ROBERT H. SMITH
SCHOOL OF BUSINESS
BMGT 495
FALL 2009
Business Policies
College Park Tu/Th Sec. 0301; VMH Rm. 1314, 12:30pm – 1:45pm
College Park Tu/Th Sec. 0401; VMH Rm. 1314, 2:00pm – 3:15pm
Instructor: Dr. Rhonda Reger
Consulting Services: Capsim Telephone XXX-XXX-XXX
Office:
VMH 4562
Phone:
301-405-2167
Email:
rreger@rhsmith.umd.edu
Office Hours: Tu/Th 3:30pm – 4:30pm and by appointment.
Section:
Required Texts:
Capstone Student Guide 2009 (in class; register for the simulation on-line before the first class)
Wall Street Journal (available free from VBIC/library)
Case Packet (Available from Copy Center in VMH)
Comp-XM, Examination Guide 2009 (will be distributed before the Final Exam)
Course Overview:
Implicitly or explicitly, every firm must define the scope of its business operations and, within the chosen
scope, how the firm will compete against rivals. Decisions about the scope of business constitute the
firm’s corporate strategy; decisions about how to compete within chosen market segments reflect the
firm’s business-level strategy. This course focuses on how a firm can develop and implement effective
business-level and corporate-level strategies.
The course is also about top management and the total organization. As such, it is an integrative course
emphasizing a “general management” or total organizational perspective as opposed to a functional
viewpoint (accounting, finance, marketing, etc.). A general management perspective is necessary because
the formulation and implementation of effective strategies requires a precise understanding of the
interrelationships among the different functions of the organization and the relationships of these
functions to the business environment.
Course Purpose and Objectives:
The course is designed to help students:
 Apply theories, concepts and models that managers can use to develop and implement successful
strategies
 Understand how to take a general management view of business strategic issues, one that integrates
different functional perspectives into a perspective on what is best for the organization as a whole
 Improve business communication skills through class discussions, formal presentations, and
preparing a written Annual Report.
Grading:
Class Contribution
Wall Street Journal Notebook
Capstone Simulation
Team Performance in the Simulation
Homework Assignments
Team Annual Presentation to Stockholders (2)
Annual Report with 8 years of data
Final Examination
10%
20%
10%
10%
20%
10%
20%
Class Contribution:
This is not a traditional lecture-based course. Conceptual material will be illustrated and applied to the
“real world” through rigorous class discussion of business cases (case packet and WSJ assignments), and
through running a company in a simulated industry. Students can contribute to the collective learning in
many ways. Your classmates and I expect all students to attend and be well prepared for each class and
team meeting, having read the required materials and analyzed the assigned case studies before class. We
also expect all class members to play an active role in class discussion and in your simulation teams. If
all class members prepare for and actively participate in each class discussion, we will all learn more from
each other and enjoy the course more. In addition, those that make consistent, meaningful contributions
to class discussions will receive higher class contribution grades.
We realize that people become ill, have job interviews and other obligations that may require a student to
miss a class session or a team meeting from time to time. It is the obligation of every student to act as a
professional in these cases: inform others of your need to miss, arrange for a classmate to take notes in
your absence and to bring you up to date on any materials or decisions you missed; take on additional
responsibilities to substitute for the missed obligations, etc.
Students will have the opportunity to complete peer evaluations at least twice during the semester to
identify both high and low contributors and to give low performers an opportunity to correct their
behavior. To avoid misunderstandings, teams should set expectations in the first team meeting, assign
roles and duties, and hold each other accountable for performance on a weekly basis. Most team issues
can be handled within the team. Teams do have the right to terminate low performers, but this drastic
step may only be taken after informal and formal corrective actions have failed within the team, and after
the team has met with the professor. Terminated employees will receive 60% of the team grade.
Wall Street Journal Notebook:
Every student is expected to keep a notebook of Wall Street Journal articles with student-provided
analysis and reflection. The journal should include a minimum of 15 articles (cut and pasted from the
print edition or downloaded from the electronic edition) on the topics found in the appendix. Each article
should be followed by the student’s analysis of the situation discussed in the article including: (1) the key
strategic issues, (2) theory or models from this course or other business school courses that help structure
analysis of the information provided in the article, (3) the student’s original analysis of the situation (not
a summary of the facts or analysis provided in the article!), and (4) recommendations to the top
management team of the company(ies) discussed in the article. Additional specific questions per topic
area are included in the appendix. Notebooks will be checked twice during the semester. Students should
have a minimum of 5 articles completed by the first check and 10 articles by the second check.
