mgt 401 ass.docx

(Mt) – mgt 401 ass
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‫ااااااااااا‬ Kingdom of Saudi Arabia Ministry of Education Saudi Electronic University
College of Administrative and Financial Sciences Assignment 2 Strategic Management (MGT
401) Due Date: 12/11/2022 @ 23:59 Course Name: Strategic Management Student’s Name:
Course Code: MGT 401 Student’s ID Number: Semester: 1st Semester CRN: 14833 Academic
Year:2022-23-1st For Instructor’s Use only Instructor’s Name: Dr. Sager Alharthi Students’
Grade: /15 Level of Marks: High/Middle/Low General Instructions – PLEASE READ THEM
CAREFULLY • • • • • • • • The Assignment must be submitted on Blackboard (WORD format
only) via allocated folder. Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page. Students
must mention question number clearly in their answer. Late submission will NOT be
accepted. Avoid plagiarism, the work should be in your own words, copying from students
or other resources without proper referencing will result in ZERO marks. No exceptions. All
answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures
containing text will be accepted and will be considered plagiarism). Submissions without
this cover page will NOT be accepted. Learning Outcomes: Distinguish between different
types and levels of strategy and strategy implementation environment of hypothetical and
real-world organizations. (CLO3) Gain insights into the strategy-making processes of
different types of organizations (CLO4) Understand the contribution of various functional
areas e.g. production, marketing, purchasing, and supply management to the overall well-
being of the organization. (CLO5) Understand issues related to strategic competitive
advantage in diversified organizations (CLO6) This assignment includes 2 sections: I. Case
study Assignment Question(s): Read carefully the mini case No 18 from your textbook
(entitled ‘Tesla Motors Inc.) and briefly answer the following questions: (1 mark for each
question) 1. 2. 3. 4. 5. 6. 7. What is the competitive strategy used by Tesla Motors company?
Use the five forces of the M. Porter matrix to describe the industry that “Tesla Motors”
belongs to. Describe the different functional strategies of the Tesla Motors company.
Describe the relationship of Tesla Motors with its primary stakeholders. Describe the
market position of Tesla Motors. Describe the core competency of Tesla Motors. Describe
any strategic alliance (acquisition, outsourcing, joint venture, ….) used by Tesla Motors?
Was it successful? justify. 8. What are the main challenges that Tesla Motors faced? 9. Assess
the competitive advantage of Tesla Motors in its market. 10. Recommend solutions for Tesla

Motors to improve its competitive advantage. II. Mini-project From real
national/international market, choose an example of acquisition and answer the following
questions: (1 mark each question) 1. Briefly introduce your chosen firms, and partners of
the acquisition (industry, nationality, size, market position…). Max 100 words 2. Explain the
different reasons for this acquisition. 3. What is the method used by the acquiring firm to
manage its culture after acquisition? underline the pros and cons of this method. 4. Is this
acquisition successful? Justify. 5. Give three challenges that can face a firm that uses an
acquisition strategy. Good Luck Answers I. Case Study II. Mini-project 1. 2. 3. 4. 5. 6. 7. 8. 9.
10. …. 1. 2. 3. 4. 5. …. Strategic Management and Business Policy Globalization, Innovation,
and Sustainability For these Global Editions, the editorial team at Pearson has collaborated
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edition Global edition Strategic Management and Business Policy Globalization, Innovation,
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Wheelen Hunger Hoffman Bamford This is a special edition of an established title widely
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without the approval of the Publisher or Author. Thomas L. Wheelen • J. David Hunger Alan
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5/20/14 12:26 PM FOURTEENTH EDITION Strategic Management and Business Policy
Global EDITION Globalization, Innovation, and Sustainability Thomas L. Wheelen Formerly
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5/20/14 12:26 PM Brief Contents PART one Introduction to Strategic Management and
Business Policy 35 CHAPTER CHAPTER CHAPTER 1 Basic Concepts of Strategic
Management 36 2 Corporate Governance 74 3 Social Responsibility and Ethics in
Strategic Management 102 PART two Scanning the Environment 123 CHAPTER CHAPTER 4
Environmental Scanning and Industry Analysis 124 5 Internal Scanning: Organizational
Analysis 160 PART three Strategy Formulation 195 CHAPTER CHAPTER CHAPTER 6

Strategy Formulation: Situation Analysis and Business Strategy 196 7 Strategy
Formulation: Corporate Strategy 218 8 Strategy Formulation: Functional Strategy and
Strategic Choice 248 PART four Strategy Implementation and Control 277 9 Strategy
Implementation: Organizing for Action 278 C H A P T E R 1 0 Strategy Implementation:
Staffing and Directing 308 C H A P T E R 1 1 Evaluation and Control 336 CHAPTER PART
five Introduction to Case Analysis 365 C H A P T E R 1 2 Suggestions for Case Analysis 366
PART six Cases in Strategic Management 393 Glossary 803 Name Index 815 Subject
Index 820 5 # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 5
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S4carlisle Publishing Services 5/20/14 12:26 PM Contents Preface 23 About the Authors
31 PART one Introduction to Strategic Management and Business Policy 35 CHAPTER 1
Basic Concepts of Strategic Management 36 The Study of Strategic Management 38
Phases of Strategic Management 38 Benefits of Strategic Management 39 Globalization,
Innovation, and Sustainability: Challenges to Strategic Management 41 Impact of
Globalization 42 Impact of Innovation 43 Global Issue: REGIONAL TRADE
ASSOCIATIONS REPLACE NATIONAL TRADE BARRIERS 43 Impact of Sustainability 44
Theories of Organizational Adaptation 45 Creating a Learning Organization 46 Basic
Model of Strategic Management 47 Environmental Scanning 48 Strategy Formulation
50 Strategy Implementation 53 Evaluation and Control 55 Feedback/Learning Process
55 Initiation of Strategy: Triggering Events 56 Strategic Decision Making 57 What
Makes a Decision Strategic 57 Mintzberg’s Modes of Strategic Decision Making 58
Strategic Decision-Making Process: Aid to Better Decisions 59 The Strategic Audit: Aid to
Strategic Decision Making 60 End of Chapter Summary 61 Appendix 1.A Strategic Audit
of a Corporation 66 7 # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 7
5/20/14 12:26 PM 8 CONTENTS CHAPTER 2 Corporate Governance 74 Role of the Board
of Directors 77 Responsibilities of the Board 78 Members of a Board of Directors 80
Innovation Issue: JCPenney and Innovation 81 Strategy Highlight: AGENCY THEORY
VERSUS STEWARDSHIP THEORY IN CORPORATE GOVERNANCE 83 Nomination and
Election of Board Members 86 Organization of the Board 87 Impact of the Sarbanes–
Oxley Act on U.S. Corporate Governance 88 Global Issue: GLOBAL BUSINESS BOARD
ACTIVISM AT YAHOO! 90 Trends in Corporate Governance 91 The Role of Top
Management 92 Responsibilities of Top Management 92 Sustainability Issue: CEO PAY
AND CORPORATE PERFORMANCE 93 End of Chapter Summary 96 CHAPTER 3 Social
Responsibility and Ethics in Strategic Management 102 Social Responsibilities of Strategic
Decision Makers 104 Responsibilities of a Business Firm 104 Sustainability 107
Corporate Stakeholders 108 Sustainability Issue: MARKS & SPENCER LEADS THE WAY
108 Strategy Highlight: JOHNSON & JOHNSON CREDO 111 Ethical Decision Making 111

Some Reasons for Unethical Behavior 112 Global Issue: HOW RULE-BASED AND
RELATIONSHIP-BASED GOVERNANCE SYSTEMS AFFECT ETHICAL BEHAVIOR 113
Innovation Issue: Turning a Need into a Business to Solve the Need 115 Encouraging
Ethical Behavior 116 End of Chapter Summary 118 PART two Scanning the
Environment 123 CHAPTER 4 Environmental Scanning and Industry Analysis 124
Environmental Scanning 126 Identifying External Environmental Variables 126 #
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9 Sustainability Issue: GREEN SUPERCARS 128 Global Issue: SUVs POWER ON IN CHINA
136 Identifying External Strategic Factors 137 Industry Analysis: Analyzing the Task
Environment 138 Porter’s Approach to Industry Analysis 138 Industry Evolution 142
Innovation Issue: TAKING STOCK OF AN OBSESSION 143 Categorizing International
Industries 143 International Risk Assessment 144 Strategic Groups 144 Strategic
Types 146 Hypercompetition 146 Using Key Success Factors to Create an Industry
Matrix 147 Competitive Intelligence 148 Sources of Competitive Intelligence 149
Strategy Highlight: EVALUATING COMPETITIVE INTELLIGENCE 150 Monitoring
Competitors for Strategic Planning 151 Forecasting 152 Danger of Assumptions 152
Useful Forecasting Techniques 152 The Strategic Audit: A Checklist for Environmental
Scanning 154 Synthesis of External Factors—EFAS 154 End of Chapter Summary 156
CHAPTER 5 Internal Scanning: Organizational Analysis 160 A Resource-Based Approach
to Organizational Analysis 162 Core and Distinctive Competencies 162 Using Resources
to Gain Competitive Advantage 163 Determining the Sustainability of an Advantage 164
Business Models 166 Value-Chain Analysis 167 Industry Value-Chain Analysis 168
Corporate Value-Chain Analysis 169 Scanning Functional Resources and Capabilities
170 Basic Organizational Structures 171 Corporate Culture: The Company Way 172 #
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CONTENTS Global Issue: MANAGING CORPORATE CULTURE FOR GLOBAL COMPETITIVE
ADVANTAGE: ABB VS. PANASONIC 174 Strategic Marketing Issues 174 Innovation
Issue: DoCoMo Moves against the Grain 176 Strategic Financial Issues 177 Strategic
Research and Development (R&D) Issues 178 Strategic Operations Issues 180 Strategic
Human Resource (HRM) Issues 181 Sustainability Issue: THE OLYMPIC GAMES—SOCHI
2014 AND RIO 2016 184 Strategic Information Systems/Technology Issues 185 The
Strategic Audit: A Checklist for Organizational Analysis 187 Synthesis of Internal Factors
187 End of Chapter Summary 189 PART three Strategy Formulation 195 CHAPTER 6
Strategy Formulation: Situation Analysis and Business Strategy 196 Situational Analysis:
SWOT Approach 198 Generating a Strategic Factors Analysis Summary (SFAS) Matrix
198 Finding a Propitious Niche 199 Review of Mission and Objectives 202 Business
Strategies 203 Porter’s Competitive Strategies 203 Global Issue: THE NIKE SHOE
STRATEGY VS. THE NEW BALANCE SHOE STRATEGY 205 Innovation Issue: CHEGG and
College Textbooks 208 Cooperative Strategies 209 Sustainability Issue: STRATEGIC

