world around us, there is no doubt that we live in a complex and oftenchaotic world. This obviously affects the world of business as well. However, it issurprising how many organisations are caught unawares by change and are oftenunable to respond to it successfully.

Consider the following questions:

To what extent does complexity play a role in your organisation?

How are organisations in your industry coping with flux? What about the organisationyou work for?

How are you personally coping in a complex world?

To what extent do you feel that the concept of "strategic management" is applicable intoday's world? What about your own industry?

The pace of change and the magnitude of complexity have led to the theory thattraditional, linear processes of strategic management may not be as applicable today

as they were in a more "stable" world. Terms like "post-modernism", "complexadaptive systems", "chaos theory", "complexity theory" and so on, all came to be a partof the strategic debate, and new theories are constantly being developed around thesecrucial concepts.

In this topic we examine the effect of chaos and complexity on strategic management,and possible strategies for dealing with chaos and complexity.


Although much has been written about the influences of complexity and chaos onstrategic management, few sources are so well researched, coherent and thorough as

the prescribed book by Brown and Eisenhardt (1998). This book makes a strong casethat a competitive advantage is merely temporary, and that dominance (competitive


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advantage) depends on the creation of a relentless stream of competitive advantages.The book also introduces the concept of semi-coherent strategy.

This is illustrated by a series of case examples --- one of the many interesting onesbeing the Microsoft case study (see p 9). Instead of the well-oiled, well-directedmachine one sometimes imagines Microsoft to be under the leadership of Bill Gates,

the case study shows that strategy in Microsoft is often unpredictable, uncontrolledand inefficient. However, Microsoft (perhaps more than any other ICT company) hascreated a stream of competitive advantages by being proactive, continuous anddiverse. One could conclude from this that strategy development in Microsoft is messyrather than ordered, and mistakes abound, but that ultimately a "semi-coherentstrategic direction" exists that gives it an edge over its rivals.

Chapter 1 examines the strategic challenge of change and introduces a number of keythemes. Figure 1.2 on page 8 is particularly interesting because it compares variousviews on strategy.

Chapters 2 to 6 examine the principles of competing on the edge, while the last three

chapters explain the development of strategy in competing-on-the-edge mode. Onpage 238 there is a useful comparison of traditional leaders with competing-on-the-edge leadership.

There are also some useful prescribed articles on the topic:

The article by Caldart and Ricart (2004) examines corporate strategy from theviewpoint of complexity theory.

The article by Pascale (1999) focuses on the relationship between chaos andbusiness.

The article by Eisenhardt and Galunic (2000) examines the role of "coevolution" incorporate strategy, with the corporate centre as the setter of context and the divisionsresponsible for managing a collaborative web" of relationships.

Instead of regarding these sources as stand-alone views, try and identify the elementscommon in all of them.

Read the prescribed book by Brown and Eisenhardt and the articles by Caldart andRicart (2004), Pascale (1999) and Eisenhardt and Galunic (2000).


Use the prescribed sources to develop your own framework for understanding the

effect of complexity and chaos on your industry. Use it to evaluate the extent to whichyour organisation manages to function as a complex adaptive system.

5.2.6 Reflection

This topic addresses a number of crucial issues that impact deeply on the practice ofcorporate strategy. It is essential for you have a deep enough understanding of certainkey issues. Take a moment to think about the next two questions.


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It is not enough merely to understand that the environment is complex and chaotic.You need to understand what your organisation and you as a manager can do about it.Do you have some ideas that you could apply in your job and your organisation?

Whatever you do well today may not matter tomorrow. Do you have a sense of howyour organisation may need to reinvent itself and learn new ways of dealing with

strategic change?

The complexity view of strategy may not be applicable to all organisations and underall conditions. However, if you operate under conditions of flux and feel that yourorganisation is not well equipped to deal with it, now is a good time to act.

5.2.7 Conclusion

Thus far in this module we have examined the role of the corporate parent in creatingvalue, and how organisations can adapt to complexity and chaos in theirenvironments. The next topic addresses the developments in strategic thinking aroundgame theory and its implications for corporate strategy.

5.3 Co-opetition and game theory in corporate strategy


Time allocation: before the examination




Imagine a situation where two partners in crime have been arrested and are being heldin separate interrogation rooms. Prisoner A has the following choices:

He can confess to the crime.

He can maintain his innocence.

The possible outcomes of each strategy are as follows:

Strategy 1 (he confesses):

His partner confesses too, and both are convicted, but with reduced prison terms (autility of 1 for each prisoner).

