Course Syllabus
MGT 5391 – Strategic and Global Management
Instructor: G. Tyge Payne, PhD, MBA, RPh
- with William (Bill) Wan, PhD, MBA
Office: RCB 1015
Office Hours: By Appointment Only
Office Phone: (806) 742-1514
E-mail: tyge.payne@ttu.edu / william.wan@ttu.edu
Course Website: http://tpayne.ba.ttu.edu
COURSE DESCRIPTION
This course provides students an opportunity to draw upon previous experiences and education to apply
various business concepts and analytical tools to complex problems and issues in organizational settings.
Specifically, this course is designed to develop a basic understanding of why some firms or organizations
are more successful than others. Strategic management explores how firms achieve competitive
advantage (which leads to long-term success) in the context of single and multi-business firms. Drawing
upon key strategic management theories, students will learn the essence of strategic analyses and
decision-making in a competitive and constantly-changing setting.
COURSE OBJECTIVES
The principle concern of business managers is the relationship between the organization, its strategy, and
the environment—at the economic, regulatory, and industry levels. This relationship is both very
complex and dynamic. Successful organizations find ways to adapt to and/or manipulate this relationship
in order to create value and successfully develop sustainable competitive advantage. This class focuses
on this basic concept by demonstrating the different aspects of strategic decision-making that facilitate
competitive advantage. The objectives of this course are established to:
1. Develop thinking skills of practicing managers when evaluating key strategic decisions in a larger
environment. We will focus on three simple, yet critical questions:
1) Where is the organization now?
2) Where does the organization need to go?
3) How does the organization get there?
2. Provide the student with an appreciation for the strategic perspective and its complexity, which
provides the foundation for critical thinking at the graduate business level.
3. Develop recognition and understanding of:
 Situations where strategy can be a comprehensive element of value creation and competitive
advantage,
 Strategic implications of decisions made by top managers, and
 Tactical implications of decisions made by both top managers and mid-level managers.
4. Develop interpersonal and communication skills.
COURSE TEXT
Strategy Management of Healthcare Organizations by Swayne, Ginter, and Duncan, 6th ed.
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ASSIGNMENTS
Assignment #1 -- Critique and Application of Text (Due: Day 2)
Turn in a three to four page critique and discussion of the Strategy Management of Healthcare
Organizations textbook. In your critique of the book identify key points that you think were
particularly interesting and/or will be valuable to you in years to come. Additionally, identify
what parts, if any, of the book you felt were less valuable or applicable to you. Then, fully
discuss how you may apply (or have successfully and/or unsuccessfully applied) these
management tools in your own organizations. Then on a scale of 1 to 10 (ten being the best)
give an overall assessment of the book, identifying reasons for you assessment.
Assignment #2 – Strategic Alternatives Project (Due: June 3, 2011)
The project should primarily be a research paper covering your organization in detail. Focus, of
course, should be placed on the strategic problems and issues that exist within and about that key
organization. Details concerning format and specific content areas are available in the Strategic
Alternatives Project document available at the end of this document. In general, the length
should be between15 and 25 pages of text, double-spaced, 1” margins, and 11-12 font. Tables,
graphs and figures are encouraged. This assignment will primarily cover the strategic
management tools of strategic analysis, strategy formulation and strategy implementation that are
covered in the Strategic Management textbook. If you are not currently a part of an organization,
you may, as an alternative develop a business plan for a new business that you would like to
start.
Appendices A & B in the assigned text are good resources that you should note.
Assignment # 3 -- In Class Presentation (Due: Day 4)
The presentation should be an in-depth professional presentation over the strategic alternatives
project. Professionalism and creativity are expected along with solid content. Length of the
presentation should be about 20 minutes and should not exceed 30 minutes in overall time.
(Otherwise we will never get to go home!) This timeframe should include a question and answer
period (~5 minutes). You will be timed on your presentation; going significantly over the time
allotted will detract from you score. Also, being a good participant (e.g., showing up for all
presentations, asking good questions) will positively influence your presentation grade.
Team Assignment (Day 3)
Teams and cases will be assigned in class. Presentations on case issues and solutions will be
developed on Day 2 and presented for discussion on Day 3. Details will be delivered in class.
