ACCA

Strategic Professional

Strategic
Business Leader
(SBL)

Revision Notes

For exams in September

2021, December 2021, March
2022 and June 2022
Fourth edition 2021
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Contents
Introduction
Helping you to pass iv
Introduction to the Essential reading v
Introduction to Strategic Business Leader (SBL) viii
Revision of essential skills areas to be successful in Strategic Business Leader (SBL) xv

Chapter 1: Strategy, leadership and culture 1

Chapter 2: Stakeholders and social responsibility 2
Chapter 3: Impact of corporate governance on strategy 3
Chapter 4: The external environment 4
Chapter 5: Strategic capability 5
Chapter 6: Competitive advantage and strategic choice 6
Chapter 7: Assessing and managing risk 8
Chapter 8: Internal control system 9
Chapter 9: Applying ethical principles 10
Chapter 10: Financial analysis 11
Chapter 11: Applications of IT 12
Chapter 12: E-business 14
Chapter 13: Enabling success and strategic change 15
Chapter 14: Process redesign 17
Chapter 15: Project management 18
Helping you to pass
BPP Learning Media – ACCA Approved Content Provider
As an ACCA Approved Content Provider, BPP Learning Media gives you the opportunity to use
study materials reviewed by the ACCA examining team. By incorporating the examining team’s
comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP
Learning Media Revision Notes provides excellent, ACCA-approved support for your studies.
These materials are reviewed by the ACCA examining team. The objective of the review is to
ensure that the material properly covers the syllabus and study guide outcomes, used by the
examining team in setting the exams, in the appropriate breadth and depth. The review does not
ensure that every eventuality, combination or application of examinable topics is addressed by
the ACCA Approved Content. Nor does the review comprise a detailed technical check of the
content as the Approved Content Provider has its own quality assurance processes in place in this
respect.
BPP Learning Media do everything possible to ensure the material is accurate and up to date
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The PER alert

Before you can qualify as an ACCA member, you not only have to pass all your exams but also
fulfil a three-year practical experience requirement (PER). To help you to recognise areas of the
syllabus that you might be able to apply in the workplace to achieve different performance
objectives, we have introduced the ‘PER alert’ feature (see the next section). You will find this
feature throughout the Revision Notes to remind you that what you are learning to pass your
ACCA exams is equally useful to the fulfilment of the PER requirement. Your achievement of the
PER should be recorded in your online My Experience record.

iv Strategic Business Leader (SBL)

Introduction to the Essential reading
The digital eBook version of the Revision Notes contains additional content, selected to enhance
your studies. Consisting of revision materials and further explanations of complex areas (including
illustrations and activities), it is designed to aid your understanding of key topics which are
covered in the main printed chapters of the Revision Notes.
To access the digital eBook version of the BPP Revision Notes, follow the instructions which can be
found on the inside cover; you’ll be able to access your eBook, plus download the BPP eBook
mobile app on multiple devices, including smartphones and tablets.
A summary of the content of the Essential reading is given below.

Chapter Summary of Essential reading content

1 Strategy, leadership • Leadership theories. This section explores in greater
and culture detail trait, behavioural, and contingency theories of
leadership.
• The role of culture. This section discusses the factors
that influence organisational culture and introduces
the organisational iceberg.

2 Stakeholders and • Agency problem. This section discusses the issues

social responsibility caused by the agency problem.
• The emergence of ecosystems. This section discusses
the emergence of ecosystem environments and how
organisations interact with stakeholders.
• Purpose and advantages of environmental reporting.

3 Impact of corporate • Institutional investors. This section focuses on

governance on institutional investors and considers how they exercise
strategy their influence and how they might intervene in the
affairs of a company.

4 The external • Porter’s Five Forces. This section provides more

environment detailed coverage of the Five Forces model.
• Market attractiveness. This section considers the
factors a firm should consider before deciding whether
to enter a market.

5 Strategic capability • Managing strategic capability. This section focuses on

how strategic capability can be improved.
• Staff development. This section focuses on the role
that staff development plays in relation to strategic
capability.
• Knowledge work. This section considers the increasing
importance of knowledge in organisations, and
introduces the ‘knowledge worker’ concept.
• Data, information and knowledge. This section
explores the key differences between the three terms.

6 Competitive • Conceptual difficulties with generic strategy. This

advantage and section considers some of the main difficulties of
strategic choice applying generic strategies.
• The seven Ps. This section provides greater coverage of
the seven Ps framework.

7 Assessing and • COSO’s Enterprise Risk Management - Integrating

managing risk with Strategy and Performance (2017). This section

Introduction v
 Chapter Summary of Essential reading content
explores how five connected components can
assist in managing risks across a whole enterprise.
• Significant rapid changes in risk. This section
considers the changes in risk that may affect an
organisation.

8 Internal control • Controls. This section considers the different types of

systems control that may be used by organisations.
• Reviewing internal control reports. This section outlines
the types of information that the board need to
consider to carry out an effective review of internal
controls.
• The internal audit team. This section explores the
types of work that may be undertaken by the internal
audit team.

9 Applying ethical • Possible fraud risks. This section highlights a number

principles of possible indicators of potential fraud.
• Bribery and corruption. This section highlights why
bribery and corruption can be particularly
problematic for organisations.
• Combating bribery and corruption. This section
explores some of ways that organisations can look to
address bribery and corruption.

10 Financial analysis • Investment appraisal techniques. This section

highlights the key features of the ROCE, payback
period, NPV and IRR methods of investment appraisal.
• Key financial ratios. This section should serve as a
reminder of the key financial ratios that exist.
• Variances. This section provides an overview of the
types of variances that exist and outlines their
meaning.

11 Applications of IT • Computerised accounting process controls. This

section explores the types of controls used by
organisations when operating computerised
accounting software.

12 E-business • Benefits and risks of e-procurement. This section

explores a number of benefits and risks associated
with adopting e-procurement.
• Ecosystems and digital business platforms. This
section explores concepts of mutuality and
orchestration in ecosystem environments, and also
gives consideration to the role of digital business
platforms.

13 Enabling success and • Team-based and project-based structures. This

strategic change section builds upon the discussion of matrix
structures.
• Collaborative working practices between
organisations and their customers. This section
introduces the concepts of crowdsourcing and user
contribution systems.

vi Strategic Business Leader (SBL)

Chapter Summary of Essential reading content
• Succession planning. This section focuses on the topic
of succession planning which is closely linked to talent
management.
• Creating a digital workforce. This section focuses on
the steps that an organisation can take to develop the
skills of its workforce in the digital age.

14 Process redesign • Business process re-engineering (BPR). This section

explores the key features of BPR.
• Lean production. This section explores the key
features of lean production. Parallels exist between the
principles of lean production and value-added
analysis.
• Workflow systems. This section explores the rise of
workflow systems.
• Process diagram. This section considers how the use
of process diagrams can be used when undertaking
process redesign.

15 Project management • Building the business case. This section highlights the
purpose of the business case and explores the key
features.
• Project benefits. This section provides greater
coverage of the different types of project benefit that
exist.
• Critical path analysis (CPA). This section provides
greater coverage of CPA.
• Data visualisation. This section considers the
important role that data visualisation plays in project
work.

Introduction vii
Introduction to Strategic Business Leader (SBL)
Overall aim of the syllabus
Strategic Business Leader is ACCA’s case study examination. It requires students to demonstrate
organisational leadership and senior consultancy or advisory capabilities and relevant
professional skills, through the context of an integrated case study.

Brought forward knowledge

The Strategic Business Leader syllabus assumes knowledge acquired in the ACCA exam
Accountant in Business, the Ethics and Professional Skills Module (EPSM), and the Applied Skills
exams.
This knowledge is developed and applied in Strategic Business Leader and is therefore vitally
important.
If it has been some time since you studied Accountant in Business or if you were exempted from
the Accountant in Business exam as a result of having a relevant degree, then we recommend that
you revise the following topics before you begin your SBL studies:

• Business organisations and their stakeholders

• The business environment
• Business organisation, structure and strategy
• Organisational culture and committees
• Corporate governance and social responsibility
• Control, security and audit
• Identifying and preventing fraud
• Leading and managing people
• Recruitment and selection
• Diversity and equal opportunities
• Individuals, groups and teams
• Motivating individuals and groups

The syllabus
The broad syllabus headings are:

A Leadership

B Governance

C Strategy

D Risk

E Technology and data analytics

F Organisational control and audit

G Finance in planning and decision-making

H Enabling success and change management

I Professional skills

J Other employability and digital skills

Main capabilities
On successful completion of this exam, you should be able to:

viii Strategic Business Leader (SBL)

 A Apply excellent leadership and ethical skills to set the ‘tone from the top’ and promote a
positive culture within the organisation, adopting a whole organisation perspective in
managing performance and value creation

B Evaluate the effectiveness of the governance and agency system of an organisation

and recognise the responsibility of the board or other agents towards their
stakeholders, including the organisation’s social responsibilities and the reporting
implications

C Evaluate the strategic position of the organisation against the external environment
and the availability of internal resources, to identify feasible strategic options

D Analyse the risk profile of the organisation and of any strategic options identified,
within a culture of responsible risk management

E Select and apply appropriate information technologies and data analytics, to analyse
factors affecting the organisation’s value chain to identify strategic opportunities and
implement strategic options within a framework of robust IT security controls

F Evaluate management reporting and internal control and audit systems to ensure
compliance and the achievement of organisation’s objectives and the safeguarding of
organisational assets

G Apply high level financial techniques from the Applied Skills exams in the planning,
implementation and evaluation of strategic options and actions

H Enable success through innovative thinking, applying best in class strategies and
disruptive technologies in the management of change; initiating, leading and
organising projects, while effectively managing talent and other business resources

I Apply a range of Professional Skills in addressing requirements within the Strategic

Business Leader examination and in preparation for, or to support, current work
experience

J Use computer technology to manipulate and effectively present data and information,
as would be required in the workplace.