His partner does not confess and prisoner A goes free in exchange for testifyingagainst him (a utility of 10).

Strategy 2 (he does not confess):

His partner confesses and prisoner A goes to jail for the full term (utility of 0).

His partner also does not confess and they go free to share the proceeds of the crime(utility of 5 for each player).

This is an example of a famous game called Prisoner's Dilemma


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(http://levine.sscnet.ucla.edu/general/whatis.htm), and it illustrates a number of keypoints central to game theory.

Before we explore this in more detail, think about the following questions:

If you were in Prisoner A's shoes, what would the best course of action be? Why?

What are the lessons from this game that could be applied to corporate strategy?

This topic explores some of the business applications of game theory and how it canbe applied to corporate strategy.


Game theory focuses on understanding how people or groups of people interact andmake decisions. The prescribed articles explore this in the context of business. A keyrequirement for using game theory is to understand what the game is, who the playersare and what their options are.

We will now go back to the Prisoner's Dilemma game for a moment. You could arguethat the most rational course of action would be that the prisoner should alwaysconfess, since it minimises risk (i.e. the worst outcome is a reduced jail sentence).

However, what if the prisoners could cooperate in some way or "signal" each otherduring the interrogation? That would mean that they could optimise utility or behave infavour of the common good" (or bad in this example) instead of behaving selfishly,especially if the game is repeated. These issues are at the heart of many businessdecisions.

This is also the line of thinking taken by Brandenburger and Nalebuff (1996), theauthors who have probably contributed most to the understanding of the practical

implications of game theory for strategy. One of the central points of departure forBrandenburger and Nalebuff (1996) is that competitors should all have a commongoal, namely to maximise the value of the industry, not to run each other down or puteach other out of business (as so often seems to be the perception of businesspractitioners and students).

For those of you interested in this topic, the following book may be an interesting read:

Brandenburger, AM & Nalebuff, BJ. 1996. Co-opetition. New York: CurrencyDoubleday.

In this regard, Brandenburger and Nalebuff (1996) have come up with two key ideas:

(1) The concept of co-opetition, which suggests that competitors may compete in someareas and co-operate in others where it is to the common good (i.e. the value of theindustry).

(2) The concept of complementors (and the Valuenet), whose presence in the marketenhances the value of your own product or service.

These concepts can be illustrated by two recent examples from the South Africancellular industry.

Soon after Cell C launched its service, it was announced that Vodacom would allowCell C to "roam" on the Vodacom network for 15 years. This decision benefits both

parties and contributes to the overall value of the industry. So although the companiesstill compete for subscribers, they cooperate in other areas to their mutual benefit.


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There are many examples of complementors in the cellular business. The mostobvious complementors to cellular services are handset manufacturers. The morefeatures cellular handsets and devices enable, the more services cellular providerscan offer. For example, with digital cameras now common in cellular phones, itbenefits cellular operators to offer multimedia messaging services (MMS). Creators ofcontent (such as logos and ringtones) are also complementors.

What are the implications of game theory for corporate strategy? Here are somethoughts:

Complementors have to be defined, as well as the relationship that one has with them.

It is sometimes necessary to introduce new players to the game (e.g. suppliers) inorder to reduce the power (and cost) of a specific group of players.

By controlling supply (as De Beers did with diamonds for a long time), the added valuecan be increased, as can increasing demand.

An overriding principle introduced by Brandenburger and Nalebuff (1996) is thatcompetition is valuabledont give it away!

Read the prescribed articles by Barbee and Rubel (1997), McAfee and McMillan 1996)and Nalebuff and Brandenburger (1997).


Using the principles of game theory identified in the prescribed articles, identify theopportunities for co-opetition and adding value that are presented by your industry.

5.3.6 Reflection

Game theory is an interesting approach, but not without flaws. Many businesssituations are much too complex for game theory principles to apply and simplificationsare required. In addition, you can never be certain that players are going to behaverationally. Given the above, take some time to reflect on the following questions:

Under what conditions would game theory be most useful as a means of identifyingcorporate strategic options?

What concepts in the context of game theory have added most to your understandingof strategy and strategic options?

Is game theory something that you would be able to apply in your businessenvironment? Why or why not?

What about the use of game theory in the broader African context?

5.3.7 Conclusion

Thus far we have considered three important approaches to adding value in corporatestrategy. The next topic is no stranger to you --- you have probably encountered theresource-based views of strategy in your previous studies. However, we now focus on

the roles of knowledge, resources and capabilities in corporate strategic decisions.


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Cellular providers, Vodacom and MTN, have replicated their capability of developingand running cellular networks and services in developing economies across variousAfrican countries, and are dominant players in several of them.