SUSTAINABILITY—ESPN 210 End of Chapter Summary 214 CHAPTER 7 Strategy
Formulation: Corporate Strategy 218 Corporate Strategy 220 Directional Strategy 220
Growth Strategies 221 Strategy Highlight: TRANSACTION COST ECONOMICS ANALYZES
VERTICAL GROWTH STRATEGY 225 International Entry Options for Horizontal Growth
226 Global Issue: GLOBAL EXPANSION IS NOT ALWAYS A PATH TO EXPANSION 226
Controversies in Directional Growth Strategies 230 # 111708 Cust: PE/NJ/B&E Au:
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Retrenchment Strategies 232 Portfolio Analysis 234 Bcg Growth-Share Matrix 234
Sustainability Issue: GENERAL MOTORS AND THE ELECTRIC CAR 236 Advantages and
Limitations of Portfolio Analysis 237 Managing a Strategic Alliance Portfolio 238
Corporate Parenting 239 Innovation Issue: To Red Hat or Not? 239 Developing a
Corporate Parenting Strategy 240 Horizontal Strategy and Multipoint Competition 241
End of Chapter Summary 241 CHAPTER 8 Strategy Formulation: Functional Strategy and
Strategic Choice 248 Functional Strategy 250 Marketing Strategy 250 Financial
Strategy 251 Research and Development (R&D) Strategy 253 Operations Strategy 254
Global Issue: WHY DOESN’T STARBUCKS WANT TO EXPAND TO ITALY? 255 Purchasing
Strategy 256 Sustainability Issue: HOW HOT IS HOT? 257 Logistics Strategy 258
Innovation Issue: When an Innovation Fails to Live Up to Expectations 258 Human
Resource Management (HRM) Strategy 259 Information Technology Strategy 259 The
Sourcing Decision: Location of Functions 260 Strategies to Avoid 263 Strategic Choice:
Selecting the Best Strategy 263 Constructing Corporate Scenarios 264 The Process of
Strategic Choice 269 Developing Policies 270 End of Chapter Summary 271 PART four
Strategy Implementation and Control 277 CHAPTER 9 Strategy Implementation:
Organizing for Action 278 Strategy Implementation 280 Who Implements Strategy?
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Services 5/20/14 12:26 PM 12 CONTENTS What Must Be Done? 282 Developing
Programs, Budgets, and Procedures 282 Sustainability Issue: A BETTER BOTTLE—
ECOLOGIC BRANDS 283 Achieving Synergy 286 How Is Strategy to Be Implemented?
Organizing for Action 287 Structure Follows Strategy 287 Stages of Corporate
Development 288 Innovation Issues: The P&G Innovation Machine Stumbles 289
Organizational Life Cycle 292 Advanced Types of Organizational Structures 294
Reengineering and Strategy Implementation 297 Six Sigma 298 Designing Jobs to
Implement Strategy 299 International Issues in Strategy Implementation 300
International Strategic Alliances 300 Stages of International Development 301 Global
Issue: OUTSOURCING COMES FULL CIRCLE 302 Centralization Versus Decentralization
302 End of Chapter Summary 304 CHAPTER 10 Strategy Implementation: Staffing and
Directing 308 Staffing 310 Staffing Follows Strategy 311 Selection and Management
Development 313 Innovation Issue: HOW TO KEEP APPLE “COOL” 313 Problems in
Retrenchment 315 International Issues in Staffing 317 Leading 319 Sustainability

Issue: PANERA AND THE “PANERA CARES COMMUNITY CAFÉ” 319 Managing Corporate
Culture 320 Action Planning 324 Management by Objectives 326 Total Quality
Management 326 International Considerations in Leading 327 Global Issue: CULTURAL
DIFFERENCES CREATE IMPLEMENTATION PROBLEMS IN MERGER 329 End of Chapter
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5/20/14 12:26 PM CONTENTS CHAPTER 11 13 Evaluation and Control 336 Evaluation
and Control in Strategic Management 338 Measuring Performance 338 Appropriate
Measures 338 Types of Controls 339 Innovation Issue: REUSE OF ELECTRIC VEHICLE
BATTERIES 340 Activity-Based Costing 341 Enterprise Risk Management 342
Primary Measures of Corporate Performance 342 Balanced Scorecard Approach: Using
Key Performance Measures 345 Sustainability Issue: E-RECEIPTS 345 Primary Measures
of Divisional and Functional Performance 347 Responsibility Centers 348 Using
Benchmarking to Evaluate Performance 349 International Measurement Issues 350
Global Issue: COUNTERFEIT GOODS AND PIRATED SOFTWARE: A GLOBAL PROBLEM 352
Strategic Information Systems 352 Enterprise Resource Planning (ERP) 353 Radio
Frequency Identification (RFID) 353 Divisional and Functional is Support 354 Problems
in Measuring Performance 354 Short-Term Orientation 354 Goal Displacement 356
Guidelines for Proper Control 357 Strategic Incentive Management 357 End of Chapter
Summary 359 PART five CHAPTER 12 Introduction to Case Analysis 365 Suggestions for
Case Analysis 366 The Case Method 368 Researching the Case Situation 368 Financial
Analysis: A Place to Begin 369 Analyzing Financial Statements 369 Common-Size
Statements 373 Z-Value and the Index of Sustainable Growth 373 Useful Economic
Measures 374 Format for Case Analysis: The Strategic Audit 375 # 111708 Cust:
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Chapter Summary 377 Appendix 12.A Resources for Case Research 379 Appendix 12.B
Suggested Case Analysis Methodology Using the Strategic Audit 381 Appendix 12.C
Example of Student-Written Strategic Audit 384 PART six Cases in Strategic Management
393 SECTION A case 1 Corporate Governance: Executive Leadership he Recalcitrant
Director at Byte Products, Inc.: Corporate Legality versus T Corporate Responsibility 399
(Contributors: Dan R. Dalton, Richard A. Cosier, and Cathy A. Enz) A plant location decision
forces a confrontation between the board of directors and the CEO regarding an issue in
social responsibility and ethics. case 2 The Wallace Group 405 (Contributor: Laurence J.
Stybel) Managers question the company’s strategic direction and how it is being managed
by its founder and CEO. Company growth has resulted not only in disorganization and
confusion among employees, but in poor overall performance. How should the board deal
with the company’s founder? SECTION B case 3 Business Ethics Everyone Does It 415
(Contributors: Steven M. Cox and Shawana P. Johnson) When Jim Willis, Marketing VP,
learns that the launch date for the company’s new satellite will be late by at least a year, he
is told by the company’s president to continue using the earlier published date for the

launch. When Jim protests that the use of an incorrect date to market contracts is unethical,
he is told that spacecraft are never launched on time and that it is common industry
practice to list unrealistic launch dates. If a realistic date was used, no one would contract
with the company. case 4 The Audit 419 (Contributors: Gamewell D. Gantt, George A.
Johnson, and John A. Kilpatrick) A questionable accounting practice by the company being
audited puts a new CPA in a difficult position. Although the practice is clearly wrong, she is
being pressured by her manager to ignore it because it is common in the industry. SECTION
C case 5 Corporate Social Responsibility arly Warning or False Sense of Security?
Concussion Risk and the Case of the E Impact-Sensing Football Chinstrap 421
(Contributors: Clifton D. Petty, and Michael R. Shirley) new In 2009, Battle Sports Science,
headquartered in Omaha, Nebraska, was built with a focus on “enhancing safety for
athletes.” Specifically, the company wanted to protect young athletes who might have
suffered a concussion. Battle Sports Science attempted to gain market attention for its
US$149.99 impact indicator (chin strap) through endorsements, and had enlisted a number
of NFL players. The company hoped to sell the device to sports programs (schools) as well
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5/20/14 12:26 PM CONTENTS SECTION D 15 International Issues in Strategic Management
case 6 A123 Systems: A New Lithium-Ion Battery System for Electric and Hybrid Cars 425
(Contributor: Alan N. Hoffman) new case 7 In 2007, A123 was developing its hybrid electric
vehicle business. A123 entered into a partnership with Cobasys to introduce lithium-ion
batteries into the automotive market. A123 also entered into an agreement with GM to use
their batteries in the Saturn Vue Plug-in Hybrid development program and to co-develop a
lithium-ion battery for the Chevrolet Volt. A123 faced cash flow shortages after its 2009 IPO
and its ultimate survival was threatened by its diminishing funds for continued operations.
Guajilote Cooperativo Forestal, Honduras 441 (Contributors: Nathan Nebbe and J. David
Hunger) This forestry cooperative has the right to harvest, transport, and sell fallen
mahogany trees in La Muralla National Park of Honduras. Although the cooperative has
been successful thus far, it is facing some serious issues: low prices for its product, illegal
logging, deforestation by poor farmers, and possible world trade restrictions on the sale of
mahogany. SECTION E General Issues in Strategic Management I N D U S T R Y O N E :
INTERNET COMPANIES case 8 Google Inc. (2010): The Future of the Internet Search Engine
447 (Contributor: Patricia A. Ryan) Google, an online company that provides a reliable
Internet search engine, was founded in 1998 and soon replaced Yahoo as the market leader
in Internet search engines. By 2010, Google was one of the strongest brands in the world.
Nevertheless, its growth by acquisition strategy was showing signs of weakness. Its 2006
acquisition of YouTube had thus far not generated significant revenue growth. Groupon, a
shopping Web site, rebuffed Google’s acquisition attempt in 2010. Is it time for a strategic
change? case 9 Amazon.com, Inc.: Retailing Giant to High-Tech Player? 461 (Contributor:
Alan N. Hoffman) new case 10 In 2012, more than half of all Amazon sales came from
computers, mobile devices including the Kindle, Kindle Fire, and Kindle Touch, and other
electronics, as well as general merchandise from home and garden supplies to groceries,

