BUAD 497: MANAGERIAL DECISION-MAKING AND …



University of Southern California

Marshall School of Business

MOR 542: STRATEGIC ISSUES FOR GLOBAL BUSINESS

Fall 2008

Professor: Carl W. Voigt, Ph.D.

Office: Bridge Hall 303-E

Phone: Office: (213) 740-0764; Mobile (213) 446-1753

Department of Management and Organization Office: (213) 740-0728

Email: cvoigt@marshall.usc.edu [Note: I do not check email sent to cvoigt@usc.edu!!!]

Office Hours: Tuesdays 1:00-2:00 pm, and by appointment

COURSE DESCRIPTION

Business enterprise in today’s environment increasingly involves crossing national borders and, more generally, engaging in business activities in numerous countries that are often very different from each other. Changes in technology, transportation, communications, and political alliances have significantly internationalized business. Increasingly, firms are required to compete in multiple foreign markets at both the product and supply-chain levels. Understanding the management, marketing, financial, and operational challenges associated with global business activity, and developing skills in these areas, have become essential requirements for success. The Global Strategy course is designed to provide students with the skills, knowledge, and sensitivity required to create, maintain, and renew sustainable competitive advantage within a global environment.

Global Strategy is an advanced strategy elective. As such it approaches the subject of global business from a strategic perspective, it will explore international business issues from an integrated firm-level perspective, and it will assume earning sustained above-normal returns is the goal. The course will adopt a strategic perspective and will highlight the following topics from this perspective: the analysis of industry and environmental forces, the competitive context in which companies operate in global industries, creating and sustaining global competitive advantage, the characteristics of global, multi-domestic and transnational strategies, international entry strategies, global strategic alliances, the role of global organizational structures, and the importance of global strategic control. Case studies used in this course will help you develop your analytical and decision-making skills and also highlight the reality of environmental uncertainties influencing decision making in the global context. Cases also seek to develop your capacity to identify issues, to reason carefully through various options and improve your ability to manage the organizational process by which decisions get formed and executed. In addition to case analyses we will also read and discuss additional articles on strategic issues relevant to operating in a global context. Thus, students will develop both, historical and current, and theoretical and practical, perspectives on operating in a global context.

This course has two broad objectives and will be taught simultaneously at two levels. First, this course is designed to teach students “about” international business issues. That is, the course intends to help students understand how business practices vary widely across regions and countries. Secondly, this course is designed to teach students “how to” formulate and evaluate winning global strategies. In a very real sense, this course is designed for students who seek to work in, or with, firms that operate in many different countries, or which operate outside the US.

By the end of the course, students should be able to: perform country, region, industry and firm analyses in an international setting, evaluate the effectiveness and sustainability of international and global corporate strategies, analyze the benefits and shortcomings of various multinational organizational structures, compare the relative merits of different modes of global market entry, and understand the underlying conditions of the international economy that influence global competitive behavior activity such as economic, legal, political and cultural differences, exchange rates, comparative national advantage, national economic policy, the role of international agreements and customs unions, and balance of trade and payments.

COURSE EVALUATION

Course grades will be determined by students’ relative performance on the following course components:

Course Contribution (including participation, group presentation,

and unannounced quizzes) 25%

Mid-term Exam 35

“Going Global” Report & Presentation 40

100%

In order to successfully pass this course, a passing grade (> 50%) must be achieved in each individual course component. Missed mid-terms and/or assignments severely reduce a students grade. Plus and minus shades will be assigned to those immediately above or below grade cutoff points. The distribution of grades will closely follow the guidelines of the Marshall School of Business (an average class GPA of 3.5).

ATTENDANCE POLICY

Class attendance is absolutely essential. All missed classes will be noted. The policy on missed classes is to allow each student three (3) absences, no questions asked, no penalty. All further absences over the limit will reduce the student's participation grade, no questions asked, no excuses of any kind expected or accepted. Students with an excessive number of absences are at risk of failing the course. Only Official University engagements, such as scheduled case competition events, sports events, are excepted from this policy. Job interviews, etc., are not excused, so choose your absences carefully. Habitual lateness (and leaving class early), for whatever reason, will be noted as evidence of low course commitment, and penalized. Simply put, you cannot learn for our class discussions, and your classmates cannot learn from you, if you are not present.