Links with other exams

Strategic Business
Leader (SBL)

EPSM Module Applied Skills exams

Accountant in Business

The diagram shows where direct links exist between this exam and other exams preceding or
following it.
The Strategic Business Leader (SBL) syllabus assumes knowledge acquired in EPS Module, Applied
Skills exams, and Accountant in Business and develops and applies this further and in greater
depth.

Introduction ix
Achieving ACCA’s Study Guide Learning Outcomes
This BPP Revision Notes covers all the Strategic Business Leader (SBL) syllabus learning outcomes.
The tables below show in which chapter(s) each area of the syllabus is covered.

A Leadership

A1 Qualities of leadership Chapter 1

A2 Leadership and organisational culture Chapter 1

A3 Professionalism, ethical codes and the public interest Chapter 9

B Governance

B1 Agency Chapter 2

B2 Stakeholder analysis and social responsibility Chapter 2

B3 Governance scope and approaches Chapter 3

B4 Reporting to stakeholders Chapter 2

B5 The board of directors Chapter 3

B6 Public sector governance Chapter 3

C Strategy

C1 Concepts of strategy Chapter 1

C2 Environmental issues Chapter 4

C3 Competitive forces Chapters 4 and 5

C4 The internal resources, capabilities and competences of an Chapter 5

organisation

C5 Strategic choices Chapter 6

D Risk

D1 Identification, assessment and measurement of risk Chapter 7

D2 Managing, monitoring and mitigating risk Chapter 7

E Technology and data analytics

E1 Cloud, mobile and smart technology Chapter 11

E2 Big data and data analytics Chapter 11

E3 Machine learning, AI and robotics Chapter 11

E4 E-business: value chain Chapter 12

E5 IT systems security and control Chapter 11

x Strategic Business Leader (SBL)

F Organisational control and audit

F1 Management and internal control systems Chapter 8

F2 Audit and compliance Chapter 8

F3 Internal control and management reporting Chapter 8

G Finance in planning and decision-making

G1 Finance transformation Chapter 10

G2 Financial analysis and decision-making techniques Chapter 10

G3 Cost and management accounting Chapter 10

H Enabling success and change management

H1 Enabling success: organising Chapter 13

H2 Enabling success: disruptive technology Chapter 12

H3 Enabling success: talent management Chapter 13

H4 Enabling success: performance excellence Chapter 13

H5 Managing strategic change Chapter 13 and 14

H6 Leading and managing projects Chapter 15

I Professional skills

I1 Communication Throughout the Revision

Notes

I2 Commercial acumen Throughout the Revision

Notes

I3 Analysis Throughout the Revision

Notes

I4 Scepticism Throughout the Revision

Notes

I5 Evaluation Throughout the Revision

Notes

J Other employability and digital skills

J1 Use computer technology to efficiently access and Throughout the Revision

manipulate relevant information. Notes

J2 Work on relevant response options, using available Throughout the Revision

functions and technology, as would be required in the Notes
workplace.

J3 Navigate windows and computer screens to create and Throughout the Revision

Introduction xi
 amend responses to exam requirements, using the appropriate Notes
tools.

J4 Present data and information effectively, using the Throughout the Revision
appropriate tools. Notes

The complete syllabus and study guide can be found by visiting the exam resource finder on the
ACCA website: www.accaglobal.com/gb/en.html.

The exam
Computer-based exams
With effect from the March 2020 sitting, ACCA have commenced the launch of computer-based
exams (CBEs) for this exam with the aim of rolling out into all markets internationally over a short
period. Paper-based examinations (PBE) will be run in parallel while the CBEs are phased in. BPP
materials have been designed to support you, whichever exam option you choose. For more
information on these changes, when they will be implemented and to access Specimen Exams in
the Strategic Professional CBE software, please visit the ACCA website. Please note that the
Strategic Professional CBE software has more functionality than you will have seen in the Applied
Skills exams.
www.accaglobal.com/gb/en/student/exam-support-resources/strategic-professional-specimen-
exams-cbe.html

Approach to examining the syllabus

Strategic Business Leader is ACCA’s case study examination and is examined as a closed book
exam of four hours, including reading, planning and reflection time which can be used flexibly
within the examination. There is no pre-seen information and all exam-related materials, including
case information, exhibits and questions, are available within the examination. The pass mark is
50%.
Strategic Business Leader is an exam based on one main business scenario which involves
candidates completing a series of tasks many of which will integrate syllabus areas in a single
requirement.
All questions are compulsory and each examination will contain a total of 80 technical marks and
20 professional skills marks. Each exam will therefore assess both technical skills and the
professional skills. Whilst marks will be awarded for the relevant technical points that candidates
make, up to 20% of the total marks within each exam will be allocated to these professional skills,
as determined by the task requirements.
The broad structure of each case will give candidates information about an organisation from a
range of sources, such as the following:
• Interviews with staff
• Survey results
• Board or organisation reports
• Press articles/website extracts
• Organisation reports and <IR> extracts
• Emails
• Memos
• Spreadsheets
• Pictures
• Figures
• Tables
The Strategic Business Leader exam will contain several task requirements relating to the same
scenario information. The number of task requirements can vary in each exam. The questions will
usually assess and link a range of subject areas across the syllabus. The exam will require
students to demonstrate high-level capabilities to understand the complexities of the case and

xii Strategic Business Leader (SBL)

evaluate, relate and apply the information in the case study to the task requirements. The
examining team have stressed the importance of reading the case in detail, taking notes as
appropriate and getting a feel for what the issues are. The exam will have a global focus and the
scenarios will not name real countries or geographical regions.

Format of the exam Marks

One compulsory case scenario, containing a number of task requirements

Application of syllabus (technical) knowledge marks 80

ACCA professional skills marks 20

100

Analysis of past exams

Specimen exam 2
*

Sept/Dec 2019
Mar/Jun 2019
Sept 2018

Dec 2018

Mar 2020
1 Agency (agency Q1(a) - Q3(a)
relationships)

12 Big data and data Q4 Q4(a) -

analytics

3 Board structures Q1(b) - Q3(c)

15 Business cases Q5(a) -

13 Change management - - - - - Q3(b)

3 Corporate governance Q3(c) - Q3(c)

11 Cybersecurity Q3(b) -

12 Disruptive technology Q3(a) -

4 Environmental analysis Q1(a) -

(PEST analysis)

9 Ethics Q3(a) Q2(b) - Q1(c)

12 E-marketing - - - - - Q2(b)

10 Financial analysis Q1 Q5(a)(b) Q1(b) Q2(a)

10 Financial decision Q4(b) -

making

2 Integrated reporting Q2(b) -

8 Internal control Q2(b) Q3(b) Q3 Q2

problems and
deficiencies

1 Leadership - - - - - Q3(a)

Introduction xiii
 Specimen exam 2
*

Sept/Dec 2019
Mar/Jun 2019
Sept 2018

Dec 2018

Mar 2020
4 National competitive Q1(a) Q2(a) -
advantage (Porter’s
diamond)

13 Performance Q3 -
excellence

10 Performance Q2(a) -
management

15 Project management Q5(b) Q2 -

7 Risk assessment and Q4 Q1(b) Q2 Q1(a)

risk management

2 Stakeholder analysis Q2(a) -

and stakeholder
management

6 Strategic options Q1(b) Q2(b) Q1(a) Q1(b)

13 Talent management Q3 -

IMPORTANT! The table above gives a broad idea of how frequently major topics in the syllabus
are examined. It should not be used to question spot and predict, for example, that Topic X will
not be examined because it came up two sittings ago. The examining team’s reports indicate
that they are well aware that some students try to question spot. They avoid predictable
patterns and may, for example, examine the same topic two sittings in a row, particularly if
there has been a recent change in legislation.

xiv Strategic Business Leader (SBL)

Revision of essential skills areas to be successful in
Strategic Business Leader (SBL)
There are three essential skills areas which students must develop to be successful in the ACCA
Strategic Business Leader exam. ACCA is clear that students cannot expect to be successful in
this exam without demonstrating competence in all three areas.