apparel, jewelry, health and beauty products, sports and outdoor equipment, tools, and auto
and industrial supplies. Amazon was at a crossroads with regard to its push into technology
versus its general merchandise. Amazon also faced other challenges, including those from
state governments that wanted it to collect sales taxes so it would not adversely compete
against local businesses. lue Nile, Inc.: “Stuck in the Middle” of the Diamond Engagement B
Ring Market 473 (Contributor: Alan N. Hoffman) new Blue Nile Inc. has developed into the
largest online retailer of diamond engagement rings. Unlike traditional jewelry retailers,
Blue Nile operates completely store-front-free, without in-person consultation services. The
business conducts all sales online or by phone, and sales include both engagement (70%)
and non-engagement (30%) categories. Blue Nile’s vision is to educate its customer base so
customers can make an informed, confident decision no matter what event they are
celebrating. It wants to make the entire diamond-buying process easy and hassle-free. #
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CONTENTS I N D U S T R Y T W O : ENTERTAINMENT AND LEISURE case 11 Groupon
Inc.: Daily Deal or Lasting Success? 489 (Contributors: Nick Falcone, Eric Halbruner, Ellie
A. Fogarty, and Joyce Vincelette) new case 12 Groupon began as a local Chicago discount
service and became a global phenomenon seemingly overnight. It was a great idea. The
company was the first of its kind and changed the way consumers spend, shop, and think
about discounts. But how could Groupon, based on such innovation and having experienced
such exceptional growth, be in such a precarious position? A wave of competition had
swelled, including the likes of technology giants and both general and niche daily deals
services, all replicating Groupon’s business model. How could Groupon compete against
large companies and their expansive resources? Netflix Inc.: The 2011 Rebranding/Price
Increase Debacle 509 (Contributor: Alan N. Hoffman) new case 13 On September 18,
2011, Netflix CEO and co-founder Reed Hastings announced on the Netflix blog that the
company was splitting its DVD delivery service from its online streaming service,
rebranding its DVD delivery service Qwikster, as a way to differentiate it from its online
streaming service, and creating a new Web site for it. Three weeks later, in response to
customer outrage and confusion, Hastings rescinded the decision to rebrand the DVD
delivery service Qwikster and reintegrated it into Netflix. Nevertheless, only five weeks
after the initial split, Netflix acknowledged that it had lost 800,000 U.S. subscribers and
expected to lose many more, thanks both to the Qwikster debacle and the price hike the
company had decided was necessary to cover increasing content costs. Carnival
Corporation & plc (2010) 521 (Contributors: Michael J. Keeffe, John K. Ross III, Sherry K.
Ross, Bill J. Middlebrook, and Thomas L. Wheelen) With its “fun ship,” Carnival Cruises
changed the way people think of ocean cruises. The cruise became more important than the
destination. Through acquisition, Carnival expanded its product line to encompass an entire
range of industry offerings. How can Carnival continue to grow in the industry it now
dominates? case 14 Zynga, Inc. (2011): Whose Turn Is It? 541 (Contributors: Zachary
Burkhalter, Daniel Zuller, Concetta Bagnato, Joyce Vincelette, and Ellie A. Fogarty) new
Zynga built its company around social gaming. This new type of gaming transformed the

gaming industry on multiple levels and across various platforms. Zynga originally built its
games using the Facebook platform and then capitalized on the company’s unique method
of social networking to capture audiences around the world. However, this strong reliance
on Facebook and changes in consumer gaming practices caused some concern among
outside investors as to the future of Zynga. I N D U S T R Y T H R E E : FOOD AND
BEVERAGE case 15 he Boston Beer Company: Brewers of Samuel Adams Boston Lager T
(Mini Case) 561 (Contributor: Alan N. Hoffman) The Boston Beer Company, founded in
1984 by Jim Koch, is viewed as pioneer in the American craft beer revolution. Brewing over
one million barrels of 25 different styles of beer, Boston Beer is the sixth-largest brewer in
the United States. Even though overall domestic beer sales declined 1.2% in 2010, sales of
craft beer have increased 20% since 2002, with Boston Beer’s increasing 22% from 2007 to
2009. How can the company continue its rapid growth in a mature industry? # 111708
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17 Panera Bread Company (2010): Still Rising Fortunes? 565 (Contributors: Joyce P.
Vincelette and Ellie A. Fogarty) Panera Bread is a successful bakery-café known for its
quality soups and sandwiches. Even though Panera’s revenues and net earnings have been
rising rapidly, new unit expansion throughout North America has fueled this growth. Will
revenue growth stop once expansion slows? The retirement of CEO Ronald Shaich, the
master baker who created the “starter” for the company’s phenomenal growth, is an
opportunity to rethink Panera’s growth strategy. case 17 Whole Foods Market (2010): How
to Grow in an Increasingly Competitive Market? (Mini Case) 589 (Contributors: Patricia
Harasta and Alan N. Hoffman) Whole Foods Market is the world’s leading retailer of natural
and organic foods. The company differentiates itself from competitors by focusing on
innovation, quality, and service excellence, allowing it to charge premium prices. Although
the company dominates the natural/organic foods category in North America, it is facing
increasing competition from larger food retailers like WalMart, who are adding
natural/organic foods to their offerings. case 18 Burger King (Mini Case) 595
(Contributor: J. David Hunger) Founded in Florida in 1953, Burger King has always trailed
behind McDonald’s as the second-largest fast-food hamburger chain in the world. Although
its total revenues dropped only slightly from 2009, its 2010 profits dropped significantly,
due to high expenses. Burger King’s purchase by an investment group in 2010 was an
opportunity to rethink the firm’s strategy. case 19 Church & Dwight: Time to Rethink the
Portfolio? 599 (Contributor: Roy A. Cook) Church & Dwight, the maker of ARM &
HAMMER Baking Soda, has used brand extension to successfully market multiple consumer
products based on sodium bicarbonate. Searching for a new growth strategy, the firm
turned to acquisitions. Can management successfully achieve a balancing act based on
finding growth through expanded uses of sodium bicarbonate while assimilating a
divergent group of consumer products into an expanding international footprint? I N D U S
T R Y F O U R : APPAREL case 20 Under Armour 609 (Contributors: Ram Subramanian
and Pradeep Gopalakrishna) new case 21 Under Armour’s footwear sales declined by 4.5%
during the second quarter of 2009 and showed a 16.6% decline in the first six months of

2010 compared to 2009. This was in contrast to its performance apparel, the company’s
core category, which saw a 32.2% uptick over 2009. Under Armour had tremendous growth
opportunities in the apparel category in China. However, CEO Kevin Plank wanted Under
Armour to be a leading player in the field of athletic footwear. TOMS Shoes (Mini Case)
621 (Contributor: J. David Hunger) Founded in 2006 by Blake Mycoskie, TOMS Shoes is an
American footwear company based in Santa Monica, California. Although TOMS Shoes is a
for-profit business, its mission is more like that of a not-for-profit organization. The firm’s
reason for existence is to donate to children in need one new pair of shoes for every pair of
shoes sold. By 2010, the company had sold over one million pairs of shoes. How should the
company plan its future growth? # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 17
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Services 5/20/14 12:26 PM 18 CONTENTS case 22 Best Buy Co. Inc. (2009): A Sustainable
Customer-Centricity Model? 625 (Contributor: Alan N. Hoffman) Best Buy, the largest
consumer electronics retailer in the United States, operates 4000 stores in North America,
China, and Turkey. It distinguishes itself from competitors by deploying a differentiation
strategy based on superior service rather than low price. The recent recession has stressed
its finances and the quality of its customer service. How can Best Buy continue to have
innovative products, topnotch employees, and superior customer service while facing
increased competition, operational costs, and financial stress? I N D U S T R Y F I V E :
SPECIALTY RETAILING case 23 Rosetta Stone Inc.: Changing the Way People Learn
Languages 639 (Contributors: Christine B. Buenafe and Joyce P. Vincelette) Rosetta
Stone’s mission was to change the way people learn languages. The company blended
language learning with technology at a time when globalization connected more and more
individuals and institutions to each other. How should the company move forward? Would
it be appropriate for Rosetta Stone to offer products like audio books or services in order to
increase market share? Which international markets could provide the company with a
successful future? case 24 Dollar General Corporation: 2011 Growth Expansion Plans (Mini
Case) 655 (Contributor: Kathryn E. Wheelen) With annual revenues of US$12.7 billion and
9200 stores in 35 states, Dollar General is the largest of the discount “dollar stores” in the
United States. Although far smaller than its “big brothers” Wal-Mart and Target, Dollar
General has done very well during the recent economic recession. In 2011, it planned to
open 625 new stores in three new states. Given that the company has a substantial long-
term debt, is this the right time to expand its operations? case 25 iRobot: Finding the Right
Market Mix? 661 (Contributor: Alan N. Hoffman) Founded in 1990, iRobot was one of the
first companies to introduce robotic technology into the consumer market. Employing over
500 robotic professionals, the firm planned to lead the robotics industry. Unfortunately, its
largest revenue source, home care robots, is a luxury good and vulnerable to recessions.
Many of iRobot’s patents are due to expire by 2019. The firm is highly dependent upon
suppliers to make its consumer products and the U.S. government for its military sales.
What is the best strategy for its future success? SECTION f I N D U S T R Y si x :
Transportation case 26 Tesla Motors, Inc.: The First U.S. Car Company IPO Since 1956 671
(Contributor: Alan N. Hoffman) new case 27 Tesla Motors was founded in 2004 to produce