COURSE CONTRIBUTION

Since this course is principally a case and seminar class, your overall commitment and attitude toward this course, and your daily active verbal participation (speaking and listening) in classroom discussions, will be closely monitored. In grading class participation, we will look at both the quantity and quality of your class contributions/interventions. Class participation is obviously a function of preparation, skills, attitude, and a willingness to actively commit yourself in front of your instructor and colleagues. A classroom is a cost-free environment for experimenting and learning to "play the game." Make use of it. Shyness is no excuse.

With regard to quality, the dimensions that we look for include:

• Relevance -- does the comment bear on the subject at hand? Comments that do not link up with what the discussion is focusing on can actually detract from the learning experience.

• Causal Linkage -- are the logical antecedents or consequences of a particular argument traced out? Comments that push the implications of a fact or idea as far as possible are generally superior.

• Responsiveness -- does the comment react in an important way to what someone else has said? Analysis -- is the reasoning employed consistent and logical?

• Evidence -- have data from the case, from personal experience, from general knowledge been employed to support the assertions made?

• Importance -- does the contribution further our understanding of the issues at hand? Is a connection made with other cases we have analyzed?

• Clarity -- is the comment succinct and understandable? Does it stick to the subject or does it wander?

All students will be formally called on, at random, to take the lead in various aspects of class discussions at least once or twice during the semester. If the student called upon is not present, is late, or is not sufficiently prepared to make a substantial contribution to the class discussion, he/she will lose points for class contribution. If the student makes helpful comments, he/she will accumulate points for class contribution. Since it is unlikely that there will be enough opportunities to call on each student more than once or twice, be warned that failure to be thoroughly prepared, on all occasions, can be devastating to your overall grade.

Each student will receive a score for participation at the end of each lecture/discussion and case discussion session.

No Credit Students, though present, who make no contributions, will receive no credit.

A Little Credit The simple recitation of facts from the case will receive some credit toward the student’s class contribution score.

More Credit Comments that do more than simply recite case facts will receive significantly greater credit towards a student’s class contribution score. For example, comments that provide synthesis or raise counterintuitive points, will add much more to a student’s class contribution score.

Gold-Star Credit Students who substantially advance the learning of the whole class by providing non-intuitive analyses, profound insights, or “over the top” quantitative analyses, will receive maximum credit.

Negative Credit Comments that contain factual misstatements, demonstrate lack of adequate preparation, or are distracting because they come too late in the discussion, will be penalized. Attempts to dominate class discussion rarely result in consistent and significant contributions.

Participation Cards: At the end of each case discussion, students who actively participated in the discussion will be asked to turn in a “Participation Card”. These cards should list your name, the date, the case discussed that day, and a synopsis of your contributions during that day’s discussion. The Participation Cards will be used in combination with the instructor’s own daily evaluations to determine your participation grade for the day. For this purpose, please purchase a package of 3x5 index cards and bring them to each class.

Group Presentations and Critiques: On days when textbook chapters/additional articles have been assigned one group will be given the task of presenting a review and critique of the assigned material. Groups should creatively think of ways to help the other students in class learn the assigned materials. These presentations will be evaluated and will factor into determining a students overall course contribution grade.

Unannounced Quizzes: Short unannounced quizzes may be given at any time during the course to test the level of student preparation for lecture and case discussions. Multiple choice and short answer questions may be given at the beginning of classes where a case is assigned for class discussion. No make-up opportunities will be given to students who are absent or late. Student performance on these pop-quizzes will be used to determine a student’s participation grade.

MID-TERM EXAM

A mid-term exam is scheduled for this course. This exam will cover all the assigned readings, course lectures, and case studies in the modules preceding the mid-term. The mid-term exam will consist of multiple choice questions, short answer and short essay questions on all assigned readings and cases. Students who miss mid-term without prior arrangement will receive a grade of zero. See Course Schedule for the date of the mid-term exam.

DOING BUSINESS GLOBALLY GROUP REPORT AND PRESENTATION

In a group (six or seven but not four or five) prepare a comprehensive global report for a new entrepreneurial idea. Students should form groups, quickly, and report their group membership list by Session 3 (September 2nd).

Assignment: Prepare a comprehensive report for a new global entrepreneurial business idea.

• Develop a strategy and business model for the value creating potential of your entrepreneurial idea.