ACCA Exam
professional success
skills Skills

Knowledge

Technical knowledge
The syllabus for Strategic Business Leader is extensive and provides a vital foundation for students
to demonstrate their abilities as accountants, strategic advisers and business leaders. Eighty
marks are assigned to application of syllabus knowledge to specific business scenarios.
Knowledge is developed through reading or listening to your tutor, reading the business press and,
importantly, by practising new cases and completing tasks as a principal focus of your studies.

Use of theories or models in the Strategic Business Leader Exam

Strategic Business Leader exam is a practical exam and unlike other exams will not test individual
theories or models in isolation or require for the these theories or models to be quoted in answers
to exam questions. However, understanding the technical theories, models and knowledge is
essential as these provide a framework for students to help them approach the practical tasks
that they will need to complete in the Strategic Business Leader exam.
The use of models in the exam will be a judgement made by students and is part of the ACCA
Professional Skills for analysis and evaluation. Students are advised to only use models which
they judge to be relevant for a particular task to help develop their answer. There is not a
prescriptive list of theories and models, however, the BPP Revision Notes focuses on the most
relevant models which it considers to be most relevant to the syllabus and to aid students in being
successful in Strategic Business Leader.

ACCA professional skills

Following consultation with employers, ACCA has identified that qualified accountants need to
possess a range of key professional skills. In the Strategic Business Leader exam, 20 marks are
assigned to the demonstration of ACCA professional skills. ACCA has defined five main
‘professional’ skills which will be assessed in the Strategic Business Leader exam and all five will be
assessed at each exam sitting. Each ACCA professional skill has been clearly defined by ACCA,
along with three further defined aspects, as follows:

ACCA professional skill: Definition Three aspects of each ACCA

professional skill
1. Communication Inform
To express yourself clearly and convincingly through an Persuade
appropriate medium, while being sensitive to the needs Clarify

Introduction xv
 ACCA professional skill: Definition Three aspects of each ACCA
professional skill
of the intended audience.

2. Commercial acumen Demonstrate awareness

To show awareness of the wider business and external Use judgement
factors affecting business, and use commercially sound Show insight
judgement and insight to resolve issues and exploit
opportunities.

3. Analysis Investigate
To thoroughly investigate and research information from Enquire
a variety of sources, and logically process it with a view Consider
to considering it for recommending appropriate action.

4. Scepticism Probe
To probe, question and challenge information and views Question
presented to you, to fully understand business issues Challenge
and to establish facts objectively, based on ethical and
professional values.

5. Evaluation Assess
To assess situations, proposals and arguments in a Estimate
balanced way, using professional and ethical judgement Appraise
to predict future outcomes and consequences as a basis
for sound decision making.

Throughout the BPP Practice & Revision Kit for the Strategic Business Leader exam, you will find a
range of activities and questions which will help to develop your ACCA professional skills
alongside your technical knowledge.
But what do the skills mean, and what do you have to do to demonstrate them?
The following section includes the defined aspects of each of the five ACCA professional skills and
then makes suggestions to help you demonstrate them in your Strategic Business Leader studies.

Skill 1: Communication
Communication means to express yourself clearly and convincingly through the appropriate
medium while being sensitive to the needs of the intended audience and also understanding both
the context and situation. In the exam, this means to present written and numerical work in the
required format with a professional tone and use of language and avoiding ambiguity,
unnecessary explanations and repetition. Communication is assessed over three aspects: inform,
persuade and clarify.
Inform concisely, objectively and unambiguously, while being sensitive to cultural differences,
using appropriate media and technology.
Advice on demonstrating ‘inform’:
• Think about who you are addressing in your answer: eg if you are writing an extract for a
board report, you need to focus on strategic issues, without going into lots of operational
details
• Adopt an appropriate tone to suit your audience: eg formal vs informal; use language they will
understand; will they understand jargon and technical terms, or should you avoid them?
• Use an appropriate style of communication: eg written vs graphic; slides; diagrams
• If the task requirement asks you to use a specific format, eg presentation slides, you must
present your answer in that format
Persuade using compelling and logical arguments demonstrating the ability to counter-argue
when appropriate.
Advice on demonstrating ‘persuade’:

xvi Strategic Business Leader (SBL)

• Support your arguments with facts
• Explain why you think a course of action is suitable/unsuitable
• Use ‘justifying’ words, such as ‘because’: ‘I recommend you do this because…’
Clarify and simplify complex issues to convey relevant information in a way that adopts an
appropriate tone and is easily understood by the intended audience.
Advice on demonstrating ‘clarify’:
• Focus on key points, and avoid unnecessary detail
• Use succinct sentences
• Use headings to break down information into clearly identifiable sections
• Present your arguments in a logical order

Commercial acumen
Commercial acumen means showing awareness of the wider business and external factors
affecting business, using commercially sound judgement and insight to resolve issues and exploit
opportunities. In the exam, this includes considering the change in revenue, cost or profit as an
important driver in decision making and avoid suggesting solutions which will have a negative
financial impact, unless it is to address a wider sustainability issue, such as ethics and
governance. Commercial acumen is assessed over three aspects: demonstrate awareness, use
judgement and show insight, as follows.
Demonstrate awareness of organisational and wider external factors affecting the work of an
individual or a team in contributing to the wider organisational objectives.
Advice on demonstrating awareness:
• Think about the specific context of a scenario and identify how this affects a decision
• Make sure recommendations are appropriate – and practical – to the context of the scenario
Use judgement to identify key issues in determining how to address or resolve problems and in
proposing and recommending the solutions to be implemented.
Advice on demonstrating judgement:
• Prioritise key points
• Only make points which are relevant to the scenario and which help to address/resolve the
issue at hand
• Make sure recommendations resolve issues and/or exploit opportunities
• Avoid making points which are not supported by facts; recommendations need to be justified
Show insight and perception in understanding work-related and organisational issues, including
the management of conflict, demonstrating acumen in arriving at appropriate solutions or
outcomes.
Advice on demonstrating insight:
• Make sure recommendations are appropriate and practical in the context of the scenario, eg
are they feasible? Will they be acceptable to key stakeholders?
• Make sure recommendations address key issues identified in the scenario
• Make sure decisions and strategies are appropriate for an organisation, rather than just
making generic points
• Ask yourself: will the points you are making help the organisation make a decision which
successfully addresses the issues it is facing?

Analysis
Analysis means to thoroughly investigate and research information from a variety of sources and
logically process it with a view to considering it for recommending appropriate action. In the
exam, this means to produce relevant analysis from the information provided in the case overview
and exhibits which creates new evidence in response to the task requirement and a basis for
action you are recommending an organisation should take. Analysis is assessed over three
aspects: investigate, enquire and consider, as follows.

Introduction xvii
Investigate relevant information from a wide range of sources, using a variety of analytical
techniques to establish the reasons and causes of problems, or to identify opportunities or
solutions.
Advice on demonstrating ‘investigation’:
• Don’t simply repeat points from the scenario; explain why they are significant and/or what
their implications are
• Identify relevant data from different places within a scenario, rather than only including the
most obvious (or most easily accessible) points
• Give reasons why a problem has happened, rather than simply stating the problem
Enquire of individuals or analyse appropriate data sources to obtain suitable evidence to
corroborate or dispute existing beliefs or opinions and come to appropriate conclusions.
Advice on demonstrating ‘enquire’:
• The reference to suitable evidence is key here: data and evidence must be relevant to the
points you are making
• Does data in the scenario support arguments made elsewhere; for example, are revenue
figures or profit margins consistent with how well someone says an organisation is performing?
Consider information, evidence and findings carefully, reflecting on their implications and how
they can be used in the interests of the department and wider organisational goals.
Advice on demonstrating ‘consider’:
• Make use of the information in the scenario in order to recommend appropriate actions
• How does the evidence in the scenario affect the suitability of a potential course of action?

