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DISTANCE LEARNING CENTRE
AHMADU BELLO UNIVERSITY

ZARIA-NIGERIA.
COURSE MATERIAL
FOR
Course Code & Title: BUAD 836: Business Policy and Strategy
Programme Title: Master in Business Administration
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COPYRIGHT PAGE
© 2018 Ahmadu Bello University (ABU) Zaria, Nigeria
All rights reserved. No part of this publication may be reproduced in any form or
by any means, electronic, mechanical, photocopying, recording or otherwise
without the prior permission of the Ahmadu Bello University, Zaria, Nigeria.
First published 2018 in Nigeria.
ISBN:
Ahmadu Bello University e-Learning project,

Ahmadu Bello University
Zaria, Nigeria.
Tel: +234
E-mail:
2

COURSE WRITERS/DEVELOPMENT TEAM
Salisu Umar & Halima Shuaibu: Subject Matter Experts
Prof Awosika: Subject Matter Reviewer
Enegoloinu Adakole: Language Reviewer
Nasiru Tanko & Ibrahim Otukoya: Instructional Designers/Graphics
Prof. Adamu Z. Hassan: Editor
3

QUOTE
“Open and Distance Learning has the exceptional ability of meeting the challenges of the three
vectors of dilemma in education delivery – Access, Quality and Cost”
– Sir John Daniels
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TABLE OF CONTENT
Title Page
Acknowledgement Page
Copyright Page
Course Writers/Development Team
Table of Content
INTRODUCTION
Preamble
i. Course Information
ii. Course Introduction and Description
iii. Course Prerequisites
iv. Course Learning Resources
v. Course Objectives and Outcomes
vi. Activities to Meet Course Objectives
vii. Time (To Complete Syllabus/Course)
viii. Grading Criteria and Scale
ix. Course Structure and Outline
STUDY MODULES
1.0 Module 1: General Overview and Assessing the Business Environment
Study Session 1: Concept, Definition, objectives and importance of Business Policy and
strategy
Study Session 2: Strategic management decision making
Study Session 3: The internal and external environment of business
Study Session 4: Company vision, mission and purpose
2.0 Module 2 Strategy Formulation

Study Session 5: Corporate Level Strategy
Study Session 6: Business Level Strategy
Study session 7: Functional Plans and Policies
Study Session 8: Strategic Analysis and Choice
3.0 Module 3 Strategy Implementation, Evaluation and Control

Study session 9: Nature of Strategy Implementation
Study session 10: Structural Design and Change
Study Session 11: Corporate Governance, Social Responsibility and Business Ethics
Study Session 12: Strategic Evaluation and Control
Study Session 13: Case Analysis
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INTRODUCTION
i. COURSE INFORMATION
Course Code: BUAD 836
Course Title: Business Policy and Strategy
Credit Units: 3
Year of Study: 2
Semester: 2nd
ii. COURSE INTRODUCTION AND DESCRIPTION

Business policy and Strategy focus on applying the knowledge you have gained in
the real business setting and also equip you to be able to formulate, implement and
evaluate business policies and strategies.
This course is charged with addressing three core objectives:

 Develop the ability to use and integrate knowledge to formulate, implement,
and evaluate business policy and strategy.
 Communicate effectively and show how to obtain and use feedback.
 Develop teamwork and decision making skills.
These objectives will be achieved through presentations, simulations and group

work. The effectiveness at achieving these objectives will be assessed through tests
and the evaluation of student performance with regard to presentations,
discussions, written work, and performance in the simulation.
Getting somewhat more specific, the primary aim of this course is to review,
deepen, and broaden your understanding of Business Policy &Strategy, and to
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allow you to gain experience in applying these to real world problems. Since the
overriding objective of an MBA program is to develop decision-makers.
In addition, the course strives to develop your conceptual and team skills, and to
help develop inter-personal skills that will serve as an added value, throughout
your life and career.
The study takes you through the functions and responsibilities of top management,
relating to those organisational problems, which affects the success of the entire
organisation. It also involves determination of the character and identity, resources
to be utilised, and future course of action of an organisation.
This course is designed to equip and expose you to an array of concepts, theories,
skills and different approaches and shows how best to take strategic decisions in
order to solve and overcome organisational problems and challenges.
iii. COURSE PREREQUISITES

You should note that although this course has no subject pre-requisite, you are
expected to have:
1. Satisfactory level of English proficiency
2. Basic Computer Operations proficiency
iv. COURSE LEARNING RESOURCES

You should note that there are no compulsory textbooks for the course.
Notwithstanding, you are encouraged to consult some of those listed for further
reading at the end of each study session.
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v. COURSE OUTCOMES
After studying this course, you should be able to:
 Critique theories, concepts, scope and developments in policy and strategy
management in business organisation.
 Synthesise the internal and external environmental factors of business.
 Describe the ethical issues in business and the quest for sustainable business
strategy.
 Explain the strategy formulation in business organisation.
 Analyse the implementation and evaluation of strategy in business
organisation.
vi. ACTIVITIES TO MEET COURSE OBJECTIVES

The distance learning system of education is quite different from the traditional
university system. Here, the study sessions replace the university lecturers, thus
conferring a unique advantage on you. For instance, you can read and work
through specially designed study materials at your own pace and at a time and
place that suit you best.
You should understand right from the onset that the contents of the course are to
be worked at and understood step by step and not to be read like a novel.
The best way is to read a study session quickly in order to see the general run of
the contents and then to re-read it carefully, making sure that the contents
are understood step by step. You should be prepared at this stage to spend a
much longer quality time on some study sessions that may appear difficult. A
paper and pen may be necessary. Ensure that you make necessary notes and
summaries where necessary for future reference.
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Moreover, the key to success in this course is to study each topic slowly in order to
ensure full apprehension before moving onto the next one. In the event any topic is
not fully understood, there is every need to go through it over and over again by
reworking illustrations in the topic. This is based on the fact that practice plays
significant role in understanding subjects that deal with computation issues. Also,
there will be series of group and individual assignments that you are expected to do
and submit within the defined time limit which will serve as part of your
assessment.
Specifically, this course shall comprise of the following activities:

i. Studying courseware
ii. Listening to course audios
iii. Watching relevant course videos
iv. Course assignments (individual and group)
v. Forum discussion participation
vi. Tutorials (optional)
vii. Semester examinations (CBT and essay based).
vii. TIME (TO COMPLETE SYLABUS/COURSE)

It is expedient that you patiently read through the study sessions, and consult the
suggested texts and other related materials. The study sessions contain self-
assessment questions to help you. As such, you are advised to devote at least 3
hours every day for this course.
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viii. GRADING CRITERIA AND SCALE
Grading Criteria
A. Formative assessment
Grades will be based on the following:
Individual assignments/test (CA 1,2 etc) 20
Group assignments (GCA 1, 2 etc) 10
Discussions/Quizzes/Out of class engagements etc 10
B. Summative assessment (Semester examination)

CBT based 30
Essay based 30
TOTAL 100%
C. Grading Scale (as appropriate for the course):

A = 70-100
B = 60 – 69
C = 50 - 59
D = 45-49
F = 0-44
D. Feedback
Courseware based:
1. In-text questions and answers (answers preceding references)
2. Self-assessment questions and answers (answers preceding references)
Tutor based:
1. Discussion Forum tutor input
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2. Graded Continuous assessments
Student based:
1. Online programme assessment (administration, learning resource,
deployment, and assessment).
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ix. COURSE STRUCTURE AND OUTLINE
Course Structure
WEEK/DAYS MODULE STUDY SESSION ACTIVITY
1 Study Session 1: 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
Evolution, concept of strategy and 3. View any other Video/U-tube (address/site
policy, importance and benefits of https://goo.gl/2f9q5c & https://goo.gl/6HSQeG )
strategy, strategic decision making, 4. View referred Animation (Address/Site
and strategic management process. https://goo.gl/2f9q5c )
2 Study Session 2 1. Read Courseware for the corresponding Study Session.

Strategic management decision 3. View any other Video/U-tube (address/site
making. https://goo.gl/pi1i4x & https://goo.gl/uR2C9f )
4. View referred Animation (Address/Site
STUDY https://goo.gl/uR2C9f )
MODULE 1 Study Session 3 1. Read Courseware for the corresponding Study Session.
3
Internal and external environment of 3. View any other Video/U-tube (address/site
business https://goo.gl/RrBaMw & https://goo.gl/hSSzJD )
4. View referred Animation
(Address/Sitehttps://goo.gl/RrBaMw)
Company purpose, mission, vision, 3. View any other Video/U-tube (address/site
goals and objective, https://goo.gl/xeSn9H, https://goo.gl/n7xpvJ &
https://goo.gl/XtXUx2 )
Corporate level strategies 3. View any other Video/U-tube (address/site
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https://goo.gl/6Xk3He & https://goo.gl/WY6hwN )
https://goo.gl/nMGKBh
STUDY 2. Listen to the Audio on this Study Session
Business level strategies 3. View any other Video/U-tube (address/site
MODULE 2 https://goo.gl/aMA4iM, https://goo.gl/SZETbJ &
https://goo.gl/aMA4iM )
Functional plans and policies 3. View any other Video/U-tube (address/site
https://goo.gl/1ZwJJS & https://goo.gl/btziee )
https://goo.gl/btziee )
Strategic analyses and choice 3. View any other Video/U-tube (address/site
https://www.youtube.com/watch?v=tBW-Kux1EeQ )
https://goo.gl/tPQK4S )
Nature of strategy implementation 3. View any other Video/U-tube (address/site
https://goo.gl/36QWZL & https://goo.gl/Ac2ume )
https://goo.gl/PVjVx4 )
STUDY Structural design and change 3. View any other Video/U-tube (address/site
MODULE 3 https://goo.gl/3evHVn & https://goo.gl/YoEnnM )
https://goo.gl/NA7BHE )
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Corporate Governance, Social 3. View any other Video/U-tube (address/site
Responsibility and Business Ethics https://goo.gl/zv4wRA )
https://goo.gl/5bBvQp )
Strategic Evaluation and Control 3. View any other Video/U-tube (address/site
https://goo.gl/GGeH7T )

Chase analyses 3. View any other Video/U-tube (address/site
https://goo.gl/RKzAXG )
Week 14 & 15 REVISION/TUTORIALS (On Campus or Online)
Week 16 & 17 SEMESTER EXAMINATION
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Course Outline
MODULE 1: General Overview and Assessing the Business
Environment
Study Session 1: Concept, Definition, objectives and importance of
Business Policy and strategy
MODULE 2: Strategy Formulation

MODULE 3: Strategy Implementation, Evaluation and Control

Study Session 3: Corporate Governance, Social Responsibility and
Business Ethics
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STUDY MODULES
1.0 MODULE 1: General Overview and Assessing the Business
Environment
Contents:
Study Session 1: Concept, Definition, objectives and importance of
Business Policy and strategy
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STUDY SESSION 1
Section and Subsection Headings
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 Evolution of Business Policy
2.2 Concept of Business Policy
2.3 Strategic Management
2.3.1 What is a strategy?
2.3.2 What is management?
2.3.3 Strategic Management Defined
2.4 Stages of Strategic Management
2.4.1 Strategy formulation
2.4.2 Strategy implementation
2.4.3Strategy evaluation:
2.5 Benefits of Strategic Management
2.6 Guidelines for Effective Strategic Management
3.0 Tutor Marked Assignments (Individual or Group assignments)
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions and Answers
6.0 Additional Activities (Videos, Animations & Out of Class activities)
7.0 References/Further Readings
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Introduction:
This study session introduces you to the concept of business policy and
strategy. You will appreciate the fact that business
policy is a guide and road map to create awareness
and direction to the management of an
organisation. Business policy was the term
formally used, as new titles for the course have
begun to be introduced, in recent years; one of such
titles is strategic management. You will understand
that the ultimate aim of strategic management is to
save the company’s business products and services so that they achieve
targeted profits and growth. You will appreciate the fact that strategic
management is all about gaining and maintaining competitive advantage.
This study session will also provide you with the foundation of what will
be discussed in the subsequent study sessions.
1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Discuss the evolution of strategic management.
2. Explain the concept of business policy/ strategic management.
3. Discuss the conceptual framework for the development of strategic
management.
4. Describe the stages in strategic management.
5. Explain the benefit(s) of strategic management and also the
guidelines for effective strategic management.
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2.0 Main Content
2.1 Evolution of Business Policy
The origins of business policy as stated by Kazmi (2006) can be traced
back to 1911, when Harvard business school introduced an integrative
course in management, aimed at the creating general management
capability. Since 1908, the course was used as an instructional purpose
based on interactive case studies. However, the introduction of business
policy in the curriculum of business schools/ management institute came
much later. In 1969, the American Assembly of collegiate schools of
business, a regulatory body for business schools, made it business a
mandatory requirement for the purpose of recognition.
During the next few decades, business policy as a course spread to

different management institute across different nations and become an
integral part of management curriculum.
2.2 Concept of Business Policy

Business policy is the study of the roles and
responsibilities of top level managements, the
significant issues affecting organisational success and
the decision affecting the organisations in the long
run.
Business policy as defined by Christensen and others

is the functions and responsibilities of senior management, the crucial
problems that affect the success in the total enterprise and the decisions
that determine the organisations to shape its future
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Business policy is a guide and roadmap to create awareness and direction
to the management of any organisation, it ensures that organisations
deliver better end product within a framework.
It encourages, promotes and improves performance attainment in an

organisation.
You should also know that, Rama Rao (2010) define Business Policy as
follows:
(1) A business policy represents the best thinking of the company

management as to how the objectives may be achieved in the prevailing
economic and social conditions.
(2) The purpose of a business policy is to enable the management to

relate properly, the organisation’s work to its environment. Business
policies are guides to action or channels to thinking.
(3) A business policy is the study of the nature and process of choice
about the future of independent enterprises by those responsible for
decisions and their implementation.
(4) A business policy is an implied overall guide, setting up boundaries

that supply the general limit and direction in which managerial action
will take place.
(5) A business policy is one, which focuses attention on the strategic

allocation of scarce resources. Conceptually speaking strategy is the
direction of such resource allocation, while planning is the limit of
allocation.
However, the main objectives of business policy are:
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(a) The formulation of mission and vision statement of the organisation.
(b) Efficiency and effectiveness in carrying out the activities of the

organisations.
(c) Adequate utilisation of resources.
(d) Better management and the provision of better products and services.
Basically, business policy is considered as a capstone, integrative course

offered all over the world. The term “Business policy” has been
traditionally used, though new titles for the course have begun to be
introduced in recent years. One of such title is strategic management.
According to Williams F. Glueck, developments in business policy arose
from the developments in use of planning techniques by managers.
Starting day-day planning in earlier times, managers tried to anticipate
the future through preparation of budgets and using control systems like
capital budgeting and management by objectives.
With the inability of these techniques to adequately emphasise the role of

the future, long range planning came to be used, soon, long range
planning was replaced with strategic planning and later by strategic
management, a term that is currently used to describe the process of
strategic decision making.
Business policy and strategic management are

