WCOB 3016: BUSINESS STRATEGY AND PLANNING – THEORY AND PRACTICE
Integrative study of the managerial decisions that ensure the long-term effectiveness of
the organization; introduces students to an understanding of strategic competitiveness and
the way in which business strategy in large and small decisions is formulated and
implemented; uses the perspective of top managers to outline the issues to be addressed
by strategic decision-makers; uses a combination of theoretical and experiential
approaches to designing business plans for key decisions, implementing these decisions,
and monitoring their short-term and long-term effects; experiential components of the
course (using about half of the course) may concern, for example, developing a business
plan, starting and running a business, running a business simulation, or solving a business
WCOB 3016 Business Strategy and Planning Integrative study of the managerial
decisions; introduces students to an understanding of strategic competitiveness and the
way in which business strategy is formulated and implemented; uses a combination of
theoretical and experiential approaches to designing business plans for key decisions,
implementing these decisions, and monitoring their effects.
• The materials will be arranged keeping in mind the nature and content of
decisions that ensure the long-term effectiveness of organizations. This six-hour
course will introduce organizational actions and issues from the perspective of
upper level managers, and will be taught in the Fall and Spring semesters of the
Junior Year. About half the six-hour course is theoretically oriented, and the other
half consists primarily of experiential content that provides practical experience
about the topics covered in the theoretical part.
• The theory and practicum parts are described separately in the following pages for
ease of presentation, but the expectation is that they will be covered in an
integrated form throughout the six-hour course.
• This outline is based on the premise that the Business Strategy and Planning
course needs to include instruction on (among others) developing and evaluating
business plans for a variety of situations commonly encountered in the business
world. Towards this end, the course focuses on:
o Integrating knowledge pertaining to different functional domains
o Adopting a holistic perspective on an organization through the use of case
studies and experiential exercises
o Highlighting the dynamic nature of business competition
o Outlining the interrelationship between a firm’s strategy and its structure
and control systems
• This course will use business plans as a primary teaching and learning tool.
• Issues relating to International Strategy and Business Ethics will be integrated
throughout the course.
• This course will draw on understanding and analyzing balance sheets, income
statements, and cash flow statements from a strategic perspective.
• This course will also actively integrate knowledge about the real business world –
the key decisions facing organizations today and the manner in which they are
responding to those issues. Business plans will be used as major tools in this
A business student must complete the pre-business requirements before enrolling
for this course. Markets and Consumers, Human Resources, Financial Resources, and
Production and Delivery of Goods and Services must each be completed with a grade of
“C” or better. This course is restricted to Walton College students.
TOPICAL OUTLINE - THEORETICAL AND CONCEPTUAL CONTENT
I. Introduction to Strategy, Strategists, and Stakeholders
This topic introduces students to an understanding of strategic competitiveness and
the process by which strategy is formulated. It introduces students to the key concepts
that are relevant in strategic management: strategic competitiveness, above average
returns, stakeholders, etc. This section introduces students to key terms that are
essential in order to understand the topics introduced subsequently. It also exposes
them to key trends that characterize today’s business environments: globalization, the
advent of information technology, high velocity competition, deregulation, etc.
Students should, at the very minimum, be exposed to the Resource-Based and the
Industrial Organizational Models.
a. Strategy and strategic objectives
b. Understanding the processes of strategy formulation and the role of
different organizational levels in formulating strategy
d. Key trends in current business environments
e. Vision and mission statements
f. Basic strategy models
• Strategy and strategic objectives – Identify what is strategy, competitive advantage and
above normal returns.
• Strategy process and locus. Identify where strategy is formulated in the organization, the
processes by which organizations create and implement strategies, and the role of
different hierarchical and functional levels in strategy formulation.
• Identify key trends in current business environments – the effect of factors such as
globalization, technological advancement, deregulation, etc., on organizational
• Stakeholders – List the different types of stakeholders, the pressures they exert on
strategists, and the ethical issues faced by strategy makers.
II. Analyzing External and Industry Environment
This section explores the first of the two widely accepted models of strategy
formulation – the Industrial Organizational Mode – in detail. It defines the notion of
a firm’s industry and its environment, and explains the manner in which the
environment is scanned for potential threats and opportunities. It introduces students
to the internal environment of an industry and the manner in which it is studied.
a. Definition/dynamic nature of a firm’s industry
b. Components of external environment
c. Industry analysis
d. Strategic groups
• Definition/dynamic nature of a firm’s industry – Describe what an industry is and why
industry boundaries are constantly changing.
• Components of external environment – List the different segments of an industry’s
environment and how strategist should scan the segments.
• Industry analysis – Describe and apply Porter’s 5 Forces Model of Industry Analysis.
• Strategic groups – Describe strategic groups and why are they are important and relevant
to strategy makers.
• Contrast the strengths and weaknesses of the IO Model.