Scepticism
Scepticism means to probe, question and challenge information and views presented, to fully
understand business issues and to establish facts objectively, based on ethical and professional
values. In the exam this means to be aware of the quality, scope, source and age of the
information provided, as well as the purpose for which the information was produced and by
whom; where necessary suggest information used for analysis, evaluation and decision making is
updated, improved or extended through questioning or appropriate challenge. This is so the best
possible information is applied before a final decision is made. Scepticism is assessed over three
aspects: probe, question and challenge, as follows.
Probe deeply into the underlying reasons for issues and problems, beyond what is immediately
apparent from the usual sources and opinions available.
Advice on demonstrating ‘probe’:
• Don’t automatically accept that the initial reason given to explain an issue is correct. (Is the
explanation somebody gives you consistent with other evidence? Does the explanation
properly explain the issue or problem you are addressing?) For example, if a management
accountant is offering an explanation of a variance between actual figures and budget, are
you satisfied their explanation properly explains the variance?
• Draw together information from different sources, rather than just including the most obvious
(or most easily accessible) points. Does information from one source support, or contradict
information from another source?
Question facts, opinions and assertions, by seeking justifications and obtaining sufficient
evidence for their support and acceptance.
Advice on demonstrating ‘question’:
• Scrutinise any assumptions being made: are they reasonable; can they be supported by the
evidence available? (Don’t simply accept everything you are told.)
• Question the motive or rationale behind facts or statements. For example, does the person
making a statement have a vested interest in one decision being taken in preference to
another? If so, how reliable, or objective, is their evidence likely to be?
• Identify additional information or evidence which may be required to corroborate facts or
assertions being made

xviii Strategic Business Leader (SBL)

Challenge information presented or decisions made, where this is clearly justified, in a
professional and courteous manner; in the wider professional, ethical, organisational, or public
interest.
Advice on demonstrating ‘challenge’:
• Highlight the weaknesses of, or problems with, information presented or potential decisions
• Use evidence to support your challenge, and justify challenges you make, perhaps by
demonstrating evidence of wider reading
• Identify potential alternative interpretations of information or alternative courses of action, to
reinforce your challenge
• Your ‘challenge’ should focus specifically on the problems with a decision, rather than trying to
evaluate problems against benefits

Evaluation
Evaluation means to carefully assess situations, proposals and arguments in a balanced way,
using professional and ethical judgement to predict future outcomes and consequences as a
basis for sound decision making. In the exam this means ensuring possible courses of action are
examined from different perspectives and, where relevant, clearly stating reasonable assumptions
and including points both for and against. Conclusions and recommendations made should be
consistent with the most persuasive factors presented which provide logical argument for the
course of action suggested. Evaluation is assessed over three aspects: assess, estimate and
appraise, as follows.
Assess and use professional judgement when considering organisational issues, problems, or
when making decisions, taking into account the implications of such decisions on the organisation
and those affected.
Advice on demonstrating ‘assessment’:
• Consider the potential importance and urgency of a problem when deciding a suitable
response to the problem
• Determine the potential advantages and disadvantages associated with a decision
• Determine the potential impact of a decision on key stakeholders, and how they are likely to
react to it
Estimate trends or make reasoned forecasts of the implications of external and internal factors on
the organisation, or of the outcomes of decisions available to the organisation.
Advice on demonstrating ‘estimate’:
• Present sensible, justified estimates and forecasts; for example, in assessing the impact which
a change in the business environment could have on an organisation’s performance
• Identify the possible impact that different decisions could have on an organisation’s
performance
Appraise facts, opinions and findings objectively, with a view to balancing the costs, risks,
benefits and opportunities, before making or recommending solutions or decisions.
Advice on demonstrating ‘appraise’:
• Present the arguments for and against a proposed strategy, so that an informed decision can
be made about whether or not to pursue that strategy
• Make decisions, or recommend solutions, which are appropriate to the circumstances, on the
basis of a balanced appraisal of advantages and disadvantages. For example, do the
potential benefits from a strategy justify the costs involved?
In summary
Overall, remember that technical knowledge is not intended to be learned for the purpose of being
either described or explained as part of these skills – it is designed to be demonstrated
appropriately as part of these skills through synthesis and application.

Introduction xix
 Exam success skills
Passing the SBL exam requires more than applying syllabus knowledge and demonstrating the
specific SBL skills; it also requires the development of excellent exam technique through significant
question practice and responding to feedback from practice assessments and mock exams.
We consider the following six skills to be vital for exam success. The Skills Checkpoints in the
Strategic Business Leader BPP Revision Notes show how each of these skills can be applied in the
exam.

1 Exam success skill 1

Case scenario: Managing information
This requires swift understanding of the case overview and exhibits, as well as the identification,
prioritisation and assimilation of key facts, events, information and data (which is both
unstructured and non-sequential) and to comprehend its usefulness, relevance and importance in
responding to question requirements.
Advice on developing this skill
Using the scenario is essential to answer the task requirement and to pass the question. Most of
what you write should relate directly to the scenario provided and be guided by the information
given, with the remainder being based on the skills and experience you bring into the exam. The
skill is using your judgement to determine what information is important to best answer each task
requirement. If there is a lot of information and detail given on a specific issue then it is likely to
play a big part in at least one of the tasks.
The ACCA Strategic Business Leader examining team advise that at least 40 minutes is spent
during the exam on reading, highlighting and interpreting the information provided in the case
overview and exhibits and considering each task requirement. The advised 40-minute reading
time is a useful benchmark to check you are committing sufficient time to managing the
information provided.
Computer-based exam
In a computer-based exam (CBE) the highlighter tool provided in the toolbar at the top of the
screen offers a range of colours:

Highlight T Strikethrough

Remove Highlight

This allows you to choose different colours to answer different aspects of a question. For
example, if a question asked you to evaluate the pros and cons of an issue then you could choose
a different colour for highlighting pros and cons within the relevant section of the exhibits.
The strikethrough function allows you to delete areas of a question that you have dealt with - this
can be useful in managing information if you are dealing with numerical questions because it can
allow you to ensure that all numerical elements have been accounted for in your answer (although
this is of limited use in the SBL exam).
The CBE also allows you to resize windows by clicking on the bottom right-hand corner of the
window as highlighted in the following section:

xx Strategic Business Leader (SBL)

 1. Company information
Exhibits T
1. Company information Page 1 of 1 Automatic Zoom
1
2. Performance reporting system
2

3. Customer survey
3
Rezillos Engineering (Rezillos) is a listed company, manufacturing pumps and valves
4. Benchmarking proposal for use in the chemical industries. These highly engineered components must be
4 integrated into Reziollos’ customers’ own plant and equipment. The company has
grown significantly via acquisition in the last 20 years to become a worldwide
5. Appendix 1 5 business.
The overall objective of the company is ‘to deliver sustainable growth in value to the
6. Appendix 2 6 shareholders by working in partnerships with customers to deliver innovative and
value-for-money solutions utilising the skills of the highly-trained workforce.’
7. Appendix 3 7
The chief executive officer (CEO) has recognised that the company has been so
focused on making acquisitions that it has not improved other aspects of
T management. He has asked you to produce a report for the board of Rezillos to
Requirements
cover a number of areas.
Requirements (50 marks)

Response Options
Word Processor

Spreadsheet

This functionality allows you to display a number of windows at the same time, so this could allow
you to review:
• the question requirements and the exhibit relating to that requirement at the same time; or
• the window containing your answer (whether a word processing or spreadsheet document)
and the exhibit relating to that requirement at the same time.

2 Exam success skill 2

Correct interpretation of the requirements
The active verb used often dictates the approach that written answers should take (eg ‘explain’,
‘discuss’, ‘evaluate’). It is important you identify and use the verb to define your approach. The
correct interpretation of the requirements skill is correctly producing only what is being asked for
by a task requirement. Anything not required will not earn marks.
Advice on demonstrating this skill
There is a real skill to understanding very quickly exactly what the ACCA examining team expect
you to deliver in an answer and within the time frame indicated by the mark allocation. This skill
can be developed by analysing task requirements and applying this process:

Step Read the requirement

1 Firstly, read the task requirement a couple of times slowly and carefully and highlight
the active verbs. Use the active verbs to define what you plan to do. For example,
discuss means consider and debate or argue about the pros and cons of an issue
(remember also that critically discuss requires you to focus on the key points that you
need to criticise).
The most commonly used verbs in the SBL exam are Discuss, Evaluate and
Recommend. Other important active verbs and their meanings are explained below:

Verb Meaning

Advise This requires you to provide someone with useful information, or to tell
them what you think they should do based on a consideration of the
issues presented in a scenario.

Analyse This requires you to break an issue into separate parts and discuss,
examine, or interpret each part.
This may require you to give reasons for the current situation or what
has happened.

Assess This requires you to judge the importance or estimate the nature,
quality or significance of an issue. To do this, consider the strengths
and weaknesses or significance of the issue under discussion.

Discuss This will require you to consider and debate/argue about the pros and
cons of an issue.

Introduction xxi
 Evaluate This will require you to present a ‘balanced’ discussion of an issue
looking both the positive and negative issues.

Where numbers feature in a question, an evaluation will require you to

use the numbers provided to create a value from which a judgement
can be made.

Explain This involves making an idea clear and could require you to, for
example, show logically how a concept is developed or to give the
reason for an event.

Recommend If you are asked to ‘recommend’ then you are expected to use details
presented in the exhibits to create a logical and justified course of
action.