highly intertwined. Business policy tends to
emphasise on the rational analytical aspect of
strategic management. It represents a framework of
understanding strategic decisions making. Such
framework enables a person to make preparations
for handling general management responsibilities.
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ITQ 1: Give three from the five definitions given by Rama Rao (2010) to describe a Business
Policy
2.3 Strategic Management
For you to gain an insight of what strategic management is all about, you
need to understand each concept separately.
What is a strategy?
The term strategy was derived from a Greek word “strategos” which
means generalship. “Strategy can be defined as the determination of the
basic long-term goals and objectives of an enterprise and the adoption of
courses of actions and the allocation of resources necessary for carrying
out those goals”. (Alfred D. Chandler). The term “strategy” is intended
to focus on the interdependence of the adversaries’ decisions and on their
expectations about each other’s behaviour” (Thomas Schelling)
Strategies are formulated at the corporate level,

divisional and functional level. Strategy is
meant to fill in the need of organisations for a
sense of dynamic direction, focus and
cohesiveness. Strategies is consciously
considered and flexible designed scheme of
corporate intent and action to achieve effectiveness, to direct efforts of
behaviour, to mobilise resources, to utilise opportunities and to meet
challenges and threats to corporate survival and success. Without a
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strategy, the organisation is like a ship without a rudder. (Joel Ross and
Michael Kami).
What is management?
You should know that the term management could be used in two major
contexts. (a) It is used with reference to a key group in an organisation in-charge
of its affairs. In relation to an organisation, management is the chief organ
entrusted with the task of making it a purposeful and productive entity, by
undertaking the task of bringing together and integrating the disorganised
resources of manpower, money, materials, and technology into a functioning
whole.
b) The term is also used with reference to a set of interrelated functions and
processes, to a field of study or discipline in social sciences and to a vocation or
profession. The functions and processes of management are wide-range but
closely interrelated. They range all the way from design of the organisation,
determination of the goals and activities, mobilisation and acquisition of
resources, allocation of tasks and resources among the personnel and activity
units. The survival and success of an organisation depend to a large extent on the
competence and character of its management. Management has to also facilitate
organisational change and adaptation.
ITQ 2: In relation to an organisation, what is the term used to describe the chief
organ entrusted with the task of making it a purposeful and productive entity, by
undertaking the task of bringing together and integrating the disorganised
resources of manpower, money, materials, and technology into a functioning
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Strategic management defined
Strategic management is defined as the dynamic process of formulation,

implementation, evaluation and control of strategies to realise the
organisations strategic intent (Kazmi; 2008).
Strategic management is a set of managerial decisions and actions that

determines the long run performance of a corporation. It includes
environmental scanning (both external and internal), strategy formulation
(strategic or long-range planning), strategy implementation, and
evaluation and control.
Fred, R David (2011) define Strategic managementas the art and science
of formulating, implementing, and evaluating cross-functional decisions
that enable an organisation to achieve its objectives. As this definition
implies, strategic management focuses on integrating management,
marketing, finance/accounting, production/operations, research and
development, and information systems to achieve organisational success.
The study of strategic management, therefore, emphasises the monitoring

and evaluating of external opportunities and threats in light of a
corporation’s strengths and weaknesses.
Strategic Management is all about
 Understanding how firms create,capture, and sustain

competitive advantage.
 Analysing strategic business situations and formulating
strategic plans.
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 Implementing strategy and organising the firm for strategic
success.
Conceptual framework for the development of strategic management
includes strategic advantage, organisational capability, competencies,
synergistic effects, strengths and weaknesses, organisational resources,
and organisational behaviour.
Ellen-Earle Chaffee(1985) summarised what she thought were the main

elements of strategic management theory
Strategic management involves adapting the organisation to its business

environment.
Strategic management is fluid and complex. Change creates novel
combinations of circumstances requiring unstructured non-repetitive
responses.
Strategic management affects the entire organisation by providing
direction.
Strategic management involves both strategy formation (she calls it
content) and also strategy implementation (she calls it process).
Strategic management is partially planned and partially unplanned.
Strategic management is done at several levels: overall corporate

strategy, and individual business strategies.
Strategic management involves both conceptual and analytical thought
processes.
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(D) Stages Of Strategic Management
As a student of strategic management, you should know that the strategic-

management process consists of three stages:
(1) Strategy formulation: This includes developing a vision

and mission, identifying an organisation’s external opportunities
and threats, determining internal strengths and weaknesses,
establishing long-term objectives, generating alternative strategies,
and choosing particular strategies to pursue. Strategy-formulation
issues include deciding what new businesses to enter, what
businesses to abandon, how to allocate resources, whether to
expand operations or diversify, whether to enter international
markets, whether to merge or form a joint venture, and how to
avoid a hostile takeover.
(2)Strategy implementation: Strategy implementation is often called the

“action stage” of strategic management. Implementing strategy means
mobilizing employees and managers to put formulated strategies into
action.
This is often considered to be the most difficult stage in strategic

management; strategy implementation requires personal discipline,
commitment, and sacrifice. It requires a firm to establish annual
objectives, devise policies, motivate employees, and allocate resources so
that formulated strategies can be executed.
Strategy implementation includes developing a strategy-supportive

culture, creating an effective organisational structure, redirecting
marketing efforts, preparing budgets, developing and utilising
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information systems, and linking employee compensation to
organisational performance.
Successful strategy implementation hinges upon managers’ ability to

motivate employees, which is more an art than a science. Strategies
formulated but not implemented serve no useful purpose.
(3)Strategy evaluation: is the final stage in strategic management.

Managers desperately need to know when particular strategies are not
working well; strategy evaluation is the primary means for obtaining this
information. All strategies are subject to future modification because
external and internal factors are constantly changing. Three fundamental
strategy-evaluation activities are;
(1) Reviewing external and internal factors that are the bases for current
strategies.
(2) Measuring performance.
(3) Taking corrective actions.
Strategy evaluation is needed because success today is no guarantee of

success tomorrow. Success always creates new and different problems;
complacent organisations experience demise.
(E)Benefits of Strategic management

Historically, the principal benefit of strategic management has been to
help organisations formulate better strategies through the use of a more
27

systematic, logical, and rational approach to strategic choice. Strategic
management allows an organisation to be more proactive than reactive in
shaping its own future; it allows an organisations to initiate and influence
activities and thus to exert control over its own destiny.
Strategic management emphasises long-term performance. Research

reveals that organisations that engage in strategic management generally
outperform those that do not. However, you should also know that
strategic management offers the following benefits:
1. It allows for identification, prioritisation, and exploitation of
opportunities.
2. It provides an objective view of management problems.
3. It represents a framework for improved coordination and control of
activities.
4. It minimises the effects of adverse conditions and changes.

5. It allows major decisions to better support established objectives.
6. It allows for more effective allocation of time and resources to
identified opportunities.
7. It allows fewer resources and less time to be devoted to

correcting erroneous or ad hoc decisions.
8. It creates a framework for internal communication among
personnel.
9. It helps integrate the behaviour of individuals into a total effort.
10. It provides a basis for clarifying individual responsibilities.
11. It encourages forward thinking.
12. It provides a cooperative, integrated, and enthusiastic approach to

tackling problems and opportunities.
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13. It encourages a favourable attitude toward change.
14. It gives a degree of discipline and formality to the management of a
business.
ITQ 3: Explain the three stages of strategic Management
2.6 Guidelines for Effective Strategic Management

As a strategic management student, you should equip yourself with the
following guidelines for effective strategic management.
1. You should make it a people process more than a paper process.
2. You should make it a learning process for all managers and employees.
3. It should be words supported by numbers rather than numbers
supported by words.
4. Make it simple and no routine.
5. You should vary assignments, team memberships, meeting formats,

and even the planning of calendar.
6. It should challenge the assumptions underlying the current corporate
strategy.
7. It should welcome bad news.
8. You should welcome open-mindedness and a spirit of inquiry and

learning.
9. It should not be a bureaucratic mechanism.

10. It should not become ritualistic, stilted, or orchestrated.
11. The process should not be too formal, predictable, or rigid.
12. It should not contain jargon or arcane planning language.
13. It should not be a formal system for control.
14. It should not disregard qualitative information.
29

15. It should not be controlled by “technicians.”
16. Do not pursue too many strategies at once.
17. Continually strengthen the “good ethics is good business” policy.
3.0 Conclusion/Summary
This study session introduced you to the concept of strategic
management, the conceptual framework for the development of strategic
management as well as the stages in strategic management. You also
learnt the benefits for strategic management and the guidelines for
effective strategic management.

Self Assessment Question
1. Write an explanatory note on the concept of policy and strategy.
2. Discuss the historical development of business policy.
3. Discuss the strategic management decision process.
4. Why are strategic decisions different from other kinds of
decisions?
5. Explain the difference between policy and strategy.
6. Explain why the strategic management class is often called a
“capstone course”.
7. What aspect of strategy formulation do you think require the most
time? Why?
8. Why is it so important to integrate intuition and analysis in
strategic management?
9. Discuss relationships among objectives, strategies and policies.
10. Would strategic-management concepts and techniques benefit
foreign businesses as much as domestic firms? Justify your answer.
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11. In your opinion, what is the single major benefit of using a
strategic-management approach to decision making?
12. Compare business strategy and military strategy?
6.0 Additional Activities (Videos, Animations & Out of Class

activities) e.g.
a. Visit U-tube: https://goo.gl/2f9q5c & https://goo.gl/6HSQeG. Watch
the video & summarise in 1 paragraph
b. View the animation on: https://goo.gl/2f9q5c and critique it in the

discussion forum
c. Take a walk and engage any 3 students on: ???????????; In 2

paragraphs summarise their opinion of the discussed topic. Etc.
ITA 1: (1) A business policy represents the best thinking of the company management as to
how the objectives may be achieved in the prevailing economic and social conditions.
(2) A business policy is the study of the nature and process of choice about the future of
independent enterprises by those responsible for decisions and their implementation.
(3) A business policy is one, which focuses attention on the strategic allocation of scarce
resources. Conceptually speaking strategy is the direction of such resource allocation, while
planning is the limit of allocation.
ITA 2: Management
ITA 3: Strategy formulation - Strategy implementation - Strategy evaluation
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References/Further Readings
Azhar K (2002) Business Policy and Strategic Management 2nd Edition:
Tata McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th
Edition: New Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th
Edition: New Delhi; Tata McGraw Hill Publishing Company,
India.
Thomas L Wheelen and J. David Hunger (2002) Strategic management
and business policy Towards Maintaining a global sustainability
13th Edition. Pearson Publishing Company.
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STUDY SESSION 2
Strategic Decision Making

Introduction
2.0 Main Content
2.1 Strategic Decision Making
2.2 What makes a decision strategic?
2.2.1 Rare
. 2.2.2 Consequential
2.2.3 Directive
2.3 Strategic Decision-Making Process: aid to better decisions

2.3.1 Evaluate current performance results
2.3.2 Review corporate governance
2.3.3 Scan and assess the external environment
2.3.4 Scan and assess the internal corporate environment
2.3.5 Analyse strategic (SWOT) factors
2.3.6 Generate, evaluate, and select the best alternative strategy
2.3.7 Implement selected strategies
2.3.8 Evaluate implemented strategies

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Introduction:
In the previous study session, you have learnt much
about strategic management. In this study session,
you will understand that decision making is a
managerial process and function of choosing a
particular course of action out of several alternative
courses, for the purpose of accomplishment of
organisational goals. You are going to learn that decision might be minor
or major; they may relate to general day to day operations and as well be
strategic in nature.

1. You are expected to be able explain the nature of strategic decision
making.
2. You are expected to describe what makes a decision strategic.
3. Discuss the decision making process.
4. Explain the dimensions of strategic decision and Mintzberges
modes of strategic decision.
2.0 Main Content
2.1 Strategic Decision Making
The distinguishing characteristic of strategic management is its emphasis
on strategic decision making. As organisations grow larger and more
complex with more uncertain environment, decisions become
increasingly complicated and difficult to make. In agreement with the
34

strategic choice perspective mentioned earlier, this course proposes a
strategic decision-making framework that can help people make these
decisions, regardless of their level and function in the corporation.
What are the strategic decisions facing a business and therefore deserve
strategic management attention?
Strategic decisions overarch several areas of a firm’s operation; they

require top-management involvement. Usually, only top management has
the perspective needed to understand the broad implications of such
decisions, and the power to authorise the necessary resource allocations.
Strategic decisions involve substantial allocations of people, physical

assets, or period (time). For these reasons, they require substantial
resources. They are also decisions that ostensibly commit the firm for a
long time; however, the impact of such decisions often lasts much longer.
Once a firm has committed itself to a particular
strategy, its image and competitive advantages
usually are tied to that strategy. These decisions
are based on what managers forecast, rather than
on what they know. In such decisions, emphasis
is placed on the development of projections that
will enable the firm to select the most promising strategic options.
Strategic decisions have complex implications for the overall or most
areas of the firm.
35

2.2 What makes a decision strategic?
Unlike many other decisions, strategic decisions deal with the long-run
future of an entire organisation and have three characteristics:
1. Rare: Strategic decisions are unusual and typically have no
precedence to follow.
2. Consequential: Strategic decisions commit substantial resources and

demand a great deal of commitment from people at all levels.
3. Directive: Strategic decisions set precedents for lesser decisions and

future actions throughout an organisation.
2.3 Strategic Decision-Making Process: aid to better decisions

Good arguments can be made for using either the entrepreneurial or
adaptive modes (or logical incrementalism) in certain situations. This
course proposes, however, that in most situations the planning mode,
which includes the basic elements of the strategic management
process, is a more rational and thus better way of making strategic
decisions.
Research indicates that the planning mode is not only more analytical and
less political than are the other modes, but it is also more appropriate for
dealing with complex, changing environments. Eight-step strategic
decision-making process is therefore proposed to improve in the
making of strategic decisions:
36

1. Evaluate current performance results in terms of (a) return on
investment, profitability, and so forth, and (b) the current mission,
objectives, strategies, and policies.
2. Review corporate governance—that is, the performance of the firm’s
board of directors and top management.
3. Scan and assess the external environment to determine the strategic

factors that pose Opportunities and Threats.
4. Scan and assess the internal corporate environment to determine

the strategic factors that are Strengths (especially core competencies) and
Weaknesses.
5. Analyse strategic (SWOT) factors to (a) pinpoint problem areas and
(b) review and revise the corporate mission and objectives, as necessary.
6. Generate, evaluate, and select the best alternative strategy in light
of the analysis conducted in step 5.
7. Implement selected strategies via programmes, budgets, and

procedures.
8. Evaluate implemented strategies via feedback systems, and the
control of activities to ensure their minimum deviation from plans.
This rational approach to strategic decision making has been used

successfully by corporations such as Warner-Lambert, Target, General
Electric, IBM, Avon Products, Bechtel Group Inc., and Taisei
Corporation.
ITQ 1: What are the factors that make a decision strategic?
37

ITQ 2: What do you understand by strategic decision making?
2.4 Dimensions of Strategic Decisions
1.Strategic issues require top-management decisions: Strategic issues involve

thinking in
totality of the organisations and also there are lots of risks involved. Hence,
problems calling for strategic decisions require to be considered by top
management.
2. Strategic issues involve the allocation of large amounts of company resources:

It may require huge financial investment to venture into a new area of business or
the organisation may require huge number of manpower with new set of skills in
them.
3. Strategic issues are likely to have a significant impact on the long term
prosperity of the firm: Generally, the results of strategic implementation are seen
on a long term basis and not immediately.
4. Strategic issues are future oriented: Strategic thinking involves predicting the
future environmental conditions and how to orient for the changed conditions.
5. Strategic issues usually have major multifunctional or multi-business

consequences, as they involve organisation in totality. They affect different
sections of the organisation with varying degree.
6. Strategic issues necessitate consideration of factors in the firm's external

environment: Strategic focus in organisation involves orienting its internal
environment to the changes of external environment.
38

Mintzberg’s Modes of Strategic Decision Making
Strategic decision varies from one organisation to another, some are

made by one person who has a brilliant insight and has the ability to
quickly convince others to adopt his or her ideas. Other decisions seem to
develop out of a series of small incremental choices that might push an
organisation more in one direction than another.
According to Henry Mintzberg, the three most typical approaches or

modes of strategic decision making are:
1. Entrepreneural mode: According to this approach, strategy is made

by one powerful individual, whereby the strategy is guided by the
founders own vision of direction and is exemplified by large, bold
decisions. The primary focus is on opportunities and not problems.
2. Adaptive mode: This is sometimes referred to as “mudding through”.

