Strategic Management
(10BSC570)
January 2011
3 hours
Answer THREE questions.
All questions carry equal marks.
Calculators are not permitted.
1.
a)
Describe and critically evaluate the various tools/methods that a strategic manager
might use to assess the macro environment?
(40 marks)
Required: Students were expected to identify the PESTEL analysis, Porter’s Diamond,
Scenario Planning, and Futurists as the various tools available to a strategic manager to assess
the macro environment. Students were expected to critically evaluate the tools.
Outcome: Most students identified the majority of tools available. However, some
answers were incomplete or only described one or two appropriate tools.
Comprehensive answers provided an in-depth critical evaluation of the tools.
Explain in detail Porter’s 5 Forces framework with reference to an industry of your
choice. Critically evaluate this analytical tool and recommend how it may be
improved.
(60 marks)
Required: Students were expected to identify the appropriate framework, explain the features,
and apply the five forces model to an industry. Students were expected to identify how five
forces affect the industry environment. Students were expected to critically evaluate Porter’s five
forces framework demonstrating knowledge of the weaknesses of this analytical tool and
recommendations for improvement.
b)
Outcome: Most students attempting this question showed the ability to apply Porter’s
five forces, but some failed to provide an in-depth and detailed analysis. Examples of
good answers included those in which implications and conclusions were drawn from
the analysis. A few students confused competing products with substituting products.
Most students offered something in the way of critical thinking. Better answers included
the following points: a firm’s industry environment is a relatively minor determinant of
that firm’s profitability; many studies show that industry factors account for a minority of
inter-firm differences in profitability; the model is very broad, so there may be a need to
disaggregate broad industry groupings, such as strategic groups; there is a missing
force in the model: complements.
2.
With reference to a company of your choice discuss strategy and organisational failure
and explain how such failures can occur. Provide guidance to managers as to the steps
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that might be taken to reduce the chances of such failures occurring.
(100 marks)
Required: Students were expected to define strategy and organisational failure. Explanation
was expected to include multiple reasons for strategy failure, such as: irrelevant strategies;
original assumptions that are no longer valid; lack of organisational learning; strategic paralysis;
inertia; unhealthy culture; poor leadership; resistance to change; thinking conflicts; etc.
organisational failure should have been discussed in relation to downward spiral theory; lack of
problem-sensing ability; unbroken chain of bad decisions; failure to execute a turn-around
strategy; etc. Guidance on prevention should have included: openness and clarity; potential
alternative courses of action; recommended course of action or decision; reaffirm your goals;
etc.
Outcome: Some students provided very good answers for this question, including a
comprehensive understanding of both strategy and organisational failure and their own
examples to support discussion. A few students only provided a limited discussion,
particularly regarding guidance to managers.
3.
a)
Define strategic leadership and distinguish between leadership and management.
(30 marks)
Required: Students were expected to define leadership and distinguish between leaders and
managers in the following manner: Managers deal with the physical resources of an
organisation - with its capital, raw materials, technology and the demonstrable skills of the
workforce. They are concerned with efficiency and in mastering routines. They are the people
who resolve issues as they arise: they do things right - working within defined policies. On the
other hand to lead is ‘to go in front, to show the way, to influence, guide in direction’. Leaders
are people who are concerned with effectiveness: they do the right things - they make policy.
Students were required to arrive at the judgement that both are necessary – both act as agents
and play different roles e.g., creating sense of ownership; control, etc.
Outcome: Most students were able to distinguish between managers and leaders, though
stronger answers drew upon wider reading to support points raised. Weaker answers did
not arrive at a clear judgement due to limited and underdeveloped critical evaluation.
b)
Describe the different types of power and explain how these can influence strategy
formation. What implications might excessive use of power have for
implementation?
(30 marks)
Required: Students were expected to identify the following types: coercive power; expert
power; legitimate power; referent power; and reward power. Students were expected to explain
that power can influence the behaviour and direction of other people; can be used to make
someone act according to the preferences of the leader/power wielder when that isn’t
necessarily in accordance with what they want to do. Therefore, it can directly impact upon the
development of business strategy (and the development and selection of strategic options).
