SBL - Revision notes PDF

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ACCAStrategic ProfessionalStrategicBusiness Leader(SBL)Revision NotesFor exams in September2021, December 2021, March2022 and June 2022Fourth edition 2021ISBN 9781 5097 3813 7ISBN (for internal use only): 9781 5097 3812 0e-ISBN 9781 5097 3900 4British Library Cataloguing-in-Publication DataA catalog...

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ACCA Strategic Professional

Strategic Business Leader (SBL) Revision Notes For exams in September 2021, December 2021, March 2022 and June 2022

Fourth edition 2021 ISBN 9781 5097 3813 7

A note about copyright

ISBN (for internal use only): 9781 5097 3812 0

Dear Customer

e-ISBN 9781 5097 3900 4

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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 when sending to print. In the event that any errors are found after the print date, they are uploaded to the following website: www.bpp.com/learningmedia/Errata.

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 1

Summary of Essential reading content Strategy, leadership and culture

• Leadership theories. This section explores in greater 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 social responsibility

• Agency problem. This section discusses the issues 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 governance on strategy

• Institutional investors. This section focuses on institutional investors and considers how they exercise their influence and how they might intervene in the affairs of a company.

4

The external environment

• Porter’s Five Forces. This section provides more 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 advantage and strategic choice

• Conceptual difficulties with generic strategy. This section considers some of the main difficulties of applying generic strategies. • The seven Ps. This section provides greater coverage of the seven Ps framework.

7

Assessing and managing risk

• COSO’s Enterprise Risk Management - Integrating 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 systems

• Controls. This section considers the different types of 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 principles

• Possible fraud risks. This section highlights a number 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 strategic change

• Team-based and project-based structures. This 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 organisation C5

D

Strategic choices

Chapter 5 Chapter 6

Risk

D1

Identification, assessment and measurement of risk

Chapter 7

D2

Managing, monitoring and mitigating risk

Chapter 7

E

Technology and data analytics

E1