This decision mode is characterised by reactive solutions to existing
problems rather than proactive search for new opportunities. Strategy is
fragmented and developed to move a corporation forward incrementally.
However, this mode is typical of most universities, large hospitals, a large
number of governmental agencies and corporations.
3. Planning mode: This decision mode involves the systematic

gathering of appropriate information for situation analysis, the generation
of feasibility alternative strategies and the rational selection of the most
appropriate strategy.
39

4. Logical Incrementalism: This mode is viewed as the synthesis of the
planning and adaptive to a lesser extent. In this mode, top management
has a reasonably clear idea of the corporation’s mission and objectives.
Both in its development of strategies, it chooses to use an interactive
process in which an organisation probe the future experiments and learn
from a series of partial commitments rather than through
global formalities of total strategies. This approach
appears to be useful when environment is changing
rapidly, and when it is important to build consensus and
develop the needed resources, before committing an entire
corporation to a specific strategy.
ITQ 3: Give three dimensions of decisions for Strategic issues
3.0 Tutor Marked Assignments (Individual or Group)
In this study session you have learnt how a strategic decision is being
made, what makes a decision strategic, dimensions of strategic decisions
and Mintzbergs modes of strategic decision.

1. Why do you think some chief executive officers fail to use a
strategic management approach to decision making?
2. What do you think are some potential pitfalls or risk in using a
40

strategic management approach to decision making?
3. In your opinion, what is the single major benefit of using a
strategic management approach in decision making? Justify
your answer.
4. What is strategic decision making? What makes a decision
strategic?
5. Explain the dimensions of strategic decision.
6. Discuss Mintzbergs modes of strategic decision making.
13.

activities) e.g.
a. Visit U-tube: https://goo.gl/pi1i4x & https://goo.gl/uR2C9f . Watch the
video & summarise in 1 paragraph
b. View the animation on: https://goo.gl/uR2C9f and critique it in the

discussion forum.

ITA 1: Rare, consequential, directive.
ITA 2: Strategic decision making or strategic planning describes the process of creating the
company’s mission and objectives and also deciding upon the course of action a company
should pursue.
ITA 3: 1. Strategic issues require top-management decisions

2. Strategic issues involve the allocation of large amounts of company resources
3. Strategic issues are likely to have a significant impact on the long term prosperity of the firm.
41

Azhar K (2002), Business Policy and Strategic Management 2nd Edition,
Edition:New Jersey; Pearson Education.
India.
Thomas L Wheelen and J. David Hunger (2002) Strategic Management
and Business Policy: Towards maintaining a global sustainability.
13th Edition. Pearson publishing company.
STUDY SESSION 3
Environment of Business

Introduction
2.0 Main Content
2.1 Business Environment
2.2 Internal Environment

2.2.1 Internal Qualities
42

2.2.2 Strengths and Weakness
2.3 External Environment
2.3.1 External circumstances
2.3.2 Threats and opportunities
2.3.3 Opportunities
2.4 SWOT Analysis
Summary
Discussion Questions
3.0 Tutor Marked Assignments (Individual or Group

assignments)
6.0 Additional Activities (Videos, Animations & Out
of Class activities)
Introduction:
In this study session, you are going to learn both the internal and external
environment of business. Understanding the environmental context of a
company is of immense significance. Successful strategies are based on
the proper understanding and analysis of the business environment.
Therefore, company has to adapt to its environment. Companies that fail
to adapt to their environment are unlikely to survive in the long run.

43

1. Discuss the internal and external environment of business.
2. Identify the strengths, weakness, opportunities and threats of any
organisation.
3. Explain the SWOT analysis.
2.0 Main Content

2.1 Business Environment
The formula for business success requires two elements; the individual
and the environment, remove either of the values and success becomes
impossible. Business environment influence the functioning of the
business system. Thus, business environment may be defined as all those
conditions and forces which affect the business, it consist of all the
factors that has a bearing on the business.
2.2 Internal Environment
The Internal environment relates the factors such as

its personnel, physical facilities, organisation and
functional means, which are generally controllable.
The internal environment refers to all the factors
within an organisation which imparts strengths or
cause weaknesses of a strategic nature.
44

Internal Qualities
Both strengths and weakness can be considered qualities which are

internal to business that renders it more or less, well suited to the tasks in
question compared to its competitors. Businesses have much greater
control over their initial qualities, compared to the external circumstances
of their business environments.
Strengths and Weakness
Internal strengths and internal weaknesses are organisation’s controllable

activities that are preformed especially well or poorly. They arise in the
management, marketing, finance or accounting, production or operations,
research and development, and management information systems,
activities of a business. Strengths are internal qualities of the business,
which enable it to complete or fulfill its desired objectives better, in
comparison to the other business. Weaknesses are the initial qualities of
the business that render it less able to meet its aim. Identifying and
evaluating organisational strengths and weaknesses in the functional area
of a business is an essential strategic management activity.
Organisation strives to pursue strategies that capitalise on internal

strengths and eliminate internal weaknesses.
Strengths and weaknesses are determined in relation to competitors.

Relative deficiency or superiority is important information. Also,
45

strengths and weakness can be determined by elements of being rather
than performance.
ITQ 1: What do you understand by internal environment of a business?
2.3 External Environment
The External environment includes

all the factors outside the
organisation. The external factors are
those factors that are beyond the
control of individual business
organisation, and the management
and affect the business enterprise, which provide opportunities or pose
threats to the organisation. External opportunities and external threats
refer to economic, social, cultural, demographic, environmental, political,
legal, governmental, technological, and competitive trends and events
that could significantly benefit or harm an organisation in the future.
External circumstances
Opportunities and threats are considered circumstances external to the

business itself, and qualities of the business environment in which the
business must desire to operate within. Opportunities and threats are the
46

factors presented by the business, more or less desirous to operate in the
said environment.
Threats and opportunities
Opportunities and threats are qualities of the business environment in

which the business can meet its aim. Example of such qualities can
include the economic state of the market in question, the demand and
supply of the market and other players in the market.
Opportunities are qualities that make fulfilling the aim desirable for the
business most often, chances to earn profit, such as untapped markets or
weak competition.
Threats are qualities that render the aim less desirable, things such as
strong and entrenched competition already present in a possible market.
Opportunities and threats are largely beyond the control of a single

organisation. A basic tenet of strategic management is that firms need to
formulate strategies, to take advantage of external opportunities and to
avoid or reduce the impact of external threats. For this reason,
identifying, monitoring and evaluating external opportunities and threats
are essential for success.
The process of conducting research and gathering assimilating external

information is sometimes called, environmental scanning or industry
analysis. Lobbying is one activity that some organisationutilise to
influence external opportunity and threats
47

2.4 SWOT Analysis
Strengths, Weakness, Opportunities and Threats (SWOT) analysis are a

planning method used, when management need to make decisions
regarding their long term strategies. The SWOT analysis is not intended
to be applied to the business as a whole; instead, it applies to the qualities
and circumstances when directed to a specific possible event. Each of
such analysis categorises the relevant qualities and circumstances of the
business and allocates into the categories of Strengths, Weakness,
Opportunities and Threats before making on a final decision once these
elements are weighed against one another.
ITQ 2: What is the external environment?
Discussion of this study session was centred on the external and internal
environment of business. Identifying the organisations strengths,
weakness, opportunities and threats is very vital to move the organisation
forward and this is what we have achieved in this session.

1. Define and explain the concept of business environment in the

industry you work.
48

2. Describe five important characteristics of business environment.
Give any recent event as an example that can support each of
your answers.
3. What is the concept of an environment in strategic
management?
4. Analyse the Porter’s Five Forces Model of competitive analysis,
identify its strengths and weaknesses and suggest how to
improve on it.
5. Review the Internal Factor Evaluation (IFE) Matrix and identify
its major weaknesses as they pertain to an organisation of your
choice.
6. Discuss the difference between internal and external
environment.
7. Considering the number of firms that closed down in Nigeria in
the last twenty years, as a result of the challenges in the external
environment, is external environment more important than
internal environment? Give your reasons.
8. Describe the process of performing external audit in an
organisation.
9. Choose any industry in Nigeria and identify any three factors
that may be considered as opportunities or threats.
10. Explain any three methods of assessing and analysing external
environment.
11. How does the external audit affect other components of the
strategic management process?

49

activities) e.g.
a. Visit U-tube: https://goo.gl/RrBaMw & https://goo.gl/hSSzJD. Watch
b. View the animation on: https://goo.gl/RrBaMw and critique it in the

discussion forum

ITA 1: Internal environment includes all those factors which influence business and which
are present within the organisation itself and can be controlled by the organisation.
ITA 2: The external environment includes all those factors which influence business and
exist outside the business and the business does not have control over.

Azhar K (2002) Business Policy and Strategic Management. 2nd Edition:
Edition: New Delhi;Tata McGraw Hill Publishing Company, India.
and Business Policy; towards maintaining a global sustainability
13thEdition. Pearson Publishing Company.
50

STUDY SESSION 4
COMPANY MISSION AND VISION

Introduction
2.0 Main Content
2.1 Organisation’s Mission
2.2 Why organisation should have a mission
Benefits of a mission statement
(D) Organisaton’s vision
(E) How to develop a strategic vision
(F) Ten Benefits of Having a Clear Mission and Vision
(G) Understanding Objectives and Goals
Tutor Marked Assignments (Individual or Group assignments)

Introduction:
51

In the previous study session, you learnt the internal and external aspects
of the organisation. In this study session, we will be discussing the
mission and vision of an organisation, where you will appreciate the
reason(s) why many organisations develop both a mission statement and
a vision statement. You will understand why a mission statement answers
the question; what is our business? And a vision statement answers the
question; what do we want to become or where are we headed?

1. Explain the organisations mission and vision.
2. Discuss the reasons why organisations need to develop mission
and vision.
3. Describe how to develop a mission and vision statement of any
organisation.
4. Explain the benefits of mission and vision statement.
5. Write good vision and mission statement.
6. Evaluate mission statements of different organisations.
52

7. Discuss how clear vision and mission statements can benefit other
strategic management activities.
2.0 Main Content

2.1 Organisation’s Mission
An organisation’s mission is the purpose or reason for the organisation’s
existence. Sometimes called a creed statement, a statement of purpose, a
statement of philosophy, a statement of beliefs, a statement of business
principles, or a statement “defining our business” It tells you what the
company provides the society—either a service such as housecleaning or
a product such as automobiles.
A well-conceived mission statement defines the fundamental, unique

purpose that sets a company apart from other firms of its type and
identifies the scope or domain of the company’s operations, in terms of
products (including services) offered and markets served.
A company's mission statement is typically focused on its present business scope

- "who we are and what we do"; mission statements broadly describe an
organisations present capabilities, customer focus, activities, and business
makeup.
Drucker says that asking the question “What is our business?” is

synonymous with asking the question “What is our mission?” An
enduring statement of purpose that distinguishes one
organisation from other similar enterprises, the mission
statement is a declaration of an organisation’s “reason for
53

being.” It answers the pivotal question “What
is our business?” A clear mission statement is essential for effectively
establishing objectives and formulating strategies.
2.2 Why organisation should have a mission
-To ensure unanimity of purpose within the organisation.
-To provide a basis for motivating the use of the organisation's resources.
-To develop a basis, or standard, for allocating organisational resources.
-To establish a general tone or organisational climate, for example, to suggest a

businesslike operation.
-To serve as a focal point for those who can identify with the organisation's
purpose and direction, and to deter those who cannot form participation further in
the organisation's activities.
-To facilitate the translation of objective and goals into a work structure,
involving the assignment of tasks to responsible elements within the organisation.
-To specify organisational purposes and the translation of these purposes into
goals in such a way that cost, time, and performance parameters can be assessed
and controlled.
2.3 Benefits of a Mission Statement
54

1. To ensure unanimity of purpose within the organisation.
2. To provide a basis, or standard, for allocating organisational
resources.
3. To establish a general tone or organisational climate.
4. To serve as a focal point for individuals to identify with the
organisation’s purpose and direction, and to deter those who cannot from
participating further in the organisation’s activities.
5. To facilitate the translation of objectives into a work structure
involving the assignment of tasks to responsible elements within the
organisation
6. To specify organisational purposes and then to translate these purposes
into objectives in such a way that cost, time, and performance parameters
can be assessed and controlled.
2.4 Organisaton’s Vision
Vision describes what the organisation would like to become. The three
elements of a strategic vision:
1. Coming up with a mission statement that defines what business the

company is presently in and conveys the essence of "Who we are and
where we are now?"
2. Using the mission statement as basis for deciding on a long-term

course, making choices about "Where we are going?"
3. Communicating the strategic vision in clear, exciting terms that

arouse the organisation’s wide commitment.
55

2.5 How to Develop a Strategic Vision
-The entrepreneurial challenge in developing a strategic vision is to think

creatively, about how to prepare a company for the future.
-Forming a strategic vision is an exercise in intelligent entrepreneurship.
-Many successful organisations need to change direction not in order to

survive, but in order to maintain their success.
-A well-articulated strategic vision creates enthusiasm

for the course management has charted and engages
members of the organisation.
-The best-worded vision statement clearly and crisply

illuminates the direction in which the organisation is
headed.
ITQ 1: Briefly Differentiate between an organisation’s mission and vision
2.6 Ten Benefits of Having a Clear Mission and Vision
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including the
internal and external assessment, establishing objectives, developing
strategies, choosing among alternative strategies, devising policies,
56

establishing organisational structure, allocating resources, and
evaluating performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and

employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organised, motivated organisation worthy of support.
9. Achieve higher organisational performance.
10. Achieve synergy among all managers and employees.
2.7 Understanding Objectives and Goals
Business organisations translate their vision and mission into objectives.