GRADING
Assignment 1 (book critique)
Assignment 2 (project)
Assignment 3 (presentation)
Team Assignment/Participation (group case presentation)
Total (100%)
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50 points
150 points
100 points
100 points
400 points
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SCALE
A
360 or above
B
320 - 359
C
280 - 319
D
F
240 - 279
below 240
CLASS SCHEDULE
March 27th (Day 1) Sunday March 27, and Saturday-Sunday April 16-17.
Sunday Morning – Course Overview & the Strategic Management Process (Payne)
Sunday Afternoon – Internal Analysis (Wan)
April 16th & 17th (Days 2 & 3)
Saturday Morning – External Analysis, Strategic Formulation & Implementation (Payne)
Saturday Afternoon – Group Case Presentation Development
Sunday – Group Case Presentations and Discussion (Payne)
May 21st (Day 4)
Saturday – Individual Presentations (Wan, Smithee, Thompson)
Student Support Services: The University supports a variety of student success programs to
help you connect with the University and achieve academic success. They include learning
assistance, developmental education, advising and mentoring, admission and transition, and
federally funded programs. Students requiring assistance academically, personally, or socially
should contact the Programs for Academic Support Services (P.A.S.S.) at 806-742-3664 for
more information and appropriate referrals.
Students with Disabilities: If you are a student who requires accommodations in compliance
with the Americans with Disabilities Act (ADA), please consult with me at the beginning of the
semester (today). As a faculty member, I am required by law to provide "reasonable
accommodation" to students with disabilities, so as not to discriminate on the basis of that
disability. Your responsibility is to inform me of the disability at the beginning of the semester
and provide me with documentation authorizing the specific accommodation. The P.A.S.S.
programs at TTU will verify and implement accommodations to ensure equal opportunity in all
programs and activities.
Academic Honesty: Academic dishonesty is a completely unacceptable mode of conduct and
will not be tolerated in any form at Texas Tech University. All persons involved in academic
dishonesty will be disciplined in accordance with University regulations and procedures.
Discipline may include suspension or expulsion from the University. At a minimum the student
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will receive an F in the course. Academic dishonesty includes, but is not limited to, cheating,
plagiarism, collusion, the submission for credit of any work or materials that are attributable in
whole or in part to another person, taking an examination for another person, any act designed to
give unfair advantage to a student or the attempt to commit such acts. Details regarding
academic dishonesty are discussed in detail in the Student Affairs Handbook; a portion is given
below.
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Strategic Alternatives Project – Physician/Dentist Version
Professor: G. Tyge Payne, PhD
Overview of Strategic Alternatives Project
The strategic alternatives projects are designed to allow you to make credible recommendations
for your organization, based on a quality strategic analyses, that will improve the company’s performance
and likelihood for long-term success. Necessary or desired information will likely be missing, but you
must make proper assumptions and judgments based on what you can find. In this regard, such projects
simulate real business environments; business leaders and strategists never have all the information they
would like. To compensate, you should make reasonable assumptions and state them clearly. Make
decisions based on the information available and seek out other resources if appropriate (e.g., interview a
manager or call the customer relations representative).
There is a wide range of approaches and analytical methods that can be applied—many will be
reviewed in class—towards making your recommendations. The following guidelines are only intended to
provide some ideas of how you might approach analyzing an organization, and hence developing several
viable alternatives for the organization. Note that several analytical tools are included below; these
should be utilized to support your alternatives and recommendations.
An organizational analysis is like a puzzle, where the challenge is to take different pieces of
information and logically piece it together to develop a picture of the business. The first step in analyzing
an organization is to identify the relevant major issues. Then you should dissect the situation, “crunch”
the numbers, establish relationships among the information, make comparisons, and develop ratios and
percentages. Try to spot trends, both good and bad. Identify items that do not follow the trend line and
determine reasons for this. When the issues involve future plans, such as the establishment of a business
or a change in business directions, make sure the numbers and the time frames for developing revenues
and implementation are realistic. Also make sure all expense factors, including the indirect cost of the
recommendations such as management time, have been considered.
Based on the analysis of the organization, you should generate feasible alternative strategies and
establish criteria for selecting the best alternative. State the pros and cons of each alternative, and support
your recommendations with your reasoning and justification. For example, your recommendations should
be very specific, including plans for implementation, time frames, and the specific performance results
that can be expected. The cost and level of risk of your recommendations should also be considered.
Proforma financial statements for one to three years may be developed to show the combined financial
impact of your recommendations. Your recommendations should satisfy the questions of what, why,
when, how, where, and who. The recommendations should then be prioritized ending with one key
strategic recommendation.