All articles in the notebook must be published between August 31, 2009 and December 1, 2009. The
notebook will account for twenty (20) percent of the course grade. The grade will be determined by the
quality of the student-provided analysis in the notebook and the quality of the chosen articles.
Capstone Business Simulation:
Capstone® is an Internet/PC-based simulation that is designed to give teams of students the opportunity
to craft strategies, to make business decisions and to be held accountable for the performance of the firm.
Simulations offer students the change to come as close as possible to managing a real company to develop
an understanding of many of the challenges encountered when managing a business.
You and your team members will assume the role of the top management team of one of the companies in
the industry. Over the eight year timeframe of the simulation, your team will encounter a range of
strategic issues that will force you to integrate your knowledge of accounting, finance, marketing,
operations, and strategic management.
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Complete details of the simulation are included in the Student Guide 2009 and online at Capsim.com.
Your grade for Capstone (50% of the total course grade) will be based on four criteria: (1) your team’s
performance in the simulation (10%), (2) homework assignments, (3) your team’s two stockholder
presentations (10% each x 2), and (4) your team’s Annual Report (10%).
Capstone Simulation Performance: Ten (10) percent of your course grade will be determined by how
well your Capstone company performs relative to the other companies in your industry. We will discuss
in class the specific criteria that will be used to evaluate your company’s performance.
Capstone Homework Assignments. Teams will complete X homework assignments during the semester.
These homework assignments will become parts of the final annual report. The first homework
assignment is to complete a mission statement, guiding principles and objectives. The second homework
assignment is to complete a strategy statement for your team. Assignment due dates are found on the
schedule.
Capstone Stockholder Presentation: Each of the Capstone teams will make two Stockholder
Presentations, each worth ten (10) percent of your course grade.. The presentations are designed to give
you experience presenting to potential stockholders of an organization. Your goals in the presentation will
be (1) to convince investors (your fellow classmates) to invest their money in your company, (2) to fairly
state your company’s past performance, and (3) to provide forward looking guidance to potential
stockholders as to your strategies and expected future performance without disclosing confidential
competitive information.
Capstone Annual Report: Each team will complete an Annual Report and 10-K (a combined report)
worth ten (10) percent of your course grade. “The annual report to shareholders is the principal document
used by most public companies to disclose corporate information to their shareholders. It is usually a
state-of-the-company report, including an opening letter from the Chief Executive Officer, financial data,
results of continuing operations, market segment information, new product plans, subsidiary activities,
and research and development activities on future programs. The Form 10-K, which must be filed with
the SEC, typically contains more detailed information about the company’s financial condition than the
annual report.” (downloaded on January 21, 2009 from http://www.sec.gov/answers/annrep.htm ). Your
annual report should focus on the last year’s performance, but also disclose data and trend lines for the
entire 8 year history of your firm.
Both presentations and annual reports should only include true, factual statements about your team and
company. Forward looking statements should be clearly identified.
Final Examination:
Individual students will make four sets of decisions for the Andrews Corporation within the Comp-XM
simulation. Your competition will be three companies run by the computer. This creates a level playing
field for all—all students go up against a standard set of competitors. As with the semester long team
simulation, the quality of your decisions directly affects the position of your company. Performance is
evaluated using a Balanced Scorecard that gauges results across four areas: financial, internal business
process, customer, and learning and growth. In addition, you will complete a series of five sets of quizzes
called Board Queries that ask questions related to the simulation environment. For example, you might
be asked to conduct a break-even analysis on an increase in production automation or calculate the effect
additional borrowing will have on your financial ratios. The exam will also include questions from the
lectures and cases discussed in class. The Board Query quizzes use multiple choice and essay formats.
For both parts of the final exam, you will work as an individual, which means all success will be
attributed to your efforts. This is your opportunity to show your strategic vision, tactical abilities and
business knowledge. The final examination accounts for twenty (20) percent of the course grade.