As such, the term objectives are synonymous with goals however, we
will make an attempt to distinguish the two. Objectives are open-ended
attributes that denote the future state or outcome. Goals are close-ended
attributes which are precise and expressed in specific terms. Thus, the
goals are more specific and translate the objectives to short term
perspective.
Objectives with strategic focus relates to outcome that strengthen an

organisation’s overall business position and competitive vitality. For
objective sto be meaningful to serve the intended role, it must possess the
following characteristics:
57

♦ Objectives should define the organisation's relationship with its
environment.
♦ They should be facilitative towards achievement of mission and
purpose.
♦ They should provide the basis for strategic decision-making.
♦ They should provide standards for performance appraisal.
♦ Objectives should be understandable.
♦ Objectives should be concrete and specific.
♦ Objectives should be related to a time frame.
♦ Objectives should be measurable and controllable.
♦ Objectives should be challenging.
♦ Different objectives should correlate with each other.
♦ Objectives should be set within constraints.
ITQ 2: What is the difference between goal and objectives?
In this study session, you discussed that the mission is a statement which defines
the role that an organisation plays in the society, while the vision statement gives
focus, direct, motivate and even excite a business into superior performance. You
also learnt how to develop a vision and a mission statement and also the benefits
of a mission and vision statements.

1. Discuss each of the following:
58

a. Mission
b. Vision
c. Objective
d. Target
e. Business purpose
f. Goal
2. Take any two companies of your choice in Nigeria, analyse and
compare their mission and vision statements. Which is the best
statement in your opinion? Why?
3. Propose the factors to be taken into consideration when setting
objectives.
4. Through the use of suitable examples, explain the role that
objectives play in strategic management.
5. Do local service stations need to have written visions and missions
statement? Why and why not?
6. Discuss how often you think a company's mission and vision
statement should be changed. Give reasons for your answer.
7. Why do you think organisations that have a comprehensive
mission tend to be high performers? Does having a comprehensive
mission cause high performance?
8. Discuss the benefits of having a clear mission statement.
9. Explain why a mission statement should not include strategies and
objectives?
10. What is your university's self- concept? How would you state that
in your mission statement? Elucidate.
11. In your opinion, what are the three most important components that
should be included when writing a mission statement? Why?
59

activities) e.g.
a. Visit U-tube: https://goo.gl/xeSn9H, https://goo.gl/n7xpvJ &
https://goo.gl/XtXUx2. Watch the video & summarise in 1 paragraph
b. View the animation on: ??????? and critique it in the discussion forum

ITA 1: An organisation’s mission is the purpose or reason for the organisation’s
existence while its vision describes what the organisation would like to.
ITA 2: The term goals and objectives are often used interchangeably; goals are
statements you make about the future of your business while objectives are the exact
steps your company must take in order to reach its goals.

India.
13th Edition: Pearson Publishing Company.
2.0 MODULE 2: Strategy Formulation
Contents:
60

61

STUDY SESSION 1
Corporate Level Strategy
Introduction
2.0 Main Content
2.1 Corporate Level Strategy
2.2 Nature, scope and concerns of corporate strategy
2.3 Corporate level strategic alternatives
2.3.1 Expansion strategies

2.3.2 Stability strategies
2.3.3 Retrenchment strategies
2.3.4 Combination strategies
2.4 Characteristics of corporate strategy

Introduction:
This study session will discuss issues that have to do with corporate level strategy.
You will realise that corporate strategy is basically the growth design of the firm; it
spells out the growth objective -the direction, extent, pace and timing of the firm's
growth, it also spells out the strategy for achieving the growth. Thus, we can also
describe corporate strategy as the objective-strategy design of the firm.
62

To arrive at such an objective-strategy design is the basic burden of corporate
strategy formulation. You will learn the nature, scope and concerns of corporate
level strategy, strategy alternatives, characteristics and importance of corporate
level strategy.

1. Discuss the nature, scope and concerns of corporate level strategy.
2. Explain the corporate level strategies alternatives.
3. Discuss the characteristics and importance of corporate level strategy.
2.0 Main Content

2.1 Corporate Level Strategy
Corporate strategy helps you to exercise the choice of direction that an
organisation adopts. This could be a small business firm involved in a
single business or a large, complex and diversified conglomerate with
several different businesses. The corporate strategy in both cases would
be about the basic direction of the firm as a whole.
63

2.2 Nature, Scope and Concerns of Corporate Strategy
Corporate strategy is basically concerned with the choice of businesses, products

and markets. The following points will clarify the corporate strategy of a
business.
-It can also be viewed as the objective-strategy design of the firm.
-It is the design for filling the firm's strategic planning gap.
-It is concerned with the choice of the firm's products and markets; it actually
denotes the changes / additions / deletions in the firm's existing product-market
postures. It spells out the businesses in which the firm will play; the markets in
which it will operate and the customer need(s) it will serve.
-It ensures that the right fit is achieved between the firm and its environment.
-It helps build the relevant competitive advantages for the firm.
-Corporate objectives and corporate strategy together describe the firm's concept
of business.
Corporate strategy describes a company’s overall direction in terms of

its general attitude toward growth and the management of its various
businesses and product lines. Corporate strategies typically fit within the
three main categories of stability, growth, and
retrenchment.
2.3 Corporate level strategic alternatives
64

Expansion Strategies
The corporate strategy of expansion is followed when an organisation
aim at high growth, by substantially broadening the scope of one or more
of its businesses, in terms of their respective customer groups, customer
functions and alternative technologies singly or jointly, in order to
improve its overall performance.
Stability Strategies
The corporate strategy of stability is adopted by an organisation, when it
attempts an incremental improvement of its performance by marginally
changing one or more of its businesses in terms of their respective
customer groups, customer functions and alternative technologies
respectively.
Retrenchment Strategies
The corporate strategy of retrenchment is followed when an organisation
aim at contraction of its activities, through a substantial reduction or
elimination of the scope of one or more of its businesses, in terms of their
respective customer groups, customer functions or alternative
technologies, either singly or jointly in order to improve its overall
performance.
Combination Strategies
The combination strategy is followed when an organisation adopts a
mixture of stability, expansion and
retrenchment strategies either at the same
time in its different businesses, or at different
65

times in one of its businesses, with the aim of improving its performance.
ITQ 1: What is the meaning of corporate level strategy and what are the alternatives?
2.4 Characteristics of Corporate Strategy
1. It is generally long-range in nature,

though it is valid for short-range
situations and also has short-range
implications.
2. It is action oriented and is more

specific than objectives.
3. It is multipronged and integrated.
4. It is flexible and dynamic.
5. It is formulated at the top management level, though middle and lower level
managers are associated in their formulation and in designing sub-strategies.
6. It is generally meant to cope with a competitive and complex setting.
7. It flows out of the goals and objectives of the enterprise and is meant to
translate them into realities.
8. It is concerned with perceiving opportunities and threats and seizing initiatives,

to cope with them. It is also concerned with deployment of limited organisational
resources in the best possible manner.
66

9. It gives importance to combination, sequence, timing, direction and depth of
various moves and action initiatives, taken by managers to handle environmental
uncertainties and complexities.
10. It provides unified criteria for managers in function of decision making.
Importance of Corporate Strategy
1. Corporate strategy is used to harness the opportunities available in the

environment, countering the threats embedded therein.
2. Corporate strategy ensures the growth of the firm and ensures the correct
alignment of the firm with its environment.
3. .It serves as the design for filling the strategic planning gap and also, helps
build the relevant competitive advantages.
4. It amounts to long-term, well thought-out and prepared responses, to the
various forces in the business environment.
ITQ 2: Give one characteristic and Importance each of a corporate strategy respectively

67

1. Analyse the different types of strategy under stability and
expansion strategies and identify the best situation to use each.
2. Provide reasons as to why these corporate strategies are
adopted; retrenchment, stability, combination and expansion.
Discuss the nature, scope and concerns of corporate level
strategy.
3. Explain the corporate level strategies alternatives.

4. What are the characteristics of corporate level strategy? Discuss
the importance of corporate level strategy.
5. Discuss the reason why firms need to develop corporate level
strategy.

activities) e.g.
a. Visit U-tube: https://goo.gl/6Xk3He & https://goo.gl/WY6hwN. Watch
b. View the animation on: https://goo.gl/nMGKBh and critique it in the

discussion forum

ITA 1: Corporate strategy defines the market and businesses in which an organisation
chooses to operate. The alternatives are: expansion, stability, retrenchment and
combination strategies.
ITA 2: - It is generally long-range in nature, though it is valid for short-range situations

and also has short-range implications.
-Corporate strategy ensures the growth of
68 the firm and ensures the correct alignment of the
firm with its environment.
India.
69

STUDY SESSION 2
BUSINESS LEVEL STRATEGY

Introduction
2.0 Main Content
2.1 Business Level Strategy
2.2 Competitive Positioning and the Business Model
2.3 Key Strategies in Business Level Strategy
2.3.1 Focused Cost leadership
2.3.2 Differentiation:
2.3.3 Focused Differentiation
70

2.4 Five Types of Business-Level Strategies
2.4.1 Coordinate Unit Activities

2.4.2 Utilise Human Resources
2.4.3 Develop Distinctive Advantages
2.4.4 Identify Market Niches
2.4.5 Monitor Product Strategies

Introduction:
In the previous study session, you considered how an organisation can
use corporate level strategies to achieve their organisational objectives. In
this study session, you will see how organisations can use business level
strategy to create competitive advantage.

1. Discuss the business level strategy of an organisation.
2. Explain what managers must do in order to create successful
business model.
3. Identify the key strategists adopt in business level strategy.
71

4. Differentiate between the main types of business level strategies,
and explain how they are used to strengthen a company’s business
level strategy and competitive advantage.
2.0 Main Content

2.1 Business Level Strategy
This section examines how a company selects and pursues a business
model, that will allow it to compete effectively in an industry and grows
its profits and profitability. A successful business model results from
business level strategies that create a competitive advantage, over rivals
and achieve superior performance in an industry. Therefore, we examine
the competitive decisions involved in creating a business model that will
attract and retain customers and continue to do so over time, so that a
company enjoys growing profits and profitability.
Business strategy usually occurs at the business unit or product level,

and it emphasises improvement of the competitive position of a
corporation’s products or services in the specific industry or market
segment, served by that business unit. Business strategies may fit within
the two overall categories, competitive and cooperative strategies.
To create a successful business model,

strategic managers must:
1. Formulate business-level strategies that
will allow a company to attract customers
away from other companies in the industry.
72

2. Implement those business level strategies which also involve the
use of functional level strategies to increase responsiveness to customers,
efficiency, innovation and quality.
ITQ 1: What must strategic managers do in order to create a successful business model?
2.2 Competitive Positioning and the Business Model

1. To create a successful business model, managers must choose a set of
business-level strategies that work together, to give a company
competitive advantage over its rivals.
2. To craft a successful model a company must first define its business,
which entails decisions about:
a. Customer needs or what is to be satisfied.
b. Customer groups or what is to be satisfied.
c. Distinctive competencies or how customer needs are to be
satisfied.
2.3 Key Strategies in Business level Strategy
i. Cost leadership: A company’s business model in pursuing a cost-

leadership strategy based on doing everything it can to lower its cost
structure, so it can make and sell goods or services at a lower cost,

than its competitors. In essence, a company seeks to achieve
competitive advantage and move above average profitability by
developing a cost leadership business model that positions it on the
value creation frontier, as close as possible to the lower costs/lower
prices axis.
73

ii. Focused Cost leadership: A cost leader is not always a large national
company that targets the average customer. Sometimes, a company can
target one or a few market segments and successfully pursue cost
leadership, by developing the right strategies to serve those segments.
iii.Differentiation: A differentiation business model is based on pursuing a

set of generic strategies, which allows a company to achieve a
competitive advantage by creating a product that customers perceive as
different, or distinct in some important way.
iv.Focused Differentiation: in the case of the focused cost leader, a

company that pursues a business model based on focused differentiation,
chooses to specialise in serving the needs of one or two market segments
or niches. Once it has chosen its market segment. A focused company
position itself using differentiation.
74

2.4 Five Types of Business-Level Strategies
Business-level strategies represent plans or methods companies use to

conduct various functions in their business operations. Larger companies
often use more business strategies, since they often have several
departments with different business functions. Small businesses may
adapt these strategies for their operations and assign them to different
employees. Companies often use business-level strategies to provide
guidelines for owners, managers and employees to follow, when working
in the business.
1. Coordinate Unit Activities
A common business-level strategy is the coordination of all individual

unit activities found in a business. Unit activities may be broken down by
departments, sections of the department and individual job positions. The
coordination of these groups or individuals usually falls on a manager or
supervisor. The manager is responsible for getting employees on the
same page and focusing these individuals on accomplishing goals or
objectives. Managers or supervisors may also be responsible for
allocating resources among several different activities.
2. Utilise Human Resources
Companies must be able to utilise the available human resources, in their

company and the overall economy. Almost all companies need some
form of human labour to accomplish business goals and objectives.
Companies develop a business-level strategy, to ensure the organisation
has enough employees to produce a specific output of goods or services.
This business-level strategy is also responsible for ensuring the right type
75

of human labour, is acquired for business operations. This often includes
an analysis to determine if skilled or unskilled labour is needed to
complete business functions.
3. Develop Distinctive Advantages
Developing distinctive core competencies or competitive advantages is

essential for creating a successful company. Core competencies and
competitive advantages represent singular activity or ability, one
company uses to produce products better than another company.
Examples of this business-level strategy may include acquiring economic
sources at lower costs than other companies, highly efficient and
effective production resources, unique goods or services that are not
duplicated by other companies and a cost-effective supply chain for
getting products into consumers' hands quickly.
4. Identify Market Niches
Identifying a market niche usually involves conducting

an economic analysis, and discovering a specific
consumer demand is unmet or not enough supply is
available, to fill current customer demand. While these
are common market niches found in a business-level
strategy, other niches may include modifying an existing
product, targeting a specific demographic group or other
similar strategies. Filling a specific market niche may
allow companies to charge higher consumer prices, since
substitute goods may not exist in the economic marketplace.
76

5. Monitor Product Strategies
Businesses must find ways to review the business-level strategies

implemented in their operation. This process often results in its own
strategy. Companies may review the acquisition process for economic
resources; equipment used to produce goods or services, business
facilities and other administrative costs to ensure that all capital spent on
business operations, is earning a strong rate of return. Reviewing
business-level strategies may also give companies an opportunity to
remain flexible in business and make changes for meeting new consumer
demand.
ITQ 2: What are the types of business level strategies?
This study session covers the discussions on business level strategy. We
learnt that business level strategy is a plan that indicates specific
methods, which an organisation will use to compete effectively against its
rival in the industry. We also discussed the key strategies adopted in this
level and also the types of business level strategy.

1. Discuss the conditions under which an organisation can attain

cost leadership and differentiation simultaneously. How is this
77

achieved?
2. Identify any firm in any of the service industry and explain the
areas of its competitive advantages.
3. Explain these types of business strategies: cost leadership,
differentiation and focus.
4. Discuss why it is not advisable to pursue too many strategies at
once.
5. How does strategic management differ in profit and nonprofit
organisations?
6. Discuss how the levels of strategy differ in a large firm versus a
small firm.
7. Discuss the business of offering a BBA or MBA degree online.
8. How would application of the strategy formulation frame work
differ, from a small to a large organisation?
9. Explain why cultural factors should be an important
consideration in analysing and choosing among alterative
strategy.
10. What do you think is the appropriate role of a board of directors
in strategic management? Why?
11. Discuss how would profit and nonprofitoriginations differ in
their application of the strategy formulation framework?

activities) e.g.
a. Visit U-tube: https://goo.gl/aMA4iM, https://goo.gl/SZETbJ &
https://goo.gl/aMA4iM. Watch the video & summarise in 1 paragraph
78


ITA 1: Strategic managers must formulate and implement business level strategies in order
to create successful business model.
ITA 2: Coordinating unit activities, utilise human resources, Develop distinctive

advantages, identify market niches, and monitor product strategies.