Chicken fast-food franchiser, Nando's, has decided to expand its recipe for successfulfranchising internationally and has over 150 franchises in the UK.

The Virgin group applies its unique skills in developing greenfield businesses to takeon large incumbents in many different industries and markets: airlines, rail services,soft drinks, record stores and even a bridal store.

The nature of the specific capabilities can be diverse, although John Kay suggests thatcapabilities typically revolve around architecture, reputation or innovation. For very few(but very successful) firms, one could even argue that the extent to which they are ableto replicate their culture could be a distinctive capability (e.g. Wal*Mart).

Read the prescribed articles by Grant (1991), Grant (1996) and Spanos and Lioukas(2001).


Looking at your industry, what are the distinctive capabilities of the dominant players inthe industry? How have they used these capabilities in their corporate strategicdecision making? Hint: Be careful not to confuse resources (such as strategic alliancesor brands) with capabilities.

5.4.6 Reflection

Now that we are nearing the end of this topic, let us reflect on some aspects ofdistinctive capabilities and the role they play in strategy.

How applicable is this theory to your day-to-day work? To your organisation? TheAfrican context?

What, in your view, are your own organisation's possible sources of distinctivecapabilities?

How does this influence your thoughts on the strategic direction of your organisation?

What are some of the opportunities presenting themselves to your organisation basedon the resource-based view?

5.4.7 Conclusion

We have covered a lot of ground, but so far we have focused much on theories thatare fairly well developed and, although they are fairly new as theories go, they havebeen around for some time. The last two topics are much newer and more abstract,and not much information is readily available on their role in corporate strategy.

5.5 Strategy as risk management





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All businesses face risk --- after all, without risk there is no reward. However, corporate

scandals like those involving Enron, Parmalat and Worldcom have highlighted theneed to manage enterprise risk more responsibly with a view to ensuring corporatesustainability. The rise of corporate governance and corporate governance frameworks(e.g. the King reports in South Africa) as a vehicle to guide corporate governance iswell documented. The effect of this has also filtered through to corporate strategicmanagement.

Imagine you are a manager deliberating whether to acquire another company.Obviously there are a number of factors that you would investigate. What variableswould you consider when making the decision? How would you decide when toexecute the transaction? What are the factors that could impact on the outcome of thedecision?

All of these questions have traditionally been dealt with in the area of strategic financialmanagement and, specifically, valuations. However, there is an increasing realisationthat the theories and techniques traditionally relating to the fields of investment,portfolio management and management accounting could also be applied to theevaluation of strategic alternatives. In this regard, real options theory seems to havefound a niche market in the evaluation of strategic alternatives. In addition to this, thereis an increasing awareness that strategic management is in reality risk management atthe highest possible level --- hence the increasing references and material onenterprise risk management (ERM).

This topic provides a brief overview of some of the concepts in the area of ERM.


Corporate decision making is mostly about investment and divestment decisions.Typically, strategic decision makers are faced with more than one option. Add to thisthe question of decision timing and other environmental contingency factors, and it canbecome quite a complex decision.

From the perspective of enterprise risk management (ERM), the article by Sobel andReding (2004) highlights the importance of interdependence between key role playersin aligning corporate governance and enterprise risk management. Merna and Merna(2004) provide a model for managing risk at the corporate, strategic business unit and

project levels. The paper by Ballou and Heitger (2005) provides certain guidelines onhow to implement ERM using the widely accepted Committee of SponsoringOrganisations of the Treadway Commission (COSO) framework for ERM. Baldoni(2005) also provides certain implementation guidelines.

There are also views that look at risk specifically as an opportunity to gain acompetitive advantage. Those interested in this topic may find the following book ofinterest:

Chatterjee, S. 2004. Failsafe strategies: profit and grow from risks that others avoid.Upper Saddle River, NJ FT Prentice Hall.

Read the prescribed articles by Sobel and Reding (2004), Merna and Merna (2004),

Baldoni (2004) and Ballou and Heitger (2005).


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Identify a situation in your own or another organisation where you feel that the use ofERM or real options theory might have made a difference, and explain how.

5.5.6 Reflection

The idea of strategy as risk management is relatively new, and you may have found ithard to come to grips with it in such a brief period of time and with relatively fewsources. However, you may have learnt enough to form some informed opinions.

Let us consider some of them.

How applicable is ERM in your organisation?

Provide some examples where they could have been applied in the past.

How useful is ERM in the African context?

