Global Strategy & Leadership
Edition 2, Sem 1, 2020
MODULE 1: Introduction to strategy and leadership
Part A: Introducing strategy and leadership 17
The evolution of strategy 17
Differentiating strategy from tactics 18
The emergence of strategy 20
Developing the strategy 21
Ethics in leadership 24
Approaches to strategy 26
Part B: Strategy process 28
Understanding the external environment—Module 2 28
Understanding the internal environment—Module 3 30
Strategic options in products and markets—Module 4 30
Strategic options, themes and implementing the final strategy—Modules 5 and 6 31
Leading the strategy—Module 7 31
Part C: Strategic thinking 32
Linking strategic thinking and strategic planning 33
Strategic fit and strategic stretch 33
Strategy equation 34
Part D: Levels of strategy 36
Corporate strategy 36
Business strategy 37
Functional strategy 37
Part E: The global context of business 38
Drivers of globalisation 39
Challenges of globalisation 42
Benefits of globalisation 45
Value of localisation 46
Part F: The role of the accountant in strategy development 46
The accountant as a strategic business driver 50
© Study Shortcut 2020
www.study-shortcut.com.au
,Global Strategy & Leadership
Edition 2, Sem 1, 2020
PART A: Introducing strategy and leadership p17
The evolution of strategy p17
Adam Smith – ‘invisible hand’: where self-interested behaviour self-regulated the market and was the core
developmental and structuring impetus of modern business.
Alfred Chandler – ‘visible hand: how capitalist function, administrative structure and managerial coordination
are the core developmental and structuring impetus of modern business.
Porter: firm’s profitability was determined by the characteristics of its industry and by its position in that
industry, and these factors determine the organisation’s overall strategy (be a low-cost producer, or
differentiate its products or offerings in a unique way that would allow it to command a higher profit margin.)
• Differentiation (Porter): A café starts up an app-based ordering and payment service
Other strategies:
• Market development: A menswear shop opens up a new store in a nearby shopping mall
• Operational effectiveness: A mortgage broker adopts a new online system for loan application process
Porter supports the rational approach to strategy (p26).
Mintzberg: strategy should be flexible, develop continuously and emerge from ‘intuition and creativity’.
Differentiating strategy from tactics (p18)
Overview Example
Tactics Operational effectiveness to A car insurer that improves its customer claims process saves
improve the performance of the customer time and the organisation money, which results in
activities an overall business improvement.
Short term improvement Note: would expect competitors to then take the same steps
Strategy Competitive strategy to A strategic move would be for the car insurer to start offering
transform the activities health insurance as well.
performed, so that they
This involves the car insurer entering into a new market, and
differ from rivals or are
differentiating itself from other traditional car insurers.
completed in a different
manner to standard practice Strategy is about ‘thinking outside the box’ and expanding into
in the market. new products and markets.
Long-term improvement
Efficient frontier – the curve on which the most efficient performers in the industry are placed
Although organisations are continually moving closer to the productivity frontier, simultaneously the
productivity frontier continues to be pushed out
The emergency of strategy (p20)
Strategy is the means by which senior management communicates the tasks of coordinating complex activities
towards the achievement of organisational goals.
Serves to legitimise the position and role of management and the direction which they take as an organisation
More important in a globalised economy – which creates a more complex operating environment
© Study Shortcut 2020
www.study-shortcut.com.au
,Global Strategy & Leadership
Edition 2, Sem 1, 2020
Developing the strategy (p21)
1. Strategic analysis: where are we today?
- Collect external and internal forms of data, including market and industry information and data
related to finance, competition and benchmarking (Modules 2 and 3)
- Undertake a detailed analysis of the external influences the affect the organisation’s performance
including industry, market and competition analysis (Module 2)
- Conduct diagnostic review of internal operations and current performance (Module 3)
- Analyse internal performance including using comparators from industry competitors (Module 3)
- Review existing product / service offerings and identify new / improvement opportunities
(Module 3)
2. Defining the future state: where are we going and by when?
- Identify the growth areas for the organisation, including new product development, innovation
and penetrating new markets (Module 4)
- Develop an overarching vision and supporting mission to drive the strategic direction of the
organisation (Module 5)
- Identify and agree on values are guiding principles (Module 5)
- Validate and agree on SMAR T goals to achieve vision and mission (Module 5)