Basic Guidelines for Strategic Alternatives Project
1. Executive Summary (1 pg): After the title page, provide a summary of the key issues and the main
points of your goals and action recommendations. This should be very concise and serve as an
overview for the entire paper.
2. Issues and Outlook Profile (3-5 pgs): This section should broadly address the most important issues
confronting the firm and the significance of these issues. Specifically, this section should give
consideration to, but not an extensive discussion of, each of the following subjects:
1) Key Macro-Environmental Issues
2) Key Industry Issues
3) Competitors and Key Competitive Issues (e.g., financial comparisons)
4) Organizational Competencies, Capabilities, and Related Internal Issues
Within this discussion, this section should clearly identify and evaluate the organization’s current
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strategy and sources of competitive advantage, if any. Additionally, you should note relative factors
influencing the organization such as the organization's current (a) scope of activities, (b)
organizational structure, (c) management systems, and (d) leadership issues and style. For instance,
ask: How successful has the strategy been? Compared to competitors, how is the performance of the
company? Does the current strategy effectively exploit the company's strengths and defend against
weaknesses? What has been the firm’s level of, or interest in, strategic activities up until the current
time period? Very broadly, where is the firm headed? Consider a 3-5 year time frame both prior to the
present and into the future.
3. Development of Strategic Alternatives and Options (5-10 pgs): This section and the next comprise
the largest (or most important) sections of the paper and should be given the most weight and
attention. If you are not in a leadership position, it may be most helpful to put yourself in the shoes of
an outside consultant who is been hired by the protagonist(s) or the top-management team (TMT) in
the organization. To receive your full consulting fee, you must persuade the TMT to adopt your
specific recommendations instead of some competing consulting team’s recommendations.
Based on information gathered in association with the above issues section, you should develop
and clearly state three viable, strategic alternatives that the company can take that address the big
problems/issues the organization is currently facing. The alternatives developed should be evaluated
extensively, taking under consideration the findings and trends that emerged as you analyzed the
organization throughout the semester. The alternatives should be strategic and mutually exclusive,
reflecting extensive thought and discussion within and amongst your group members. You should
clearly discuss the pros (benefits) and cons (risks) associated with the alternatives in such a way as to
demonstrate your understanding of the organization and the context within which it operates.
4. Strategic Choice and Further Evaluation of Recommendation (3-7 pgs): In this section, you
should select one of the three alternatives developed in the above section to serve as the main
recommendation for the organization. This final recommendation should, in most cases, be
challenging, yet achievable – creative and innovative, yet feasible. It should fit well with the
organization’s vision, mission, and goals (unless that is the final recommendation). In short, the final
recommendation should be documented in detail as to why it was the final choice and the best option.
Ask yourself, is this recommendation financially viable? Does the proper personnel exist? How
would you monitor the accomplishment and success of the recommendation? Is the timing right to
implement such a plan? Can the organization afford to wait? Basically, you should extensively
elaborate on why this choice is best and what are the issues and implications for moving forward with
this recommendation at the current time.
5. Strategic Implementation and Control Mechanisms (an Action Plan) (3-7 pgs): Develop a
detailed strategic action plan which addresses all or most of the salient issues you identified in the
sections above. For example, you might have identified a new, attractive national market to sell to
(external analysis); yet, the firm lacks the experience and/or resources to move into the market with
sufficient speed or force (internal analysis). You might have recommended that the firm form an
alliance with another firm. Here, you should provide more specific details about the critical aspects of
alliance formation: partner selection criteria, degree of formality (equity-based vs. loose
commitment); contributions of each partner (cash vs. technology vs. distribution channel vs.
marketing knowledge); relative control over alliance for each partner; roles and responsibilities of
each partner; and, expected results for the alliance.
Each component of the overall action plan should contain the following: sub-section label, a set
of specific "strategic" tasks to be carried out, justifications, a brief description of new resources
required/to be developed, and a brief description as to how this action component will contribute to
the attainment recommendation identified. This should all be very specific and tuned to your
organizations current situation!
For instance, you may wish to discuss:
1. Structure: How is your practice/organization currently structured and what changes to the
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structure do you plan to make?
2. Culture: Type of culture you want your organization to have. How will you develop this
type of culture?
3. Resources: Goals for each functional resource area. Be sure to include a timeline
regarding the goals you set. Your resource allocation plan for each functional areas (i.e.,
use a pie chart made up of functional areas). Projected profit or loss from expansion over
the next five years.