III. Analyzing Internal Environment and Developing Organizational Capabilities
This section introduces students to the second model of strategy formulation – The Resource
Based Model of Strategy Formulation. This model is presented as an alternative to the IO model
and the relative strengths and weaknesses of the two models are explored. This is one of the most
important sections of the course as several strategic actions that are taught subsequently in the
course draw on key aspects of the Resource Based Model.
a. Resource Based View – Resources
b. Capabilities, core competencies and competitive advantage
c. Temporal nature of core competencies
d. Strategy formulation using the RB model
e. Value chain analysis
• Resource Based View. Resources. Capabilities. Core Competencies – Define resources;
identify type of resources; importance of resources, and the relationship between
resources and capabilities.
• Capabilities, Core Competencies and Competitive Advantage – List the criteria of rare,
valuable, inimitable and non-substitutable resources; identify the relationship between
core competencies and competitive advantage.
• Temporal Nature of Core Competencies –Identify the reasons why core competencies
lose value over time
• Strategy Formulation using the RB Model – Enumerate the key steps in strategy
formulation using the RB Model, and contrast the IO and RB Model
• Value Chain Analysis – Define value chain, its construction, its value in aiding strategy
makers, and the relationship of value-chain analysis to outsourcing
IV. Types of Strategies
This topic introduces students to the different kinds of strategies that can yield
competitive advantage. The primary focus is on strategies derived based on
organizational scope and source of competitive advantage. More traditional types such
as Miles and Snow’s strategies may also be introduced. While the types of strategies
described in this section are rarely adopted in an idealized form, this section provides
students with a wide range of strategic responses to issues facing organizations.
a. Content of generic strategies
b. Implementing generic strategies
• Identify types of generic strategies; describe the importance, strengths and weaknesses of
• Identify the effects of following different generic strategies on the practices that
V. Understanding the Dynamics of Organizational Competition
This section moves students away from the content of strategy to the uncertainties
encountered during strategy implementation. It introduces a variety of themes related
to the dynamics of organizational competition and alerts them to how the outcome of
an organization’s strategy depends on the actions of its competitors and its allies. The
section draws on several theoretical approaches: it draws on traditional research
that looks at first, second, and late mover firms. It draws on the theory of
Hypercompetition to describe the typical sequence of strategic actions and
counteractions that are adopted at different stages of an industry’s life cycle. And it
looks at the processes of gathering information about competitors and the ethical
issues involved in such practices.
a. Strategic and tactical moves
b. First Mover, Second Mover, Late Mover strategies
c. Hypercompetitive sequencing
d. Predicting competitor moves and countermoves
• Strategic and tactical moves – Differentiate between the two kinds of moves and identify
the appropriateness of each move.
• First Mover, Second Mover, Late Mover Strategies. Identify the importance of strategic
timing, and compare the advantages and disadvantages of first mover, second mover, and
late mover strategies.
• Hypercompetitive sequencing – Identify the sequence in which organizations act and
react to each other’s moves when engaged in intense competitive rivalry.
• Predicting competitor moves and countermoves – Identify the role and sources of
competitive intelligence, and the ethical issues involved in competitive intelligence.
VI. Evaluating and Measuring Strategies
This section deals with the importance and process of establishing and using short- and long-
term performance measures that evaluate the implementation of strategies. It discusses pitfalls
associated with interpreting ambiguous performance data. It also introduces students to the
Balanced Scorecard approach to evaluating organizational performance
a. Strategic objectives
b. Balanced scorecard approach
c. Mid-course evaluations of strategies
d. Non-rational escalation of commitment in strategies
• Strategic objectives – Identify the importance of objectives, types of objectives (tangible
vs. intangible, financial vs. behavioral, etc.).
• Balanced scorecard approach – Define the need for using multiple objectives that
evaluate performance on multiple fronts
• Non-rational escalation of commitment in strategies – Identify the relevance of non-
rational escalation in strategy, types of non-rational escalations, define the actions to
avoid non-rational escalation.
VII. Corporate Strategy
While previous sections have been focused on examining how an organization
competes in a given industry, this section introduces students to the challenges of
managing organizations that operate multiple business lines. It introduces them to
organizational diversification and restructuring, and discusses the challenges and
benefits of managing diversified firms and the conditions under which such strategies
a. Introduction to diversification, divestment, and restructuring
b. Pros and cons of diversification
c. Types of diversification
d. Diversification and firm performance
e. Reasons for divestment
• Introduction to diversification, divestment, and restructuring – Define diversification,
divestment, and restructuring and their organizational consequences.
• Compare the pros and cons of diversification, and list the reasons that organizations
choose to diversify.
• Define the types of diversification and the concepts of vertical and horizontal integration.
• Diversification and firm performance. Define the organizational/industrial conditions that
determine the success of a diversification strategy
• Reasons for divestment: Define the conditions under which organizations choose to
divest. Compare the short and long term consequences of divestment.
VIII. Strategy Implementation
This section examines the conditions that facilitate the successful implementation of
organizational strategies. It draws on tradition research on organizational structure, and
also focuses on mechanisms to motivate and control managers (including top managers) in
organizations. It also focuses on more contemporary issues such as shareholder, board and
executive relationships, and the agency problem.
a. Organizational structure
b. Link between organizational structure and strategy
c. Corporate governance
• Define organizational structure and the different types of structures
• Define the relationship between structure and strategy
• Define agency costs and separation of control and ownership in organizations
• Define the role of a board and the importance of board composition.