Academic Integrity:
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Assignments and presentations must be your own work, in your own words. Using outside materials is
generally acceptable as long as you clearly identify the source. The key point is to make clear which
ideas and text were developed by you or your group members, and which came from others. False or
fabricated information is unacceptable. The integrity of your reports and presentations should meet the
highest standards, whether as a student, consultant, or manager. Singular and isolated lapses of ethics,
integrity, or professionalism have had devastating consequences on careers.
Students are encouraged to discuss cases, exchange ideas, collaborate and cooperate with others in the
class where appropriate. New ideas often arise from such interactions. While collaboration and
brainstorming are thus encouraged, you need to always keep clear what value you have added, separate
from the ideas of others. Academic dishonesty, as defined by university policy, will not be tolerated in
any form. Activities that constitute academic dishonesty in this course include: (1) copying text passages
verbatim or paraphrasing those passages in your paper without referencing the original source (including
from the Internet); (2) consulting those who have already taken BMGT 495 about cases or assignments
before they are due; and (3) working with others on individual assignments; working with non-team
members on team assignments. You are not allowed to share written or electronic notes, outlines or "key
points" in anticipation of completing written assignments. Papers that are judged to be substantially
similar in content will be submitted to University procedures.
Academic dishonesty cheapens the value of your degree and undermines the quality of your education.
The University's Code of Academic Integrity is designed to ensure that the principles of academic honesty
and integrity are upheld. All students are expected to adhere to this Code. The Smith School does not
tolerate academic dishonesty. All acts of academic dishonesty will be dealt with in accordance with the
provisions of this code. Please visit the following website for more information on the University's Code
of Academic Integrity:
http://www.studentconduct.umd.edu/aca/honorpledge.html
An original, signed copy of the honor pledge must be turned into the professor’s office after
you complete the final exam, and no later than 4:00 pm on December 18th:
I pledge on my honor that I have not given or received any
unauthorized assistance on the final examination.
Signature: ___________________________ Date: ________________
Accommodations for Students with Disabilities:
The University has a legal obligation to provide appropriate accommodations for students with
documented disabilities. In order to ascertain what accommodations may need to be provided, I ask that
students with disabilities inform me of their needs within two weeks of the start of the semester.
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PROPOSED CLASS SCHEDULE
Session
Sept 1
Topic
Course Introduction
Assignment
Log onto:
http://www.msimediaplayer.com/registration.htm
Sept 3
Sept 8
Mission Statements & Objectives
Assignment to Teams
The External Environment: General and
Industry Environment
Course number C28408
Complete Rehearsal Rounds
before class for bonus points.
Complete Rehearsal Rounds
for regular credit
Complete Practice Round 1
before 3 am (before class).
Sept 10
The External Environment: Competitor
Analysis
Sept 15
The Internal Environment: Resources,
Capabilities, and Core Competencies
Complete Practice Round 2
before 3 am (before class).
Sept 17
Business Level Strategy: Low Cost,
Differentiation, Focus, Integrated low
cost/differentiation
Homework 1: Mission
Statement & Objectives and
Strategy Statement Due in
Class
Sept 22
Business Level Strategy: Sources of Low
Cost Advantage, Risks
Homework 2: Strategy
Statement Due in Class
Sept 24
Business Level Strategy: Sources of
Differentiation, Risks
Competition Round 1
Due before 3 am (before class)
Sept 29
Business Level Strategy: Integrated versus
Stuck in the middle
Oct 1
HR Module enabled beginning in Round 2
Oct 6
Oct 8
Oct 13
Sustainability and the Triple Bottom Line.
Oct 15
Oct 20
TQM/Sustainability Module enabled beginning
in Round 4.
All teams present for 10 minutes each.
Competition Round 2
Due before 3 am (before class)
WSJ Notebooks at least 1/3
complete. Bring Notebooks
to class.
Competition Round 3
Due before 3 am (before class)
Homework 3: Sustainability
and the triple bottom line.
Competition Round 4
Due before 3 am (before class)
Presentation to Stockholders
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Oct 22
Oct 27
Oct 29
Corporate Level Strategy
Acquisition and Restructuring Strategies
Downsizing, Downscoping, Bankruptcy,
Turnarounds
International and Global Strategy:
Globalization, multidomestic strategies,
exporting
CASE: Danaher ?