• Assess and evaluate the market potential in your target global market, including potential target segments.

• Examine in detail the institutional voids present in the target economy and the challenges they present

• Examine the opportunities to create/exploit new sustainable global competitive advantages. Note and analyze the presence/absence of diamond-based advantages

• Prepare full competitive industry structure analysis, and a competitor/competitive dynamics analysis. Note and assess cost of entry issues (barriers to entry).

• Propose a market entry strategy, both short and longer –term

• Prepare pro-forma profitability analyses including your best estimates of growth potential

Reports will be weighted by degree of difficulty in grading. For example:

1.0 Extension of current business to a developed foreign market

1.02 Extension of a current business to an emerging market

1.03 New entrepreneurial idea for a new start up in a developed foreign market

1.04 New entrepreneurial idea for a new start up in an emerging foreign market

1.04 Entrepreneurial business idea for an existing or new business involving the disposition of “used” goods/materials to an emerging market

1.05 New entrepreneurial idea for an existing or new business target to the bottom of the pyramid in an emerging economy

1.05 New entrepreneurial idea for attacking a global social and/or economic challenge, i.e. global warming, sustainable energy, poverty, disease, etc.

Report Format You should limit your report to 2 pages of executive brief, and up to 15-20 pages of appropriate “Management report format” pages. Fewer pages would be better if you can more effectively present the data in diagrams and tables (and Powerpoint slides). Make use of tables and charts to present as much information as parsimoniously as possible. You will not have enough time to be able to provide a full comprehensive treatment of the assignment, so focus on the most important issues in each area outlined above. Please note: Cases are not good models for your group project because they are intendedly descriptive, and, on purpose lack substantive analysis. Your project should be long on analysis and short on description.

The report and presentation is 40 percent of the course grade. Late projects will be penalized 10 percent per day late, including weekends. The 40 percent report grade will be divided into 25 percent for the written report, which I will assign, and 15 percent for the class presentation. The class presentation grade will be determined by the class as a whole. Member of the class will be required to rank all the group presentations. Your average presentation ranking will determine your presentation grade. The top ranked group will receive an A, the bottom ranked group will received a B.

In preparing your presentation you should carefully consider your audience; your classmates. Be sure to prepare your verbal/oral presentation in a way that teaches them something new and interesting. It is difficult to educate without entertaining, although it is easier to entertain without educating. Be careful to get the education part right. Your written reports should necessarily be more comprehensive, including all appropriate detailed analyses. However, an oral presentation, to your classmates who have also prepared similar reports, will necessarily be different than your written report.

COURSE MATERIAL

Textbook: Ghemawat, Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter, HBS Press, 2007

Course Reader: A series of cases and readings have been assigned for this course. They are available through University Partners in the University Book Store. When necessary, your instructors may place additional materials in the bookstore for you to purchase.

COURSE COMMUNICATION: BLACKBOARD

An “Electronic Folder” has been created for this course in BLACKBOARD. You should begin the habit of checking the BLACKBOARD folder on a very regular basis. The course syllabus, case discussion and assignment information have been posted to the MOR 542 folder. Additional course lecture notes/materials, further details on assigned cases and the group projects, and general course announcements, will be posted to the folder throughout the semester.

STUDENT REPRESENTATIVE

You will be asked to elect a Section Representative during our first session. The selected student representative will act as a liaison between the section and the instructor to provide informal feedback and communication, particularly on issues that individual students may not wish to raise personally with the instructor.

OFFICE HOURS AND APPOINTMENTS

I have set aside the hour after lunch and class on Tuesdays for “open” office hours, for those who would like/need to discuss specific issues related to the course. I will also make appointments for those who cannot meet me during the “open” office hours.

ACADEMIC INTEGRITY

The following information on academic integrity, dishonesty, and the grading standard are placed here at the recommendation of the School of Business Administration Faculty and are taken from the Faculty Handbook.

