MNG301A/201/1/2012

Tutorial Letter 201/1/2012

Strategic Planning

MNG301A Semester 1
Department of Business Management
This tutorial letter contains important information about your module.

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CONTENTS 1 2 3 Introduction Feedback for Assignment 01 (Unique number: 888137) Closing remarks

Dear Student

INTRODUCTION

This tutorial letter provides feedback on Assignment 01, one of the two compulsory assignments. You need to study the contents of this tutorial letter carefully because it will provide you with valuable insight and assist you with your examination preparation. This assignment consisted of 20 multiple-choice questions. Assignments 03 and 04 are self-evaluation assignments. Therefore, you do not need to hand in these assignments. However, consider these assignments as vital learning opportunities. The evaluation of your answers will give you an indication of your level of understanding of the outcomes thus far.

FEEDBACK ON ASSIGNMENT 01

This assignment covered the contents of chapters 1 to 4 in your prescribed book. NB: As communicated previously, see page 24 of Tutorial Letter 101: The options for question 12 should read (1, 2, 3, 4) and NOT (2, 3, 4, 5). Question 1 Option 3 is the correct answer. In strategic management, resources are allocated in such a way that they maximise wealth for all stakeholders. Also see Ehlers and Lazenby (2010:3).

Question 2 Option 2 is the correct answer. Business-level strategy is more concerned with developing and sustaining a competitive advantage for the goods and services that are produced. It is strategy for competing against competitors within a particular industry. Also see Bhoya and Crafford (2010:12).

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Question 3 Option 2 is the correct answer. Being in a success groove means that managers become overconfident. For this reason it is suggested that managers should guard against getting stuck in a success groove. Todays success is no guarantee of tomorrows competitive advantage. Organisations are essentially blind to change as they fail to foresee future difficulties and, therefore, do not see strategic management as necessary. Also see Ehlers and Lazenby (2010:13) Question 4 Option 3 is the correct answer. Strategic planning (the thinking part) generally takes place at top management level, whilst strategy implementation (the action part) takes place at lower levels in the organisation. It is important to clarify the chain of implementation from the top to the bottom to ensure that everybody is certain of their role in the strategy implementation and strategic management efforts. However, due to poorly communicated plans and/or goals that are not clearly formulated, implementers are not always sure why or how to implement plans. Also see Ehlers and Lazenby (2010:13). Question 5 Option 3 is the correct answer. A strategic leader must be able to think strategically, develop a purpose or envision a future for an organisation, and initiate change. He or she must also be able to work with others to create change. Also see Ehlers and Lazenby (2010: 59). Question 6 Option 1 is the correct answer. Strategic leaders are generally entrusted to move the organisation towards an ideal future. Also see Ehlers and Lazenby (2010:61). Question 7 Option 3 is the correct answer. Strategic leaders should view human capital as a critical resource on which many core competencies are built. Also see Ehlers and Lazenby (2010:61).

Question 8 Option 4 is the correct answer. The vision statement focuses on a desirable or ideal (dream) future. It serves as a roadmap and enduring promise. Also see Ehlers and Lazenby (2010:68). Question 9 Option 2 is the correct answer. This means that an organisation is required to take ownership of the consequences of its business activities at an economic, social and environmental level. Also see Ehlers and Lazenby (2010:88). Question 10 Option 4 is the correct answer. As a contemporary concept, the triple bottom line measures corporate sustainability performance by measuring the economic, social and environmental impacts of an organisation. Also see Ehlers and Lazenby (2010:89). Question 11 Option 4 is the correct answer. With regard to the agency problem, shareholders are considered to be principal stakeholders given that they are the providers of capital and that they assign the managers to act on their behalf. Also see Ehlers and Lazenby (2010: 90). Question 12 Option 2 is the correct answer. Corporate governance is concerned with a board of directors of a company striking a balance between economic and social goals, and between individual and communal goals, whilst aiming to align the interests of individuals, organisations and society as closely as possible. Also see Ehlers and Lazenby (2010:90). Question 13 Option 1 is the correct answer. Discipline, fairness, accountability, transparency, responsibility, social responsibility and independence are the characteristics of good corporate governance. Also see Ehlers and Lazenby (2010: 96).

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Question 14 Option 3 is the correct answer. According to the King III report, a risk-based approach must be in place to alert the organisation to the dangers of unsustainable business practices. This should by no means be a mere legal compliance. Also see Ehlers and Lazenby (2010: 97). Question 15 Option 3 is the correct answer. When performing an internal environmental analysis, an organisation is viewed as a bundle of resources, core capabilities and competencies. Competencies largely include expertise, experiences and unique attributes which the organisation possesses. Also see Ehlers and Lazenby (2010: 110). Question 16 Option 2 is the correct answer. The retirement of two long-serving executives could be regarded as weakness for the organisation given that their skills and experiences could be difficult to replace. Tacit knowledge is viewed as the most important strategic resource of an organisation. Also see Ehlers and Lazenby (2010: 111-114). Question 17 Option 3 is the correct answer. The low increase in administration expenses could be regarded as strength of the organisations financial controls which require a meticulous approach by all those involved. Also see Ehlers and Lazenby (2010: 111-114). Question 18 Option 1 is the correct answer. An investigation initiated into major South African supermarket chains by the Competition Commission is a threat for Spar. Should the Competition Commission find any wrongdoing within the retail industry, harsher trading laws could be introduced which could affect the way Spar does business. More controls also lead to increased costs associated with implementing such controls. Also see Ehlers and Lazenby (2010: 111-114).

Question 19 Option 3 is the correct answer. The cash generation, which is expected to improve/reduce capital expenditure, is deemed to be an opportunity for Spar. This is likely to help Spar to invest in its expansion programmes. Also see Ehlers and Lazenby (2010: 111-114). Question 20 Option 2 is the correct answer. Pressured consumer spending is deemed to be a threat for Spar. This is likely to prevent Spar from realising its set targets in the future financial years unless mitigation measures are put in place. Also see Ehlers and Lazenby (2010: 111-114).

Bibliography Ehlers, MB & Lazenby, JA (eds). 2010. Strategic management: Southern African concepts and cases. 3rd edition. Pretoria: Van Schaik. Bhoya, SK and Crafford, F. 2010. Strategy planning: study guide for MNG301A. Pretoria: University of South Africa.

CLOSING REMARKS

It is vital to review the feedback in this tutorial letter and compare it with your answers and we strongly urge you to make a concerted effort in that regard. Furthermore, as part of your preparation for the examination, you can incorporate the feedback provided into the material in your prescribed book and study guide. Remember, your efforts in this regard will assist you in your preparation for the final examination.

You are welcome to contact us should you have any queries.

Wishing you every success in your studies!

Kind regards

Ms NV Moraka Mr SK Bhoya Department of Business Management Unisa