Please be advised that university policy states that students who fail to attend the
first two (2) class sessions will be administratively dropped from the class.
Summer 2009
Professor Kelley
CALIFORNIA STATE UNIVERSITY, SACRAMENTO
College of Business Administration
GM 105 – Strategic Management
Course Outline
INSTRUCTOR:
OFFICE:
PHONE:
E-Mail:
WEB SITE:
OFFICE HOURS:
Professor Craig Kelley
Tahoe 2019
278-7199
Kelleyca@csus.edu
www.csus.edu/indiv/k/kelleyca
TWR 10:00-10:20 a.m.
REQUIRED MATERIALS
Capstone Ultimate Business Simulation 2009, Management Simulations, Inc.
[You may purchase the materials through the Hornet Bookstore or through the Capsim web site
www.capsim.com]
(You must register on the Capsim web site to receive credit for the Capsim assignments for
the course. You must register at www.capsim.com before you will be assigned to a team).
COURSE OBJECTIVES
Strategic Management builds upon the knowledge gained in the business core. Emphasis is placed
on making functional, business level and strategic decisions. This is accomplished by encouraging
the student to act as a “manager” in making decisions and supporting them with well developed
analysis. Specific objectives for all who participate in Strategic Management are:
1.
2.
3.
4.
5.
To integrate concepts and knowledge from the core business courses.
To study market competition and to learn useful tools with particular emphasis on a
systematic approach, a long-term orientation and a top management point-of-view.
To develop a framework of analysis that enables students to analyze organizations,
marshal evidence to support conclusions drawn from the analysis and engage in problem
solving in all areas of strategic management.
To stimulate creativity in implementing business solutions.
To develop team building and leadership skills.
CONDUCT OF THE COURSE
Participants in Strategic Management are required to complete assigned readings "prior" to class
sessions when those readings are discussed. Class will be a combination of instructor lectures,
interactive class discussions, and participant presentations. Interactive class discussions will be
conducted under both Socratic and volunteer formats. Students are expected to approach the class
as professionals. You are responsible for completing assignments on time.
GRADING
Average work in this course is a "C." Keep in mind that a score on an assignment may not equate
to the amount of time that was spent on the assignment. Grades for the course will be determined
based upon the following components:
Component
Points
1. Business Concepts Test
2. Capstone simulation rehearsal
3. Eight rounds of Capstone simulation results
(maximum of 18 points possible each round,
plus 6 points to round to 150)
2. Four sales forecasts (20 points each)
3. Management Memorandum
4. Competitor SWOT
5. Strategic Management Concepts Test
7. Individual paper assessing strategy used in First Simulation
8. Individual paper
9. Eight rounds of Advanced Capstone simulation results
(maximum of 18 points possible each round, plus 6 points)
60
40
150
80
100
20
100
60
100
150
860
Final grades will be based on the following scale:
860 - 790
789 - 774
773 - 759
758 - 696
695 - 680
679 - 664
663 - 610
609 - 600
599 - 516
515 - 0
A
AB+
B
BC+
C
CD
F
BUSINESS REVIEW TEST
You will take a test on key business concepts that you should know from the prerequisite classes
required for enrollment in GM 105. The test will be short answer/essay and will be given on
June 9th. The test is closed book but you are encouraged to review any source prior to taking the
test. The questions will be selected from the list of key business concepts attached to the end of this
syllabus. NO MAKE-UP TEST WILL BE GIVEN.
STRATEGIC MANAGEMENT CONCEPTS TEST
You will take a test on key strategic management concepts that are covered on June 9th. The test
will be short answer/essay. The test is closed book and note but you are encouraged to review any
source prior to taking the test. Power Point slides are available on my web site. NO MAKE-UP
TEST WILL BE GIVEN.
CAPSTONE REHEARSAL
You must run eight (8) rounds of the Capstone Rehearsal by 11:00 p.m. on June 4th.
CAPSTONE DECISIONS
You will be assigned to a two-member team. Your task is to manage a business with five products,
each targeted toward five different markets. You will compete against five other firms in the same
industry. Your team’s decisions for each round must be uploaded to the Capstone website by
2:00 p.m. for the 1:00 p.m. class and 8:00 p.m. for the 6:30 p.m. class. The game will run
automatically so late decisions will not be accepted.
To prevent gamesmanship you must submit decisions for an on-going business for all 8 decision
periods. (For example, you can’t stop production or sell capacity in the 8 decision period to
maximize profit simply because there is no 9th decision.) Your team must specify its measures of
success based on your overall business strategy before the game is played for credit. You may pick
three of the following measurement choices; total dollar profit, stock price, EPS, ROE, ROS, ROA,
asset turnover, total market share, average contribution margin or total market capitalization. The
measures that you pick will remain in effect for Rounds 1-4 of the game. You may change your
measures for Rounds 5-8. You will be ranked 6 (highest) to 1 (lowest) on each measure per round.