4. Strategic Control: Identify and discuss how the success of the strategy will be
quantitatively measured. Identify at least five key control measures and give me the
number or percentage associated with each measure (e.g. 20% ROI by year five, sales for
years 1-5).
Examples of quantitative control measures would include things like:
a. Quality measures
b. Market Share
c. Sales
d. Profits
e. Worker turnover and absenteeism
f. Employee morale
g. Production rate
h. Return on Investment
i. Number of new products developed
j. Service level and customer satisfaction
6. Conclusions (1-2 pgs): End the study with a basic rational for why this study is accurate and useful.
Be persuasive and interesting!
7. References (unlimited): You should include at the end of the project a list of all references used in
the development of your study. You should cite the references in the text such as (Payne, 2004).
Then the full citation record should be given in alphabetical order in the reference section. APA
format is preferred. You are encouraged to use company-supplied information (e.g., annual reports,
10-Ks, company websites) to write the project if available. Accordingly, the following are good
sources for the project:
 Robert Morris & Associates Annual Statement Studies
 Standard & Poor’s Industry Surveys
 Business press articles about the company, its industry, or its competitors (e.g.,
Wall Street Journal, Business Week, or Fortune).
Aesthetics
The body of the paper should contain the sections identified above. The length of the paper
should be between 15 and 25 pages of text. Excessively short or long reports with little value-added will
detract from the report's contribution and impact. Utilization of appendices, tables, models and graphs can
help contain text length without ridding the project of important information. Tables, figures and graphs
are encouraged when they can easily deliver necessary information to the reader.
Use 11 or 12-point Times New Roman or equivalent font. The report is to be double-spaced with
1" margins all around (use 1.25" left margin if binding eats up too much of the margin). Number each
page of report body beginning with the Executive Summary as page 1. Endnotes or footnotes may be
utilized if appropriate. Provide a cover page with report title and your name. Use common binding
technology that is professional in form and function. However, excessively expensive copying or binding
is not necessary.
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Use section labels and subsection labels whenever possible. This makes it easier to quickly
identify important components of the report. In the body, refer the reader to tables, figures, or other
appendix items where appropriate.
Each written report may also contain the following supporting sections:
Footnotes/Endnotes (unlimited, but prudent): This is a numerical listing of the footnotes/endnotes you
used in the body of the paper. You are free to use footnotes/endnotes to provide a 1-2 sentence
elaboration of points of "tangential relevance" to certain elements in the body of the report.
Appendix Items (unlimited pg.): You may provide supplementary materials that serve to clarify or
augment organizational facts or arguments made in the body of the report. You are encouraged to use
charts, diagrams, lists, tables, photos, etc., which provide some relevant contribution to the report. There
is no limit to the number of appendix items you choose to attach. However, include them with purpose.
Analytical Tools
There are a number of analytical tools to help you organize, analyze, and display your
information in a convenient and easy to interpret form. Some of these techniques allow you to quantify
the decisions by making judgments about the situation. You should select those tools which best fit the
particular situation. Following are some of the tools that are available:
1) Performance Analysis - You should make comparisons of key financial and market data at
both the corporate and business unit level with major competitors and/or industry averages.
Compare key expenses to sales, such as percent R&D of sales, percent sales and
administrative expense of sales, percent of accounts receivable of sales, and sales per
employee or sales per store.
2) BCG Portfolio Mapping / Product Mission Matrix - Developing a matrix that compares
variables between companies, such as product lines or financial results, is an easy way to
illustrate differences. A simple two-by-two matrix sometimes illustrates the relationships
between variables. This can also be expanded into a larger matrix, sometimes referred to as
portfolio mapping, such as those developed by the Boston Consulting Group. You can be
creative with the mapping technique and use it for a variety of comparisons, such as a
business compared with competitors, a SBU or product line compared with others within the
same company, or SBU's compared to industry. You can modify the BCG techniques to fit
your particular needs. Be sure to carefully label and identify the components used in
mapping.
3) Key Success Factors / Strength Assessment - Identifying key success factors for the
company and its competitors is another useful analytical tool. By utilizing a rating and
weighing technique, you can quantify qualitative evaluations. The first step is to identify the
key success factors, then apply a weighing to each of those that totals one hundred percent.