3. Evaluating options and developing the plan: how are we going to get there?
- Develop and evaluate strategic drivers and options (Module 5)
- Identify and evaluation high-level strategic themes (Module 5)
- Senior management team to agree on strategic direction, options and themes from the data
collected to date (Module 5)
- Develop the detailed strategic plan (Module 5)
- Define key performance measures for agreed strategies and agree on reporting mechanisms
(Module 5)
- Review and validate new model and identify and correct any gaps (Module 5)
4. Implementation: how do we implement the strategy?
- Design and develop detailed implementation plans and project briefs (Module 6)
- Implement the strategy (Module 6)
- Manage change (Module 6)
- Monitor implementation and performance (Module 6)
The role of leadership
Focus on influencing activity, rather than forcing action.
Leaders are required to be a part of each step of the strategy process:
- driving analysis;
- reviewing outcomes;
- determining the key aspects of the strategy;
- developing the plan; and
- implementing the strategy.
Ethics in leadership (p24)
Corporate misconduct often results from the failure of leaders to establish and enforce ethical compliance
with their organisations operating procedures.
Ethical issues often arise in situations where people have power and influence over others, and for this reason,
leadership and ethics are closely linked.
© Study Shortcut 2020
www.study-shortcut.com.au
,Global Strategy & Leadership
Edition 2, Sem 1, 2020
Ethics and morals guide leaders, while rules and laws can restrict their behaviour and ensure they act
appropriately.
Classical view The primary obligation of senior management is to provide a return on investment to the
of ethics (p25) owners of the organisation for which they work.
Milton The only social responsibility of the organisation is to utilise its resources and engage in
Friedman profit-maximising activities, as long as those activities are conducted without fraud or
deception. Other types of social responsibility will incur costs / refocus the firm and may
reduce productivity and profits.
Argues that in pursuit of economic efficiency – wellbeing can be maximised
Socioeconomic Leaders of organisations have a responsibility to the society that creates and sustains
view of ethics them.
Ferrell & Organisations have significant economic and social power – in return for granting
Fraedrich organisations a separate legal entity, society is entitled to expect from them a significant
net positive contribution to the general good
© Study Shortcut 2020
www.study-shortcut.com.au
, Global Strategy & Leadership
Edition 2, Sem 1, 2020
Approaches to strategy p26
Rational approach
Based on a linear and mechanistic model, in which the conception and execution of strategy are treated as
discrete sequential activities.
Necessary to consider the vision, missions, values and goals of the organisation – as this helps understand how
to move the organisation from its current state (using all the resources available) to a more desirable future
state (including one that fits with the organisation’s longer term aspirations).
Key features:
- Senior management involved
- An organised plan (external focus: market positioning; internal focus: how to achieve success)
- Formed by managers who are able to observe and analyse their business
- Long process of analysis and goal setting
- Separated stages
1. Context analysis
Analysis of an organisation’s situation, its external environment and its internal resources and capabilities. A
range of ‘rational’ and ‘objective’ tools and techniques are employed in this process. This is discussed in
Modules 2 and 3.
2. Customer value
The establishment of clear strategic vision, mission, values and goals. This is discussed in Module 5.
3. Vision, mission, values, goals
The generation of strategic options that are evaluated and chosen on the basis of their potential to optimise
the achievement of the established goals. This is discussed in Modules 4 and 5.
4. Implement strategic options
Implementation of the chosen strategic option, which is usually expressed in a strategic plan. This is
discussed in Module 6.
Michael Porter’s (1980) ‘five forces’ model of competition is an exemplar of the rational approach.
Examples of a rational approach:
- Board reaffirms each year that its mission is to provide X and its key strategic objective is to
increase shareholder wealth
- Strategy committee meets to discuss strategic options for the company and then make
recommendations to the board
- Annual budget is set each year within the framework of a five year plan
Criticisms:
- long process of analysis and goal setting, once formulated was filed away and not implemented
because too busy with day to day operations
- Events are reduced to linear cause and effect relationship that does not capture enough of what
is going on in a changing organisational world.