“The University, as an instrument of learning, is predicated on the existence of an environment of integrity. As members of the academic community, faculty, students, and administrative officials share the responsibility for maintaining this environment. Faculty have the primary responsibility for establishing and maintaining an atmosphere and attitude of academic integrity such that the enterprise may flourish in an open and honest way. Students share this responsibility for maintaining standards of academic performance and classroom behavior conducive to the learning process. Administrative officials are responsible for the establishment and maintenance of procedures to support and enforce those academic standards. Thus, the entire University community bears the responsibility for maintaining an environment of integrity and for taking appropriate action to sanction individuals involved in any violation. When there is a clear indication that such individuals are unwilling or unable to support these standards, they should not be allowed to remain in the University.” (Faculty Handbook, 1994: 20)

Academic dishonesty includes: (Faculty Handbook, 1994: 21-22)

1. Examination behavior - any use of external assistance during an examination shall be considered academically dishonest unless expressly permitted by the teacher.

2. Fabrication - any intentional falsification or invention of data or citation in an academic exercise will be considered a violation of academic integrity.

3. Plagiarism - the appropriation and subsequent passing off of another’s ideas or words as one’s own. If the words or ideas of another are used, acknowledgment of the original source must be made through recognized referencing practices.

4. Other Types of Academic Dishonesty - submitting a paper written by or obtained from another, using a paper or essay in more than one class without the teacher’s express permission, obtaining a copy of an examination in advance without the knowledge and consent of the teacher, changing academic records outside of normal procedures and/or petitions, using another person to complete homework assignments or take-home exams without the knowledge or consent of the teacher.

The use of unauthorized material, communication with fellow students for course assignments, or during a mid-term examination, attempting to benefit from work of another student, past or present, and similar behavior that defeats the intent of an assignment or mid-term examination is unacceptable to the University. It is often difficult to distinguish between a culpable act and inadvertent behavior resulting from the nervous tensions accompanying examinations. Where a clear violation has occurred, however, the instructor may disqualify the student’s work as unacceptable and assign a failing mark on the paper.

STUDENTS WITH DISABILITIES

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. Your letter must be specific as to the nature of any accommodations granted. DSP is located in STU 301 and is open 8:30 am to 5:00 pm, Monday through Friday. The telephone number for DSP is (213) 740-0776.

RETURNED COURSEWORK

Returned paperwork, unclaimed by a student, will be discarded after 4 weeks and hence, will not be available should a grade appeal be pursued following receipt of his/her grade.

ABOUT YOUR PROFESSOR

Carl Voigt is an Associate Professor of Strategy (Clinical) in the Management and Organization Department. He received his Ph.D. from the Anderson School at UCLA in strategy and organization. He is a native New Zealander, although he completed his undergraduate work at Avondale College in New South Wales, Australia.

Carl specializes in teaching competitive and global strategy, and management courses in both the undergraduate and MBA programs here at USC. His academic interests are in business, corporate and global strategy, and in particular in entrepreneurship.

Carl has consulted with firms and organizations in the entertainment, food processing, tourism, health care, engineering, telecommunications, defense, and not-for-profit sectors. He has also conducted numerous seminars for teams of managers in the areas of management and strategy. He is an academic consultant with the F.T.C. Line of Business program.

Initially, Carl began his career as a high school teacher. His first job was teaching high school business subjects on Guadalcanal in the Solomon Islands. During that time he also served as Chair of the Business Studies Curriculum Development Committee and a member of the National Secondary School Curriculum Committee for the Solomon Island government.

Carl has earned four Marshall’s Golden Apple teaching awards: one from the Marshall MBA students in 2001, and two from the Marshall undergrads (2005, 2007) and one from the Marshall MBA.PM students in 2008. Carl was previously been an Associate Dean of our Marshall Undergrad Program, MBA.PM and EMBA Programs, and Marshall MBA Program for seven years.

In a “past” life, he was heavily involved in coaching basketball; having coached at the high school, college and international levels. While in the Solomon Islands he coached their national basketball team for 2 ½ years. Today, he is first and foremost a father. He spends most of his free time, now, organizing and coaching and refereeing in recreational programs for his children (He has three sons: 23, 18 and 15 years old, and a 13 year old daughter). Carl’s wife, Diane, teaches grades 7-10.

VERY TENTATIVE COURSE SCHEDULE

Several Invitations are outstanding to executives with extensive global strategy and management experience to come to our classroom. If, and when, these executives confirm their availability, I will adjust our course schedule. I have a strong preference for “live cases” and will substitute these opportunities for “passive cases” when appropriate.