In addition, your team may earn up to five ‘stars’ per round. Each star is worth one extra credit
point. A star is earned for each period that your team has a profit, maintains a contribution
margin of at least 30%, increases the stock price from the previous round, doesn’t have any stock
outs or inventory levels over 60 days, and no emergency loan.
*** Three practice rounds will be run before the game is played for credit. The purpose of the
practice rounds is for the students to become familiar with the variables and mechanics of the
game. You may not want to use your first choice of strategy for the practice round as your
competitors will see the results.
ACCELERATED CAPSTONE DECISIONS
Your team will run an accelerated Capstone game. Your team’s decisions for each round must be
uploaded to the Capstone website by 2:00 p.m. and 3:00 p.m. for the 1:00 p.m. class and 7:00
p.m. and 8:00 p.m. for the 6:30 p.m. class. The game will run automatically so late decisions will
not be accepted. Your team needs to specify its measures of success based on your overall business
strategy before the accelerated game is played. You may pick three of the following measurement
choices; total dollar profit, stock price, EPS, ROE, ROS, ROA, asset turnover, total market share,
average contribution margin or total market capitalization. The measures that you pick will remain
in effect for all 8 Rounds. You will be ranked 6 (highest) to 1 (lowest) on each measure per round.
In addition, your team may earn up to five ‘stars’ per round. Each star is worth an extra credit
point. A star is earned for each period that your team has a profit, maintains a contribution
margin of at least 30%, increases the stock price from the previous round, doesn’t have any stock
outs or inventory levels over 60 days, and no emergency loan.
CAPSTONE TEAM WRITTEN ASSIGNMENTS
Your team will complete several written assignments. Each assignment must be typed (I don’t read
assignments that are not typed) and are due at the beginning of class on the date listed in the
tentative schedule. No late papers will be accepted. You may submit your papers via email.
These assignments are:
1.
Sales Forecasts for Rounds 2, 3, 5 & 7
Your team will submit a copy of a sales forecast for rounds 2, 4, 6 & 7. The forecasts
are due before 2:00 p.m. for the 1:00 p.m. class and 8:00 p.m. for the 6:30 p.m. class
on the days that round 2, 4, 6 & 7 are run. You may email me your sales forecasts.
Your team’s actual results will be measured relative to your forecast. For example, if
your actual results are 85% of your forecast, you will receive 85% of the possible points
for this assignment.
2.
Management Memorandum
Your team will prepare a written memorandum addressed to me that describes the
following:
(1)
(2)
(3)
(4)
(5)
The managerial roles that each member will assume during the game.
The performance expectations of the members of the team.
How each member of the team will be held accountable for their
performance during the game.
A detailed description of how your business strategy will be
implemented during the course of the Capsim game. This portion
should specify the following.
1. A mission statement for your firm.
2. Statements of specific strategic and financial objectives for rounds
1-4 of the game.
3. A detailed description of the strategy that you will use in rounds 1
through 4 including what decisions you will implement in the
following areas:
a. Promotion and sales with budget allocations for each set of
decisions.
b. Production capacity expansion/contraction, automation
c. Timing and amount invested in Research and Development
d. Amount invested in various initiatives of Total Quality
Management (TQM)
e. Amount invested in Human Resources initiatives
Your measures of success. You must pick three of the following
measurement choices; total dollar profit, average contribution margin,
stock price, EPS, ROE, ROS, ROA, asset turnover, total market share
or total market capitalization. The measures that you pick will remain
in effect for the duration of the game. You will be ranked 6 (highest)
to 1 (lowest) on each measure per round.
Each team member must sign the memorandum. I will stop reading this assignment
after the third grammatical error.
3.
Competitor SWOT Analysis
Your team will complete a SWOT analysis on your firm relative to the five competing
firms in your industry. Please refer the SWOT on my web site for format. I will stop
reading this assignment after the second grammatical error. The SWOT is due by 2:00
p.m. for the 1:00 p.m. class and 8:00 p.m. for the 6:30 p.m. class on June 24th.
Papers are due at the beginning of class on the date that they are due. No late papers will
be accepted. You may submit papers by email.
INDIVIDUAL PAPERS
Each participant in Strategic Management will write two papers. The papers must be typed and are
due at the beginning of class. No late papers will be accepted. You may submit your papers
via email.
