Agribusiness Management 308W, Spring 2009
Strategic Decision Making in Agribusiness
Instructor:
Edward (Ted) Jaenicke, Ph.D.
208A Armsby Building
Telephone: 865-5282
Office Hours: 3 - 4 p.m. Wed. and Thurs.
or by appt.
E-mail: tjaenicke@psu.edu
Course Overview: This course is designed to analyze a wide array of strategic
decisions by agribusiness firms in a market environment characterized by imperfect
information and market power. The course draws upon game theory and other
strategic decision tools to analyze three broad types of strategic decisions, each of which
corresponds with the three main parts of the course:
1. Strategic Decisions Between Rival Firms. Focusing on firm decisions made
between rivals with full information, Part One includes the following topics and
strategies: predatory pricing, entry deterrence, excess capacity, wars of attrition,
strategic commitment, tit-for-tat pricing, avoiding price wars, and non-price
competition.
2. Strategic Firm Decisions in an Uncertain World. Focusing on firm decisions made
with incomplete information, Part Two includes topics on probabilities, expected
value and expected utility, investment decisions, research and development
decisions, and the value of waiting.
3. Company-wide Strategic Decisions – with Rivals and Uncertainty. Part Three
focuses on performance-driven management decisions of company divisions and
entire companies.
In each of the three parts, the class will investigate how many firms’ business
decisions can be deconstructed or translated into relatively simple games where one
firm plays against a rival, where one firm plays against nature, or where an employer
must account for both rivalry and uncertainty. Class content, which draws upon both
economic theory and practical business cases, will be presented through lectures and a
substantial amount of class discussion. Course materials will feature industry
applications -- heavily featuring the food retailing sector -- and case studies of
individual companies. The class is designed with three broad goals in mind: (i)
improving students’ critical-thinking skills, (ii) improving their writing skills, and (iii)
providing a realistic picture of the wide array of different decisions facing agribusiness
professionals.
AG BM 308 Syllabus: Page 1
Learning Objectives. Students will have the opportunity to:




Classify practical agribusiness problems by the type of available information – full,
incomplete, or imperfect – and by the nature of market power in an industry.
Construct and analyze game trees and other representative models of strategic
decisions facing businesses and employees.
Analyze strategic business problems using economic models based on game theory,
game-based rules of analysis, basic statistics, and other economic principles.
Write and re-write business-style memos, essays, and reports that communicate or
summarize a business decision, plan, or solution that is supported by economic
analysis.
Writing:
This writing intensive course will use written assignments to help students learn
the course content. The emphasis on writing is designed to demonstrate that the clear
communication of innovative and thoughtful ideas is as important as the ideas
themselves.
Students will be reminded that the writing process develops through several
iterations and that the first iteration can be characterized as a brainstorming process
where ideas start with notes and are eventually refined into a thesis statement,
recommendation, or piece of supporting evidence. The writing process continues with
written and re-written drafts, followed by feedback from peers and/or the instructor,
and yet more revisions. To emphasize the iterative process, several assignments will
have multiple parts. For at least one writing assignment, students will be expected to
revise their assignments after receiving a grade and written comments, and after
scheduling a conference with the instructor. The revised paper can potentially receive
full marks.
Each writing assignment will be accompanied by a written assignment sheet.
The writing assignment grades will be based on both writing style and content. Writing
style, which refers to issues of composition, grammar, punctuation, and sentence
structure, will be the subject of both class lectures and discussion throughout the class.
Required Materials:
1. Style for Students, Joe Schall, Outernet Publishing, 2002.
2. A Course Packet containing a collection of nine business school case studies
and notes.
3. The purchase an on-line simulation game from Harvard Business School
4. Handouts and readings as needed.
AG BM 308 Syllabus: Page 2
Assignments:
Semester
Week
1
2
3
4
5
6
7
8
9
10
Assign.
#
1
2
3
4
5
6
7
11
12
13
10
11
12
14
15
13
14
8
9
Assignment Title/Topic
Points
Personal Resume
Loblaw Companies Limited
Universal Rental Car #1(simple assignment)
Five Forces Report
Universal Rental Car #2 (complex assignment)
A.1 Fist mover/Price war or no price war
Natureview Farm I – Solve a Decision Tree
No assignment due (next week is Spring Break)
OSI Group – list five risk factors and implications
Natureview Farm II – Design, solve, analyze a complex
decision tree
Annotated Bibliography on EVA, VBM, and BSC
Tesco
Whole Foods I – EVA (w/comps) and ann.
bibliography
Whole Foods II – Five Forces and pricing strategy
Whole Foods III - design a Balanced Scorecard for
them
Total Assigned Points
10
20
20
30
30
30
20
30
30
20
30
30
20
30
350
Grading:
Fourteen Homework Assignments
Peer Reviews (2 @ 5 points each)
Class Participation
350 points
10 points
40 points
400 points
87.5 %
2.5 %
10.0 %
100 %
Notes:
1. Class participation: Criteria for class participation include the following:
class attendance; class contributions – in the form of vocal comments and/or
questions; completion of a revision conference; and an optional final two-page
“exit statement” that describes how a student’s approach to business analysis
has evolved and how a student’s writing has changed over the semester.
2. Missing more than a certain number of classes (~ 10) is grounds for a failing
grade.
AG BM 308 Syllabus: Page 3
Grade Cutoffs:
A
AB+
B
B-
 92%
 90%
 88%
 82%
 80%
C+
C
D
F
 78%
 72%
 60%
 60%
Academic Integrity:
Academic dishonesty includes, but is not limited to: cheating, plagiarizing,
fabricating of information or citations, facilitating academic dishonesty by others,
having unauthorized possession of examinations, submitting work of another person or
work previously used without informing the instructor, or tampering with the
academic work of others. Sanctions imposed for acts of academic dishonesty can
include receiving an “F” for the assignment, course, or even expulsion from the
University. All course participants are expected to adhere to the University’s Academic
Integrity Policy http://www.psu.edu/ufs/policies/47-00.html#49-20. In addition, the
instructor will complete a College of Agricultural Sciences Academic Integrity Form
and file it with the Associate Dean for Undergraduate Education.
You are encouraged to discuss concepts, ideas, and assignments with other
students. The work you turn in will represent your integration of information from
books and journals, other people, and your own ideas. You must accurately reference
any material copied verbatim or summarized directly from other sources. Please see
me if you have any questions about this policy.
A Note on Plagiarism:
Because this course emphasizes writing, there is a potential for plagiarism to be a
big problem. Plagiarism can range from submitting someone's work as your own to
copying pieces of text or phrasings without acknowledging the original source. The
following Web Sites (active “hotlinks” are in the electronic version of this syllabus) not
only define plagiarism, but provide examples of the different types of plagiarism:



Statement of Plagiarism and Academic Dishonesty (Penn State University)
Avoiding Plagiarism (The OWL at Purdue University)
Unacceptable Paraphrases (Indiana University Writing Tutorial Services)
Course Material on the Web: http://cms.psu.edu
The material for this course is available as part of PSU’s ANGEL system. After
each class, I’ll add my class notes, in the form of PowerPoint slides, to the Web site. I’ll
also place all other class materials on the Web site.
AG BM 508 Syllabus: Page 4