Important: Please refer the accompanying Course Discussion Outline (also posted to Blackboard). It contains detailed descriptions of each class session and for thought questions that you should use as you prepare the course cases.

Session Date Case / Topic Course Deliverable

1 8/26 Course Introduction

I. (GLOBAL) STRATEGIC CONCEPTS & ORGANIZING FRAMEWORKS

2 8/28 WBMH: Conceptual Framework

Case: Jollibee

Read: Ghemawat, Semiglobalization and Strategy

9/1 L A B O R D A Y H O L I D A Y

3 9/2 Review: (Global) Strategy “Toy Model” Toolbox

Case: P&G: SK II (Critique of junior consultant work-product)

4 9/4 Review: (Global) Strategy “Toy Model” Toolbox (Continued)

Case: P&G: SK II (Critique of junior consultant work-product)

Group Presentation – Semiglobalization and Strategy

II. REDEFINING GLOBAL STRATEGY

5 9/9 Redefining Global Strategy

Lecture/Discussion: Ghemawat’s AAA Framework

Read: Ghemawat, Chapters 4-7

Group Presentation – CAGE Framework

6 9/11 Arbitrage-based Global Strategies

Case: Flextronics

Group Presentation - Arbitrage

7 9/16 Aggregation-based Global Strategies

Case: Volvo Trucks: Penetrating the US Market

Group Presentation - Aggregation

8 9/18 Adaptation-based Global Strategies

Case: Wal-Mart Stores “Everyday Low Prices” in China

Group Presentation - Adaptation

III. CREATING GLOBAL COMPETITIVE ADVANTAGES

9 9/23 Building Global Advantages

Lecture/Discussion: Global Value Creation

Read: Ghemawat, Chapter 3

Group Presentation – ADDING Value Scorecard

10 9/25 Competitive Cluster & Diamond-based Advantages

Case: Indian Software Industry

Reread: Porter, “The Competitive Advantage of Nations”

Group Presentation – Diamond-based Advantages

11 9/30 Constructing New Global Business Models

Case: Chupa Chups

12 10/2 Heptagon of Global Advantage

Case: CEMEX (Revisited)

Group Presentation – ADDING Value Scorecard vs Heptagon

13 10/7 Pursuing Transnational Advantages

Case: Haier: Taking a Chinese Company Global

14 10/9 Global Competitive Dynamics

Case: Must Zee TV

IV. GLOBAL ENTRY STRATEGIES AND STRATEGIC ALLIANCES

15 10/14 Global Market Entry: Alternative Entry Choices

Case: Lincoln Electric in India

16 10/16 Protecting a Firm’s “Secret Sauce”: IP and Proprietary Competencies

Case: LVMH in Asia

17 10/21 Market Potential Analysis

Case: Tyson Chicken in China

18 10/23 Acquisition vs Greenfield Entry

Case: Tyson Chicken in China

Special Session – Sunday, October 25th

19 10/25 Strategic Leadership

Case: Tyson Chicken in China

Guest: Jim Rice, Tyson VP & China Country Manager

20 10/30 Using Contract Manufacturers

Case: Li & Fung

21 11/4 Large Scale Investment Entry

Case: Hong Kong Disney

Guest: Nobel Coker

22 11/6 Joint Venture Challenges

Case: Danone vs Wahaha: Who is having the last laugh?

23 11/11 Global Mergers & Acquisitions

Case: Santander’s Acquisition

24 11/13 MID-TERM EXAM

VI. FOCUS ON EMERGING ECONOMIES

25 11/18 Focus on Emerging Economies

Professor Nandini Rajagopalan

Read: Serving the world’s poor profitably

The end of corporate imperialism

Strategies that fit emerging markets

Emerging Giants: Building world class companies in emerging markets

The new multinationals-Emerging Giants

26 11/20 Focus on Emerging Economies: China

Professor Nandini Rajagopalan

Read: Balancing Act – A survey of China

Reaching for a renaissance – A special report on China and its region

27 11/25 Focus on Emerging Economies: India

Professor Nandini Rajagopalan

Read: Can India fly? A 14-page special report

The trouble with India

Hungry tiger, dancing elephant

28 12/2 Final Presentations Report Due

29 12/4 Final Presentations

FINAL EXAM PERIOD (see Spring Schedule of Classes for date)

Scheduled Feedback Sessions on Presentations and Report

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