Step Read the scenario

2 By reading the task requirement first, you will have an idea of what you are looking out
for as you read through the case overview and exhibits. This is a great time saver and
means you don’t end up having to read the whole question in full twice – it also allows
you to identify which elements of the exhibit materials are most relevant for each task.
As you go through the scenario you should be using the highlighting function in a CBE,
or annotating key information in your question paper, which you think will play a key
role in answering the specific task requirements.

Step Read the requirement again

3 Read the requirement again to remind yourself of the exact wording before starting
your written answer. This will capture any misinterpretation of the requirements or any
missed requirements entirely. This should become a habit in your approach and, with
repeated practice, you will find the focus, relevance and depth of your answer plan will
improve.

3 Exam success skill 3

Answer planning: Priorities, structure and logic
This skill requires the drafting of the key aspects of an answer which accurately and completely
responds to the task requirement in the format specified before calculations and a written answer
are attempted. A good answer plan is one which prioritises what can be covered in the time
available, is in a logical order and focuses on points that are likely to score the best marks in the
exam.
Advice on developing Answer planning: Priorities, structure and logic
Advice on developing this skill
This skill can be developed by applying the following process:

Step Identify key words and mark allocation

1 The answer plan should directly relate to the key words in the task requirement and the
mark allocation. Use the active verb to start your answer plan and use the mark
allocation to determine the time available to complete the answer and guide the
number of points to discuss.

Step Plan any calculations

2 The creation of numerical analysis must be essential to completing the task
requirement, otherwise it should not be included. Plan the scope of numerical work to
avoid unnecessary complexity and to ensure analysis is relevant to the task.
In a computer-based exam you can begin to input data needed for your calculations
onto a spreadsheet, allowing the spreadsheet functionality to perform computations
for you.

xxii Strategic Business Leader (SBL)

 Step Take time to plan in sufficient detail
3 The plan should go into sufficient detail to enable you to move smoothly into writing out
a good answer without having to stop too often and rethink. To do this requires creative
thinking up front, but beware of writing too much at the planning stage; the plan is
essential for a good answer, but is not an answer in itself.
Good answer planning has been shown as a valuable contributor to good time
management and efficient answer writing – using the marks on offer can help with this
time allocation as well.
In a computer-based exam you can use the copy and paste functions to copy the task
requirements to the beginning of your answer. This will ensure that your answer plan
addresses all parts of the task requirements.
You can also copy the task requirements to the main body of your answer. This will
allow you to create sub-headings for your answer, again ensuring that your answer
addresses all parts of the task requirements. Copying and pasting simply involves
highlighting the relevant information and either right clicking to access the copy and
paste functions, or alternatively using Ctrl+C to copy and Ctrl+V to paste.

4 Exam success skill 4

Efficient numerical analysis
This skill aims to maximise the marks awarded by making clear to the marker the process of
arriving at your answer. This is achieved by laying out an answer such that, even if you make a
few errors, you can still score subsequent marks for follow-on calculations. It is vital that you do
not lose marks purely because the marker cannot follow what you have done.
Advice on developing this skill
This skill can be developed by applying the following process:

Step Use a standard proforma working where relevant

1 If answers can be laid out in a standard proforma or table then always plan to do so.
This will help the marker to understand your working and locate the marks easily. It will
also help you to work through the figures in a methodical and time-efficient way. In a
computer-based exam you can use the spreadsheet functionality to present proformas
and workings.

Step Show your workings

2 Keep your workings as clear and simple as possible and ensure they are cross-
referenced to the main part of your answer. Where it helps, provide brief narrative
explanations to help the marker understand the steps in the calculation. This means
that if a mistake is made you do not lose any subsequent marks for follow-on
calculations.

Step Keep moving!

3 It is important to remember that, in an exam situation, it is difficult to get every number
100% correct. The key is therefore ensuring you do not spend too long on any single
calculation. If you are struggling with a solution then make a sensible assumption, state
it and move on.
Efficient numerical analysis means providing sufficient numerical evidence to support
your written arguments, evaluations, conclusions and recommendations, so the
creation of numerical work must not replace effective writing and presentation.
In a computer-based exam it is important to show the marker where numbers have
come from ie it is not sensible to perform the calculations on a calculator and then
manually transfer the result to the spreadsheet. For example, in the following
spreadsheet the marker can see that the highlighted calculation in cell G14 is
calculated as (D14-E14/E14) because this is what is recorded in the spreadsheet cell (as
shown in the first row).

Introduction xxiii
 G14 =(D14-E14)/E14

A B C D E F G H
1 Analysis of current performance
2
3
4
5 20X7 20X7
6 Actual Budget Variance
7 $'000 $'000 $'000 %
8
9 Revenue from rooms 131,072 129,347 1,725 1.3%
10 Discounts (24,904) (19,402) (5,502) -28.4%
11 Other revenue 34,079 33,630 449 1.3%
12 Total revenue 140,247 143,575 (3,328) -2.3%
13 (117,964) (115,764) (2,200) 1.9%
14 22,282 27,811 (5,529) -19.9%
15

If the workings are visible in the cell as shown here then there is less need to show
detailed workings. It will still sometimes be helpful to produce workings because they
can reduce the likelihood of errors being made (if calculations are complex).
In a computer-based exam you can also use useful spreadsheet short-cuts to improve
the efficiency of numerical analysis. For SBL useful short-cuts include the ability to
calculate totals and averages and also to calculate NPV, IRR and MIRR.
To help the marker locate your numerical analysis you should clearly label your
workings. Any commentary should be provided in a word processing document with a
reference to calculations provided within the spreadsheet.

5 Exam success skill 5

Effective writing and presentation
Written answers should be presented so that the marker can clearly see the different points you
are making, presented in the format specified by the task requirement. The skill is to provide
efficient written answers with sufficient breadth of points that actually answer the task set and
provide necessary depth of explanation in the time available.
Advice on developing this skill
This skill can be developed by applying the following features to your written work.

Step Identify the appropriate format for your written work

1 The SBL exam will ask you to present your answers in a variety of formats, including
reports, briefing notes, emails and presentation slides/speaker notes. Review past exam
questions to understand the differences in these format types so that you know how to
replicate them in the exam. SBL is the only strategic professional exam where you may
be asked to produce presentation slides. Be sure to keep slide content simple and
uncluttered, developing your points in accompanying speaker notes. In a computer-
based exam presentation slide software is provided for this purpose.

Step Use subheadings

2 Using the subheadings taken from your answer plan will give you structure, order and
logic. This will ensure your answer links back to the task requirement and is clearly
signposted, making it easier for the marker to understand the different points you are
making and award marks accordingly.

Step Write your answer in short, punchy, sentences

xxiv Strategic Business Leader (SBL)

 3 Use short, punchy sentences when presenting written answers with the aim that every
written sentence should say something different and generate marks.

Step Extend your points with depth

4 You should not leave the marker in a position asking why, or so what. A useful
technique is to use short sentences to explain what you mean in one sentence and then
to explain why it matters in the next. If further depth is required, consider how the
consequences of inaction or making a decision will impact on the organisation in the
future.
Computer-based exam
The ACCA examining team advises candidates to keep formatting simple. Use bold
font for sub-headings avoiding the use of underlining or italics. There is no auto-
correct or spell check functionality but do not waste time on detailed spelling and
grammar checks of your work.

6 Exam success skill 6

Good time management
This skill means planning your time across all the task requirements so that all tasks have been
attempted at the end of the four hours available and actively checking on time during your
progress through the exam. This is so that, if necessary, you can flex your approach and prioritise
tasks which, in your judgement, will generate the maximum marks in the available time remaining.
Advice on developing Good time management
This skill can be developed by applying the following process:

Step Stick to mark and time allocations

1 At the beginning of a question, work out the amount of time you should be spending on
each task requirement. The ACCA examining team advise spending at least 40 minutes
on reading, which leaves 200 minutes to complete your answer planning and
calculations and write up your answer.

Step Follow your answer plan

2 It is not uncommon to spend five minutes creating a good plan then not use it when
writing up the answer. This means explanations of good points which had been
identified are missed or the time allocation is ignored. The key is using the answer plan
to limit how much is written and how much time is used.

Step Keep an eye on the clock

3 Aim to attempt all tasks, but be ready to be ruthless and move on if your answer is not
going as planned. The challenge for many is sticking to planned timings. Be aware this
is difficult to achieve in the early stages of your studies and be ready to let this skill
develop over time.
The good time management skill means actively planning for exam success as your
written answers cover more of the available marks.
If you find yourself running short on time and know that a full answer is not possible in
the time you have, consider recreating your plan in overview form and then add key
terms and details as time allows. Remember, some key marks may still be available, for
example, simply stating a conclusion which you don’t have time to justify in full.
Computer-based exam
When planning your answer, type your ideas into the word processor to create sub-
headings, which can be developed further when you type up your full answer. Doing
this will make the best use of your planning time, giving your final answer a
professional structure and format.