Competition Round 5
Due before 3 am (before class)
Nov 3
Cooperative Strategy: Joint Ventures,
Alliances, consortia
CASE: ???
Nov 5
Implementing Strategy: Structure, Systems,
People, Style, Culture
Competition Round 6
Due before 3 am (before class)
Nov 10
WSJ Notebooks at least 2/3
Implementing Strategy: Leadership,
Leadership Development, Executive Succession complete. Bring Notebooks to
class.
Nov 12
Implementing Strategy: Leadership,
Competition Round 7
Leadership Development, Executive Succession Due before 3 am (before class)
Nov 17
Implementing Strategy: Leadership,
CASE: ???
Leadership Development, Executive Succession
Final Review & Annual Report requirements
Competition Round 8
Due before 3 am (before class)
Work on Presentation to Shareholders and
Annual Reports
Thanksgiving Holiday
Work on Presentation to Shareholders and
WSJ Notebooks due in class.
Annual Reports
Presentations to
Shareholders
Presentations to
Shareholders
Class Wrap up and Course Evaluations
Presentations to
Shareholders
Nov 19
Nov 24
Nov 26
Dec 1
Dec 3
Dec 8
Dec 10
Dec 1218
The Final Exam will be available on-line
beginning at 8 am on December 12. Students
are to complete the exam individually
without help for any others and must bring a
signed copy of the University Honor Code to
my office after completing the exam. These
must be in my office by 4 pm on Friday,
December 18th. Only an original, signed
copy of the Honor Pledge will be accepted
(no electronic copies).
Annual Reports due
Final Exam must be
completed on line by 3 pm on
Friday, December 18.
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Note: As we progress through the course, it may prove necessary to make adjustments to the schedule. You will be
notified in advance of any changes.
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Appendix 1:
Wall Street Journal Notebook
Required Topics
Every student is expected to keep a notebook of Wall Street Journal articles with student-provided
analysis and reflection. The journal should include a minimum of 15 articles (cut and pasted from the
print edition or downloaded from the electronic edition) on the topics found in this appendix. Each article
should be followed by the student’s analysis of the situation discussed in the article including: (1) the key
strategic issues, (2) theory or models from this course or other business school courses that help structure
analysis of the information provided in the article, (3) the student’s original analysis of the situation (not
a summary of the facts or analysis provided in the article!), and (4) recommendations to the top
management team of the company(ies) discussed in the article. Additional specific questions per topic
area are included in this appendix. Notebooks will be checked twice during the semester. Students
should have a minimum of 5 articles completed by the first check and 10 articles by the second
check.
All articles in the notebook must be published between August 31, 2009 and December 1, 2009. The
notebook will account for twenty (20) percent of the course grade. The grade will be determined by the
quality of the student-provided analysis in the notebook and the quality of the chosen articles.
Students may turn in additional articles for extra credit, with analysis and recommendations, beyond these
requirements. Credit will only be given if the following are included for each article: 1) a copy of the
article; 2) analysis using methods and models learned in this class and other business school courses; and
3) recommendations from the student (acting as an outside consultant) to the top management team of the
company(ies) featured in the article. Students may also include current articles from other publications
(with analysis and recommendations) for extra credit, but 15 of the articles MUST come from the current
term of the Wall Street Journal. (August 31, 2009 to December 1, 2009).
Please use this form as the Table of Contents for your Notebook.
Topic
1. Value Based
Management
Purpose, Vision
(evidence the company
cares about something
beyond making money)
2. Industry Analysis
(Porter’s five forces;
profit potential of an
industry)
3. Market Segmentation
Title of
Article/Company(ies)
Questions to Consider
(among others)
Pages in
Notebook
What evidence do you have
that the company is sincere
about their purpose? Has
the vision or sense of
purpose helped or hurt the
firm?
Why do some industries
outperform others year
after year (e.g.,
pharmaceuticals) while
others are chronic low
performers (i.e., airlines),
and why are some cyclical,
while others are recession
proof?