• Identify the contemporary issues in corporate governance: interlocking directorates,
insiders vs. outsiders, etc.
• Identify the methods of monitoring/controlling top executives – compensation design,
behavioral controls, etc.
IX. Creating Change in Organizations
Creating change in organizations is one of the key challenges faced by strategic managers.
The change could be with respect to the strategy of the organization, or with respect to the
structure or processes of an organization. This section, explains the different change theories
that are currently prevalent in organizations and the factors that can facilitate or inhibit a
successful change process. It introduces students to a foremost reality of organizations – the
notion that strategy implementation often requires changes that affect the way employees
think or behave. Whether an organization will succeed in the long term depends on whether
employees are motivated and willing to change existing behaviors to support organizational
a. Introduction to various models of organizational change
b. The role of identity and culture in organizational change
c. Challenges in creating change
• Identify various models of organizational change, and describe organizational inertia,
different change models, challenges faced by individuals during organizational change,
and differences between change models.
• Describe the role of identity and culture in organizational change and define
characteristics of identity and culture, and describe the relationship of identity and culture
and with organizational change.
• Identify challenges in creating change, including challenges faced by managers and
X. Mergers and Alliances
This section builds on recent research on mergers and alliances as organizational tools to
achieve strategic advantage. It develops an understanding of why organizations choose to favor
mergers/alliances over independent growth. It also explains the challenges faced by managers
when they adopt such strategies and looks at how various characteristics such as firm size,
industry competitiveness, and organizational culture assist/hamper in the success/failure of such
a. Types of cooperative strategies
b. Advantages and disadvantages of cooperative strategies
c. Strategic issues involved in cooperative strategies
d. Characteristics of successful mergers/acquisitions
• Types of cooperative strategies – Identify the different types of mergers/acquisitions that
can occur (e.g. leveraged buyouts, hostile takeovers, etc.) and the short and long term
consequences of cooperative strategies.
• Compare the advantages and disadvantages of cooperative strategies
• Strategic issues involved in cooperative strategies – Identify the key challenges faced by
strategic managers engaging in cooperative strategies (e.g. departure of talented
employees, integration of processes and technologies, etc.).
• Identify the characteristics of successful mergers/acquisitions – governance issues, due
diligence/prior research, etc.
XI. Strategic Leadership
This section focuses on the leadership roles that top executives must perform in order to support
organizational strategies. It explains the different types of leadership styles and how each style
affects the organization. The section draws on existing leadership theories and focuses on their
relevance to organizational strategy formulation and implementation.
a. Importance of strategic leadership in designing and implementing strategy
b. Leadership styles and their impact on organizations
c. Ensuring effective succession in organizations
• Identify the importance of strategic leadership in designing and implementing strategy –
Good and bad leaders, why leadership is needed
• Define leadership styles and their impact on organizations – different types of leadership
styles (e.g. autocratic, transactional, transformational, etc.) and the impact of each style
on organizational strategy
• Identify issues in ensuring effective succession in organizations – Executive succession
XIII. Strategic Management of Human and Social Capital
This section deals with some of the key challenges faced by organizations in the twenty-first century –
issues related to organizational intellectual capital. It draws on current research on organizational
knowledge, social networks, and strategic Human Resources. It introduces students to the importance of
knowledge for organizational success, informs them of the different types of knowledge, and the manners in
which it can be tapped.
a. Define human and social capital
b. Importance of human and social capital for strategy and innovation
c. Strategies for managing human and social capital
• Define human and social capital – definitions and importance of human and social capital
for organizational performance.
• Identify the importance of human and social capital for strategy and innovation –
Importance and types of innovations in organizations, Factors facilitating/inhibiting
innovation in organizations.
• Identify strategies for managing human and social capital – methods of expanding and
harnessing organizational intellectual capital. Downsides of relying on human and/or
The experiential part of the course includes about half of the six-hour course.
The experiential exercise allows students to get hands-on experience on issues covered in
the theoretical part of the course. The theory and practice will be integrated throughout
the course rather than being covered sequentially.
The central focus of the experiential part of this course is experience in the hands-
on development of a business plan (whether for a new business or for a business
problem). Through the development of such a plan students gain the opportunity to apply
what they have learned in the theoretical part of the course. It is assumed that this
experiential exercise, at the very least, will involve use of most of the topics covered in
items I through VI of the theory content described above (see the list of “skills to be
included” at the bottom of this outline.) Additional topics that are covered in the exercise
will vary with the specific exercise being used.
Approaches to Teaching the Practicum Content
• Business simulation
• Starting and running a business
• Addressing an actual business problem
• Developing a business plan
The different formats listed above will be used in different sections of the course.
For example, all students in Sections 1 and 2 will use business simulations, all students in
Section 3 will start and run a business, and so forth. The precise format used in each of
these sections will naturally be determined by the approach to be used in the section.
Skills to be Included in All Sections
• Business planning
• Environmental analysis
• Strategy formulation and implementation
• Competitor analysis
• Strategic management in a dynamic environment
• Strategy/performance mapping and evaluation