1.Azhar K (2002) Business Policy and Strategic Management. 2nd
Edition: Tata McGraw-Hill Publishing Company.
India.
79

STUDY SESSION 3
Functional Plans and Policies

Introduction
2.0 Main Content
2.1 (A) Functional Plans and Policies
(B) Need for Functional Plan and Policies
(C)Responsibilities of Functional Level Managers
Tutor Marked Assignments (Individual or Group assignments)

Introduction:
When you have a plan, it means that you have set a course for yourself on
how to achieve your set goals. It is important that you look at how to
strategise and focus on those areas that achievable. Functional plans and
policies is an approach taken by a functional area to achieve corporate
and business unit objectives, and strategies by maximising resource
80

productivity. You will appreciate the fact that it is concerned with
developing and nurturing a distinctive competence, to provide a company
or business unit with a competitive advantage.

1. Discuss the need for plans and policies within an organisation.
2. Explain the possible plans and policies of some functional areas in
an organisation.
3. Describe the responsibilities of functional level managers.
2.0 Main Content

2. Functional plan and policies are the plans or tactics to implement
business strategies, which are made within the guide lines that have been
set at higher level. Plans are formulated to select a course of action, while
policies are required to act as guidelines to those actions. Functional
plans and policies are therefore, in the nature of the tactics which make a
strategy work.
Functional strategies operate on a level below the business strategies.

There might be several sub functional areas within functional strategies.
For instance, the functional area of marketing may have sub functions,
such as, product development, advertising, sales promotion, market
research, and so on.
Functional managers need guidance from the corporate

and business strategies in order to make decisions. In
81

simple term, functional plans tell the functional managers what has to be
done, while functional policies state how the plans are to be
implemented.
ITQ 1: What are functional plans and policies all about?
82

(B) Need for Functional Plan and Policies
I. To implement strategic decision by all departments of the
organisation.
II. To control activities in different functional areas of the business.
III. To reduce the time spent by functional managers in decision
making.
IV. To handle similar situations occurring in different functional area
in a consistent manner.
V. To enable coordination across the different functions.
VI. Plan and policies can be used to control managers within an
organisation.
VII. It is necessary to give an organisation a sense of direction and
purpose.
VIII. It serves as a useful way of getting managers to participate in
decision making, about the appropriate goals and strategies for an
organisation.
(C)Responsibilities of Functional Level Managers
Functional-level managers are responsible for the specific business functions or

operations (human resources, purchasing, product development, customer service,
and so on) that constitute a company or one of its divisions. Thus, a
functional manager's sphere of responsibility is generally confined to one
organisational activity, whereas, general managers oversee the operation
of a whole company or division. Although they are not responsible for
the overall performance of the organisation, functional managers
nevertheless have a major strategic role; to develop functional strategies
83

in their area that help fulfill the strategic objectives set by business- and
corporate-level general managers.
Functional managers provide most of the information that makes it

possible for business- and corporate-level general managers, to formulate
realistic and attainable strategies. Indeed, because they are closer to the
customer than the typical general manager is, functional managers
themselves may generate important ideas that subsequently may become
major strategies for the company. Hence, it is important for general
managers to listen closely to the ideas of their functional managers. An
equally great responsibility for managers at the operational level is
strategy implementation: the execution of corporate and business-level
plans.
ITQ 2: What are the basic responsibilities of functional level managers?
This study session discussed the functional plans and policies, the need
for functional plans and policies, and also the responsibilities of
functional managers in the organisation.

1. Highlight the major considerations of strategists in the integration
of functional plans and policies.
84

2. A bank wishes to review its marketing plan and policies in order to
make them compatible with its business strategy of focused
differentiation on corporate customers and high net worth
individuals in urban centres in Nigeria. Suggest the major elements
of the marketing plans and policies the bank should consider
implementing.
3. Describe the major concerns of financial, marketing, personnel,
production and research and development plans and policies. Point
out the significance of each functional plans and policies for
strategy implementation.
4. Discuss the relationships between annual objectives and policies.
5. What are the advantages and disadvantages of decentralising the
wage and salary functions of an organisation? How can this be
accomplished?
6. Identify and discuss three policies that apply to your present
business class.
7. Discuss the advantages and disadvantages of a functional versus a
divisional organisational structure.
8. Discuss the need for functional plans and policies.
9. Functional plan and policies are the plan or tactics used to
implement business strategies. Do you agree? Discuss the reason
for your answer.

activities) e.g.
a. Visit U-tube: https://goo.gl/1ZwJJS & https://goo.gl/btziee. Watch the
85

b. View the animation on: https://goo.gl/btzieeand critique it in the

discussion forum.

ITA 1: Functional plans and strategies make it possible for a strategy to work.
ITA 2: Functional-level managers are responsible for the specific business functions or
operations (human resources, purchasing, product development, customer service, and so on)
that constitute a company or one of its divisions.

India.
and Business Policy; towards maintaining a global
sustainability 13th Edition: Pearson Publishing Company.
86

STUDY SESSION 4
STRATEGIC ANALYSIS AND CHOICE

Introduction
2.0 Main Content
2.1 Strategic Analysis and Choice
Introduction:
In the last study session, the functional plans and policies of an organisation was
the focus of discussion. In this study session, you will learn the strategic analysis
and choice which largely depend on making subjective decisions, based on
objective information.
87

1. Explain how strategic analysis and choice is done.
2. Discuss the process of generating and selecting strategies.
3. Discuss portfolio analysis and corporate parenting.
2.0 Main Content

2.1 (A) Strategic Analysis and Choice
Strategic Analysis and Choice seeks to determine alternative course of action
that enables the firm to achieve its mission and objectives. Strategic Analysis
and Choice tries to find answers to three basic questions:
 How effective has the existing strategy been?

 How effective will that strategy be in the future?
 What will be the effectiveness of selected alternative strategy in the future?
ITQ 1: What is strategic analysis and choice?
Process of Generating and Selecting Strategies Identifying and evaluating

alternative strategies should involve many of the managers and employees who
earlier assembled the organisational vision and mission statements, performed the
88

external audit, and conducted the internal audit. Representatives
from each department and division of the firm should be included in this process,
as was
the case, in previous strategy-formulation activities. Strategists never consider all
feasible alternatives that could benefit the firm because there
are an infinite number of possible actions and an infinite number of ways to
implement those actions. Therefore, a manageable set of the most attractive
alternative strategies must be developed. The advantages, disadvantages, trade-
offs, costs, and benefits of these strategies should be determined.
All participants in the strategy analysis and choice activity should have the firm’s
external and internal audit information by their side. This information, coupled
with the firm’s mission statement, will help participants crystallise in their own
minds, particular strategies that they believe could benefit the firm most. Creativity
should be encouraged in this thought process.
Alternative strategies proposed by participants should be considered and discussed
in a meeting or series of meetings. Proposed strategies should be listed in writing.
When all feasible strategies identified by participants are given and understood, the
strategies should be ranked in order of attractiveness by all participants, with 1 =
should not be implemented, 2 = should possibly be implemented, 3 = should
probably be implemented, and 4 = should definitely be implemented. This process
will result in a prioritised list of best strategies that reflects the collective wisdom
of the group.
Corporate Portfolio Analysis

Corporate portfolio analysis is defined as a set of techniques that help strategists
in taking strategic decisions with regard to individual products or business, in
89

a firm’s portfolio. It is primarily used for competitive analysis and strategic
planning in multiproduct and multi-business firms. They may also be used in less
diversified firms, if these consist of a main business and other minor
complementary interests. The main advantages in adopting a portfolio approach in
a multi-product, multi-business firm is that, resources could be targeted at the
corporate level to those businesses that possess the greatest potential, for creating
competitive advantage.
ITQ 2: What is corporate portfolio analysis?
Corporate Parenting
This refers to the strategy employed by highly centralised and diversified
firms, with large resource pools. It views the corporation in terms of resources
and capabilities that can be used to build business units value, as well as generate
synergies across business units. Corporate parenting generates corporate strategy,
by focusing on the core competencies of the parent corporation and on the value
created from the relationship, between the parent and its businesses;
1. If there is a good fit between the parent’s skills and resources and the needs
and opportunities of the business unit’s corporation is likely to create value.
2. If there is not a good fit corporation is likely to destroy value.
ITQ 3: What is corporate parenting?
90

The discussion of this study session was based on the nature of strategic analysis
and choice, the process of generating and selecting strategy, corporate portfolio
analysis and corporate parenting.

1. Explain the manner in which the process of strategic choice works.
2. Discuss the types of subjective factors that affect strategic choice. And
explain the meaning of corporate parenting.
3. Describe the contents of a good strategic plan for a corporate
organisation.
4. Discuss how marketing, finance/accounting, R&D, and management
information systems managers involvement in strategy formulation, can
enhance strategy implementation.
5. Explain why projected financial statement analysis is considered both a
strategy formulation and a strategy implementation tool.
6. How would the R&D role in strategy implementation differ in small
versus large organisations?
6.0 Additional Activities (Videos, Animations & Out of Class activities) e.g.
a. Visit U-tube: https://www.youtube.com/watch?v=tBW-Kux1EeQ. Watch the
b. View the animation on: https://goo.gl/tPQK4S and critique it in the discussion

forum
91

c. Take a walk and engage any 3 students on: ???????????; In 2 paragraphs
summarise their opinion of the discussed topic. Etc.
ITA 1: Strategic analysis and choice are the two most important components of the
implementation stage of the strategic management plan.
ITA 2: corporate financial planning is a portfolio analysis which is used for competitive
analysis and strategic planning which help to create competitive advantage.
ITA 3: Corporate parenting is a way of generating corporate strategies, by focusing on the

core competencies of the parent corporation and on the value created from the relationship,
between the parent and its businesses

Azhar K (2002) Business Policy and Strategic Management. 2nd Edition: Tata
McGraw-Hill Publishing Company.
David, F.R. (2011) Strategic Management: Concepts and Cases. 13th Edition: New
Jersey; Pearson Education.
Kazmi A. (2008) Strategic Management and Business Policy. 13th Edition: New
Delhi; Tata McGraw Hill Publishing Company, India.
Thomas L Wheelen and J. David Hunger (2002) Strategic Management and
Business Policy; towards maintaining a global sustainability 13th Edition:
Pearson Publishing Company.
92

3.0 MODULE 3: Strategy Implementation, Evaluation and Control
Contents:
Study Session 3: Corporate Governance, Social Responsibility and Business Ethics
93

STUDY SESSION 1
Nature of Strategy Implementation
Introduction
2.0 Main Content
2.1 Nature of Strategy Implementation
2.2 Developing Programmes, Budget, and procedures
2.3 Who implement strategy?
2.4 Achieving synergy in strategy implementation
i Shared know-how
ii Coordinated strategies
iii Shared tangible resources
iv Economies of scale or scope:
v Pooled negotiating power
vi New business creation

94

Introduction:
In this study session, we will discuss the nature of strategy implementation. You
will understand that strategic management process does not end, when the firm
decides what strategy or strategies to pursue, rather,there must be a translation of
strategic thought into strategic action. You will also realise that strategy
implementation is fundamentally different, from strategy formulation.
Implementation of strategy affects the organisation from top to bottom; it affects
all the divisional areas of a business.

1. Describe the nature of strategy implementation.
2. Develop programmes, budgets and procedures to implement strategic
change.
3. Understand the importance of achieving synergy during strategy
implementation.
2.0 Main Content

2.1 Nature of Strategy Implementation
Strategy implementation often is called the “action stage” of strategic
management. Implementing strategy means mobilising employees and managers to
put formulated strategies into action. It is the sum total of activities and choices
required for the execution of a strategic plan.
Strategy implementation involves the use of organisational

design, the process of deciding how a company should create,
95

use and combine organisational structure control systems and culture to pursue a
business model successfully.
2.2 Developing Programmes, Budget, and Procedures
Strategy implementation is a process by which strategies and policies are put into
action, through the development of programmes to create series of new
organisational activities, budgets to allocate funds to the new activities and
procedures to handle the day to day activities. This process might involve
changes within the overall culture, structure, and/or management system of the
entire organisation.
A programme is a statement of the activities or steps needed to accomplish a

single-use plan. It makes a strategy action oriented. It may involve restructuring
the corporation, changing the company’s internal culture, or beginning a new
research effort.
A budget is a statement of a corporation’s programmes in terms of dollars. Used in

planning and control, a budget lists the detail cost of each programme. Many
corporations demand a certain percentage return on investment, often called a
“hurdle rate,” before management will approve a new programme. This ensures
that the new programme will significantly add to the corporation’s
profit performance and thus build shareholder value. The budget thus, not only
serves as a detailed plan of the new strategy in action, it also specifies through pro
forma financial statements, the expected impact on the firm’s financial future.
96

Procedures, sometimes termed Standard Operating Procedures (SOP), are a
system of sequential steps or techniques that describe in detail, how a particular
task or job is to be done.
They typically detail the various activities that must be carried out, in order to
complete the corporation’s programme.
Strategy implementation requires a firm to establish annual objectives, devise

policies, motivate employees, and allocate resources so that formulated
strategies can be
executed. Strategy implementation includes developing a strategy-supportive
culture, creating an effective organisational structure, redirecting marketing efforts,
preparing budgets, developing and utilising information systems, and linking
employee compensation to organisational performance.
ITQ 1: Briefly differentiate between a programme and budget
2.3 Who Implement Strategy?