The importance of question practice in your studies

The best study approach to improve your knowledge of the ACCA professional skills and exam
success skills is to focus on question practice as a core part of learning new topic areas, ensuring

Introduction xxv
you focus on improving the Exam Success Skills – personal to your needs – by obtaining feedback
or through a process of self-assessment.
If sitting this exam as a computer-based exam, practising as many exam-style questions as
possible in the ACCA CBE practice platform will be key to passing this exam. You should attempt
questions under timed conditions and ensure you produce full answers to the discussion parts as
well as doing any numerical analysis. Also ensure that you attempt all mock exams under exam
conditions.
ACCA provides a free on-demand resource designed to mirror the live exam experience helping
you to become more familiar with the exam format. You can access the platform via the Study
Support Resources section of the ACCA website navigating to the CBE question practice section
and logging in with your myACCA credentials.

xxvi Strategic Business Leader (SBL)

Chapter 1: Strategy, leadership and culture

Strategy, leadership and culture

Leadership Strategy Culture

What is leadership? What is strategy? What is culture?

The process of influencing an The long-term direction of an 'A pattern of shared basic
organisation (or group within organisation assumptions...considered valid
an organisation) in its efforts and transmitted to new
towards achieving an aim members'
or goal Levels of strategy
Corporate, business-level,
operational Cultural web
Perspectives on leadership • Control systems
• Trait approach • Routines
• Behaviour approach Mission statements • Organisation structure
• Power-influence approach Formal documents that state the • Paradigm
• Situational approach organisation's mission • Symbols
• Integrative approach • Power structures
• Stories and myths
Objectives
Leadership roles
Specific, measurable, achievable,
• Top managers – envisioning results-focused, time-related
future strategy, aligning,
embodying change
• Middle managers – advisers, Strategic values
'sense making',
• Ethics in business
reinterpretation & adjustment,
• Corporate social responsibility
local leadership of change
• Corporate governance

Change and leadership

Strategic management
• Charismatic and transactional
Strategic position, strategic
leadership
choices, strategic action
• Change management styles

Entrepreneurship
Entrepreneurship and
intrapreneurship

1
Chapter 2: Stakeholders and social responsibility

Stakeholders and social responsibility

Principals and agents Social Sustainability

in governance responsibility

Agency theory Corporate Social Responsibility Environmental and social issues

• Principals (shareholders) vs (CSR) (Carroll, 1991) • Environmental and social
agents (directors) • Economic (basic requirement) footprint
• Agency problems • Legal (and comply with laws) • Social and environmental
• Agency monitoring • Ethical (go beyond the law) reporting
• Agency solutions • Philanthropic (help others)

Integrated Reporting <IR>

Stakeholders Corporate citizenship • Founded on integrated thinking
• Who are stakeholders? What (Matten and Crane, 2005) • Financial capital
do they want (claims)? • Limited view = self-interest only • Manufactured capital
• Classifying stakeholders • Equivalent view = CSR • Human capital
• Extended view = going above • Intellectual capital
and beyond • Natural capital
Power and interest • Social capital
(Mendelow, 1991) • Auditing Integrated Reports
• Low power, low interest = Ethical stances
minimal effort (Johnson et al, 2017)
• Low power, high interest = • Short-term stakeholder interest Social and environmental audits
keep informed • Long-term stakeholder interest • Social audits – engaging in
• High power, low interest = • Multiple stakeholders socially responsible activity;
keep satisfied • Shaper of society goal congruence with this;
• High power, high interest = assess objectives and priorities
key player • Environmental audits – agree
CSR viewpoints (Gray et al 1996) on suitable metrics; measure
• Pristine capitalist performance and compare
• Expedient with targets; report from
• Social contractarian auditor on compliance (or
• Social ecologist otherwise)
• Socialist
• Radical feminist
• Deep ecologist

CSR 2.0 (Visser, 2011)

• Responding to change: greed;
philanthropy; marketing;
management; responsibility
• CSR 2.0: creativity; scalability;
responsiveness; glocality;
circularity
• Our ability to change

2 Strategic Business Leader (SBL)

Chapter 3: Impact of corporate governance on strategy

Impact of corporate governance on strategy

What is How is corporate What impact does

corporate governance achieved ownership have on
governance? across the world? corporate governance?

Definition of corporate Principles or rules? The role of the investor

governance • Principles: • Insider systems: small numbers
• 'The system by which – Broad principles of large shareholders; family
organisations are directed and – Comply or explain ownership; more expensive
controlled' – Deviations require disclosure • Outsider systems: eg stock
• 11 Core principles: and explanation market; strong systems to
– Integrity – Requires investors to make counter the agency problem
– Fairness an informed decision • Institutional investors: strategic
– Judgement • Rules: focus; possible short-term
– Independence – Compliance is required interest; can influence strategy
– Scepticism – Pass or fail – no middle of their investment by close
– Transparency ground involvement
– Probity – Requires a third party or
– Responsibility regulator to enforce the rules Disclosures and reporting
– Accountability
– Innovation • Organisational
– Reputation Different jurisdictions • CSR and business ethics
• Corporate governance in the • Annual reports
UK (principles-based)
Regulatory guidance
• USA Sarbanes- Oxley Act Public sector and third sector
• OECD (governments) (rules-based) governance
• OECD principles: • South Africa – King Report
– Ensuring the basis for an • Purposes and objectives of
• Singapore Code
effective corporate private sector, public sector;
governance framework charitable institutions;
– The rights and equitable Board responsibilities QuANGOs Performance and
treatment of shareholders • Effectiveness of boards: ownership
and key ownership functions – Entrepreneurial leadership • Agency and public sector
– Institutional investors, stock – Strategy organisations
markets, and other – Briefing, training and • Levels of public sector
intermediaries appraisals organisation
– The role of stakeholders in – Membership: size and • Strategy, objectives, leadership
corporate governance diversity and governance
– Disclosure and transparency • Leadership CEO vs chair • Democratic control, political
– The responsibilities of the • Unitary and multi-tier boards influence and public sector
board • Leaving the board policy implementation
• ICGN (companies):
– Board role and Board support mechanisms
responsibilities
– Leadership and • Committees: Audit;
independence Nomination; Remuneration;
– Composition and Risk
appointment • NEDs: Strategy; scrutiny; risk;
– Corporate culture people
– Risk oversight • Remuneration: balance across
– Remuneration package; accountability for
– Reporting and audit results; market factors
– Shareholder rights
• Limitations of international
codes

3
Chapter 4: The external environment

The external environment

The external environment The macro environment National environment

Drivers of change • Broad factors affecting all • Factors influencing a country's

Assessing opportunities and businesses attractiveness for different
threats • Analyse the overall business industries or types of
environment using PESTEL organisation
• Analyse national competitive
Strategic drift environment using Porter's
PESTEL analysis Diamond
Failing to respond to change can
cause strategic drift Framework for analysing sources
of opportunities and threats:
Porter's Diamond (1990)
• Political
• Economic • Components of the diamond
• Social (influences on national
• Technological competitiveness):
• Environmental – Factor conditions
• Legal – Demand conditions
– Related and supporting
industries
– Firm strategy, structure and
rivalry
• Clustering
• Government policy

Industry or Customers and Scenario

sector environment markets planning

• (Micro-environment) • Key issue: offering an • View of how the environment

• Factors affecting the attractive product to an could develop in future
profitability, and attractive market • Consider these when setting
attractiveness, of different • Customers strategy
industries or markets • Markets
• Analyse using Porter's five – Market attractiveness
forces – Business attractiveness Stages in scenario planning
• Market segmentation • Identify key areas of
uncertainty
Using Porter's five forces model • Construct scenarios based on
(1980) those key areas
• Attractiveness of an industry • Assess potential impact of
• Five forces: different scenarios on the
– Threat of new entrants organisation
– Substitutes • Develop strategies to adopt in
– Bargaining power of different strategies
customers
– Bargaining power of
suppliers
– Competition and rivalry
• Industry life cycle
• Triggers for change

4 Strategic Business Leader (SBL)

Chapter 5: Strategic capability

Strategic capability

Strategic Strategic capability and sustainable Organisational

capability competitive advantage knowledge

Resources and Four qualities Knowledge is a major

competences source of competitive
Threshold resources and advantage
competences/unique Value
resources and core Need to be valued by the customer and/or
competences organisation Organisational learning
Culture that values
intuition, argument from
Competitive advantage Rarity conflicting views and
Competitive advantage Competitors cannot obtain same resource/ experimentation
is the term used to competence
describe the ability of an
organisation to generate Knowledge
greater returns than Inimitability management
those of competitors Competitors cannot copy the resource/competence Exploit existing
over the long term knowledge and to create
new knowledge so that it
Organisational support may be exploited in turn
The organisation must be able to support its
capabilities, including its processes and systems
Knowledge
management
technology
Dynamic capabilities
Sophisticated IT systems
The ability to develop and change competences in
to facilitate knowledge
response to changing environments
management