How can multiple firms in
the same industry do well
by adopting different
strategies to serve different
industry segments? Are
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4. Positioning in an
industry as a source of
competitive advantage
5. Internal sources of
competitive advantage
such as brands,
leadership, intangible
resources
6. Competitive Rivalry
and competitive
dynamics—firms
reacting to the actions of
competitors in an
industry
7. Turnaround or Chapter
11 Bankruptcy
8. Sustainability
some segments more
attractive than others? Is it
possible for one firm to
serve all segments well?
Why do some firms
consistently outperform
their rivals? Have they
carved out the most
profitable niche?
Or are they better managed
and out-execute their
rivals? Why can’t other
firms seem to copy these
industry leaders?
Unlike sports, where each
game ends and a winner is
declared, rivalry in
business sometimes
continues for years or even
decades (e.g., Coke vs.
Pepsi). Is this rivalry
destructive and weakens
the companies, or is it
constructive, and renders
the companies stronger?
What caused the company
to get into trouble in the
first place? Are the actions
the management has taken
addressing the problem and
allowing the company to
emerge as strong or
stronger? At what cost in
terms of lost jobs, divisions
sold, loss of stockholder
value, etc? Could the
company have avoided the
problem or were events
really beyond their
foresight or control?
If the company has entered
Chapter 11 of the U.S.
Bankruptcy Code
(Reorganization): Same
questions as above; plus:
What steps are needed to
emerge from bankruptcy as
a going concern, or should
the company liquidate?
Increasingly, leading
corporations in Europe, the
U.S. and elsewhere are
pursuing the “triple bottom
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9. Major legal
problems/major public
relations problems (e.g.,
like Valdez oil spill; lead
in toys)
10. Mergers &
Acquisitions
11. Spin-offs (converting
a division of a
multidivisional firm into
a standalone company);
corporate downsizing
(cutting the budget;
usually cutting
headcount, without
getting rid of businesses),
or downscoping
(narrowing the scope of
businesses in the
line” of people, planet, and
prosperity. Some critics
say these actions are simple
public relations moves. In
your article, what evidence
is provided that the
company is sincerely
interested in being part of a
sustainable future? What
evidence is there that this
corporation is not sincere,
but rather just seeking
“good press”? What is the
purpose of business? Is it
only to provide prosperity
for its owners (e.g.,
maximize shareholder’s
wealth), or do major
corporations have a
responsibility to be a good
citizen and neighbor (e.g.,
provide social and
environmental value as
well as economic value)?
Could the company have
avoided the problem?
What caused it? How
should they address it?
How can they avoid long
term harm to their
reputation, sales, and
profits?
Is this a merger of equals or
an acquisition of one firm
by another? Why are they
merging (what benefits do
they expect)? At what cost?
Since up to 70% of all
acquisitions fail, do you
think this one will be
successful, and why?
The economy is bad so
there will be many articles
about downsizing, spinoffs, and downscoping.
Are these being done in
this case for short term
financial reasons only?
Will the long term
competitiveness of the firm
be harmed? Might there be
other ways to achieve the
same goal?
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portfolio by selling
divisions to others or
closing down business
units).
12. Entrepreneurs, CEO
and Wall Street pay and
bonuses
13. Leadership &
Executive Succession
14. International/global
strategy
15. A company or
business leader you
admire
The US has the highest
income disparity in the
industrialized world
between the upper echelons
of large companies and the
average white collar
worker at the same
companies. The gap has
grown much wider in the
last 20 years. Do
entrepreneurs, CEOs,
investment bankers, and
hedge fund managers
assume downside risk, or
do they only enjoy upside
rewards in good times and
no real risk in bad times?
Are they worth what they
are paid?
Steven Jobs’ recent
medical problems and
Apple’s related stock price
plunge reminds us that
leadership matters. How
does it matter? What
makes a good leader? Are
all leaders equally good in
all situations or do different
situations call for different
types of leaders? How can
companies “grow” leaders
for the future? Why kind of
leader will you be?
How does this firm enter
new markets (joint
ventures, acquisitions,
greenfield)? Does it pursue
a global strategy or a multidomestic strategy or a
hybrid? Has it been
successful? What could it
do better in the future?
Why do you admire this
company or leader? What
are you doing to be more
like this person or to join
this organization (or one
similar to it) so that you
can learn more from them?
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Additional topics of the
student’s choice
Additional articles on the
same topics
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