First Paper This paper is due at the beginning of class on June 18th. You may email me your
paper. You must use at least four sources in writing this paper. These sources may include
internet source from the library database. All other sources should be established business sources
such as the Wall Street Journal, BusinessWeek, Fortune, Financial Times, etc. Internet versions of
these sources are permitted.
Write a maximum five, single-spaced page paper on strategic decision-making under the
proposed Employee Free Choice Act. Specifically address the following in your paper.
a.
What are the key provisions of the Employee Free Choice Act?
b.
Analyze the impact would passage of the Employee Free Choice Act have on the
cost structure of American business.
c.
Explain how the passage of the Employee Free Choice Act might impact the global
strategy of American business.
d.
Discuss the pros and cons of the Employee Free Choice Act from a public policy
perspective.
I will stop reading this paper after the third grammatical error.
Second Paper This paper is due at the beginning of class on July 2nd. You may email me
your paper.
Write a maximum three page, single spaced paper on the success of the strategy that your
team used in first simulation game.
a.
Was your team’s strategy successful or unsuccessful? Why?
b.
If you changed your team’s strategy, was the new strategy successful? Why?
c.
Explain in detail what you are planning to do differently in the second game to
improve your team’s performance.
d.
What are the key success factors in this simulation game? Explain why you
consider these success factors.
I will stop reading this paper after the third grammatical error.
Policy on Extra Credit
There are no extra credit opportunities in this class. An ample number of assignments are
required for you to demonstrate your knowledge of strategic management. Also, I do not curve
grades or modify the grading scale.
TENTATIVE SCHEDULE
Date
June 2
Topic/Assignment
Introduction, Key Business Concepts
June 3
Key Concepts of Strategic Management
June 4
Introduction to Capstone Simulation Game,
Form Groups, Capstone Practice Round Planning, Complete Individual
Rehearsal
June 9
Key Business Concepts & Strategic Management Concepts Tests
June 10
Practice Round #1 decisions due
June 12
Practice Round #2, #3 & #4 decisions due
June 16
Round #1 decisions due, Capstone Management Memorandum due
June 17
Round #2 decisions due, Capstone Sales Forecast for Round 2 due
June 18
Round #3 decisions due, First paper due, attendance mandatory
June 23
Round #4 decisions due, Capstone Sales Forecast for Round 4 due
June 24
Round #5 decisions due, Capstone SWOT due
June 25
Round #6 decisions due, Capstone Sales Forecast for Round 6 due
June 30
Round #7 decisions due, Capstone Sales Forecast for Round 7 due
July 1
Round #8 decisions due
July 2
Accelerated game Rounds #1 & #2 decisions, Second paper due
July 7
Accelerated game Rounds #3 & #4 decisions
July 8
Accelerated game Rounds #5 & #6 decisions
July 9
Accelerated game Rounds #7 & #8 decisions
Changes to this tentative schedule and syllabus will be announced in class.
Key Business Concepts
1.
2.
3.
4.
5.
6.
7.
8.
Describe what working capital is and why it is important.
Describe the concept of financial leverage and it affects EPS and cost of borrowing.
Describe the accounts on an income statement and balance sheet.
Read and interpret an income statement and balance sheet.
Explain how cash flow is used to make business decisions.
Explain the difference between a direct fixed and variable costs, and indirect fixed costs.
Explain the concept of contribution margin and how it is used in the financing of a business.
Explain return on equity, debt ratio, net profit margin, gross profit margin, debt to equity
ratio and current ratio.
9. Explain how to evaluate a long-term business capital investment.
10. Explain the relationship between payment of dividends and stock price.
11. Explain what is market capitalization and what affects its size.
12. Explain the difference between net income of a project and project cash flow.
13. Explain the difference between profit maximization and value maximization.
14. Explain how the yield curve for short, intermediate and long-term debt affects different
sectors of the economy.
15. Explain the difference between secured and unsecured debt.
16. Describe how you would develop a product sales forecast given market size, market growth
rate and market share.
17. Describe how you would develop a production forecast given market size, market growth
rate, market share and ending inventory.
18. Explain product positioning and product cannibalization.
19. Explain market share and how it is computed.
20. Explain the relationship between advertising, sales promotion and personal selling.
21. Explain marginal cost and how managers can use it to make decisions.
22. Explain the difference between sole proprietorship, Limited Liability Company (LLC),
Limited Liability Partnership (LLP), Corporation.
23. Explain benchmarking and how managers use it to make decisions.
24. Explain the difference between private equity firms and publicly traded firms.
25. Explain safety stock, carrying cost, inventory turnover and break even analysis.