To begin the implementation process, strategy makers must consider these
questions:
Who are the people that will carry out the strategic plan?
What must be done to align the company’s operations in the new intended
direction?
How is everyone going to work together to do what is needed?
97

These questions and similar ones should have been addressed initially when the
pros and cons of strategic alternatives were analysed. They must also be addressed
again before appropriate implementation plans can be made. Unless top
management can answer these basic questions satisfactorily, even the best planned
strategy is unlikely to provide the desired outcome.
Depending on how a corporation is organised, those who implement strategy will

probably be a more diverse set of people than those who formulate it. In most
large, multi-industrial corporations, the implementers are everyone in the
organisation. Vice presidents of functional areas and directors of divisions or
strategic business units (SBUs), work with their subordinates to put together large-
scale implementation plans. Plant managers, project managers, and unit
heads put together plans for their specific plants, departments, and units.
Therefore, every operational manager down to the first-line supervisor and every
employee are involved in some way in the implementation of corporate, business,
and functional strategies.
Many people in the organisation who are crucial to the successful strategy
implementation, probably, had little to do with the development of the corporate
and even business strategy. Therefore, they might be entirely ignorant of the vast
amount of data and work that went into the formulation process. Unless changes in
mission, objectives, strategies, and policies and their importance to the company
are communicated clearly for all operational managers,
there can be a lot of resistance and foot-dragging.
98

Managers might hope to influence top management into abandoning its new plans
and returning to its old ways. This is one reason why involving people from all
organisational levels in the formulation and implementation of strategy tend to
result in better organisational performance.
2.4 Achieving synergy in strategy implementation
One of the goals to be achieved in strategy implementation is synergy between and

among functions and business units. This is the reason corporations commonly
reorganise after an acquisition. Synergy is said to exist for a divisional
corporation, if the return on investment (ROI) of each division is greater than what
the return would be, if each division were an independent
business. According to Goold and Campbell, synergy can take place in one of six
forms:
Shared know-how: Combined units often benefit from sharing knowledge or

skills. This is a leveraging of core competencies. One reason that Procter &
Gamble purchased Gillette, was to combine P&G’s knowledge of the female
consumer with Gillette’s knowledge of the male consumer.
Coordinated strategies: Aligning the business strategies of two or more business

units, may provide a corporation significant advantage by reducing inter-unit
competition and developing a coordinated response to common competitors
(horizontal strategy). The merger between Arcelor and Mittal Steel, for example,
gave the combined company enhanced R&D capabilities and wider global
coverage, while presenting a common face to the market.
Shared tangible resources: Combined units can sometimes save money by

sharing resources, such as a common manufacturing facility or R&D lab. The
99

alliance between Renault and Nissan allowed it to build new factories that would
build both Nissan and Renault vehicles.
Economies of scale or scope: Coordinating the flow of products or services of one

unit with that of another unit can reduce inventory, increase capacity utilisation,
and improve market access. This was a reason Delta Airlines bought Northwest
Airlines.
Pooled negotiating power: Combined units can combine their purchasing to gain
bargaining power, over common suppliers to reduce costs and improve quality.
The same can be done with common distributors. The acquisitions of Macy’s and
the May Company, enabled Federated Department Stores (which changed its name
to Macy’s in 2007) to gain purchasing economies for all of its stores.
New business creation: Exchanging knowledge and skills can facilitate new
products or services by extracting discrete activities, from various units and
combining them in a new unit or by establishing
joint ventures among internal business units.
Oracle, for example, purchased a number of
software companies in order to create a suite of
software codenamed “Project Fusion” to help
corporations run everything from accounting
and sales to customer relations and supply-chain
management.
100

This study session focused on the nature of strategy implementation, you have
learnt the need to develop programmes, budget and procedures in strategy
implementation. Who should implement strategy and also the need to achieve
synergy in strategy
ITQ 2: What is strategyimplementation was
implementation all enumerated.
about?

1. Do you agree with the statement, ‘strategy implementation is essentially
a. management of change’? Why?
2. Discuss the interrelationship that exit between formulation and
implementation of strategies. Provide examples of such interrelationship.
3. Explain why successful strategy implementation often hinges on whether the
strategy formulation process empowers the implementers.
4. Explain why organisational structure is so important in strategy
implementation.
5. Choose an organisation that you are familiar with, discuss how the
management issues affect strategy implementation in that organisation.
6. Explain why strategy implementation often hinges on, whether the strategy
formulation process empowers managers and employees.
7. As production manager of a local newspaper, what problems would you
anticipate in implementing a strategy, to increase the average number of
pages in the paper by 40 percent? Discuss.
8. Why is strategy implementation, often consideredthe most difficult stage, in
strategic management process?
101

9. How can strategists’ best ensure that strategies will be effectively
implemented? Elucidate.
10. Discuss the major pitfalls in strategic management implementation.
a. Visit U-tube: https://goo.gl/36QWZL & https://goo.gl/Ac2ume. Watch the video
& summarise in 1 paragraph
b. View the animation on: https://goo.gl/PVjVx4 and critique it in the discussion

forum

ITA 1: A programmeis a statement of the activities or steps needed to accomplish a single-use plan
while a budget is a statement of a corporation’s programmes used in planning and control, a
budget lists the detail cost of each programme.
ITA 2: Strategy implementation is the translation of chosen strategy into organisational action, so
as to achieve strategic goals and objectives.
102

Azhar K (2002) Business Policy and Strategic Management. 2nd Edition: Tata
Thomas L Wheelen and J. David Hunger (2002) Strategic Management and

103

STUDY SESSION 2
Structural Design and Change
Introduction
2.0 Main Content
2.1 Structural Design
2.2 Basis of designing organisation structure
2.3 Structural Change
2.4 What Causes Structural Change within an Organisation?

2.4.1 Acquisitions
2.4.2 Job Duplication
2.4.3 Marketplace Changes
2.4.4 Process Changes

Introduction:
In the previous study session we talked about the nature of strategy
implementation. In this session, you will understand the impact of structural design
and change in the strategy implementation.
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1. Discuss the structural change.
2. Explain the basics for designing organisational structure.
3. Differentiate between organisational change and strategic change.
4. Explain the causes of structural change within the organisation.
2.0 Main Content

2.1 Structural Design
Strategy implementation is usually done through organisational design or
redesign.The first challenge of the design process is to create a streamlined and
effective organisation that is aligned with the strategy and desired results of the
organisation. The second challenge is to get buy-in from the entire organisation
and implement the new design, so that it dramatically and positively changes the
way the business operates. Many organisations fail to adapt and adjust their
internal infrastructure to the rapidly changing business demands around them,
because their business processes, structures, and systems act as barriers to
efficiency and common-sense decision making.
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These internal barriers can trap capable people who eventually become cynical and
disheartened by their inability to change or influence obvious gaps,
inconsistencies, or burdensome constraints within the organisation.
The design process identifies ineffective work flows, structures, or systems,

redesigns them to fit current business needs, and develops plans to implement the
new changes, promptly achieving better results throughout the organisation.
Processes are streamlined, structures are simplified, and systems are improved as
people are organised into business units and teams, which allow them greater
authority and responsibility for their success.
There are a number of ways to set up the design process. Senior leadership can
sponsor and lead the change process using the conference model, where large
numbers of people from a cross-section of the organisation participate real-time in
analysis, design, and implementation sessions. The advantage of this model is that
a significant number of employees, if not the entire organisation, can be directly
involved in the change process. This builds a strong sense of commitment and
ownership to new design decisions and directions. Another advantage to the
conference model sessions is that, problems can be identified and design and
implementation decisions can be made quickly, without drawing out the process
over extended period of time.
Using this model, we can accomplish short-cycle redesign in a matter of weeks,

instead of months and years.
A second model involves a core design team, charted by senior management. In

this model, a smaller number of employees from a cross-section of the organisation
analyse, redesign, and develop implementation plans which they present to senior
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leadership, and the rest of the organisation for approval and adjustment. The
advantage of this model is that the design team creates continuity throughout the
process, and can drill deeper in some of the analysis, design and planning tasks.
The design team model also fosters commitment and ownership throughout the
organisation, but requires more ongoing communication to the rest of the
organisation, and tends to take a little more time, to get through design and
planning and on to implementation. With either the conference model or the design
team model, the design process, from chartering to implementation, can take from
six weeks to eighteen months, depending on the size, motivation, and resources of
the organisation.
2.2 Basis of Designing Organisation Structure
The following basic aspects which require a strategist’s attention while designing
structure include;
 Differentiation.
 Integration.
 Bureaucratic cost.
 Allocating Authority and Responsibility.
ITQ 1: What are the challenges faced during a structural design process?
2.3 Structural Change
Organisational change can occur in response to internal or external factors. This

lesson focuses specifically on those changes that occur in a company's internal
environment, including structural, strategic, people and process changes.
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Change in Organisations
Most organisations have to change, as part of keeping up with the competition or

adjusting to new market trends or technologies. Things such as mergers,
restructuring, technological advancements, process enhancements, changing
customer demands and new product lines are fairly common in today's business
environments. If you recall, reasons for change can be attributed to an
organisation's external environment, as well as their internal environment. This
lesson will focus specifically on those changes that occur in a company's internal
environment, including structural, strategic, people and process changes.
Structural Change
Structural changes are those changes made to the organisation's structure that
might stem from internal or external factors, and typically affect how the company
is run. Structural changes include things such as the organisation's hierarchy, chain
of command, management systems, job structure and administrative procedures.
Circumstances that usually create the need for structural change include mergers
and acquisitions, job duplication, changes in the market and process or policy
changes.
For example, let us assume that MTN Communication decided to merge with Glo
Communication. As a part of that merger, duplicate departments need to be
eliminated, employees from both companies need to be reassigned to new positions
or terminated, managers acquire new employees, duplicate management positions
are eliminated, new policies and procedures need to be created (and old ones
retired) and job functions need to be realigned to fit the new company structure.
Likewise, if the merger was a result of changes in the marketplace, structural
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changes might also need to be made to respond to the market shift, such as creating
new departments that can produce whatever the market is demanding from
communication providers.
Strategic Change
Strategic change involves making changes to the overall goals, purpose, strategy or
mission of an organisation. It is a major upheaval to how the organisation conducts
business. The external environment of an organisation can, at times, place
significant demands on an organisation that it must rethink its fundamental
approach to business. Changes to things such as what products or services it offers,
the target customer segments or markets it tries to reach, how the company
distributes its products or services, its position in the global economy and who it
will partner with for manufacturers, distributors and other logistical needs, are just
some examples of strategic changes.
2.4 What Causes Structural Change within an Organisation?
Structural change within an organisation might stem from internal or external

factors. Efficient change management requires the ability to identify what causes
structural change within an organisation. The ability to identify the signs of
oncoming organisational change can help you better prepare for the change and
implement policies that will keep your company on a growth path.
1. Acquisitions
According to Organisational Change Management, acquiring or merging with

another company has a profound effect on organisational structure. The deletion of
duplicate departments manages cost, yet talent from both companies can be utilised
in the resulting corporate structure. However, job functions will be altered to fit the
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business model of the company, and management positions may be eliminated as
well.
2. Job Duplication
Multiple managers or executives within an organisation may create the need for
change, according to JobDig.com. Employees can either become frustrated with
trying to please more than one manager, or employees may find ways to use
opposing views by multiple managers to get what the employee needs. When
employees encounter duplicate management positions, the structure of the
organisation needs to be altered to eliminate the excess positions and bring
departments into line with the proper individual manager.
3. Marketplace Changes
As the marketplace changes, so do the structural needs of your organisation. For

example, as fuel prices rise, customers may begin to demand more fuel-efficient
vehicles. If you own a car dealership known for selling large SUVs and vans, you
may have to shift your focus to smaller and more fuel efficient cars. This requires
bringing in sales people and service technicians accustomed to selling and working
on these vehicles. Marketing then needs to change to target the car-buying public,
and the old methods should be eliminated.
4. Process Changes
Changes to the way the company does business can cause structural changes. If
your company was used to allowing departments to be autonomous, then a change
to a centralised way of doing business will create changes in company structure. If
a new department has been created to address a company demand, the company
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structure must change to accommodate the new group. For example, if the backlog
of archived files becomes so large that an archiving department needs to be
created, that can change the flow of information in your company and have a
significant effect on corporate structure.
ITQ 2: What do you understand by structural and strategic changes respectively?
In this study session, we have learnt the structural design, the basis for designing
organisational structure, structural change and the causes of structural change.

1. Explain why organisational structure and culture are so important in strategy
implementation.
a. Discuss the salient features of structures for the business strategies of
cost leadership, differentiation and focus.
2. Write a descriptive note on the emerging forms of organisational structures.
3. What is structural design? What is the basis for designing organisation
structure?
4. Differentiate between structural change and strategic change.
5. What are the causes of structural change within the organisation?
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a. Visit U-tube: https://goo.gl/3evHVn & https://goo.gl/YoEnnM. Watch the video
& summarise in 1 paragraph
b. View the animation on: https://goo.gl/NA7BHE and critique it in the discussion

forum

ITA 1: Creating a streamlined and effective organisation that is aligned with the strategy and
desired results of the organisation. Another challenge is to get buy-in from the entire
organisation and implement the new design, so that it dramatically and positively changes the
way the business operates.
ITA 2: Structural changes are those changes made to the organisation's structure that might
stem from internal or external factors, and typically affect how the company is run. Strategic
changes involve making changes to the overall goals, purpose, strategy or mission of an
organization.
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Azhar K. (2002) Business Policy and Strategic Management. 2nd Edition: Tata
Thomas L.Wheelen and J. David Hunger (2002) Strategic Management and

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STUDY SESSION 3
Corporate Governance, Social Responsibility and Business Ethics
Introduction
2.0 Main Content
2.1 Corporate Governance
2.2 Responsibilities of the Board
2.3 Role of the Board in Strategic Management
2.3.1 Monitor:
2.3.2 Evaluate and influence
2.3.3 Initiate and determine
2.4 Social Responsibilities

2.5 Responsibilities of A Business Firm
2.6 Benefits from being socially responsible
2.7 Business Ethics

2.8 Role of ethics in business

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Introduction:
In this study session, we are going to discuss corporate governance, social
responsibilities and business ethics of an organisation.

1. Discuss the concept of corporate social responsibility.
2. Explain the responsibilities of the board.
3. Describe the role of the board in strategic management.
4. Discuss the concept of social responsibility.
5. Give reasons why business should be socially responsible.
6. Compare and contrast Friedman’s and Carroll’s views on business
responsibility.
7. Explain the benefits of being socially responsible.
8. Discuss the concept of business ethics.
9. Explain the role of ethics in business.
2.0 Main Content

2.1 Corporate Governance
A corporation is a mechanism established to allow different parties to contribute
capital, expertise, and labour for their mutual benefit. The investor/shareholder
participates in the profits of the enterprise without taking responsibility for the
operations. Management runs the company without being responsible for
personally providing the funds. To make this possible, laws
have been passed that give shareholders limited liability and, correspondingly,
limited involvement in a corporation’s activities. That involvement does include,
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however, the right to elect directors who have a legal duty to represent the
shareholders and protect their interests.
The term corporate governance is all about determining the direction and
performance of the corporation. Corporate Governance involves a set of
relationships amongst the company’s management; its board of directors,
shareholders and other stakeholders. These relationships which involve various
rules and incentives provide the structure through which the objectives of the
company are set and the means of attaining the objectives and monitoring
performance are determined.
As representatives of the shareholders, directors have both the authority and the
responsibility to establish basic corporate policies and to ensure that they are
followed. The board of directors, therefore, has an obligation to approve all
decisions that might affect the long-run performance of the corporation. This
means that the corporation is fundamentally governed by the board of directors
overseeing top management, with the concurrence of the shareholder.
2.2 RESPONSIBILITIES OF THE BOARD
Laws and standards defining the responsibilities of boards of directors vary from
country to country. Interviews with 200 directors from eight
countries (Canada, France, Germany, Finland, Switzerland, the Netherlands, the
United Kingdom, and Venezuela) reveals strong agreement on the following five
boards of directors responsibilities, listed in order of importance:
1. Setting corporate strategy, overall direction, mission, or vision.
2.Hiring and firing the CEO and top management.
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3. Controlling, monitoring, or supervising top management.
4.Reviewing and approving the use of resources.
5. Caring for shareholder interests.
2.3 Role of the Board in Strategic Management
How does a board of directors fulfill these many responsibilities? The role of the
board of directors in strategic management is to carry out three basic tasks:
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. Most 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.
ITQ 1: What does corporate governance involve?
2.4 Social Responsibilities

