COURSE NUMBER:  MBA296.1
This course is dual-listed with the Evening & Weekend MBA Program.

COURSE TITLE:  Corporate Level Strategy: Principles and Practices

UNITS OF CREDIT:  2

INSTRUCTOR:  Dan Simpson

E-MAIL ADDRESS:  dsimpson at berkeley dot edu

CLASS WEB PAGE LOCATION:  bCourses

MEETING DAY(S) / TIME:  Monday evenings 6:05PM to 9:30PM.  The class will meet 10 weeks during the 15-week semester, beginning Monday, January 25, 2016.  Specific dates to be determined, based on availability of the external guests.

PREREQUISITE(S):  Completion of the core strategy course.  Exceptions require permission of instructor.

CLASS FORMAT:
Case Discussions – This is largely a case-based course.  Some cases (Cargill, Eli Lilly, Dell and 3M) are discussed in a single class session, before or after the break.  Some cases are discussed in pairs over two or more classes (Apple versus Alphabet/Google, Danaher versus Clorox, The Mayo Clinic versus Kaiser Permanente, HP versus eBay), where the key lessons are embedded in the similarities and differences between the firms.  

Classroom dialog will be managed in much the same way a CEO manages senior leadership team meetings: We will dive into the issues without any case set-up, we’ll debate and learn from each other (me included!), and you should be prepared to respond, at any time, to the question “so what is your view?”

Deep Dive Case – Classes 5 and 6 are devoted to a deep dive into lessons from the 35-year history of corporate strategy at General Electric, under two CEOs – Jack Welch and Jeff Immelt.  An experienced GE leader will co-teach those classes.

Practitioner Guests – We will have a several other senior-level practitioners join various classes (live or via videoconference) to push forward our collective thinking on the case / topic for that day.

Short lectures, brief discussions of assigned articles and book chapters, and role-plays are also part of the class format.

REQUIRED READINGS: Course reader (cases, articles, and book chapters), plus posted articles on bCourses (some of which update cases with current information).  There is no textbook, but this is a reading intensive course.

BASIS FOR FINAL GRADE:  Your grade will be a composite of three elements:
a) The quality of your contributions to class discussions. (30%)
b) The quality of ten mini-assignments [one per class] that are due no later than 11:59AM the Sunday before each class. (40%)
c) A final 10-slide PowerPoint deck that assesses the corporate strategy of a company of your choice. (30%).

Mini-assignments can range from a few short bullet points to a short paragraph or two, on a question that is central to the topic or case for the upcoming class.  There are no right or wrong answers.  Your grade is based on the clarity, uniqueness and strength of your argument.  Example assignment questions:

Class 2: Alphabet/Google – Do you think the new structure of the parent company is a good or bad move?  Why (1-3 bullet points)?  What are the most compelling arguments for the opposite point of view (1-3 bullet points)?

Class 4: Danaher – Is there a limit to the types of businesses that would fit in Danaher’s portfolio?  If yes, what are the characteristics of businesses you consider off strategy, and why (1-3 bullet points)?  If no, why do you believe Danaher can add value to almost any business (1-3 bullet points)?

You may work on the final 10-slide project alone or in teams of up to three people, recognizing that performance expectations for a team are higher than for an individual.  If working in a team, evaluation of your contribution by other team members will be part of your grade.  The deck will be submitted, not presented, so it needs to stand on its own (format and some training provided).

CAREER FIELD:  This course is designed for students whose career progression will lead to a leadership position in a multi-business enterprise, a job consulting to a multi-business enterprise, or for students who intend to sell a business to a multi-business enterprise.

ABSTRACT OF THE COURSE’S CONTENT AND OBJECTIVES:
This course is focused on the development and execution of the enterprise strategy for a firm that has multiple business units, each of them competing in their own markets or segments, and each competing for resources within the enterprise.  Such enterprises can range from a highly integrated corporation of closely related businesses (e.g. Clorox) to a “holding company” of more loosely related business (e.g. GE or a private equity firm). 

