Business Strategy - SMO306

Business Strategy – SMO306
Introduction to SMO306
Ewout van der Schaft

February-June 2022
Week 1-4
Week Number
Location Topic/Theme/Title Pre-reading
and/or Date
Online BBB Week 1 Learning Mall Introduction module. Selected theory textbook
20-25 Feb What is strategy?
(9-12 noon) Mission, vision, and values.
Macro-environment analysis.
PESTEL + scenarios
Online BBB Week 2 Learning Mall Industry analysis + Porter’s 5 Forces, Selected theory textbook
28 Feb - 4 March Blue Ocean strategy Resources and
(9-12 noon) Capabilities.
VRIO, SWOT.
Online BBB Week 3 Learning Mall Review Selected theory textbook

7-11 March Stakeholders and governance.
(9-12 noon) Stakeholder mapping, CSR.
History and Culture
Online BBB Week 4 Learning Mall Competitive strategies, strategic clock. Selected theory textbook
14-18 March Diversification, Ansoff Matrix, BCG Model
(9-12 noon) Global-Local
Week 5-10
Lecture Week 5 Lecture ES101 Introduction to Simulation Game, Tutorial Selected theory textbook
24 March Rehearsal, and Practice Round + Learningmall (LM)
(9-12 noon) tutorial material
Workshop Week 6 Foundation Building Business Simulation Game – LM online tutorial material
31 March FB351, FB359 Round 1 + Round 2
(9-12 noon)
Midterm
Workshop Week 8 Foundation Building Business Simulation Game – Round 3 + Round 4 LM online tutorial material
14 April FB351, FB359
(9-12 noon)
Workshop Foundation Building Business Simulation Game – Round 5 + Round 6 LM online tutorial material
Week 9 FB351, FB359
21 April
(9-12 noon)
Week 10 Group Presentations Group Presentations: every group presents See LM for assessment
25-29 April (location tbd) (30% of final mark) instructions and schedule
Week 11-14
Lecture Week 11 Lecture ES101 Disruptive innovation entrepreneurial life Selected theory textbook
5 May cycle, first-mover advantage.
(9-12 noon) Strategic fit, alliances.
Lecture Week 12 Lecture ES101 SAFe criteria, gap analysis Selected theory textbook
12 May Deliberate vs. emergent strategies, strategic
(9-12 noon) planning.
Lecture Week 13 Lecture ES101 Organisation structures Selected theory textbook

19 May Types of strategic change
(9-12 noon)
Week 14 TBD TBD Review ALL

Grading
The grading will consist of 2 parts (total 100%):
• Presentation for Business Simulation Game

(30%)
• Final Exam (70%)
Business Strategy
Ewout van der Schaft

March 2022
Business Strategy
Week 3
Stakeholders and Governance
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved
Stakeholders, governance
and ethics
Slide 2.8
Who are the stakeholders?

Stakeholders are those individuals or groups that
depend on an organisation to fulfil their own goals
and on whom, in turn, the organisation depends.
Types of stakeholder
Stakeholders can be divided into internal
stakeholders (e.g. managers and employees) and
external stakeholders.
External stakeholders are of 4 types:
• Economic (e.g. suppliers, shareholders, banks)
• Social/political (e.g. government agencies)
• Technological (e.g. standards agencies)
• Community (e.g. local residents)
Stakeholder mapping
Stakeholder mapping identifies stakeholder power
and attention in order to understand political
priorities.
The power and interest of stakeholders depend on

the particular issue being considered – different
issues require different maps.
Conflicts of stakeholder interests and
expectations
• Pursuit of short-term profits may suit shareholders and
managerial bonuses but come at the expense of investment in
long-term projects.
• Family business owners may want business growth, but also
fear the loss of family control if they need to appoint
professional managers.
• In large multinational organisations, conflict can result
because of a local division's responsibilities simultaneously to
the company head-office and to its host country.
• Going public on the stock market may raise funds, but require
unwelcome degrees of openness and accountability from
management.
11
Stakeholder mapping: the power/attention
matrix.
Source: Adapted from Newcombe, R. ‘From client to project stakeholders: a stakeholder mapping approach’’, Construction Management and Economics vol. 21, no. 8 (2003): 841-8.
Power
Power is the ability of individuals or
groups to persuade, induce or coerce
others into following certain courses of
action.
Table Sources of power (1 of 2)
Table 5.2 Indicators of power (2 of 2)
Corporate governance
Corporate governance is concerned with the
structures and systems of control by which
managers are held accountable to those who
have a legitimate stake in an organisation.
Corporate governance
Corporate
governance is
concerned with the
structures and
systems of control by
which managers are
held accountable to
those who have a
legitimate stake in an
organisation.
The growing importance of governance
• The separation of ownership and management