electric automobiles. Its first car, the Tesla Roadster, sold for US$101,000. It could
accelerate from 0 to 60 mph in 3.9 seconds, and cruise for 236 miles on a single charge. In
contrast to existing automakers, Tesla sold and serviced its cars through the Internet and its
own Tesla stores. With the goal of building a full line of electric vehicles, Tesla Motors faces
increasing competition from established automakers. How can Tesla Motors succeed in an
industry dominated by giant global competitors? Delta Air Lines (2012): Navigating an
Uncertain Environment 687 (Contributors: Alan N. Hoffman and J. David Hunger) new
Delta used mergers and acquisitions (M&A) successfully to solidify its strong position as a
leader in the airline industry. It has gone through five M&As since 1953, including the most
recent acquisition of Northwest Airlines (Northwest), which turned Delta into an airline
with major operations in every region of the world. The Northwest merger took a toll on
Delta’s financial position, however, by contributing to its high long-term debt. # 111708
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2012, top management began cautiously exploring opportunities for entering new markets,
routes, and partnerships in order to boost market share. Management was also searching
for ways to reduce costs and expenses in an industry that was rapidly consolidating into
fewer major national and international players. Delta is considering purchasing from
Conoco. case 28 TomTom: New Competition Everywhere! 707 (Contributor: Alan N.
Hoffman) TomTom, an Amsterdam-based company that provides navigation services and
devices, led the navigation systems market in Europe and is second in popularity in the
United States. However, the company is facing increasing competition from other platforms
using GPS technology, like cell phones and Smartphones with built-in navigation functions.
As its primary markets in the United States and Europe mature, how can the company
ensure its future growth and success? SECTION G I N D U S T R Y S E V E N :
MANUFACTURING case 29 eneral Electric, GE Capital, and the Financial Crisis of 2008: The
Best of the G Worst in the Financial Sector? 721 (Contributor: Alan N. Hoffman) new case
30 The financial services industry was, by definition, volatile, and GE Capital was
particularly hard hit by the economic recession of 2008. With the credit markets illiquid and
financial markets falling, GE Capital found it was overexposed to commercial real estate and
foreign residential mortgages. At this point, GE’s parent corporation stepped in, began
reorganizing GE Capital, and significantly downsized the unit. GE Capital hoped to see
continued sustainable earnings growth with growing margins and lower portfolio risk, and
to return money to investors and resume paying dividends to its parent company AB
Electrolux: Challenging Times in the Appliance Industry 737 (Contributor: Alan N.
Hoffman) new AB Electrolux is currently the world’s second-largest appliance maker,
behind Whirlpool. Electrolux has over 50,000 employees in more than 50 countries around
the world. Its headquarters are in Stockholm, Sweden. As the social and demographic trends
continue to evolve, so do the opportunities afforded to Electrolux. The most significant
demographic shift globally is the growing middle class in Asia, which includes families with
incomes between US$6000 and US$30,000. It is estimated that by 2020 there will be one
billion more people in the global middle class than there were in 2010. Correlated with

rising incomes worldwide, homeownership has also increased at a substantial rate, giving
rise to increased demand for consumer durables such as refrigerators, washing machines,
and dishwashers. I N D U S T R Y E I G H T : INFORMATION TECHNOLOGY case 31 Apple
Inc.: Performance in a Zero-Sum World Economy 749 (Contributors: Moustafa H.
Abdelsamad, Hitesh (John) Adhia, David B. Croll, Bernard A. Morin, Lawrence C. Pettit Jr.,
Kathryn E. Wheelen, Richard D. Wheelen, Thomas L. Wheelen II, and Thomas L. Wheelen)
By the 1990s, Apple, the first company to mass-market a personal computer, had become a
minor player in an industry dominated by Microsoft. After being expelled from the company
in 1985, founder Steve Jobs returned as CEO in 1997 to reenergize the firm. The
introduction of the iPod in 2001, followed by the iPad, catapulted Apple back into the
spotlight. However, in 2011 Jobs was forced to take his third medical leave, leading to
questions regarding his ability to lead Apple. How can Apple continue its success? How
dependent is the company on Steve Jobs? # 111708 Cust: PE/NJ/B&E Au: Wheelen
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Publishing Services 5/20/14 12:26 PM 20 CONTENTS case 32 Dell Inc.: Changing the
Business Model (Mini Case) 771 (Contributor: J. David Hunger) Dell, once the largest PC
vendor in the world, is now battling with Acer for second place in the global PC market. Its
chief advantages—direct marketing and power over suppliers—no longer provides a
competitive advantage. The industry’s focus has shifted from desktop PCs to mobile
computing, software, and technology services, areas of relative weakness for Dell. Is it time
for Dell to change its strategy? case 33 Logitech (Mini Case) 777 (Contributor: Alan N.
Hoffman) Logitech, the world’s leading provider of computer peripherals, was on the
forefront of mouse, keyboard, and videoconferencing technology. By 2010, however,
Logitech’s products were threatened by new technologies, such as touchpads, that could
replace both the mouse and keyboard. As the peripherals market begins to disintegrate,
Logitech is considering a change in strategy. case 34 Daktronics (A): The U.S. Digital Signage
Industry 2010 783 (Contributors: Joseph Kavanaugh, Joshua Warne, and Carol J. Cumber)
new The billboard, sign, and outdoor advertising industry in the United States is almost as
old as the Colonies. Lighted billboards, roadside signs, neon lights, and other forms of
display are part of our everyday environment. The newest segment of the industry, digital
signage, is driven by 21st-century technologies in computers, peripherals, graphics, and
new sources of light—liquid crystal display (LCD), light-emitting diodes (LED), and others.
Less than 20 years old, the digital segment (sales of US$2.14 billion) was estimated to be
17.8% of the outdoor signage industry in 2008. This note reviews the digital signage
industry and explores the forces that are driving this emerging segment of the advertising,
messaging, and sign industry. Glossary 803 Name Index 815 Subject Index 820 #
20 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short /
Normal DESIGN SERVICES OF S4carlisle Publishing Services 5/20/14 12:26 PM Dedicated
to SPECIAL DEDICATION TO TOM WHEELEN Tom originated this book in the late 1970s
and with his friend David Hunger brought the first edition to fruition in 1982. What a ride it
has been! After battling bone cancer, Tom died in Saint Petersburg, Florida, on December

24, 2011. It was Tom’s idea from the very beginning to include the latest research and
useful material written in such a way that the typical student could read and understand the
book without outside assistance. That has been a key reason for the success of the book
through its many editions. Tom’s last months were spent working with the two new co-
authors to map out the direction for the 14th edition. We thank you, Tom, and bid you a
fond farewell! This 14th edition is for you. J. David Hunger Alan N. Hoffman Charles E.
Bamford This is a special dedication to Thomas L. Wheelen, co-author, father, and best
friend, May 30, 1935 – December 24, 2011. This is the 14th edition of SMBP the creation you
and Mr. Hunger started due to your friendship at the McIntire School of Commerce at UVA
with that adjoining door! It is not very often that two co-authors become the best of friends,
but you both did. That was a very special gift that Tom treasured until the end. We are so
glad you were able to meet as the dynamic foursome to discuss the 14th edition of SMBP!
The new addition of co-authors Alan Hoffman and Chuck Bamford gave you and Mr. Hunger
the ability to relax and smell the roses. We have come full circle with you being back at UVA!
You were an amazing friend, visionary, teacher, and leader! Thank you for pushing us to be
who we are today! You were very blessed to have two children as your best friends! You will
never know how much you are missed! Dad – chailleann againn go mbainfidh tú agus grá
agat. Tá do Spiorad na hÉireann le linn i gcónaí! GNPD KEW and RDW Betty, Kari and Jeff,
Maddie and Megan, Suzi and Nick, Summer and Kacey, Lori, Merry, Dylan, and newborn
Edan. Also to Wolfie (arf!). David Hunger To Will Hoffman, the greatest son in the world. . . .
and to our saint Wendy Appel. In memory of my good friend, Tom Wheelen, via con dios.
Thank you, Tom and David. Alan Hoffman To Yvonne, for your support, advice,
encouragement, love, and confidence. To David and Tom, for your confidence, council, and
mental energy in the revision of this remarkable text. Chuck Bamford # 111708 Cust:
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5/20/14 12:26 PM Preface Welcome to the 14th edition of Strategic Management and
Business Policy! All of the -chapters have been updated, and most of the cases are new and
different. We have added several brand-new cases (Early Warning: Concussion Risk and the
Case of the Impact Sensing Chinstrap, A123, Amazon, Blue Nile, Groupon, Netflix, Zynga,
Under Armour, General Electric, AB Electrolux, Tesla Motors, Delta Airlines, and The U.S.
Digital Signage Industry Note) for a total of 13 new cases! Many of the cases are exclusive to
this edition! Although we still make a distinction between full-length and mini cases, we
have interwoven them throughout the book to better identify them with their industries.
This edition revamps the theme that runs throughout all 12 chapters. We utilize a
threelegged approach consisting of globalization, innovation, and sustainability. These three
strategic issues comprise the cornerstone that all organizations must build upon to push
their businesses forward. Each chapter incorporates specific vignettes about these three
themes. We continue to be the most comprehensive and practical strategy book on the