Implications of excessive use of power should have included loss of trust; implementation
problems; resistance to change; adherence; poor development of strategy formation; etc.
Outcome: Most students were able to correctly identify the different types of leadership
power. However, in explanation of the influence of the types of power on strategy
formation, some students solely discussed leadership styles and arenas/levers of
leadership influence, which wasn’t wholly appropriate to this question.
c)
Explain how strategic leaders play a role in effective strategic management.
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(40 Marks)
Required: Students were expected to position the explanation in relation to Levers and Arenas
of leadership influence and Strategic Leadership and the Strategic Management Process given
that effective strategic leadership shapes the formulation of strategic intent and mission, which
influence successful strategic actions (i.e., Determining Strategic Direction; Establishing
Balanced Organisational Controls; Effectively managing the firm’s resource portfolio; Sustaining
an effective organisational culture; Emphasising ethical practices).
Outcome: Some students incorporated extensive relevant wider reading to construct a
comprehensive explanation. Weaker answers failed to focus the discussion around a
leader’s role in effective strategic management.
4.
Examine in detail the notion of business ethics and its role in strategic management. Is
competitive advantage ethical?
(100 marks)
Required: Students were expected to define business ethics and corporate social responsibility;
identify their role in strategic management; relate ethics and social responsibility to the
behaviour of the business and stakeholders and discuss the implications of different ethical
stances. They were expected to apply different ethical frameworks or shareholder value
perspectives/stakeholder value perspectives to analyse the role of business ethics and CSR in
strategic management. Students were allowed to present their own ideas and thinking to debate
the role of business ethics and CSR, but were required to justify their answers with sufficient
knowledge of the topic. Good answers were able to argue that being ethical and taking CSR
may help companies create competitive advantage through differentiation, which can be unique
and hard to copy etc. Students also needed to be aware of the cost of being ethical and taking
CSR e.g. unethical companies may have cost advantages, but ethics is growing in importance.
Outcome: Some students provided very good answers for this question, including their
own understanding and their own ideas, but a few students only provided a limited
discussion and did not address relevant aspects of business ethics and CSR e.g.
stances, behaviours, internal/external factors.
5.
Discuss in detail the concept of competitive advantage and explain how such advantage
may be created and sustained.
(100 marks)
Required: Students were expected to explain fully what is meant by competitive advantage and
provide examples of companies they believe have competitive advantage so as to illustrate their
answer. Students needed to refer to value here as value is a key driver of competitive
advantage and a basis by which to pursue sustainable competitive advantage. Competitive
advantage can be achieved through: value, generic strategies, market orientation; value chain,
RBV and VRIO, strategic resources and capabilities, innovation, people, collaboration, lock-in,
etc. Students were expected to discuss sustaining advantage, including the importance of fit.
Outcome: Some students attempting this question did well, but a few students only
provided very brief answers or focused on specific topics (as opposed to illustrating a
broad understanding of the creation and sustainability of competitive advantage), or
didn’t provide any appropriate examples or evaluation.
6.
It is said that resources are fundamental to business strategies and that weaknesses in
resources can undermine an organisation and its business strategy. With particular
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reference to achieving competitive advantage, examine the role of resources in business
strategy and discuss how resource weaknesses may impact upon organisations.
(100 marks)
Required: Students were expected to introduce a lot of theory from the whole of the module as
the role of resources has been emphasised clearly and in detail during the module. Resources
needed to be explained clearly (from money to tangible assets to intangible assets). Students
were expected to define strategic resources in light of RBV and RA theory and discuss
capabilities and competencies, in particular with reference to strategic resources. Students
needed to define resource weakness and explain how resource weakness can impact on
competitive advantage (i.e. making it harder for the business to conduct strategic activities
especially in relation to providing superior value), the number of available strategic options, and
on strategy implementation.
Outcome: Some students attempting this question did well, but a few students only
provided very brief answers without providing any appropriate examples or evaluation,
and without discussing the resource-based view of strategy or resource-advantage
theory.
P. Hughes & I. Hodgkinson
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