Porter's value chain (1985) Value network SWOT analysis

Framework for assessing the strategic capabilities Set of inter- Strengths, weaknesses,
(activities) of an organisation organisational links and opportunities and
relationships threats

Components of the value chain

• Margin is the excess the customer is prepared to Relationships in the SWOT analysis in action
pay over the cost to the firm value network • Strengths and
• Activities can be primary or supporting Bargaining power/ weaknesses are
promote innovation internal
• Opportunities and
The value chain and competitive advantage threats are external
Managers can focus on those activities that give • Lead to strategic
customers what they want/assess costs and benefits options
of certain activities

5
Chapter 6: Competitive advantage and strategic choice

Competitive advantage and strategic choice

Competitive Sustainable Managing Product-market

advantage and competitive organisational strategy: direction
strategic choice advantage portfolios of growth

Porter's generic The seven Ps The BCG Matrix Growth vector matrix
strategies • Product Consists of: Consists of:
• Cost leadership means • Place • Stars • Market Penetration
being the lowest-cost • Promotion • Cash Cows • Product Development
producer in the • Price • Question Marks • Market Development
industry as a whole • People • Dogs • Diversification
• Differentiation is the • Processes
exploitation of a • Physical evidence
product or service The public sector
which the industry as portfolio matrix
a whole believes to be Price-based,
Consists of:
unique differentiation and
• Focus (or niche) lock-in • Public Sector Stars
strategy involves a • Political Hot Boxes
• Sustaining price-based • Golden Fleeces
restriction of activities strategies
to only part of the • Back Drawer Issues
• Sustaining
market (a segment) differentiation
• Which generic • Lock-in is achieved in
strategy? Need to a market when a
avoid being stuck in product becomes the
the middle industry standard

6 Strategic Business Leader (SBL)

 Diversity of products Methods of Suitability, acceptability
and markets development and feasibility

The need for diversification Internal development Suitability

Uses internal resources Relates to strategic logic

Types of diversification
• Related diversification Business combinations Acceptability
(horizontal and vertical Acquisitions (buy another) and To stakeholders?
integration) mergers (two entities join)
• Advantages and
disadvantages of vertical Feasibility
integration Partnering Concerns whether a strategy
• Unrelated diversification
• External partnering (restricts can be implemented
• Advantages and
formal legal arrangements
disadvantages of
between entities to specific
conglomerate diversification
operations)
• Diversity and strategic success
• Joint ventures (two (or more)
entities join forces to create a
separate entity which has a
International diversification
common purpose)
Management orientation • Franchising (franchiser and
(ethnocentrism, polycentrism, franchisee)
geocentrism and regiocentrism) • Strategic alliances (involves
some form of co-operation
between two or more
organisations)
• Internal partnering (involves
active collaboration between
different departments)

7
Chapter 7: Assessing and managing risk

Assessing and managing risk

The relationship between organisational Risk management

strategy and risk management strategy process

Understanding stakeholder responses to risks Who is responsible for risk?

Link to organisational strategy Stakeholder view • Risk committee
• Risk manager

Embedding risk in an organisation's culture

and values
Risk appetite
• Why?
• Risk averse vs risk seeker
• How?
• Risk capacity

Identify risks
• Risk factors
• Strategic and operational
• Categories of risk
• Risk registers

Assess risks
• Techniques
• Risk maps
• Subjectivity, including frequency vs severity

Respond to risks
• TARA
• ALARP – as low as reasonably practicable
• Diversification of risks

Monitoring
• Review the process
• Dynamic nature of risks
• Adapt if necessary

Start again!

8 Strategic Business Leader (SBL)

Chapter 8: Internal control system

Internal control systems

Internal control Monitoring

Definitions of internal control Information

Systems and attitudes • Types of information
• Levels of information
• Qualities of good information
Objectives of internal control • Sources of good information
• RORCS:
– Risks
– Operations Reviewing internal controls
– Reporting • Internal control reports
– Compliance • Annual review of controls
– Safeguard assets • External reporting on risk management and
• Inherent limitations of internal control internal controls
• Sarbanes-Oxley

Elements of internal control

Audit committees
• COSO cube
• Financial Reporting Council’s (FRC) Guidance • Advantages and disadvantages
• Advantages and disadvantages of using • Who should be on the audit committee?
internal frameworks • Responsibilities of the audit committee

Categories of control Internal audit

• Corporate, management, business process • Role of internal audit
and transaction • Assessing the quality of internal audit
• Administration and accounting – Scope
• Prevent, detect, correct and direct – Authority
• Discretionary and non-discretionary – Independence
• Voluntary and mandated – Resources
• General and application • Assessing the ongoing need for internal audit
• Financial and non-financial

Control procedures
APIPS:
• Authorisation
• Performance review
• Information systems
• Physical controls
• Segregation of duties

Controls over financial reporting

• Journal entries
• Accounting estimates
• IT controls

9
Chapter 9: Applying ethical principles

Applying ethical principles

Doing the Doing the right thing

wrong thing

Fraud Conflicts of interest Professions and the public

• Intentional act to gain • Conflicts of interest in the interest
advantage by deception exam • Influence of the accountancy
– Pressure – Read relevant task profession on organisations
– Opportunity information – Mechanistic
– Rationalisation – Identify ethical conflicts at – Judgemental
(Cressey's Fraud Triangle) stake
– Use scenario information
– Make recommendations The code of ethics for
Responding to fraud risks – Justify recommendations accountants
Suitable internal controls: • Resolving ethical conflicts • Principles-based approach
• Segregation of duties – No one best way to achieve • The fundamental ethical
• Authorisation – Resolving conflicts is principles
• Performance review influenced by a range of (ACCA, 2019):
factors – Professional behaviour
• Frameworks for dealing with – Integrity
Bribery and corruption ethical conflicts and dilemmas – Professional competence and
– A number of frameworks exist due care
• Impacts:
– Confidentiality
– Bribery = influencing the
– Objectivity
actions of someone
– Corruption = deviation from Responsible leadership
honest behaviour • Collaboration with
stakeholders Threats and safeguards for
• Aspects of bribery – can lead accountants
to the following problems: • Sustainable decisions
– Lack of honesty • Manage societal problems • Advocacy threat
– Conflicts of interest • Self-interest threat
– International risk • Intimidation threat
management Corporate codes of ethics • Familiarity threat
– Economic issues • Values and expected • Self-review threat
– Reputation behaviours
• Consequences and sanctions

Measures to combat bribery

and corruption
• Establish culture
• Code of conduct
• Risk assessment
• Business conduct
• Reporting
• Monitoring

10 Strategic Business Leader (SBL)

Chapter 10: Financial analysis

Financial analysis

Financial The Financial analysis and

objectives and finance decision-making techniques
business strategy function

Financial issues relating The impact of Financing requirements Dealing with risk and
to strategy are technology on finance Investment, financing & uncertainty
managing for value, functions and dividend decisions Expected values and
funding and the professionals decision trees
expectations of Impact of big data,
stakeholders cloud computing and Sources of finance
predictive analytics • Evaluated by SAF Financial reporting and
• Initial coin offering tax implications
(ICO)
Finance function
structure Organisation
Business partner model, Investment appraisal performance and
options of outsourcing position
ROCE, payback, NPV,
and shared/global IRR Analysing financial and
business services non-financial data

Cost and Standard costing Evaluating strategic

management and variance options using
accounting analysis marginal and relevant
costing techniques

Strategic cost Budgeting Standard quantities and Uses of relevant and

management and • Benefits and costs marginal costing
control limitations of budgets Use estimates for control Costs that vary with the
• Planning, decision being
co-ordination, considered
Forecasting motivation, control, Variance analysis
Linear regression and authorisation Compare standards to
time series analysis • Successful budgeting actuals

Limitations of control
through variances and
standards

11
Chapter 11: Applications of IT

Applications of IT

Applications Mobile technologies and cloud computing

of IT

The need for a strategic Mobile technology Benefits and risks of cloud
perspective: new technologies • Mobile technology is computing
Strategic managers are concerned with technology • Benefits of cloud computing
increasingly embracing emerging that is portable include: cost effectiveness,
technologies as a way to • Mobile technology devices flexibility, accessibility of data.
innovate, improve performance include: laptops, tablet • Risks include: loss of control,
and ultimately get ahead of the computers, smartphones, GPS data might be stolen, lost or
competition technologies corrupted