© Study Shortcut 2020
www.study-shortcut.com.au
Edition 2, Sem 1, 2020
MODULE 1: Introduction to strategy and leadership
Part A: Introducing strategy and leadership 17
The evolution of strategy 17
Differentiating strategy from tactics 18
The emergence of strategy 20
Developing the strategy 21
Ethics in leadership 24
Approaches to strategy 26
Part B: Strategy process 28
Understanding the external environment—Module 2 28
Understanding the internal environment—Module 3 30
Strategic options in products and markets—Module 4 30
Strategic options, themes and implementing the final strategy—Modules 5 and 6 31
Leading the strategy—Module 7 31
Part C: Strategic thinking 32
Linking strategic thinking and strategic planning 33
Strategic fit and strategic stretch 33
Strategy equation 34
Part D: Levels of strategy 36
Corporate strategy 36
Business strategy 37
Functional strategy 37
Part E: The global context of business 38
Drivers of globalisation 39
Challenges of globalisation 42
Benefits of globalisation 45
Value of localisation 46
Part F: The role of the accountant in strategy development 46
The accountant as a strategic business driver 50
© Study Shortcut 2020
www.study-shortcut.com.au
,Global Strategy & Leadership
Edition 2, Sem 1, 2020
PART A: Introducing strategy and leadership p17
The evolution of strategy p17
Adam Smith – ‘invisible hand’: where self-interested behaviour self-regulated the market and was the core
developmental and structuring impetus of modern business.
Alfred Chandler – ‘visible hand: how capitalist function, administrative structure and managerial coordination
are the core developmental and structuring impetus of modern business.
Porter: firm’s profitability was determined by the characteristics of its industry and by its position in that
industry, and these factors determine the organisation’s overall strategy (be a low-cost producer, or
differentiate its products or offerings in a unique way that would allow it to command a higher profit margin.)
• Differentiation (Porter): A café starts up an app-based ordering and payment service
Other strategies:
• Market development: A menswear shop opens up a new store in a nearby shopping mall
• Operational effectiveness: A mortgage broker adopts a new online system for loan application process
Porter supports the rational approach to strategy (p26).
Mintzberg: strategy should be flexible, develop continuously and emerge from ‘intuition and creativity’.
Differentiating strategy from tactics (p18)
Overview Example
Tactics Operational effectiveness to A car insurer that improves its customer claims process saves
improve the performance of the customer time and the organisation money, which results in
activities an overall business improvement.
Short term improvement Note: would expect competitors to then take the same steps
Strategy Competitive strategy to A strategic move would be for the car insurer to start offering
transform the activities health insurance as well.
performed, so that they
This involves the car insurer entering into a new market, and
differ from rivals or are
differentiating itself from other traditional car insurers.
completed in a different
manner to standard practice Strategy is about ‘thinking outside the box’ and expanding into
in the market. new products and markets.
Long-term improvement
Efficient frontier – the curve on which the most efficient performers in the industry are placed
Although organisations are continually moving closer to the productivity frontier, simultaneously the
productivity frontier continues to be pushed out
The emergency of strategy (p20)
Strategy is the means by which senior management communicates the tasks of coordinating complex activities
towards the achievement of organisational goals.
Serves to legitimise the position and role of management and the direction which they take as an organisation
More important in a globalised economy – which creates a more complex operating environment
© Study Shortcut 2020
www.study-shortcut.com.au
,Global Strategy & Leadership
Edition 2, Sem 1, 2020
Developing the strategy (p21)
1. Strategic analysis: where are we today?
- Collect external and internal forms of data, including market and industry information and data
related to finance, competition and benchmarking (Modules 2 and 3)
- Undertake a detailed analysis of the external influences the affect the organisation’s performance
including industry, market and competition analysis (Module 2)
- Conduct diagnostic review of internal operations and current performance (Module 3)
- Analyse internal performance including using comparators from industry competitors (Module 3)
- Review existing product / service offerings and identify new / improvement opportunities
(Module 3)
2. Defining the future state: where are we going and by when?
- Identify the growth areas for the organisation, including new product development, innovation
and penetrating new markets (Module 4)
- Develop an overarching vision and supporting mission to drive the strategic direction of the
organisation (Module 5)
- Identify and agree on values are guiding principles (Module 5)
- Validate and agree on SMAR T goals to achieve vision and mission (Module 5)
