E3 - Enterprise Strategy



Paper E3 continues the integration of skills across functions, but concentrates on developing the knowledge and skills used in designing and implementing strategy.

Strategy is developed in a context. Understanding how an organisation's external environment and stakeholders affect strategy development is important.

This paper requires application of tools to assist in the evaluation of the performance implications of a given strategy.

Note: This paper forms part of the strategic level. However, material included in any of the papers within the operational or management levels may also be relevant for the purposes of assessment.

Learning outcomes - on completion of their studies students should be able to:

Lead:
1. evaluate the key external factors affecting an organisation's strategy.

Component:
(a) evaluate the impact and influence of the external environment on an organisation and its strategy
(b) recommend approaches to business/government relations and to relations with civil society
(c) discuss the drivers of external demands for corporate social responsibility and the organisation's response
(d) recommend how to manage relationships with stakeholders
(e) recommend how to interact with suppliers and customers

Indicative syllabus content:

• non market strategy and forms of corporate political activity
• external demands for responsible business practices and ways to respond to these
• stakeholder management (stakeholders to include government and regulatory agencies, non-governmental organisations and civil society, industry associations, customers and      suppliers)
• the customer portfolio: customer analysis and behaviour, including the marketing audit and customer profitability analysis as well as customer retention and loyalty
• strategic supply chain management
• implications of these interactions for chartered management accountants and the management accounting system.

Lead:
2. evaluate the impact of information systems on an organisation.

Component:
(a) evaluate the impact of the internet on an organisation and its strategy
(b) evaluate the strategic and competitive impact of information systems.

Indicative syllabus content:

• the impact of IT (including the internet) on an organisation (utilising frameworks such as Porter's five forces and the value chain)
• competing through exploiting information (rather than technology), e.g. use of databases to identify potential customers or market segments, and the management of data (warehousing and mining)
• contemporary developments in the commercial use of the internet (eg web 2.0)

Learning outcomes - on completion of their studies students should be able to:

Lead:
1. advise on important elements in the change process.

Component:
(a) discuss the concept of organisational change.
(b) recommend techniques to manage resistance to change.

Indicative syllabus content:

• external and internal change triggers (eg environmental factors, mergers and acquisitions, re organisation and rationalisation)
• stage models of change
• problem identification as a precursor to change
• cultural processes of change, i.e. change within the context of the whole firm

Lead:
2. evaluate tools and methods for successfully implementing a change programme.

Component:
(a) evaluate approaches to managing change
(b) compare and contrast continuous and discontinuous change
(c) evaluate tools, techniques and strategies for managing the change process
(d) evaluate the role of leadership in managing the change process.

Indicative syllabus content:

• the importance of managing critical periods of discontinuous change
• tools, techniques and models associated with organisational change
• approaches, styles and strategies of change management
• importance of adaptation and continuous change
• leading change

Lead:
3. recommend change management processes in support of strategy implementation.

Component:
(a) evaluate the role of change management in the context of strategy implementation
(b) evaluate ethical issues and their resolution in the context of organisational change.

Indicative syllabus content:

• change management and its role in the successful implementation of strategy
• the advantages and disadvantages of different styles of management on the successful implementation of strategy
• group formation within organisation and its impact on change processes within organisations
• business ethics in general and the CIMA code of ethics for professional accountants (parts A and B) in the context of implementation of strategic plans

Learning outcomes - on completion of their studies students should be able to:

Lead:
1. evaluate the process of strategy development.

Component:
(a) evaluate the process of strategy formulation
(b) evaluate strategic options
(c) evaluate different organisational structures
(d) discuss the role and responsibilities of directors in the strategy development process.

Indicative syllabus content:

• mission statements and their use in orientating an organisation's strategy
• the process of strategy formulation
• the identification and evaluation of strategic options
• strategic options generation (e.g. using Ansoff's product/market matrix and Porter's generic strategies)
• real options as a tool for strategic analysis (note: complex numerical questions will not be set)
• scenario planning and long range planning as tools in strategic decision making
• game theoretic approaches to strategic planning and decision making (note: complex numerical questions will not be set)
• acquisition, divestment, rationalisation and relocation strategies and their place in the strategic plan
• the relationship between strategy and organisational structure
• the role and responsibilities of directors in making strategic decisions (including issues of due diligence and fiduciary responsibilities)

Lead:
2. evaluate tools and techniques used in strategy formulation.

Component:
(a) evaluate strategic analysis tools
(b) recommend appropriate changes to the product portfolio of an organisation to support the organisation's strategic goals
(c) produce an organisation's value chain
(d) discuss both qualitative and quantitative techniques in the support of the strategic decision making function.

Indicative syllabus content:

• audit of resources and the analysis of this for use in strategic decision making
• forecasting and the various techniques used: trend analysis, system modelling and in depth consultation with experts (Delphi method)
• management of the product portfolio
• value chain analysis
• strategic decision making processes