Benefits and risks of mobile Cloud computing v owned

technology technology
• Benefits: greater access to Organisations need to determine
information/data, stakeholder whether to pursue a cloud-based
interaction approach to data management
• Risks: costs/obsolescence/ or to manage data using owned
hackers hardware and software in-house

Cloud computing
Growing amounts of
organisational data is now held
in servers operated by
cloud-based service providers

Robotics and Information technology Big data

Artificial Intelligence and data analysis

Robotic Process Automation Growth in organisational data The Vs of big data

• Software able to perform Has been caused by the 'Internet Volume, velocity, variety and
repetitive, routine tasks of things' veracity
• Greater accuracy
• Faster processing time
• Reduced cost Data analytics Opportunities and threats of big
• Staff can focus on value Analyse and reveal insights in data
adding work data • Opportunities include: new
trends and patterns, improve
responsiveness
Artificial Intelligence (Al) • Threats include: hackers,
A technology that can mimic viruses, focus on correlation
human intelligence not causation

Machine learning
• An application of Al
• Algorithms learn by doing

12 Strategic Business Leader (SBL)

 Data for Information system IT and systems
decision making controls from a security controls
strategic perspective

New product development, Need for information system Types of control

marketing and pricing controls Controls over physical access,
• Senior management need Information systems need to be logical access controls,
quality data controlled if the output they operational controls and controls
• New product development provide to an organisation's over data input
decisions strategic managers is to be
• Marketing decisions meaningful
• Pricing decisions

Sources of data

Cybersecurity Improving IT/ IS controls

The rise of cybersecurity Practical improvements

Cybersecurity is concerned with Establishing continuity plans,
the protection of systems, regularly maintaining systems,
networks and data in cyberspace introduce organisational IT/IS
policies, employ trustworthy
staff, and assign information
Promoting cybersecurity in 'owners'
organisations
Cybersecurity can be promoted
through a range of activities

13
Chapter 12: E-business

E-business

Delivering Strategy Applications of Characteristics of

e-business models technology to e-marketing:
for e-business support e-business the 6 Is model

Transformation of key Eight areas to consider, Can analyse using the Interactivity,
business processes four-stage models of value chain intelligence,
through the use of progress individualisation,
internet technologies, integration, industry
evaluated by SAF. Also structure, independence
called Digital Business of location

Comparison of Acquiring and managing New

traditional and suppliers and customers developments
online branding using technology and innovation

Visual identity E-procurement Innovation and competitive

'Look and feel', domain name Models include public web, advantage
exchange, supplier-centric, Can create first-mover
buyer-centric, B2B marketplace advantage, but associated
Online brand options problems
Migrate traditional brand online,
extend traditional brand, partner Acquiring customers through
with existing digital brand, e-business technologies Innovation dilemmas
create new digital brand Search engine optimisation, Technology push vs. market pull,
newsgroups/forums, newsletters, product vs. process, closed vs.
link building/partnership open, business model innovation
campaigns, viral marketing,
banner advertising
Business model innovation
Means now ways of thinking
Managing customers through about value creation,
e-business technologies configuration and capture
Promotions, extranets, online
communities, opt-in emails, data
mining, cookies Disruptive innovation and
technologies
• Disruptive and sustaining
innovations
• Blockchain
• Cryptocurrencies

Social innovation
Aims to address social problems
rather than create and capture
economic value

14 Strategic Business Leader (SBL)

Chapter 13: Enabling success and strategic change

Enabling success and strategic change

Enabling success and Collaborative Performance

strategic change working excellence

Organisational structure and Boundary-less organisations The Baldrige criteria (framework

internal relationships (collaborate with external for assessing performance)
parties) • Elements of the Baldrige
• Hollow structure (non-core assessment (leadership,
Organisational structure processes outsourced) strategy, customers,
(responsibilities, communication • Modular structure (production measurement, workforce,
and skills) processes outsourced) operations, results)
Types of structure (simple, • Networks (groups of • Analysing performance
functional, divisional, holding organisations co-operate to
company, transnational and deliver service)
matrix) • Virtual structures (network of
organisations linked via
technology)
Internal relationships
• Centralisation (degree of
central control) Partnering
• Advantages of centralisation • Internal partnering
(control, standardisation) (co-operation and
• Advantages of decentralisation collaboration)
(local knowledge, flexibility) • External partnering (takes
• Strategic management many forms including
relationships (strategic franchising)
planning, strategic control,
financial control)
Outsourcing (use a third party)
• Offshoring (outsourcing in a
different country)
• Shared servicing (consolidate
transaction-processing
activities)
• Global business services
(global approach to shared
servicing and outsourcing)

15
 Empowering organisations Talent management Strategic change

Empowerment The need for a strategic view The need for change
• Workers responsible for setting People source competitive Balogun and Hope Hailey's scope
and achieving work targets advantage and nature of change
• Achieving empowerment (give
workers freedom, may need to
change culture and approach The benefits of talent Type of change
to HR) management Adaptation, reconstruction,
Create a learning organisation, evolution and revolution
attract new talent, succession
planning

Talent management activities

Activities (coaching, networking,
communication and involvement
with the board and key
customers)

Contextual features The four-view Lewin's

of change (POPIT) model three-stage model

Aspects of context Usefulness of POPIT Unfreeze, change, and refreeze

Time, preservation, diversity, Organisation, processes, people • Unfreeze (weaken resistance)
capability, capacity, readiness, and IT • Change (or 'move') (transition
power and scope stage)
• Refreeze (stabilise new state)

16 Strategic Business Leader (SBL)

Chapter 14: Process redesign

Process redesign

Process Harmon's Process redesign

redesign process-strategy matrix options

Organisational processes Low complexity/low strategic Re-engineering

• Drivers of process redesign importance processes Starts with a clean sheet of
• Internal and external Automate/outsource paper
developments

Low complexity/high strategic Simplification

Evaluating existing importance processes Eliminates redundant process
organisational processes Automate elements
• Gap analysis
– Current v desired position
• Need for a holistic view High complexity/low strategic Value-added analysis
– Need to consider how importance processes Eliminates activities that do not
activities and resources Outsource add value
interact
• Business case and benefits
– Helps management decide High complexity/high strategic Gaps and disconnects
which projects to undertake importance processes Target problems at departmental
Improve boundaries

Feasibility A process redesign

methodology

Areas of feasibility Advantages of having a

Technical, social, environmental, methodology
financial Discipline and acceptance

Harmon's process redesign

methodology
• Planning
– Goals set, scope defined
• Analysing the existing process
– Workflow documented,
problems identified, redesign
plan established
• Designing the new process
– Possible solutions considered
• Development
– Functional implications
followed through
• Transition
– Redesigned process is
implemented

17
Chapter 15: Project management

Project management

Project management Project initiation Project costs and benefits

What is a project? Pre-initiating tasks Identifying the benefits

A project has a beginning and an Set objectives, select project
end and is carried out to meet manager, identify the project
established goals within cost, sponsor Measuring benefits
schedule and quality objectives Observable, measurable,
quantifiable and financial
The project manager
What is project management? • The role of the project manager
• The combination of systems, is to take responsibility for Identifying the costs
techniques, and people used to ensuring the desired result is Capital expenditure and
control and monitor activities achieved on time and within operating costs
undertaken within the project budget
• The triple constraint (scope, • The responsibilities of a project
cost and time) manager Cost-benefit evaluation
• Project challenges • Duties of a project manager Accounting rate of return,
payback period, NPV and IRR

Projects and strategy Project sponsor

Project selection (suitability, Provides and is accountable for
acceptability and feasibility) the resources invested into the
project and is responsible for the
achievement of the project's
objectives

Initiating tasks
• Preparation of a business case
(This a key document for a
project. It is used to propose a
course of action to senior
management for their
consideration)
• The project initiation document
(Gives authorisation for work
to be done and resources used)

18 Strategic Business Leader (SBL)

 Project Project execution Project
planning and control completion

Planning tools Controlling projects The completion report

• Work breakdown structure • Gateways are project review Summarises the results of the
(The project is broken down points project, and includes client
into manageable components) • It is at this point that certain sign-off
• The project budget criteria must be met before the
(The amount and distribution project can pass through the
of resources allocated to a gateway and proceed to the The post-project review
project) next stage Is a formal review of the project
• Gantt charts • Progress tests show the current that examines the lessons that
(Shows the deployment of status of the project, usually in may be learned and used for the
resources over time) relation to the planned status benefit of future projects
• Network analysis (or critical
path analysis)
(CPA aims to ensure the Project slippage The post-implementation review
progress of a project, so the • Slippage occurs when a project Are assessments of the
project is completed in the is running behind schedule completed working solution
minimum amount of time) • Addressing slippage
• Resource histogram • Fast-tracking
(Shows a view of project data • Crashing
in which resource
requirements, usage, and
availability are shown against Project change procedure
a time scale)

Responding to project risk

Avoidance, reduction,
transference, and acceptance

19