The weighing represents the importance of each factor relative to the others. Next, using a
scale of one to five, with five being very strong and one being very weak, rate the company
on each of the success factors. Also rate its key competitors. This shows rather quickly the
comparison on each factor, and when multiplied by the weighing and added together, can
provide one number that represents the total key success factor comparison with each major
competitor. This technique can also be used as a starting point in developing a map such as
strategic groups map.
4) SWOT Analysis - A SWOT analysis is designed to identify the strengths and weaknesses of
the company (internal factors) and the opportunities and threats for the company (external
factors). A SWOT analysis is often a good starting point, but you need to draw conclusions as
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a result of the analysis. For example, is the company in a strong competitive position? What
can it do to turn weaknesses into strengths and threats into opportunities? Can it continue to
pursue its current strategy in a profitable manner, or will the strategy need revision?
5) Competitive Strategy Models (Porter) - A useful point to begin the analysis of strategy is to
use Porter's Competitive Strategy Model. Porter believes that to be successful, a company
must select one of three generic models of competitive strategy. These are Low Cost
Producer, Differentiation, and Focus or Niche. This can be followed by developing Porter's
Five Forces Model. The Five Forces Model displays the major sources of competition. These
five forces of competition include direct competitors, substitute products, customers,
suppliers, and new entrants into the marketplace. Successful use of the Porter Model Analysis
includes identifying the sources of competition, the strength and likelihood of that
competition existing, and strategic recommendations for the action a company should take to
develop barriers to the various forms of competition.
6) Best Case/Worst Case/Expected Case Scenarios - In developing business plans it is useful
to develop future financial scenarios based on a best case/worst case/expected case basis.
7) Break-Even Analysis - In preparing a business plan or evaluating a project, it is helpful to
develop a break-even analysis, in essence that point where cost equals sales with no profit or
no loss. Two basic ways of calculating break-even point are the amount of sales that would be
necessary to break even or the number of units that must be sold to break even. A very
important aspect of this calculation is the classification of cost between fixed and variable as
it applies to the period of time under consideration. For example, if you are using a two-year
planning horizon and you have a two-year lease on your property, that would be considered
fixed for this purpose. If you have a store that is open a set number of hours per day, the
minimum is one employee available during the hours the store is open. This could be
considered fixed, while the addition of other employees could be considered variable.
8) Common-Sized Financial Statements - The comparison of balance sheet and income
statements over time and across companies will be facilitated by using common-sized
statements. Convert every category from dollar terms to percentages. For the income
statement divide each item by total sales. For the balance sheet divide each balance sheet item
by total assets.
9) Valuation of a Business - There are a number of factors that go into determining the value
and appropriate price for a business. The degree to which the buyer wants to buy and the
seller wants to sell, the various terms and conditions associated with the sale, and the actual
negotiation capabilities are all factors in arriving at the final price. However, there are two
methods that help quantify the decision and provide a basis for negotiation.
(a) The price earnings ratio is the amount investors are willing to pay per dollar
of reported profit. It is determined by dividing the selling price per share by the
earnings per share and comparing the P/E ratio with comparable firms or the
industry average. For example, if the P/E ratio for the industry is 6:1 and the
earnings of the business under consideration are $100,000 per year, the value of
the business could be estimated at $600,000.
(b) The net present value of a business can be obtained by using a discounted
cash flow of future earnings method.
10) Lease vs. Buy Decisions - There are many factors that influence the decision of whether to
lease or purchase an asset. A cost comparison using net present value and cash flow
evaluations of the two alternatives is helpful in reaching the appropriate decision.
11) Proforma Statements - A forecast of financial statements (income and balance sheet) is used
for business planning. In addition to being a good ongoing planning tool, they are usually
prepared by month for a two-year period. They are required when presenting business plans
to obtain financing. It is important to note all major assumptions that impact the plan.
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12) Cash Flow Statement - The purpose is to show where a firm is obtaining funds and how they
plan to use them. It is typically divided into operating activities, investing activities, and
financing activities. This is normally done on a monthly basis for a two-year period and is
also necessary when seeking financing. The purpose is to ensure the company has the cash on
a monthly basis to meet its financial obligations. If the cumulative cash flow is negative at
any point in the plan, it is an indicator the plans need to be revised or additional sources of
funds need to be obtained.
13) Other Forms of Analysis (a) Marketing plans should consider the 4 P's - product, price, promotion, place.
(b) Learning/experience curve.
(c) Economies of scale concept.
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