Social Responsibility of business refers to all such duties and obligations of
business, directed towards the welfare of society. The obligation of any business
to protect and serve public interest is known as social responsibility of business.
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Why should business be socially responsible?
 Public image.
 Government Regulation.
 Survival and growth.
 Employee satisfaction.
 Consumer Awareness.
The concept of social responsibility proposes that a private corporation has

responsibilities to society that extend beyond making a profit. Strategic decisions
often affect more than just the corporation. A decision to retrench by closing some
plants and discontinuing product lines, for example, affects not only the firm’s
workforce but also the communities where the plants are located, and the
customers with no other source for the discontinued product. Such situations raise
questions of the appropriateness of certain missions, objectives, and
strategies of business corporations. Managers must be able to deal with these
conflicting interests in an ethical manner, to formulate a viable strategic plan.
2.5 RESPONSIBILITIES OF A BUSINESS FIRM
What are the responsibilities of a business firm and how many of them must be
fulfilled?
Milton Friedman and Archie Carroll offer two contrasting views of the
responsibilities of business firms to society.
Friedman’s Traditional View of Business Responsibility

Urging a return to a laissez-faire worldwide economy with a minimum of
government regulation, Milton Friedman argues against the concept of social
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responsibility. A business person who acts “responsibly” by cutting the price of the
firm’s product to prevent inflation, or by making expenditures to reduce pollution,
or by hiring the hard-core unemployed, according to
Friedman, is spending the shareholder’s money for a general social interest.
Even if the businessperson has shareholder permission or encouragement to do so,

he or she is still acting from motives other than economic and may, in the long run,
harm the very society the firm is trying to help. By taking on the burden of these
social costs, the business becomes less efficient—
either price go up to pay for the increased costs, or investment in new activities and
research is postponed. These results negatively affect—perhaps fatally—the long-
term efficiency of a business. Friedman thus referred to the social responsibility of
business as a “fundamentally subversive doctrine”.
Carroll view of Business Responsibility
A business firm must first make a profit to satisfy its economic responsibilities. To
continue in existence, the firm must follow the laws, thus fulfilling its legal
responsibilities. There is evidence that companies found guilty of violating laws
have lower profits and sales growth after conviction.
Archie Carroll proposes that the managers of business organisations have four
responsibilities: economic, legal, ethical, and discretionary. Carroll lists these four
responsibilities in order of priority.
1. Economic responsibilities of a business organisation’s management are, to

produce goods and services of value to society, so that the firm may repay its
creditors and shareholders.
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2. Legal responsibilities are defined by governments in laws that management is
expected to obey. For example, U.S. business firms are required to hire and
promote people based on their credentials rather than to discriminate on non-job-
related characteristics such as race, gender, or religion.
3. Ethical responsibilities of an organisation’s management are to follow the

generally held beliefs about behaviour in a society. For example, society generally
expects firms to work 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 organisation’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 centres. The difference between ethical and
discretionary responsibilities is that few people expect an organisation to fulfill
discretionary responsibilities, whereas, many expect an organisation to fulfill
ethical ones.
Having satisfied the two basic responsibilities, according to Carroll, a firm should
look to fulfilling its social responsibilities. Social responsibility, therefore, includes
both ethical and discretionary, but not economic and legal, responsibilities.
A firm can fulfill its ethical responsibilities by taking actions that society tends to
value but has not yet put into law. When ethical responsibilities are satisfied, a firm
can focus on discretionary responsibilities—purely
voluntary actions that society has not yet decided are important. For example,
when Cisco Systems decided to dismiss 6,000 full-time employees, it provided a
novel severance package. Those employees who agreed to work for a local
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nonprofit organisation for a year would receive one-third of their salaries plus
benefits and stock options and be the first to be rehired.
Nonprofits were delighted to hire such highly qualified people and Cisco was able
to maintain its talent pool for when it could hire once again.
2.6 Benefits from being socially responsible -
Their environmental concerns may enable them to charge premium prices and gain
brand loyalty.
-Their trustworthiness may help them generate enduring relationships with

suppliers and distributors, without requiring them to spend a lot of time and money
policing contracts.
-They can attract outstanding employees who prefer working for a responsible
firm.
-They are more likely to be welcomed into a foreign country.
They can utilise the goodwill of public officials for support in difficult times.
-They are more likely to attract capital infusions from investors, who view
reputable companies as desirable long-term investments.
ITQ 2: What are the four responsibilities proposed to managers from Archie Carroll’s view
of business responsibility?
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2.7 Business Ethics
This widely used phrase has two meanings, which are related but can lead to
confusion. The first meaning is simply the area of work we have called
‘organisational ethics’, but with the added stipulation of a competitive market
environment, that is, we are referring to the ethics of people working within a
‘business’ in the accepted sense of the word. Where the issues to be discussed are
common to competitive and non-competitive contexts, it is more useful
to talk about organisational ethics. If we are talking about ethical dilemmas which
only arise within a competitive environment, then
we can signal this by using the phrase ‘business
ethics’.
The other use of ‘business ethics’ is to refer to the

business itself, as
a distinct entity, acting competitively. Indeed the
phrase is used by some
writers in discussions of the ethical problems of doing business in general,
though, perhaps, ‘market ethics’ might be more helpful in referring to
a competitive market-based economic system. Obviously in reality, all
the actions of the ‘business as an entity’, are actions of individual entrepreneurs,
managers and employees.
2.8 Role of Ethics in Business
There are several different roles to be played by business ethics,

which may be summarised as follows:
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-to describe and categorise (that is, provide a language for) the process of value
formation in organisations and in the free market economy;
-to describe and categorise, as moral or otherwise, how decisions are made in
organisations;
-to provide a critique of the process of value formation, in organisations, and in the
free market economy. Some writers argue that business ethics has become far too
‘owned’ by the business community to be incisively critical;
-to prescribe the values which should hold in organisations,
presumably in combination with experience, and the findings of the
social sciences. It should be noted that this presumption is not
obvious in some approaches;
-to prescribe how decisions should be made, in line with sound moral
principles (and with the above presumption)
ITQ 3: What do you understand by business ethics?
In this study session, we had a discussion on corporate governance, social
responsibility and business ethics.

i. Describe the manner in which corporate governance can be related to
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different phases in the strategic management process.
ii. Use Agency theory and Stewardship theory to explain the relationship
between management and stakeholders.
iii. Discuss the role that ethics play in strategic management process.
iv. Why is social responsibility a contentious issue?
v. What do you feel is the relationship between personal ethics and business
ethics? Are they or should they be the same?
vi. If you own a small business, would you develop a code of business conduct?
If yes, what variables would you include? If no, how would you ensure that
ethical standards were being followed by your employees?
vii. Discuss the ethics of gathering competitive intelligence.
viii. What are the ethics of cooperating with rival firms? Discuss them.
ix. What is social responsibility? Does it affect the overall performance of the
organisation? Discuss.
x. Discuss why it is necessary to have a code of ethics? Give a comprehensive
guideline on how to write a code of ethics.
a. Visit U-tube: https://goo.gl/zv4wRA. Watch the video & summarise in 1
paragraph
b. View the animation on: https://goo.gl/5bBvQp and critique it in the discussion

forum

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ITA 1: Corporate governance essentially involves the balancing of interest of many stakeholders
of the company, which include its shareholders, management, customers, suppliers, financiers,
government and the community.
ITA 2: Economic, legal, ethical, and discretionary
ITA 3: Business ethics (also corporate ethics) is a form of applied ethics or professional ethics
that examines ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations.

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STUDY SESSION 4
Strategic Evaluation and Control
Introduction
2.0 Main Content
2.1 Strategic Evaluation and Control
Introduction:

1.
2.
3.
2.0 Main Content

2. (A) Strategic Evaluation and Control
When you make plans and set goals on how to achieve your aim, you sit back and
take stock of all that has taken place. This helps you to view and adjust those areas
that you are lagging behind and is refer to as evaluation.
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Strategy evaluation is vital to an organisation’s well-being; timely evaluations
can alert management to problems or potential problems before a situation
becomes critical.
Strategy evaluation includes three basic activities: (1) examining the underlying
bases of a firm’s strategy, (2) comparing expected results with actual results, and
(3) taking corrective actions to ensure that performance conforms to plans.
Strategy evaluation is the final stage in strategic management. Managers

desperately need to know when particular strategies are not working well; strategy
evaluation is the primary means for obtaining this information. All strategies are
subject to future modification because external and internal factors are constantly
changing. Strategy evaluation is needed because success today is no guarantee of
success tomorrow! Success always creates new and
different problems; complacent organisations experience demise.
Evaluation and control mechanisms are set in place to inform every stage of the
strategic management process. They are a means of collecting whatever
information we may need to compare plans against actual events, to ensure that
things are working well, and to anticipate, or correct, any faults or weaknesses in
the system. Effective evaluation and control can tell us what we are doing well and
what we are not.
Evaluation and control is a process by which corporate

activities and performance results are monitored, so that
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actual performance can be compared with desired performance.
Managers at all levels use the resulting information to take corrective action and
resolve problems. Although evaluation and control is the final major element of
strategic management, it can also pinpoint weaknesses in previously implemented
strategic plans and thus, stimulate the entire process to begin again.
ITQ 1: Why is evaluation and control important?

1. Write a descriptive note on the importance of strategy evaluation.
2. Describe the organisations that may need to be evaluating strategy more
frequently than others. Support your answer with examples.
3. Describe and explain the application of the techniques for strategic
control.
4. Why has strategy evaluation become so important in business today?
5. Strategy evaluation allows an organisation to take proactive stance
towards shaping its own future. Discuss the meaning of this statement.
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6. As the owner of a local independent supermarket, explain how you would
evaluate the firm’s strategy.
7. Discuss under what conditions corrective actions are not required, in the
strategy evaluation process.
8. Identify and discuss some key financial ratios that would be important in
evaluating a bank's strategy.
9. As executive director of the state forestry commission, in what ways and
how frequently would you evaluate the organisation’s strategy?
10. Identify types of organisations that may need to frequently evaluate
strategy more than others. Justify your choices.
a. Visit U-tube: https://goo.gl/GGeH7T. Watch the video & summarise in 1
paragraph

ITA 1: Evaluation focuses on analysing quantitative and qualitative metrics, associated

with the implementation of strategy. Control is necessary for the evaluation phase. These
two are the final stage in strategic management. All strategies are subject to future
modifications because internal and external factors are constantly changing. In strategic
evaluation and control process, managers determine whether the chosen strategy is
achieving the organisational objectives.
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STUDY SESSION 5
Case Analysis

Introduction
2.0 Main Content
2.1Case Analysis
2.2 Guidelines for preparing case analysis
2.3 The Need for Justification

Introduction:
This study session will introduce you to strategic management case analysis. The
purpose is to help you understand strategic management case, the guidelines and
the steps involved in preparing a case.

1. Describe the case method for learning strategic management case.
2. Discuss the guidelines for preparing a case.
3. Explain the steps involved in preparing a comprehensive written case.
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2.0 Main Content
2.1 Case Analysis
A case study is a description of an actual administrative situation, involving a
decision to be made or a problem to be solved. It is a real situation that actually
happened just as described, or portions have been disguised for reasons of privacy.
Most case studies are written in such a way that the reader takes the place of the
manager whose responsibility is to make decisions to help solve the problem. In
almost all case studies, a decision must be made, although that decision might be to
leave the situation as it is and do nothing.
A strategic-management case describes an

organisation’s external and internal conditions and
raises issues concerning the firm’s mission, strategies,
objectives, and policies. Most
of the information in a business policy case is
established fact, but some information may
be opinions, judgments, and belief.
Guidelines for preparing case analysis
The Need for Practicality
Be practical. For example, in performing a projected financial analysis, make

reasonable assumptions, appropriately state them, and proceed to show what
impact your recommendations are expected to have on the organisation’s financial
position. Avoid saying, “I don’t have enough information.” You can always
supplement the information provided in a case with internet and library research.
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The Need for Justification
The most important part of analysing cases is not what strategies you recommend
rather, how you support your decisions and how you propose that they be
implemented. There is no single best solution or one right answer to a case, so give
ample justification for your recommendations.
The Need for Realism:
Avoid recommending a course of action beyond an organisation’s means. Be

realistic. No organisation can possibly pursue all the strategies that could
potentially benefit the firm. Estimate how much capital will be required to
implement what you recommended. Determine whether debt, stock, or a
combination of debt and stock could be used to obtain the capital. Make sure your
recommendations are feasible.
Do not prepare a case analysis that omits all arguments and information not
supportive of your recommendations. Rather, present the major advantages and
disadvantages of several feasible alternatives. Try not to exaggerate, be tereotype,
prejudge, or over dramatise. Strive to demonstrate that your interpretation of the
evidence is reasonable and objective.
The Need for Specificity
Do not make broad generalisations such as “The company should pursue a market
penetration strategy.” Be specific by telling what, why, when, how, where, and
who. Failure to use specifics is the single major shortcoming of most oral and
written case analyses.
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The Need for Originality
Do not necessarily recommend the course of action that the firm plans to take or
actually undertook, even if those actions resulted in improved revenues and
earnings. The aim of case analysis is for you to consider all the facts and
information relevant to the organisation at the time, to generate feasible alternative
strategies, to choose among those alternatives, and to defend your
recommendations.
The Need to Contribute
Strategy formulation, implementation, and evaluation decisions are commonly

made by a group of individuals rather than by a single personal fits, their attitudes
toward social responsibility, and their views concerning globalisation. There are
no perfect people, so there are no perfect strategies. Be open-minded to others’
views. Be a good listener and a good contributor.
ITQ 1: Why is it important to study strategic management case analysis?
ITQ 2: Why is the need for justification important for case analysis?
Steps in Preparing a Comprehensive Written Analysis
In preparing a written case analysis, you could follow the steps outlined here,
which correlate with the stages in the strategic-management process.
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Step 1 Identify the firm’s existing vision, mission, objectives, and strategies.
Step 2 Develop vision and mission statements for the organisation.
Step 3 Identify the organisation’s external opportunities and threats.
Step 4 Construct a Competitive Profile Matrix (CPM).
Step 5 Construct an External Factor Evaluation (EFE) Matrix.
Step 6 Identify the organisation’s internal strengths and weaknesses.
Step 7 Construct an Internal Factor Evaluation (IFE) Matrix.
Step 8 Prepare a Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix.
Strategic Position and Action Evaluation (SPACE) Matrix, Boston Consulting

Group (BCG) Matrix, Internal-External (IE) Matrix, Grand Strategy Matrix,
and Quantitative Strategic Planning Matrix (QSPM) as appropriate. Give
advantages and disadvantages of alternative strategies.
Step 9 Recommend specific strategies and long-term objectives. Show how much
your recommendations will cost. Clearly itemise these costs for each projected
year. Compare your recommendations to actual strategies planned by the company.
Step 10 Specify how your recommendations can be implemented and what results
you can expect. Prepare forecasted ratios and projected financial statements.
Present a timetable or agenda for action.
Step 11 Recommend specific annual objectives and policies.
Step 12 Recommend procedures for strategy review and evaluation.
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In this study session, you learnt what strategic management case is all about,
guidelines in preparing a case and the steps involved in preparing a comprehensive
case.