control – defining different roles in governance.
• Corporate failures and scandals (e.g. Enron) –
focusing attention on governance issues.
• Increased accountability to wider stakeholder
interests and the need for corporate social
responsibility (e.g. green issues).
The governance chain (1 of 2)
The governance chain shows the roles and
relationships of different groups involved in the
governance of an organisation.
• In a small family business, the governance
chain is simple.
• In large publicly-quoted corporations,
however, influences on governance can be
complex
The governance chain (2 of 2)
Source: Adapted from David Pitt-Watson, Hermes Fund Management.
Issues in governance
• Who are the shareholders – should boards respond
to the demands of institutional investment
managers or the needs of the ultimate
beneficiaries?
• The role of institutional investors – should they
actively intervene in strategy?
• Establishing the specific role of the board – in
particular the role of non-executive directors.
• Scrutiny and control – statutory requirements and
voluntary codes to regulate boards.
22
Different governance models
Shareholder model Stakeholder model
Advantages  Higher rates of return  Long-term horizons
 Reduced risk  Less reckless risk-
 Increased innovation taking
and entrepreneurship  Better management
 Better decision-making
Disadvantages  Diluted monitoring  Weaker decision-
 Vulnerable minority making
shareholders  Uneconomic
 Short-termism investments
 Reduced innovation
and entrepreneurship
Corporate social responsibility
Corporate social responsibility (CSR) is the
commitment by organisations to ‘behave ethically
and contribute to economic development while
improving the quality of life of the workforce and
their families as well as the local community and
society at large’.1
1 World Business Council for Sustainable Development.
The Evolution of CSR Reporting
Chandler, Strategic Corporate Social Responsibility, 5e. © SAGE Publishing, 2020 25

26
27
Unilever Value Chain
Chandler, Strategic Corporate Social Responsibility, 5e. © SAGE Publishing, 2020 28

Chandler, Strategic Corporate Social
Responsibility, 5e. © SAGE Publishing, 29
2020
30
Table 5.3 Corporate social responsibility stances
The ethics of individuals
and managers
Ethical issues have to be faced at the individual level:
• The responsibility of an individual who believes
that the strategy of the organisation is unethical
– resign, ignore it or take action
• ‘Whistle-blowing’ – divulging information to the
authorities or media about an organisation
if wrong-doing is suspected.
Texas instruments’ guidelines
• Is the action legal? . . . If not, stop immediately.
• Does it comply with our values? . . . If it does not, stop.
• If you do it would you feel bad? . . . Ask your own
conscience if you can live with it.
• How would this look in the newspaper? . . . Ask if this
goes public tomorrow would you do it today?
• If you know it’s wrong . . . don’t do it.
• If you are not sure . . . ask; and keep asking until you get
an answer.
34
Table 5.4 Some questions of corporate social
responsibility (1 of 2)
Table 5.4 Some questions of corporate social
responsibility (2 of 2)
Business Strategy
Week 3
History and Culture
Why history is important
• Learning from the past. Will trends be repeated?
How were problems dealt with in the past? Asking
‘what if’ questions.
• Building capabilities. The lessons of the past can give
rise to new ideas and innovation. Can capabilities built
in the past be adapted or transfered to the current
situation?
• Legitimising strategy and change. Past success can be
used as evidence to support current strategies.
Organisational culture
Organisational culture is the taken-for-

granted assumptions and behaviours that
are shared within a particular group and
help to make sense of the organisational
context.
Geographically-based cultures
• Different countries may have different cultures.
• Such cultures may mean attitudes to work,
authority, equality, ethics and behaviours differ
between countries/regions.
• Subnational cultures may also differ within a
country, e.g. Northern and Southern Italy.
Geographically based cultures
Hofstede suggests that there are at least four key
dimensions upon which national cultures tend to
differ:
• Power distance.
• Individualism-collectivism.
• Long-term orientation.
• Uncertainty avoidance.
Organisational identity
Organisational identity refers to what members
believe and understand about who they
specifically are as an organisation.
Managers and entrepreneurs often try to
manipulate organisational identity because it is
important for recruiting and guiding employees,
interacting with customers and dealing with
regulators. (e.g. Carslberg wanted to redefine
itself as a fast-moving consumer goods business
rather than a brewer).
The Cultural web of an organisation
Strategic drift (1 of 2)
Strategic drift is the tendency for strategies

to develop incrementally on the basis of
historical and cultural influences, but fail to
keep pace with a changing environment.
Strategic drift (2 of 2)
Incremental strategic change
• Gradual change in alignment with
environmental change.
• Building on successful strategies used in the
past.
• In successful businesses, there are usually quite
long periods of continuity where strategies are
largely unchanged or change incrementally.

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Business Strategy – SMO306

Ewout van der Schaft

Online BBB Week 3 Learning Mall Review Selected theory textbook

Lecture Week 13 Lecture ES101 Organisation structures Selected theory textbook

Week 14 TBD TBD Review ALL

The grading will consist of 2 parts (total 100%):

• Presentation for Business Simulation Game

Ewout van der Schaft

Who are the stakeholders?

The power and interest of stakeholders depend on

• The separation of ownership and management

Source: Adapted from David Pitt-Watson, Hermes Fund Management.

1 World Business Council for Sustainable Development.

Chandler, Strategic Corporate Social Responsibility, 5e. © SAGE Publishing, 2020 25

Chandler, Strategic Corporate Social Responsibility, 5e. © SAGE Publishing, 2020 28

Organisational culture is the taken-for-

Strategic drift is the tendency for strategies

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