market, with chapters ranging from corporate governance and social responsibility to
competitive strategy, functional strategy, and strategic alliances. Features New to this 14th
Edition For the first time in 30 years, the 14th edition has added two new authors to the
text. Alan Hoffman, a major contributor to the 13th edition, is a former textbook author and
worldrenowned author of strategy business cases, and Chuck Bamford, who was a student
of Tom Wheelen and David Hunger back in 1980 at the University of Virginia (McIntire
School of Commerce), has authored four other textbooks. They join J. David Hunger and
bring a fresh perspective to this extraordinarily well-researched and practically crafted text.
In that vein, this edition of the text has: Vignettes on Sustainability (which is widely defined
as Business Sustainability), -Globalization (which we view as an expectation of business),
and Innovation (which is the single most important element in achieving competitive
advantage) appear in every chapter of the text. ■ Every example, chapter opening, and
story has been updated. This includes chapter -opening vignettes examining companies
such as: Five Guys, RIM (BlackBerry), HP’s Board of Directors, Tata Motors, Costco, and
Pfizer among many others. ■ Resource-based analysis (Chapter 5) has been added to the
toolbox of students’ understanding of competitive advantage. ■ Extensive additions have
been made to the text on strategy research. ■ Current consulting practices have been added
to the topics of strategy formulation and strategy implementation. ■ Thirteen new full-
length cases have been added: ■ Twelve new comprehensive cases and one new Industry
Note have been added to support the 13 popular full-length cases and 8 mini-cases carried
forward from past editions. Thirteen of the cases in the 14th edition are brand new and one
case is an updated favorite from 23 # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No.
23 A01_WHEE0811_14_GE_FM.indd 23 Management and Business Policy Server: Jobs4
Services 5/20/14 12:26 PM 24 Pref ace past editions. Of the 34 cases appearing in this
book, 20 are exclusive and do not appear in other books. One of the new cases deals with
corporate social responsibility issues (Early Warning: Concussion Risk and the Case of the
Impact Sensing Chinstrap). ■ Two of the new cases deal with international issues (A123, AB
Electrolux). ■ Two of the new cases involve Internet companies (Amazon, Blue Nile). ■
Three of the new cases deal with Entertainment and Leisure (Groupon, Netflix, and Zynga).
■ One new case deals with sports and apparel clothing (Under Armour). ■ One new
Industry Note concerns digital signage. (Daktronics). ■ One new case concerns the financial
crisis of 2008 (GE Capital). ■ Two new cases deal with transportation (Delta Airlines, Tesla
Motors) ■ How this Book is Different from other Strategy Textbooks This book contains a
Strategic Management Model that runs through the first 11 chapters and is made
operational through the Strategic Audit, a complete case analysis methodology. The
Strategic Audit provides a professional framework for case analysis in terms of external and
internal factors and takes the student through the generation of strategic alternatives and
implementation programs. To help the student synthesize the many factors in a complex
strategy case, we developed three useful techniques: The External Factor Analysis (EFAS)
Table in Chapter 4 This reduces the external opportunities and threats to the 8 to 10 most
important external factors facing management. ■ The Internal Factor Analysis (IFAS) Table
in Chapter 5 This reduces the internal strengths and weaknesses to the 8 to 10 most

important internal factors facing management. ■ The Strategic Factor Analysis Summary
(SFAS) Matrix in Chapter 6 This condenses the 16 to 20 factors generated in the EFAS and
IFAS tables into the 8 to 10 most important (strategic) factors facing the company. These
strategic factors become the basis for generating alternatives and act as a recommendation
for the company’s future direction. ■ Suggestions for case analysis are provided in
Appendix 12.B (end of Chapter 12) and contain step-by-step procedures on how to use a
strategic audit in analyzing a case. This appendix includes an example of a student-written
strategic audit. Thousands of students around the world have applied this methodology to
case analysis with great success. The Case Instructor’s Manual contains examples of
student-written strategic audits for each of the full-length comprehensive strategy cases. #
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Features This edition contains many of the same features and content that helped make
previous editions successful. Some of the features include the following: CHAPTER ■ 1
basic concepts of Strategic Management Environmental Scanning: Gathering Information
External Mission Natural Environment: Reason for existence Resources and climate After
reading this chapter, you should be able to: ■ ■ ■ Strategy Formulation: Strategy
Implementation: Evaluation and Control: Developing Long-range Plans Putting Strategy into
Action Monitoring Performance Understand the benefits of strategic management Explain
how globalization and environmental sustainability influence strategic management ■ ■ ■
Understand the basic model of strategic management and its components Identify some
common triggering events that act as stimuli for strategic change Understand strategic
decision-making modes Use the strategic audit as a method of analyzing corporate functions
and activities The 21st-century story of the power of strategic planning and implementation
for Ford Motor Company really starts in January 2006. Ford announced a US$1.6 billion loss
in North American operations and a continuing loss of market share. Then CEO and
grandson of the founder, William Clay (Bill) Ford General forces Task Environment:
announced the “Way Forward”—a surprisingly clear strategy document to lead the
company Strategies Plan to achieve the hi he mission & objectives Industry analysis PART
back to profitability by 2008 and reduce costs by over US$6 billion by 2010. The entire
document was only 16 pages long and clearly laid out the way that Ford was going to
change the Policies Broad guidelines id li for decision making Internal direction of the
company. This was a corporate-level change document in the classic planning Programs and
Tactics Activities d d to needed accomplishh a plan mode of strategy. Budgets Cost of the
programs Procedures Sequence off steps needed to do the job Structure: Chain of command
Culture: by the third quarter of 2006 was a staggering US$5.6 billion loss that would end up
being a loss of over US$12 billion before the year was out. Bill Ford and the Board of
Directors realized Performance that they needed a CEO who could really implement the
plan. Someone with an operations Actual results approach and the willingness to make the
tough decisions required by that plan. They tapped Resources: Alan Mulally, the President
and CEO of Boeing’s Commercial Airlines unit. He stated that “These Assets, skills,
competencies, knowledge business results are clearly unacceptable. We are committed to

dealing decisively with the fundamental business reality that customer demand is shifting
to smaller, more efficient vehicles.” Introduction to Mulally immediately eliminated the Ford
dividend which had been a staple of the blue chip company for decades. He sold off Volvo,
Aston-Martin, Jaguar, and Land Feedback/Learning: Make corrections as needed Rover to
other companies and sold most of Ford’s stock holdings in Mazda. He shut down the historic
Mercury line of vehicles and focused all of the company’s energy on two MyManagementLab
® vehicle lines: Ford and Lincoln. In what now looks even more brilliant than it did at the
Improve Your Grade! CH A P T E R 2 Over 10 million students improved their results using
the Pearson MyLabs.Visit mymanagementlab.com for simulations, tutorials, and end-of-
chapter problems. time, he secured US$23.6 billion in lines of credit to help the company
through the change. Corporate GovernanceIt turned45out to be prescient. When the other
American automobile companies saw their sales plummet in 2009, Ford was able to thrive.
In fact, Ford was the only American auto Monitor: By acting through its committees, a board
can keep abreast of developments inside and outside the corporation, bringing to
management’s attention developments it might have overlooked. A board should at the
minimum carry out this task. ■ Evaluate and influence: A board can examine management’s
proposals, decisions, and actions; agree or disagree with them; give advice and offer
suggestions; and outline alternatives. More active boards perform this task in addition to
monitoring. ■ Initiate and determine: A board can delineate a corporation’s mission and
specify strategic options to its management. Only the most active boards take on this task in
addition ■ to the two previous ones. ■ Board of Directors’ Continuum A board of directors
is involved in strategic management to the extent that it carries out the three tasks of
monitoring, evaluating and influencing, and initiating and determining. The board of
directors’ continuum shown in Figure 2–1 shows the possible degree of involvement (from
low to high) in the strategic management process. Boards can range from phantom boards
with no real involvement to catalyst boards with a very high degree of involvement.9
CHthat A P Tactive E R 3board Social Responsibility and Ethicsmanagement in Strategic
Management 71 Research suggests involvement in strategic is positively related to a
corporation’s financial performance and its credit rating.10 Highly boards tend tothus be
very active. take their tasks of monitoring, efficiency of involved a business. Friedman
referred to They the social responsibility of businessevaluas a ating and influencing, and
initiating and determining very seriously; they provide advice when “fundamentally
subversive doctrine” and stated that: necessary and keep management alert. As depicted in
Figure 2–1, their heavy involvement in There is one and only one social responsibility of
business—to use its resources and engage in the strategic management process places them
in the active participation or even catalyst posiactivities designed to increase its profits so
long as it stays within the rules of the game, which tions. Although 74% of public
corporations have periodic board meetings devoted primarily to is to say, engages in open
and free competition without deception or fraud.1 the review of overall company strategy,
the boards may not have had much influence in genFollowing theglobal management Coca-
Cola was clearly of erating the planFriedman’s itself.11 Thereasoning, same 2011 survey
ofofdirectors by McKinsey & guilty Company misusing corporate assets and negatively
affecting shareholder wealth.proposed The millions spent41% in found that 44% of