5.5.7 Conclusion

We are nearing the end of this module, and you have hopefully learnt a lot about anumber of approaches and ideas that could be useful in the environment you work in.This last module again highlights the fact that the strategic body of knowledge was andis constantly informed by many diverse disciplines.

5.6 The role of innovation in corporate strategy







"Disruptive technologies", "reinvention", "re-engineering" and "creative destruction" arebut a few of the many phrases and buzz-words associated with the need for radicalchange and the innovation that goes along with it. Bain and Company report thatmanagers are increasingly concerned about the commoditisation of products andservices, and that this "innovation gap" is high on the agenda of many organisations.

Consider the following questions:

What does innovation mean to you?

Would you describe your organisation as innovative? What about yourself?

Can you think of examples of innovation from your industry?

Can one use the term strategic innovation? What other types of innovation are there?


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This topic investigates (fleetingly) the role of innovation in corporate strategicmanagement.


Strategic planning, in the traditional sense of the word, and innovation are not

necessarily comfortable partners, as Krinsky and Jenkins (1997) point out in theirprescribed article. However, many of the leading management thinkers today suggestthat "incrementalism" or "continuous improvement is not enough. Instead, theysuggest, organisations should "reinvent", reimagine" or even "creatively destroy"themselves and the way they do business.

Robert Grant suggests that strategic innovation (as opposed to product or processinnovation) involves the following:

The creation of "new game strategies" by redefining or disrupting the traditional valuechain (e.g. Dell Computers and amazon.com).

Embracing new markets or customer groups.

Adding products and services that perform new but related functions.

For most businesses, innovation is easier said than done. In fact, most businesses gotto where they are in a linear fashion, and to suggest that radical change or innovationis what is needed, really goes against the grain for them. In addition, it is easier saidthan done to actually design and implement innovation programmes.

The articles by Schoenberg (2003), Hamel (1998), and Harris, Coles and Dickson(2000) all investigate different aspects of strategic innovation.

It is important for you to examine these sources and views to establish how (in your

view) they influence corporate strategic decision making.

Read the prescribed articles by Hamel (1998), Harris, Coles and Dickson (2000),Krinsky and Jenkins (1997), and Schoenberg (2003).


Using an organisation that you are familiar with, evaluate the extent to which you feeltheir success is dependent on innovation.

5.6.6 Reflection

Innovation is an over-used phrase, but actually hard to grasp and make concrete and

practical. In addition, many people believe that innovation only applies to new-to-the-world inventions, forgetting that there are various kinds of innovation. Take a momentto reflect on the following questions:

What types of innovation did you come across in your study of this topic?

What does the term "innovation" mean to you in the context of corporate strategy?

How does innovation influence corporate strategic decision making?

How important is innovation in the African context?

8.6.7 Conclusion


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We have now come to the end of this module on corporate strategic management. Asyou reflect on your learning so far, I trust that you have realised that there are manydifferent approaches, yet no single "right" answer. However, one could say that someanswers are more thoughtful than others, and the aim of this module is really to openyour mind to some of the thinking processes available to you.

6 STUDY SCHOOL PLAN

Topic number 1: Corporate parenting advantage (prescribed book Goold et al1994)

Topic number 2: Introduction to strategy and complexity theory

7 MODULE-SPECIFIC STUDY PLAN

Use your my Stu dies @ Unisabrochure for general time management and planningskills. This brochure is available at http://www.unisa.ac.za/contents/study2012/docs/myStudies-Unisa-2014.pdf. We strongly recommend thatyou set a study programme for yourself for this year and that you allocate sufficienttime to work through the study guide, to study and read the relevant sections of theprescribed books, to incorporate additional material if necessary, to do theassignments, and to prepare for the examination.

You will need to spend at least 240 hours working on this module. This includesapproximately 100 hours of reading and studying the learning material, 80 hours ofdoing activities and assignments, and 60 hours of preparation for the examination.This includes attending the study school.

8 ASSESSMENT

The distributed distance learning elements comprises self-tuition and group work inwhich you must do both prescribed and recommended reading, completeassignments, and contribute to group activities.

8.1 Assessment plan

To determine how well you have accomplished the learning outcomes for the

module, you will be assessed throughout the year by means of an individual test, twogroup assignments and an examination. Assignments contribute 24% towards thefinal mark of this module. The test is written during May, at approved Unisaexamination centres, and contributes 16% towards the final mark. The weight of theyear mark is 40% and that of the written examination is 60%.

8.2 General assignment numbers

8.2.1 Due dates for assignm ents

Assignment 01 09/05/2014

Assignment 02 08/08/2014


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8.3 Submission of assignments

Both Assignment 01 and Assignment 02 have to be submitted before the closingdates to gain entrance to the examination.

