Discussion

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) Dyer Chapter 4 (Cost Advantage)

Let’s discuss this chapter! Here are some tasks to get you started (pick one or two and jump in):

  • Pick a key terms on pg. 76 (preferably a term that someone else hasn’t already picked; note that page numbers are from the print version of the text) and defined it (in your own words), then explain why it’s important to corporate strategy
  • Pick a review question on pg. 76 (preferably a question that someone else hasn’t already picked), and answer it, then comment on a question that someone else has answered

A couple thought questions:

Isn’t the message of this chapter basically that the biggest company wins? Why or why not?

Why does this chapter treat labor inputs (see pg. 80) as equivalent to material inputs? If a company figures out how to make product X using less steel or less glass, assuming the end result has the same utility as the original product, then the company has created additional economic value, right? If a company leverages its bargaining power to force suppliers of steel or glass to lower their prices, has it created any economic value? If is does the same with respect to labor, has it created any economic value?

Here’s a concrete example. Company A makes product X and it sells for $10. Because this company has a captive work force (it’s the largest employer in a small town), it is able to lower wages. It uses labor savings to lower the price of product X to $9. Has the company created any additional economic value?

2) Dyer Chapter 5 (Differentiation Advantage)

You can address any/all of these questions or any/all of the review questions on pg. 95:

  • The textbook uses Facebook as a “differentiation” story. Wouldn’t this same “story” apply no matter which company had succeeded (since theyre all different, MySpace, Friendster, etc.)? If that’s true, then what’s the point? Is Facebook’s success really an example of successful differentiation? Why isn’t the rise of Facebook better explained by network externalities?
  • How are economic markets are supposed to work if every product is differentiated? Properly functioning economic markets are supposed to deliver allocative and productive efficiency, and they’re supposed to maximize social surplus. Will markets comprised of differentiated products deliver these outcomes? Why or why not? What does the Walters chapter say is necessary if markets are to function properly? Why is this question important?
  • When does marketing become lying?
  • What does it mean to “hire” a product to do a “job” for you? Is this a useful perspective? Why or why not?
  • What does it mean to map the consumption chain?

3) Dyer Chapter 6 (Corporate Strategy)

You can address any of these questions (or any of the review questions on pg. 114):

  • Explain the different levels of diversification.
  • Explain what it means to create economic value. Explain what it means to add value through diversification (see Figure 6.1). Are these two things the same? Is one a subset of the other? If I’m a shareholder of two different companies, why might I want them to merge?
  • What are the six Ss ?
  • Can value be added in the same way regardless of the type of diversification? Or are there better ways to add value depending on the type of diversification involved?
  • What does it mean to destroy economic value? Give you provide a specific example?
  • What are the methods of diversification?

4) CSR text, Chapter 1 (What is CSR?)

From the book (Review Questions):

  • A convenient marker for the start of the modern CSR era is the publication of Bowens book, Social Responsibilities of the Businessman. What questions did Bowen ask in this book? Why are these questions still relevant today?
  • How is CSR different from Adam Smiths concept of the invisible hand? Why is this important?
  • Based on the definitions of CSR in the chapterincluding the authors definitionwhat do you believe are the essential elements of CSR? Why?
  • Describe some of the CSR programs or activities you discovered on the websites of the company listed in Table 1.
  • Briefly describe the Concentric Circle Model of CSR and the CSR Pyramid. Explain how these models inappropriately compartmentalize economic, legal, and ethical considerations.
  • List and briefly describe the CSR-related terms highlighted in the text: sustainability, corporate citizenship, corporate social performance, philanthropy, stakeholder theory, and systems theory.

Here’s a couple big picture questions: What does CSR have to do with economic value (from our first discussion in Module 2)? What does (or should) CSR have to do with corporate strategy?