respondents reviewed and approved management’s strategy, social services couldwith
havemanagement, been investedand in new development or given back as divideveloped
strategy 11% product developed strategy, which management was dends to the
shareholders. Coca-Cola’s management acting on its own, shareholders then assigned to
execute.Instead Those of boards reporting high influence typically shared a common could
have decided which charities to support. Carroll’s Four Responsibilities of Business FIGURE
2–1 Board of Directors’ Continuum Friedman’s contention that the primary goal of business
is profit maximization is only one side of an ongoing debate regarding corporate social
responsibility (CSR). According to William J. DEGREE OF INVOLVEMENT IN STRATEGIC
MANAGEMENT Byron, Distinguished Professor of Ethics at Georgetown University and past
President of Low Catholic University of America, profits are merely a means to an end, not
anHigh end in itself. (Passive) (Active) Just as a person needs food to survive and grow, so
does a business corporation need profits to survive and grow. Minimal “Maximizing profits
is like maximizing food.” Thus, contends Byron, Rubber Nominal Active 2 Phantom
maximization Stamp of profits Review Participation cannot be theParticipation primary
obligation of business.Catalyst As shown in Figure 3–1, Archie Carroll proposed that the
managers of business organiNever knows Permits officers Formally reviews Involved to a
Approves, Takes the3 have all four responsibilities: legal, ethical, andand discretionary.
what to do, zations if to make selected issueseconomic, limited degree questions, leading
role in anything; no degree of 1. involvement. decisions. It that officers in the perfor- makes
final de- 3 The strategic audit, a way to operationalize the strategic -decision-making
process, serves as a checklist in case analysis. (Chapter 1) FIGURE 3–1 Corporate
governance is examined in terms of the roles, responsibilities, and interactions of top
management and the board of directors and includes the impact of the Sarbanes–Oxley Act.
(Chapter 2) ■ Social responsibility and managerial ethics are examined in detail in terms of
how they affect strategic decision -making. They include the process of stakeholder analysis
and the concept of social capital. (Chapter 3) establishing Discretionary Social
Responsibilities Ethical Economic Strategic Management and Business Policy ■ Economic
organization’s to produce goods votes as theresponsibilities bring to its of a business mance
or review cisions management on misand are modifying and services to society so that
thekey firm sion, maystrategy, repay its creditors and increase the officers recom-of value
attention. of selected the mission, mend on policies, and objectives, decisions, wealth
ofaction its shareholders. issues. indicators, or objectives. Has strategy, and 2. Legal
responsibilities are defined by governments in board laws that management programs of
active policies. It has is expected managment. committees. a very activepeople based to
obey. For example, U.S. business firms are required to hire and promote Performs fiscal on
their credentials rather than to discriminate on non-job-relatedstrategy characteristics such
as and managecommittee. race, gender, or religion. ment audits. 3. Ethical responsibilities of
an organization’s management are to follow the generally held SOURCE: T. L. Wheelen and J.
D. Hunger, “Board of Directors’ Continuum,” Copyright © 1994 by Wheelen and Hunger
Associates. Reprinted beliefs about behavior in a society. For example, society generally
expects firms to work by permission. with the employees and the community in planning
for layoffs, even though no law may require this. The affected people can get very upset if an

organization’s management fails to act according to generally prevailing ethical values. 4.
Discretionary responsibilities are the purely voluntary obligations a corporation assumes.
Examples are philanthropic contributions, training the hard-core unemployed, and
providing day-care centers. The difference between ethical and discretionary
responsibilities is that few people expect an organization to fulfill discretionary
responsibilities, whereas many expect an organization to fulfill ethical ones.4
Responsibilities of Business 1 For the next nine months, the company attempted to
implement the plan, and the result Beliefs, expectations, values 2 A strategic management
model runs throughout the first 11 chapters as a unifying concept. (Explained in Chapter 1)
Ford—A Study in Strategic Planning Objectives What results l to accomplish h by when
Societal Environment: Learning Objectives Legal SOURCE: Suggested by Archie Carroll in A.
B. Carroll, “A Three Dimensional Conceptual Model of Corporate Performance,” Academy of
Management Review (October 1979), pp. 497–505; A. B. Carroll, “Managing Ethically with
Global Stakeholders: A Present and Future Challenge,” Academy of Management Executive
(May 2004), pp. 114–120; and A. B. Carroll, “The Pyramid of Corporate Social
Responsibility: Toward the Moral Management of Organizational Stakeholders,” Business
Horizons (July–August 1991), pp. 39–48. # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg.
No. 25 A01_WHEE0811_14_GE_FM.indd Title: Strategic 25 Management and Business Policy
5/20/14 12:27 PM 26 Pref ace Equal emphasis is placed on environmental scanning of the
societal environment as well as on the task environment. Topics include forecasting and
Miles and Snow’s typology in addition to competitive intelligence techniques and Porter’s
industry analysis. (Chapter 4) ■ Core and distinctive competencies are examined within the
framework of the resource-based view of the firm. (Chapter 5) ■ Organizational analysis
includes material on business models, supply chain management, and corporate reputation.
(Chapter 5) ■ Internal and external strategic factors are emphasized through the use of
specially designed EFAS, IFAS, and SFAS tables. (Chapters 4, 5, and 6) ■ Functional
strategies are examined in light of outsourcing. (Chapter 8) ■ CHAPTER 9 strategy
implementation: organizing for Action Environmental Scanning: Gathering Information
External Mission Natural Environment: Reason for existence Resources and climate Societal
Environment: Strategy Formulation: Strategy Implementation: Evaluation and Control:
Developing Long-range Plans Putting Strategy into Action Monitoring Performance Develop
programs, budgets, and procedures to implement strategic change ■ Understand the
importance of achieving synergy during strategy implementation List the stages of
corporate development and the structure that characterizes each stage ■ ■ Identify the
blocks to changing from one stage to another ■ Construct matrix and network structures to
support flexible and nimble organizational strategies ■ Decide when and if programs such
as reengineering, Six Sigma, and job redesign are appropriate methods of strategy
implementation Understand the centralization versus decentralization issue in
multinational corporations ■ For nearly five decades, Wal-Mart’s “everyday low prices” and
low-cost position had enabled it to rapidly grow to dominate North America’s retailing
landscape. By 2012, however, its U.S. division generated only 2.2% growth in its same-store
General forces Task Environment: Industry analysis Internal the people’s car in India and

then offer it in other developing markets, management has really retrenched and the Nano
looks to be based in India for a long time to come. A Resource-Based Approach to
Organizational Analysis Scanning and analyzing the external environment for opportunities
and threats is necessary for the firm to be able to understand its competitive environment
and its place in that environment; however, it is not enough to provide an organization with
a competitive advantage. Once this external examination has been completed, the attention
must turn to look within the corporation itself to identify internal strategic factors—critical
strengths and weaknesses that are likely to determine whether a firm will be able to take
advantage of opportunities while avoiding threats. This internal scanning, often referred to
as organizational analysis, is concerned with identifying, developing, and taking advantage
of an organization’s resources and competencies. CORE AND DISTINCTIVE COMPETENCIES
Resources are an organization’s assets and are thus the basic building blocks of the
organization. They include tangible assets (such as its plant, equipment, finances, and
location), human assets (the number of employees, their skills, and motivation), and
intangible assets (such as its technology [patents and copyrights], culture, and reputation).1
Capabilities refer to a corporation’s ability to exploit its resources. They consist of business
processes and routines that manage the interaction among resources to turn inputs into
outputs. For example, a company’s marketing capability can be based on the interaction
among its marketing specialists, distribution channels, and salespeople. A capability is
functionally based and is resident in a particular function. Thus, there are marketing
capabilities, manufacturing capabilities, and human resource management capabilities.
When these capabilities are constantly being changed and reconfigured to make them more
adaptive to an uncertain environment, they are called dynamic capabilities.2 A competency
is a cross-functional integration and coordination of capabilities. For example, a competency
in new product development in one division of a corporation may be the consequence of
integrating information systems capabilities, marketing capabilities, R&D capabilities, and
production capabilities within the division. A core competency is a collection of
competencies that crosses divisional boundaries, is widespread within the corporation, and
is something that the corporation can do exceedingly well. Thus, new product development
is a core competency if it goes beyond one division.3 For example, a core competency of
Avon Products is its expertise in doorto-door selling. FedEx has a core competency in its
application of information technology to all its operations. A company must continually
reinvest in a core competency or risk its becoming a core rigidity or deficiency—that is, a
strength that over time matures and may become a weakness.4 Although it is typically not
an asset in the accounting sense, a core competency is a very valuable resource—it does not
“wear out” with use. In general, the ■ Two chapters deal with issues in strategy
implementation, such as organizational and job design, as well as strategy-manager fit,
action planning, corporate culture, and international strategic alliances. (Chapters 9 and 10)
■ A separate chapter on evaluation and control explains the importance of measurement
and incentives to organizational performance. (Chapter 11) sales even as the recession was
fading. Target, Macy’s, Kohl’s Costco, GAP, Kroger, and even The Home Depot were all
growing faster than Wal-Mart. At about the same time, Strategies Plan to achieve the hi he
mission & objectives Microsoft, whose software had grown to dominate personal computers