1. What is strategic management case?
2. Discuss the guidelines for preparing case analyses.
3. Explain the approaches to case analyses, from your view point select the best
approach. What are your reasons?
4. Discuss the difference between case method versus lecture method.
5. Discuss the steps involved in preparing a comprehensive written analysis.
6. Discuss the guidelines involved in presenting an effective oral presentation.
7. What are the special tips needed for success in case analysis? Discuss them.
8. Business policy case analysis gives you the opportunity to learn more about
yourself, your colleagues, strategic management and the decision making
process in organisations. Elucidate.
9. Discuss the case method for learning strategic management concepts.
10. Prepare a written case for any organisation of your choice and discuss the
major components.
a. Visit U-tube: ???????????????? . Watch the video & summarise in 1 paragraph

136

ITA 1: This helps an organisation to understand more about its strategic position and
construct answers such as what do we need to know about our customers, what new options
should we consider, how can we develop our competence to meet all the changes in the
business environment etc.
ITA 2: Justification can be defined as a circumstance that serves as an acceptable reason

for taking a particular action or attitude. Therefore, in case analysis, how you support your
decisions and propose that they be implemented is very important. There is no single best
solution or one right answer to a case, so give ample justification for
your recommendations.
137

FURTHER READING
Bennet, R. (2006)Corporate Strategy and Business Planning. Glasgow:Bin and
Bill Ltd.
Curtis, E. T. and Marylyn L. T. (2004) Business Policy: Administrative,

Strategic and Constituency Issues. Ontario:Irwin Darsey Limited.
David, F.R. (2011)Strategic Management: Concepts and Cases.13th Edition: New

Garba, A. M. (1998)Essentials of Corporate Strategy, Corporate Solutions. Kano.
Glueck, W. F. (2007)Business Policy, Strategy Formation and Management

Action. New York: McGraw-Hill Book Company
Hill, C.W.L and Jones, G.R. (2013) Strategic-Management-An-Integrated-

Approach. 10th Edition: Mason: South- Western Cengage Learning, U.S.A.
Kazmi, A. (2008)Strategic Management and Business Policy.13th Edition: New

Lynch, R. (2008)Corporate Strategy. Fourth Edition: U.S.A; Pitman Publishing.
Oghojafor, B.A. (2006)Essentials of Business Policy. Lagos: Ababa press ltd.
Osaze, E. B. (2004) Strategic Management in Nigeria: Texts and Cases. Ikoyi:

CMD, Lagos.
Pearce, J.A. and Robinson, R.B. (1998) Strategic management: strategy

formulation and implementation. 3rd Edition: Delhi; All Indian Traveller.
Wheelen, T.L. and Hunger, J.D. (2008) Strategic Management and Business
Policy. 11th Edition: New Jersey; Pearson International.
138

11.0 GLOSSARY
1. Authority: For Managers at all levels the organisationally granted right to
influence the actions and behaviour of the workers they managed.
2. Autonomy: The degree to which the job provides substantial freedom and
discretion to the individual in scheduling the work and in determining the
procedure to be used to carry out the job.
3. Availability: A product or service’s ability to perform its intended function

at a given time and under appropriate conditions. It can be expressed by the
ratio operative time/total time, where operative time is the timethat it is
functioning or ready to function.
4. Benchmarking: A technique that involves comparing one's own processes

to excellent examples of similar processes in other organisations or
departments. Through benchmarking, rapid learning can occur, and
processes can undergo dramatic improvements.
5. Benefits: compensation package for employees.
6. Bootstrapping: Starting a business from scratch and building it up with

minimum outside investment.
139

7. Break Even: To make enough money to cover costs. In business, the point
at which sales equals costs, i.e. to make neither a profit nor loss.
8. Bureaucracy: A structure with highly routine operating tasks achieved

through specialisation, very formalised rules and regulations task, that are
grouped into functional departments, centralised authority narrow span of
control and decision making that flows to chain of command.
9. Bureaucratic Management: The management approach that examines the

entire organisation as a rational entity, using impersonal rules and
procedures or decision making.
10. Business: Specifies the present and/or prospective scope of a strategic

business unit's activities, in terms of the boundaries of the arena in which the
business elects to compete. The definition also serves to direct attention to
the true function of the business- that is, the way that the business meets the
needs of its target customers. A complete definition requires choices about
the business position along four dimensions: (1) customer functions-
addressing the benefits being provided; (2) customer segments- specifying
the customer groups seeking similar benefits and sharing characteristics that
are strategically relevant; (3) technology- specifying the alternative ways in
which a particular function can be performed and (4) vertical business
system- specifying where the business chooses to participate in the sequence
of stages in the vertical business system (or value- added system).
140

11. Business Plan: The business’s proposal that maps out its business strategy
for entering markets and that explains the business to potential investors.
12. Case Study Method: A development method in which a manager is

presented with a written description of an organisational problem to
diagnose and solve.
13. Centralisation: in any organisation, concentration of authority and power in

the hands of top-management is referred to as centralisation. (b) The
location of decision authority at the top of the organisation hierarchy. (C)
This term describes the concentration of government and political authority
in the capital city and at the national level, as opposed to the
sharing of powers and responsibilities between national, local authorities.
14. Channel Of Distribution: Also known as Distribution Channel; A means of

distributing a product from the manufacturer to the customer/end user via
warehouses, wholesalers, retailers, etc.
15. Competitive Advantage: A position a business gains over its competitors.
16. Competitor: A business rival, usually one who manufactures or sells similar
goods and/or services.
141

17. Competitor Analysis: Also called Competitive Analysis. A company's
marketing strategy which involves assessing the performance of competitors
in order to determine their strengths and weaknesses.
18. Conglomerate: A corporation which consists of several smaller companies

with different business activities.
19. Consortium: A group of businesses, investors or financial institutions

working together on a joint venture.
20. Consumer: An individual who uses goods and services but who may not
have been the purchaser.
21. Corporate Governance: Corporate governance refers to the (ideally visible,

transparent, published) policies and practices by which an organisation is
directed and managed at executive level, with particular focus on the
executive board's accountabilities to shareholders and other stakeholders,
especially concerning avoidance of risk, and the competence, ethics and
propriety of the leadership, typically a chairman and board of directors.
22. Corporate level strategy: The corporation’s overall plan concerning the
number of businesses the corporation holds, the variety of markets or
industries it serves, the distribution of resources among those businesses.
142

23. Corporate Social Responsibility: CSR. An obligation of a company to
adhere to legal guidelines in order to meet the needs of its employees,
shareholders and customers, and also to be concerned about social and
environmental issues.
24. Customer: An individual, company, etc., who purchases goods and/or
services from other individuals, companies, stores, etc.
25. Decision making: The process of identifying problems and opportunities

and resolving them. (b) Refers to process of identifying problems for
decision, devising alternative courses of action, and choosing one
alternative. It is distinguished from problem - solving by (i) requirement that
problems be sought rather than given, (ii) alternative formulated rather than
given. Sometimes distinguished from policy - making by (a) presence of
sanctions to compel compliance with the decision and (b) including not only
policy - making in governmental or political organisations, but all kinds of
decisional affair.
26. Departmentalisation: The horizontal basis for organising jobs into units in
an organisation.
27. Development phase: A career development steps in which actions are

designed to help the employee grow and learn the necessary skills to
move along the desired career path.
143

28. Differentiation strategy: Delivering products and services that customers
perceive as unique. The act or strategy of growing a business/brand by
developing its range of products, services, investments, etc. into new market
sectors, horizontally or vertically.
29. Diversity: The wide spectrum of individual and group differences.
30. Divestiture: The corporate process of selling a business in order to generate

cash, which the corporation can better deploy elsewhere, or to refocus on its
core related businesses, which are better, understood by management.
31. Entrepreneurship: the process of creating a business enterprise capable of

entering new or established markets by deploying resources and people in
a unique way to develop a new organisation.
32. Environment: those instructions or forces outside or inside the organisation

that potentially affect the organisation’s performance.
33. Flat organisation: an organisation with relatively few levels in its

hierarchy.
34. Franchise/Franchising: An authorisation or license-effecting a business

methodology, which can be bought - enabling someone (franchisee) to use
the franchisor's company name and trademarks to sell their products and
144

services, etc. and usually to receive certain support, in a particular town, area
of a country, or international region.
35. Horizontal Integration: The joining together of businesses which produce

similar goods or offer similar services, or are involved in the same stage of
activities, such as production or selling.
36. Insolvency: Not having enough finances or assets available to pay all your
debts.
37. Leadership: a widely applied term that usually refers to the personality,
characteristic and the behaviour of people with authority and influence and
responsibility for leading group.
38. Leadership style: this term usually refers to the adoption of an

authoritarian management or depending on which style is more comfortable
to his or her personality.
39. Market: A situation where buyers and sellers are in communication with
each other.
40. Marketing: the series of process by which demand for goods and services is
identified, supplied, anticipated or manipulated, it relies heavily on such
functions as advertising and market research.
145

41. Marketing concept: a philosophy of marketing that emphasises the supreme
importance of the custom, fundamental to this philosophy is an
understanding of what the customer wants in any given market, and this is
usually ascertain by the extensive market research.
42. Marketing environment: the set of external factors that affect the market
in which an organisation operates i.e. cultural, economic, legal, political,
geographical etc.
43. Marketing Mix: The combination of different aspects of an organisation’s

strategy for marketing a product, e.g. advertising, market research,
production and public relations. The guidelines for the most appropriate mix
are sometimes expressed as the four Ps- product, price, promotion and place.
44. Market leader: The organisation with the largest share in a given market.
45. Market penetration: the amount of demand in a given market that is

supplied by a particular organisation.
46. Market Research: Research carried out in the course of marketing, either
by an organisation itself or by specialists from an external consultancy, to
determine the likely market for a product or the effects of past or prospective
adverting on consumers.
146

47. Market Segment: A subgroup within a larger market in which people share
certain characteristics and require similar products or services.
48. Market Segmentation: The process of identifying and dividing consumers

into groups according to their purchasing behaviour.
49. Merger: The joining of two or more companies, organisations etc.
50. Mission Statement: A brief statement which sets out the activities and
objectives of a company or organisation.
51. Penetration Pricing: The practice of charging a low price for a new product
for a short period of time in order to establish a market share and attract
customers.
52. Price: The amount of money required to purchase something or to bribe

someone. The amount agreed upon between the buyer and seller in a
commercial transaction.
53. Price Control: Maximum and minimum price limitations, often during
periods of inflation, which a government puts on essential goods and/or
services.
147

54. Price Discrimination: The practice of a provider to charge different prices
for the same product to different customers.
55. Price Mechanism: Describes the way prices for goods and services are
influenced by the changes in supply and demand. Shortages cause a rise in
prices; surpluses cause a fall in prices.
56. Price Taker: A company or individual who’s selling or buying of goods and
services has little or no influence over prices.
57. Pricing: To evaluate the price of a product by taking into account the cost of
production, the price of similar competing products, market situation, etc.
58. Product Life Cycle: This refers to the (generally very usual and
unavoidable) stages that a product/service passes through from
invention/development to maturity to decline until it becomes obsolete,
usually because it has been superseded by competitive/replacement
offerings, and/or to a lesser degree the product/service has saturated the
market, i.e., everyone who wants it has purchased it. Product life cycle is
often shown as a graph of sales volumes or market-share over time.
59. Strategic intent: the firm’s internally focused definition of how the firm
intends to use its resources, capabilities, and core competencies to win
competitive battles.
148

60. Strategic Managers: the firm’s senior executives who are responsible for
overall management.
61. Strategic Meeting: bringing people from different departments or divisions

together to synchronise plans and objectives and to coordinate activities.
62. Strategic Mission: the firm’s externally focused definition of what it plans
to produce and market, utilising its internally based core competence.
63. Strategising: the management skills of focusing on the firm’s key objectives
and on the internal and external environments and responding in an
appropriate and timely fashion.
64. Strategy formulation: the design of an approach to achieve the firm’s

fashion.
65. Tactical decisions: decisions that have a short- term perspective of one year
or less and focus on subunits of the organisation such as departments or
project teams.
66. Tactical Managers: the firm’s management staff who are responsible for
translating the general goals and plan developed by strategic managers into
specific objectives and activities.
149

67. Tactical Planning: Short to middle - range business planning that
addresses issues associated with the growth of current or new operations, as
well as with any specific problems that might disrupt the pace of planned
growth. Also known as operational planning.
68. Vertical Disintegration: A situation in which a company that previously
produced parts and materials is now buying them from other suppliers.
69. Vertical Integration: A situation in which a company acquires one or more

of the companies which are involved in the production or distribution
processes of its goods/services, for example a brewer which buys a pub
chain, or a clothing retailer which buys a knitwear factory.
Source: Business and Management Dictionary of Businessball.com and Concise

Dictionaryof Management Terms by Musa Kamawi, 2013.
150

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DISTANCE LEARNING CENTRE

AHMADU BELLO UNIVERSITY

Programme Title: Master in Business Administration

© 2018 Ahmadu Bello University (ABU) Zaria, Nigeria

First published 2018 in Nigeria.

Ahmadu Bello University e-Learning project,

2.0 Module 2 Strategy Formulation

3.0 Module 3 Strategy Implementation, Evaluation and Control

ii. COURSE INTRODUCTION AND DESCRIPTION

This course is charged with addressing three core objectives:

These objectives will be achieved through presentations, simulations and group

iii. COURSE PREREQUISITES

iv. COURSE LEARNING RESOURCES

vi. ACTIVITIES TO MEET COURSE OBJECTIVES

Specifically, this course shall comprise of the following activities:

vii. TIME (TO COMPLETE SYLABUS/COURSE)

B. Summative assessment (Semester examination)

C. Grading Scale (as appropriate for the course):

1 Study Session 1: 1. Read Courseware for the corresponding Study Session.

2 Study Session 2 1. Read Courseware for the corresponding Study Session.

13 Study Session 5 1. Read Courseware for the corresponding Study Session.

Week 16 & 17 SEMESTER EXAMINATION

MODULE 2: Strategy Formulation

MODULE 3: Strategy Implementation, Evaluation and Control

1.0 Study Session Learning Outcomes

During the next few decades, business policy as a course spread to

2.2 Concept of Business Policy

Business policy as defined by Christensen and others

It encourages, promotes and improves performance attainment in an

(1) A business policy represents the best thinking of the company

(2) The purpose of a business policy is to enable the management to

(4) A business policy is an implied overall guide, setting up boundaries

(5) A business policy is one, which focuses attention on the strategic

However, the main objectives of business policy are:

(b) Efficiency and effectiveness in carrying out the activities of the

(c) Adequate utilisation of resources.

Basically, business policy is considered as a capstone, integrative course

With the inability of these techniques to adequately emphasise the role of

Business policy and strategic management are

2.3 Strategic Management

Strategies are formulated at the corporate level,

Strategic management is defined as the dynamic process of formulation,

Strategic management is a set of managerial decisions and actions that

The study of strategic management, therefore, emphasises the monitoring

Strategic Management is all about

 Understanding how firms create,capture, and sustain

Ellen-Earle Chaffee(1985) summarised what she thought were the main

Strategic management involves adapting the organisation to its business

Strategic management is done at several levels: overall corporate

As a student of strategic management, you should know that the strategic-

(1) Strategy formulation: This includes developing a vision

(2)Strategy implementation: Strategy implementation is often called the

This is often considered to be the most difficult stage in strategic

Strategy implementation includes developing a strategy-supportive

Successful strategy implementation hinges upon managers’ ability to

(3)Strategy evaluation: is the final stage in strategic management.

(3) Taking corrective actions.

Strategy evaluation is needed because success today is no guarantee of

(E)Benefits of Strategic management

Strategic management emphasises long-term performance. Research

4. It minimises the effects of adverse conditions and changes.

7. It allows fewer resources and less time to be devoted to

12. It provides a cooperative, integrated, and enthusiastic approach to