INSTITUTE OF PROFESSIONAL STUDIES (IPS), LEGON DEGREE PROGRAMME ¢ END OF SECOND SEMESTER EXAMINATIONS- 2010/2011 LEVEL 400 PBBS 404: BUSINESS POLICY AND STRATEGY Date: 10TH MAY, 2011 TIME ALLOWED: 3 HOURS. INDEX NUMBER INSTRUCTION (S): ANSWER THREE (3) QUESTIONS IN ALL QUESTION ONE (1) AND ANY OTHER TWO (2) QUESTIONS (THIS PAPER IS 70% OF YOUR TOTAL ASSESSMENT) costed wit nitro”™ professional evel bennettBUSINESS POLICY AND STRATEGY LEVEL 4000 SEMESTER TWO QUESTION ONE CASE: ADEHYEMAN GOLD RESOURCES In January 2011, Matthew Barnor, MBA graduate and Chief Finance Officer of Adehyeman Gold Resources wrote a memo to his top managers arguing that ‘Adehyeman Gold Resources the diversified mining company was spreading its resources too thinly, like peanut butter on a slice of bread and as result is experiencing cash flow problems. Edited extracts from the memo follow: Adehyeman Gold Resources is an international mining company it claims a leading position in the mining industry on the basis of ‘large, long lived, geographically diverse assets and significant proven and probable reserves of copper, gold and molybdenum’. More specifically, in terms of its Indonesian operation it points to a ‘principal asset’ as the world’ class Grasberg mine discovered in 2007’ which has ‘the world’s largest copper reserve and work's largest single gold reserve’. ‘Three and half years ago, I enthusiastically joined Adehyeman Gold Resources; the magnitude of the opportunity was only matched by the magnitude of the assets. And an amazing team has been responsible for rebuilding Adehyeman Gold Resources. Limagine there's much discussion amongst the Company’s senior-most leadership around the challenges we face. At the risk of being redundant, I wanted to. share my take on our current situation and offer a recommended path forward, an. attempt to be part of the solution rather than part of the problem. We lack a focused, cohesive vision for our company. We want to do everything and be everything - to everyone. We've known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out, We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don’t talk to each other. And when we do talk, it isn’t to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics. I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the gold industry. The result: a thin year crested wth pl nitro’* professionalBUSINESS POLICY AND STRATEGY LEVI of investment spread across everything we do and thus we focus on nothing in particular. Thate peanut butter! The most painful manifestation of this is the massive redundancy that exists throughout Adehyeman. We now operate in an organizational structure - admittedly created with the best of intentions - that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs. There’s a reason why a centerfielder and a left fielder have clear areas of ownership. Pursuing the same ball repeatedly results in either collisions or dropped balls. Knowing that someone else is pursuing the ball and hoping to avoid that collision - we have become timid in our pursuit. Again, the ball drops. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis. We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos in Adehyeman Gold Resources. We have awesome assets: we have acquired the advanced stage of Gold Assets through the acquisition of The Tolon Mine Fields in the Western Region of Ghana. The Government of Ghana as a result of the oil find is taking steps to provide excellent road networking, power and a nearby local skilled workforce since the Western Region of Ghana is also a mining region. We are well located and nearly every mining company is painfully jealous of our position. If we get back up, embrace dramatic change, we will win. I don’t pretend there is only one path forward available to us. However, at a minimum, I want to be part of the solution and thus have outlined a plan here that I believe can provide Adehyeman with competitive advantage: [3] costed wit nitro” professionalBUSINESS POLICY AND STRATEGY LEVEL 4000 SEMESTER TWO. | emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly, We need to return more decision making to a new set of business units and their leadership. But we can’t achieve this with baby step changes. I love Adehyeman and I am proud to admit that I shaved an “A” to connote Adehyeman at the back of my head. My motivation for this memo is the adamant belief that, as before, we have a tremendous opportunity ahead. I don’t pretend that I have the only availably answers, but we need to get the discussion going; change is needed and it is needed soon. We can be a stronger and a faster mining company - a company with a clearer vision and clearer ownership and clearer accountability. We may have fallen down, but the race is a marathon and not a sprint. I don’t pretend that this will be easy. It will take courage, conviction, insight and tremendous commitment. I very much look forward to the challenge. So let's get back up, catch the balls and stop eating peanut butter. An Adaptation fom Sra Geringhouse's memo to Yahoo! managers, November 2006, Reprated in Wal Stet Jour, 16 November 2006. REQUIRED a. Why were the issues facing Adehyeman Gold Resources described as strategic? (1S Marks) b, Assume the position of a Business & Strategic Analyst; categorize the range of capabilities highlighted by Matthew Barnor in terms of Strategic Capability, Threshold Resources, and Threshold Competences and provide an appropriate definition and relevant examples in the cases for each category for Adehyeman Gold Resources. (15 Marks) c. What is strategic positioning and what are the elements within the context of Adehyeman that Matthew needs to consider for the strategic positioning of Adehyeman Gold Resources? (40 Marks) [Hint: you may need to consider the environment, strategic capability, culture and purpose and apply to the case]. [TOTAL = 40 MARKS] crested wih a nitro’ professional‘BUSINESS POLICY AND STRATEGY LEVEL 4000 SEMESTER TWO_ QUESTION TWO Experience shows that members of top management team have lots of good ideas about the kind of business their enterprise is in or would be in. Take the position of a policy analyst and corporate planner of any Ghanaian institution or firm, you are required to design a recommended approach to your CEO as to how to tap the ideas of top management team to accomplish stated objectives and targets and formulation of mission statements. Flowing from your design determine whether the mission statement is sound and justify whether the recommended approach to your CEO has all the characteristics of a sound mission statement. QUESTION THREE Commitment and implementation of objectives, strategies and policies within a reasonable accord with values and preferences of individuals within the organization. Select a Ghanaian firm and practically demonstrate how objectives, strategies and policies could be achieved. QUESTION FOUR Key Success Factors (KSFs) in and outside the enterprise are matched in order to identify strategic alternatives. State and explain how these alternatives can be compared for policy and strategic decision making. CHARLES BARNOR cred wih nitro’ professional