worldwide, saw its revenue growth over the five-year period from 2007 to 2012 slow to just
6.6%. The company’s Policies Broad guidelines id li for decision making stock price had
been virtually flat since 2002, an indication that investors no longer perceived Programs
and Tactics Activities d d to needed accomplishh a plan Microsoft as a growth company.
What had happened to these two successful companies? Was Budgets Cost of the programs
this an isolated phenomenon? What could be done, if anything, to reinvigorate these giants?
A research study by Matthew Olson, Derek van Bever, and Seth Verry attempts to provide
Procedures Sequence off steps needed to do the job Structure: Chain of command Culture:
Resources: they found that 87% of the firms had suffered one or more serious declines in
sales and profits. Actual results Beliefs, expectations, values Assets, skills, competencies,
knowledge an answer. After analyzing the experiences of 500 successful companies over a
50-year period, Performance CHAPTER This included a diverse set of corporations, such as
Levi Strauss, 3M, Apple, Bank One, Caterpillar, 10 Daimler-Benz, Toys“R”Us, and Volvo. After
years of prolonged growth in sales and profits, revenue growth at each of these firms
suddenly stopped and even turned negative! Olson, van strategy implementation: Staffing
and Directing Scanning the Environment SOURCES: S. Philip, “Chairman Tata Seeks to
Salvage World’s Cheapest Nano Car,” Bloomberg (August 21, 2012),
(www.bloomberg.com/news/2012-08-21/chairman-tata-seeks-to-salvage-world-s-
cheapest-nan-carhtml); A. K. Mishra, “Tata’s Nano:Fire!” Forbes (May 21, 2010),
(www.forbes.com/2010/05/20/forbes-indiawheels-of-fire-tata-motors.html); D. Welch and
N. Lakshman, “My Other Car Is a Tata,” Business Week (January 14, 2008), pp. 33–34. After
reading this chapter, you should be able to: ■ P ART 2 approximately 75,000 Nanos a year.
Although Tata Motors had intended to initially sell Learning Objectives Objectives What
results l to accomplish h by when 128 Learning Objectives Bever, and Verry called these
long-term reversals in company growth stall points. On average, corporations lost 74% of
their market capitalization in the decade surrounding a growth stall. After reading Even
though the CEO and other members of top management were typically replaced, onlythis
chapter, you should be able to: Feedback/Learning: Make corrections as needed 46% of the
firms were able to return to moderate or high growth within the decade. When ■
Understand the link between strategy and ■ of this group was able to return to moderate or
high growth. ■ slow growth was allowed to persist for more than 10 years, the delay was
usuallystaffing fatal. Only 7% decisions MyManagementLab® ■ Match the appropriate
manager to the strategy At Levi Strauss & Company, for example, sales topped US$7 billion
in 1996—extending Improve Your Grade! ■ Understand how to implement an effecgrowth
that had more than doubled over the previous decade. From that high-water mark, Over 10
million students improved their results using the Pearson MyLabs.Visit
mymanagement.com for simulations, tutorials, and end-of-chapter problems. 244
Environmental Scanning: Gathering Information External Mission Natural Environment:
Reason for existence Resources and climate Societal Environment: Strategy Formulation:
Strategy Implementation: Evaluation and Control: Developing Long-range Plans Putting
Strategy into Action Monitoring Performance ■ tive downsizing program Discuss important
issues in effectively staffing and directing international 245 expansion Assess and manage
the corporate culture’s fit with a new strategy Formulate effective action plans when MBO

and TQM are determined to be appropriate methods of strategy implementation Costco:
Leading from the Front Costco was founded in 1983 upon several simple foundations, such
as marking everything up by no more than 15% (ever), paying and treating employees well,
and providing a more upscale experience in the warehouse retail world. Today, the
company is the largest (by sales) in the industry despite having fewer store locations
Objectives What results l to accomplish h by when General forces Task Environment:
Industry analysis Internal than its rival Sam’s Club. In 2011, the company racked up sales of
US$93 billion and had more Strategies Plan to achieve the hi he mission & objectives than
60 million members who pay for the privilege of shopping there. One of the most stunning
elements of the Costco success story is the way it has handled Policies Broad guidelines id li
for decision making the staffing and leading elements of the business. Employees at the
company make an average Programs and Tactics Activities d d to needed accomplishh a
plan salary of US$20.89/hour and 88% of employees receive health care benefits even
though half Budgets Cost of the programs are part-time employees. During the recession
that hit the globe from 2008–2011, the company Procedures Sequence off steps needed to
do the job Structure: Chain of command Culture: had no layoffs. This has meant that the
company enjoys some of the lowest turnover in an inPerformance dustry plagued by
turnover. Employees at Costco know what they are doing and actively help Actual results
customers. Beliefs, expectations, values Interestingly, the staffing model morphs into
leading with the approach that the company takes to executive compensation. The former
CEO and co-founder of Costco had a salary of Resources: Assets, skills, competencies,
knowledge only US$325,000/year and his total compensation package was US$2.2 million
when the average for Fortune 500 CEOs in 2012 was US$9.6 million. The senior
management team is similarly compensated, leading to an “all in for the good of the
company” approach to the business. In addition to leading with salary, the CEO made it a
part of his yearly effort to visit all Feedback/Learning: Make corrections as needed
MyManagementLab® Improve Your Grade! Over 10 million students improved their results
using the Pearson MyLabs.Visit mymanagementlab.com for simulations, tutorials, and end-
of-chapter problems. 560 stores in nine countries. This visible leading-from-the-front
approach caught employees off guard when he would repeatedly jump in and work at the
stores: cleaning, stocking, giving out food, and working the food court. In fact, the company
has held tightly to the idea that a hot dog and soda should cost a patron no more than
US$1.50. That was the price in 1985 when they opened their first hotdog stand in a store,
and it is the price today. Costco sells more than 90 million hotdogs a year. 274 275 ■
Suggestions for in-depth case analysis provide a complete listing of financial ratios,
recommendations for oral and written analysis, and ideas for further research. (Chapter 12)
# 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 26 A01_WHEE0811_14_GE_FM.indd
Normal DESIGN SERVICES OF S4carlisle Publishing Services 5/20/14 12:28 PM P re f ace ■
The strategic audit worksheet is based on the -time-tested strategic audit and is designed to
help students organize and structure daily case -preparation in a brief period of time. The
worksheet works -exceedingly well for checking the level of daily student case
preparation—especially for open class discussions of cases. (Chapter 12) FIGURE 12–1

Strategic Audit Worksheet 27 Analysis Strategic Audit Heading I. (+) Factors (−) Factors
Comments Current Situation B. Strategic Posture: Current Mission Current Objectives
Current Strategies Current Policies SWOT Analysis Begins: II. End of Ch Using ment be abl of
info manag the re throug A. Past Corporate Performance Indexes Corporate Governance A.
Board of Directors MyManagement B. Top Management III. External Environment (EFAS):
Opportunities and Threats (SWOT) Go to mymanagementlab.com A. Natural Environment B.
Societal Environment IV. C. Task Environment (Industry Analysis) KEY TERMS A. Corporate
Structure activity ratio (p. 335) Altman’s Z-Value Bankruptcy F (p. 339) annual report (p.
335) common-size statement (p. 339 constant dollars (p. 340) Internal Environment (IFAS):
Strengths and Weaknesses (SWOT) B. Corporate Culture C. Corporate Resources 1.
Marketing 2. Finance 3. Research and Development 4. Operations and Logistics
MyManagement 5. Human Resources V. Go to mymanagementlab.com 6. Information
Technology 1-1. What ratios would you 1-2. What are the five crucia 1-3.
MyManagementLab On Analysis of Strategic Factors (SFAS) A. Key Internal and External
Strategic Factors (SWOT) B. Review of Mission and Objectives SWOT Analysis Ends.
Recommendation Begins: VI. Alternatives and Recommendations DISCUSSION A. Strategic
Alternatives—pros and cons 1-4. Why should you begin a analysis? When are othe B.
Recommended Strategy VII. Implementation 1-5. What are common-size their value to case
analy VIII. Evaluation and Control CHAPTER 5 Internal Scanning: Organizational Analysis
NOTE: See the complete Strategic Audit on pages 34–41. It lists the pages in the book that
discuss each of the eight headings. SOURCE: T. L. Wheelen and J. D. Hunger, “Strategic Audit
Worksheet.” Copyright © 1985, 1986, 1987, 1988, 1989, 2005, and 2009 by T. L. Wheelen.
Copyright © 1989, 2005, and 2009 by Wheelen and Hunger Associates. Revised 1991, 1994,
and 1997. Reprinted by permission. Additional copies available for classroom use in Part D
of the Case Instructor’s Manual and on the Prentice Hall Web site
(www.prenhall.com/wheelen). 155 End of Chapter SUMMA R Y 342 Every day, about 17
truckloads of used diesel engines and other parts are dumped at a receiving facility at
Caterpillar’s remanufacturing plant in Corinth, Mississippi. The filthy iron engines are then
broken down by two workers, who manually hammer and drill for half a day until they have
taken every bolt off the engine and put each component into its own bin. The engines are
then cleaned and remade at half of the cost of a new engine and sold for a tidy profit. This
system works at Caterpillar because, as a general rule, 70% of the cost to build ■ something
new is in the materials and 30% is in the labor. Remanufacturing simply starts the
manufacturing process over again with materials that are essentially free and which already
contain most of the energy costs needed to make them. The would-be discards become
fodder for the next product, eliminating waste, and cutting costs. Caterpillar’s management
was so impressed by the remanufacturing operation that they made the business a separate
division in 2005. The unit earned more than US$1 billion in sales in 2005 and in 2012
employed more than 8500 workers in 16 countries. Caterpillar’s remanufacturing unit was
successful not only because of its capability of wringing productivity out of materials and
labor, but also because it designed its products for reuse. Before they are built new,
remanufactured products must be designed for disassembly. In order to achieve this,
Caterpillar asks its designers to check a “Reman” box on Caterpillar’s product development