Learning Objectives – To enhance your skills in how:
1) a corporate parent can make smart choices about its portfolio of businesses.
2) to maximize ways a corporate parent adds value to the businesses in its portfolio, and minimize ways a parent destroys value in those businesses.
3) to clarify and balance different (sometimes conflicting) interests of various constituencies – internal and external.
4) to organize and manage the corporate entity in a way that maximizes long-term, total-enterprise value.

This is not a course in marketing strategy or competitive strategy.  Corporate strategy is the set of choices an enterprise makes to create value through ownership, configuration and coordination of activities across multiple businesses.  Except in the market for capital, multi-business enterprises do not compete.  They don’t create value in their own right; they only create value by improving the performance of the businesses in their portfolio.

The course will focus on the two key challenges in corporate strategy:

1) What is the portfolio strategy – in what businesses should the enterprise invest?
     This includes questions about buying and selling businesses, about diversifying into adjacent spaces, about entering new geographies or markets, about the degree of vertical integration, and about the level of resources (people and dollars) to commit to each of the businesses.  The central question in portfolio strategy is the “Ownership Test” – is the value added to each business greater than the cost of constraints the business unit incurs by being part of the parent company?

2) What is the “parenting” strategy – how should the group of businesses be managed?
     What capabilities does the corporate parent add to the businesses, and what should the capability development agenda be?  How should the organization be structured, how should the parent guide each unit, how should linkages and synergies between units be managed, and how should leaders be selected and guided?  What is the role of the corporate center – how does it add and destroy value, and how can it do more of the former than the latter?  The central question in parenting is the “Better Off Test” – is the competitive advantage of a business improved by being part of the parent company?

This course is very cross-functional and it will build not only on the core course in Strategy, but also on Economics for Decision Making, Intro to Finance, Marketing Management, Leading People, Applied Innovation, and PFPS.  Because there are separate, dedicated electives on global strategy, M&A, structure and incentives, and dynamic capabilities, this course will only touch on those subjects to the degree that they are relevant to enterprise-level strategy development and execution.

This is a highly analytical course, but it is not a quant course.  Issues are framed, tensions are identified and assessed, potential choices are illuminated, and views are formed with disciplined logic.  Sometimes numbers are critically important, and sometimes they just divert your attention from the real issues.  Figuring out what is signal and what is noise can be one of the tougher challenges.

Most courses are broken into discrete, bite-sized lessons, but this course is not.  A corporate strategy is an integrated set of choices around goals & aspirations, portfolio, resources, and organization.  Most sessions will dive more deeply into one element versus another, but all classes will take stock of the entire system.

You Will Probably Like This Course If:

• You want to improve your conceptual thinking skills in framing issues and creating options that address complex challenges with broad systemic effects.
• You want to improve your critical thinking skills in clarifying trade-offs and assessing choices that often have both positive and negative consequences simultaneously.
• You are interested in getting grounded in the theory and principles of corporate strategy, but going beyond them and thinking through practical issues of leading a multi-business enterprise as a practitioner.

This Course Is Not for You If:

• You prefer working on problems that have clear right or wrong answers and you struggle with ambiguity.
• You frame and solve most every problem using numbers.
• You want a course with a light reading load.
• You need fairly granular instructions that define specific tasks to be completed in specific ways.

MODIFICATIONS TO COURSE FROM ITS MOST RECENT OFFERING:  Based on very helpful feedback from last spring (the first time this course was taught), it has been shortened from 3 to 2 units; some elements have been eliminated; some new cases, readings and speakers have been added; and the pace will be faster.

BIOGRAPHICAL SKETCH:
Dan Simpson spent 34 years as an executive at The Clorox Company, a $6 billion manufacturer of consumer goods.  He most recently served as Vice President - Office of the Chairman, where he supported the CEO in the execution of his duties and also led work on innovation and partnership practices.  His previous role, held for 15 years, was head of corporate strategy, with responsibility for corporate strategy, strategic planning for business and functional units, and internal strategy consulting.  Prior assignments included positions in brand management, M&A, corporate finance, and new business ventures.

Dan was a founding member of the Corporate Strategy Board and the Bay Area Chief Strategy Officer Roundtable, was Chairman of the Conference Board Council of Strategic Planning Executives, and he has been a contributor to the McKinsey Quarterly.  He holds a B. S. from Northwestern University and an MBA from Kellogg.