Assignments must be submitted on the SBL EDS system in Ms Word format, Arial 11

font, 1.5 line spacing. A Turn-it-In report with the text must accompany thesubmissions.

Late assignments, assignments that do not conform to the specifications andassignments that do not answer the assignment questions will not be considered.Feedback on the assignments will be provided on the SBL EDS system.

8.4 Assignments

8.4.1 Individual Assignment 01 Due Date: 09/05/2014

Select a commercial multi-business corporation of your choice. Assess its corporatestrategy in relation to the theory presented by Goold et al (1994). Use the evidencefrom the case to make plausible assumptions. Apply the theory by incorporating thecase variables (populate diagrams, tables, graphs, etc).

Note: It is important that you select an appropriate corporation (e.g. a small business with nosubsidiaries is not a multi-business corporation); alternatively, you could select alisted corporation and do your own research or use an appropriate case study of yourchoice. Bear in mind that the parenting advantage statement is the product oroutcome of analysis to understand, for example, the corporations strategy for addingvalue or distinctive parenting characteristics. If you select a case study where anassessment of the corporate strategy has been done by someone else, you will find ithard to make your own additional and novel contribution, which is what marks areearned for. The reader is familiar with Goold et al (1994) - no marks will be earned forunapplied theory.

Your answer should be a maximum of 15 A4 pages (only the body, excluding the titlepage, contents page, executive summary, references and appendices). The title ofthe assignment is given with the instructions above. Right after the contents page,present an executive summary of two pages maximum, in bullet form. This should beable to convey your findings as a stand-alone section.

8.4.2 Individual Assignment 02 Due Date: 08/08/2014

Find an article from a peer reviewed, scholarly journal, that is relevant to thecorporate strategy of local corporations, on each of the following three topics;

Global markets, emerging markets, green economy and corporate socialresponsibility (CSR).

For each article:

(1) Briefly introduce the topic, (25% weighting)

(2) Discuss the key contributions of the article. (25% weighting)

(3) Discuss the relevance of the topic to the corporate strategy of local corporationsand the implications of the contributions of the article. Relate to the topicsstudied in this course. (50% weighting)


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Your answer should be a maximum of 20 A4 pages (only the body, excluding the titlepage, contents page, executive summary, references and appendices). The title ofthe assignment is given in the instructions above, with your topic selected. Right afterthe contents page, present an executive summary of two pages maximum, in bulletform. This should be able to convey your findings as a stand-alone section. Attachcopies of the articles as appendices.

8.5 Marking guideline/matrix/rubric

1 Use of theory [20]

Requirement: The ability to select and correctly apply theoretical conceptsfrom the body of knowledge.

Did the student select appropriate concepts from the body of knowledge? Were theselected concepts used in the correct context?

Did the use of theory suggest thorough understanding of theoretical principles?

2 Application of theory [40]

Requirement: The use of theoretical principles to derive insight into a practicalsituation

Were the theoretical concepts applied correctly? This might be evident through theuse of case examples as evidence.

Did the student show insight into the corporate strategic management issues of thecase or the organisation?

3 Argumentation skills [20]

Requirement: The student shows the ability to adopt a logical approach toanswering a question.

The assignment followed a logical approach (introduction, discussion, conclusion)

The student managed to established a common thread or flow throughout theassignment

Clear conclusions were provided that were clearly linked to analysis

The question was clearly answered.

4 Technical factors [Maximum penalty of -20]

Length requirement

Layout (headings, numbering, structure) and correct referencing

Bibliography

Language

9 OTHER ASSESSMENT METHODS

No other assessment is done.


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Open book examinations will be written during October/November. The duration ofthe examination is four hours. The examination will consist of one or more casestudies and specific questions related to the case(s). All reading material set out inthis module overview, together with all material covered at the study schools, shouldbe studied for the examination.

Examination eligibility will be according to the rules and procedures applicable to theMBL. Students will be required to adhere to the Unisa examination timetable as wellas the designated Unisa examination centres. Students may be required to writemore than one module per day during the examination period.

11 FREQUENTLY ASKED QUESTIONS

The my Stu dies @ Unisabrochure contains an A-Z guide of the most relevant study

information. This brochure is available at http://www.unisa.ac.za /contents/study2012/docs/myStudies-Unisa-2014.pdf

12 SOURCES CONSULTED

Raynor, E.M. 2007. What is corporate strategy, really? Ivey Business Journal,December 2007

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MBL93D-U Module Overview 2014

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