checklist. The company also needs to know where its products are being used in order to
take them back—known as the art of reverse logistics. This is achieved by Caterpillar’s
excellent relationship with its dealers throughout the world, as well as through financial
incentives. For example, when a customer orders a crankshaft, that customer is offered a
remanufactured one for half the cost of a new one—assuming the customer turns in the old
crankshaft to Caterpillar. The products also should be built for performance with little
regard for changing fashion. Since diesel engines change little from year to year, a
remanufactured engine is very similar to a new engine and might perform even better.
Monitoring the external environment is only one part of environmental scanning.
Strategists also need to scan a corporation’s internal environment to identify its resources,
capabilities, and competencies. What are its strengths and weaknesses? At Caterpillar,
management clearly noted that the environment was changing in a way to make its
remanufactured product 270distribution PART to 4 offer Strategy Implementation and
Control more desirable. It took advantage of its strengths in manufacturing and a recycling
service for its current customers and a low-cost alternative product for those who could not
afford a new Caterpillar engine. It also happened to be an environmentally friendly,
sustainable business model. Caterpillar’s management felt that remanufacturing thus
provided them with a strategic advantage over competitors who don’t remanufacture. This
is an example of a company using its capabilities in key functional areas to expand its
business byStrategy implementation is where “the rubber hits the road.” Environmental
scanning and moving into a new profitable position on its value chain.87 An experiential
exercise focusing on the material covered in each chapter helps the reader apply strategic
concepts to an actual situation. ■ A list of key terms and the pages in which they are
discussed let the reader keep track of important -concepts as they are introduced in
ManagementLab® eachMy chapter. Go to mymanagementlab.com to complete the problems
marked with this icon . End of Chapter SUMMARY KEY TERMS brand (p. 142) business
model (p. 132) capabilities (p. 128) capital budgeting (p. 143) competency (p. 128)
conglomerate structure (p. 138) continuum of sustainability (p. xx) core competencies (p.
128) corporate culture (p. 138) strategy formulation are crucial to strategic management
but are only the beginning of the process. The failure to carry a strategic plan into the day-
to-day operations of the workplace is a major reason why strategic planning often fails to
achieve its objectives. It is discouraging to note that in one study nearly 70% of the strategic
plans were never successfully implemented.84 For a strategy to be successfully
implemented, it must be made action-oriented. This is done through a series of programs
that are funded through specific budgets and contain new detailed procedures. This is what
Sergio Marchionne did when he implemented a turnaround strategy as the new Fiat Group
CEO in 2004. He attacked the lethargic, bureaucratic system by flattening Fiat’s structure
and giving younger managers a larger amount of authority and responsibility. He and other
managers worked to reduce the number of auto platforms from 19 to six by 2012. The time
from the completion of the design process to new car production was cut from 26 to 18
months. By 2008, the Fiat auto unit was again profitable. Marchionne reintroduced Fiat to
the United States market in 2012 after a 27-year absence.85 This chapter explains how jobs
and organizational units can be designed to support a change in strategy. We will continue

with staffing and directing issues in strategy implementation in the next chapter.
MyManagementLab® Go to mymanagementlab.com to complete the problems marked with
this icon. KEY TERMS budget (p. 251) cellular/modular organization (p. 263) geographic-
area structure (p. 269) job design (p. 265) matrix of change (p. xx) matrix structure (p. 260)
multinational corporation (MNC) (p. 266) network structure (p. 262) organizational life
cycle (p. 258) procedure (p. 252) product-group structure (p. 269) program (p. 248)
reengineering(p. 263) Six Sigma (p. 264) stages of corporate development (p. 255) stages of
international development (p. 267) strategy implementation (p. 246) structure follows
strategy (p. 253) synergy (p. 252) virtual organization (p. 262) MyManagementLab® Go to
mymanagementlab.com for Auto-graded writing questions as well as the following Assisted-
graded writing questions: 1-1. How do timing tactics impact the strategy implementation
efforts of a company? 1-2. What issues would you consider to be the most important for a
company that is considering the use of a functional structure? 1-3. MyManagementLab
Only—comprehensive writing assignment for this chapter. DISCUSSION QUESTIONS 1-4.
How should a corporation attempt to achieve synergy 1-7. Is reengineering just another
management fad, or does DESIGN SERVICES OF # 111708 Cust: PE/NJ/B&E Au:
Wheelen Pg. No. 27 among functions and business units? C/M/Y/K it offer something of
lasting value? 1-5. How should an owner-manager prepare a company for 1-8. How is the
cellular/modular structure different from A01_WHEE0811_14_GE_FM.indd 27 Management
and Business Policy Server:itsJobs4 movement from Stage I to Stage II? the network
structure? Publishing Services Title: Strategic Short / Normal S4carlisle 5/20/14 12:28 PM
1-6. When should you gathe What should you look f 28 Pre f ace ■ ■ Learning objectives
begin each chapter. Timely, well-researched, and class-tested cases deal with interesting
companies and industries. Many of the cases are about well-known, publicly held
corporations—ideal subjects for further research by students wishing to “update” the cases.
Both the text and the cases have been class-tested in strategy courses and revised based on
feedback from students and instructors. The first 11 chapters are organized around a
strategic management model that begins each chapter and provides a structure for both
content and case analysis. We emphasize those concepts that have proven to be most useful
in understanding strategic decision making and in conducting case analysis. Our goal was to
make the text as comprehensive as possible without getting bogged down in any one area.
Extensive endnote references are provided for those who wish to learn more about any
particular topic. All cases are about actual organizations. The firms range in size from large,
established multinationals to small, entrepreneurial ventures, and cover a broad variety of
issues. As an aid to case analysis, we propose the strategic audit as an analytical technique.
Supplements Instructor Resource Center At www.pearsonglobaleditions.com/Wheelen,
instructors can access teaching resources available with this text in a downloadable, digital
format. Registration is simple and gives you immediate access to new titles and editions.
Please contact your Pearson sales representative for your access code. As a registered
faculty member, you can download resource files and receive immediate access and
instructions for installing course management content on your campus server. In case you
ever need assistance, our dedicated technical support team is ready to assist instructors
with questions about the media supplements that accompany this text. Visit

http://247.pearsoned.com for answers to frequently asked questions and toll-free user
support phone numbers. The Instructor Resource Center provides the following electronic
resources. Instructor’s Manuals Two comprehensive Instructor’s Manuals have been
carefully constructed to accompany this book. The first one accompanies the concepts
chapters; the second one accompanies the cases. Concepts Instructor’s Manual To aid in
discussing the 12 strategy chapters, the Concepts Instructor’s Manual includes: ■
Suggestions for Teaching Strategic Management: These include various teaching methods
and suggested course syllabi. ■ Chapter Notes: These include summaries of each chapter,
suggested answers to discussion questions, and suggestions for using end-of-chapter
cases/exercises and part-ending cases, plus additional discussion questions (with answers)
and lecture modules. Case Instructor’s Manual To aid in case method teaching, the Case
Instructor’s Manual includes detailed suggestions for its use, teaching objectives, and
examples of student analyses for each of the full-length comprehensive cases. This is the
most comprehensive instructor’s manual available in strategic management. A standardized
format is provided for each case: 1. Case Abstract 2. Case Issues and Subjects 3. Steps
Covered in the Strategic Decision-Making Process # 111708 Cust: PE/NJ/B&E Au:
S4carlisle Publishing Services 5/20/14 12:28 PM P re f ace 29 4. Case Objectives 5.
Suggested Classroom Approaches 6. Discussion Questions 7. Case Author’s Teaching Note (if
available) 8. Student-Written Strategic Audit (if appropriate) 9. EFAS, IFAS, and SFAS
Exhibits 10. Financial Analysis—ratios and common-size income statements (if
appropriate) PowerPoint Slides PowerPoint slides, provided in a comprehensive package of
text outlines and figures corresponding to the text, are designed to aid the educator and
supplement in-class lectures. Test Item File The Test Item File contains over 1200
questions, including multiple-choice, true/false, and essay questions. Each question is
followed by the correct answer, AACSB category, and difficulty rating. TestGen TestGen
software is preloaded with all of the Test Item File questions. It allows instructors to
manually or randomly view test questions, and to add, delete, or modify test-bank questions
as needed to create multiple tests. VIDEO LIBRARY Videos illustrating the most important
subject topics are available at: ■ MyLab – available for instructors and students, provides
round the clock instant access to videos and corresponding assessment and simulations for
Pearson textbooks. Contact your local Pearson representative to request access.
CourseSmart* eTextbooks Online CourseSmart eTextbooks were developed for students
looking to save the cost on required or recommended textbooks. Students simply select
their eText by title or author and purchase immediate access to the content for the duration
of the course using any major credit card. With a CourseSmart eText, students can search
for specific keywords or page numbers, take notes online, print out reading assignments
that incorporate lecture notes, and bookmark -important passages for later review. For
more information or to purchase a CourseSmart eTextbook, visit www.coursesmart.co.uk.
Acknowledgments We would like to thank the many people at Pearson who helped make
this e- dition possible. We are especially grateful to our senior project manager, Karalyn
Holland, who managed to keep everything on an even keel. We also would like to thank

Stephanie Wall, Sarah Holle, Norine Strang, Judy Leale, Estelle Simpson, Michael Joyce,
Michael -McGee, Bernard Ollila, Erin Gardner, and Brooks Hill-Whilton and everyone at
Pearson who guided the book through the production and marketing processes. Special
thanks to Dave Ostrow at Pearson for his hard work in the trenches. *This product may not
be available in all markets. For more details, please visit www.coursesmart.co.uk or contact
your local Pearson representative. # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No.
29 A01_WHEE0811_14_GE_FM.indd 29 Management and Business Policy Server: Jobs4
Services 5/20/14 12:28 PM 30 Pref ace We are very thankful to Paul D. Maxwell, St.
Thomas University, Miami, FL; Terry J. Schindler, University of Indianapolis; Anne Walsh, La
Salle University; Angelo Camillo, Woodbury University; Jeannine L Scherenberg, Rockford
College; William Reisel, St. John’s University; Ronaldo Parente, …

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