3. Evaluating options and developing the plan: how are we going to get there?
- Develop and evaluate strategic drivers and options (Module 5)
- Identify and evaluation high-level strategic themes (Module 5)
- Senior management team to agree on strategic direction, options and themes from the data
collected to date (Module 5)
- Develop the detailed strategic plan (Module 5)
- Define key performance measures for agreed strategies and agree on reporting mechanisms
(Module 5)
- Review and validate new model and identify and correct any gaps (Module 5)
4. Implementation: how do we implement the strategy?
- Design and develop detailed implementation plans and project briefs (Module 6)
- Implement the strategy (Module 6)
- Manage change (Module 6)
- Monitor implementation and performance (Module 6)
The role of leadership
Focus on influencing activity, rather than forcing action.
Leaders are required to be a part of each step of the strategy process:
- driving analysis;
- reviewing outcomes;
- determining the key aspects of the strategy;
- developing the plan; and
- implementing the strategy.
Ethics in leadership (p24)
Corporate misconduct often results from the failure of leaders to establish and enforce ethical compliance
with their organisations operating procedures.
Ethical issues often arise in situations where people have power and influence over others, and for this reason,
leadership and ethics are closely linked.
© Study Shortcut 2020
www.study-shortcut.com.au
,Global Strategy & Leadership
Edition 2, Sem 1, 2020
Ethics and morals guide leaders, while rules and laws can restrict their behaviour and ensure they act
appropriately.
Classical view The primary obligation of senior management is to provide a return on investment to the
of ethics (p25) owners of the organisation for which they work.
Milton The only social responsibility of the organisation is to utilise its resources and engage in
Friedman profit-maximising activities, as long as those activities are conducted without fraud or
deception. Other types of social responsibility will incur costs / refocus the firm and may
reduce productivity and profits.
Argues that in pursuit of economic efficiency – wellbeing can be maximised
Socioeconomic Leaders of organisations have a responsibility to the society that creates and sustains
view of ethics them.
Ferrell & Organisations have significant economic and social power – in return for granting
Fraedrich organisations a separate legal entity, society is entitled to expect from them a significant
net positive contribution to the general good
© Study Shortcut 2020
www.study-shortcut.com.au
, Global Strategy & Leadership
Edition 2, Sem 1, 2020
Approaches to strategy p26
Rational approach
Based on a linear and mechanistic model, in which the conception and execution of strategy are treated as
discrete sequential activities.
Necessary to consider the vision, missions, values and goals of the organisation – as this helps understand how
to move the organisation from its current state (using all the resources available) to a more desirable future
state (including one that fits with the organisation’s longer term aspirations).
Key features:
- Senior management involved
- An organised plan (external focus: market positioning; internal focus: how to achieve success)
- Formed by managers who are able to observe and analyse their business
- Long process of analysis and goal setting
- Separated stages
1. Context analysis
Analysis of an organisation’s situation, its external environment and its internal resources and capabilities. A
range of ‘rational’ and ‘objective’ tools and techniques are employed in this process. This is discussed in
Modules 2 and 3.
2. Customer value
The establishment of clear strategic vision, mission, values and goals. This is discussed in Module 5.
3. Vision, mission, values, goals
The generation of strategic options that are evaluated and chosen on the basis of their potential to optimise
the achievement of the established goals. This is discussed in Modules 4 and 5.
4. Implement strategic options
Implementation of the chosen strategic option, which is usually expressed in a strategic plan. This is
discussed in Module 6.
Michael Porter’s (1980) ‘five forces’ model of competition is an exemplar of the rational approach.
Examples of a rational approach:
- Board reaffirms each year that its mission is to provide X and its key strategic objective is to
increase shareholder wealth
- Strategy committee meets to discuss strategic options for the company and then make
recommendations to the board
- Annual budget is set each year within the framework of a five year plan
Criticisms:
- long process of analysis and goal setting, once formulated was filed away and not implemented
because too busy with day to day operations
- Events are reduced to linear cause and effect relationship that does not capture enough of what
is going on in a changing organisational world.
© Study Shortcut 2020
www.study-shortcut.com.au
