Global Strategy and Leadership

Global Strategy and Leadership is the capstone segment for the CPA Program professional level. This segment consolidates the learnings candidates have gained in the other three compulsory segments, Ethics and Governance, Financial Reporting and Strategic Management Accounting. In the increasingly complex business environment in which organisations operate, characterised by change, uncertainty and escalating competition, the disciplines of strategy and leadership have become critical to successful organisational performance.

The aim of this segment is to link the knowledge of management and financial accounting to the concepts of strategy and leadership. Accountants use a variety of technical information to make decisions for the future of the business within an ethical framework of operation. This segment shows that accounting information, ethics, strategy and leadership are applicable to accountants working throughout the world in diverse organisations. As discussed in Ethics and Governance, accounting as a profession is respected internationally and CPAs are employed worldwide. The segment materials address the needs of candidates operating in different international markets in varying roles.

This segment builds upon knowledge gained in the other three compulsory segments of the professional level. The concepts of professional ethics and good governance underpin the segment. Candidates who have previously undertaken the Advanced Audit and Assurance or Strategic Management Accounting segments will be familiar with the use and application of Porter’s five forces model. Those candidates who have studied Strategic Management Accounting will note a number of concepts that have been expanded upon in this segment, including strategic analysis, performance measurement and the value chain. The international focus of this segment acknowledges the importance of the reporting requirements under the International Financial Reporting Standards (IFRSs).

Segment aims

The segment has two aims:
The primary aim of this segment is to provide candidates with an understanding of the concepts and principles that underpin the practices of strategy and leadership in the global economy, and the ability to apply these concepts to real-life business cases.

The secondary aim of the segment is to consolidate the knowledge candidates have gained from their study of the other three compulsory segments, Ethics and Governance, Financial Reporting and Strategic Management Accounting.

General objectives

On completion of this segment, candidates should be able to:

• understand the role of the accountant in the development and implementation of strategy
• use analytical tools and models to analyse the industry and the market in which an organisation operates 
• use analytical tools and models to understand and measure the performance of the organisation 
• use business information for decision-making from an organisational perspective 
• identify and explain the key challenges faced in the implementation of strategy and the role of the accountant in the implementation and leadership functions 
• consolidate the understanding of strategy and leadership concepts through the use of real-world examples integrated throughout the material, and apply these concepts to business case scenarios through the use of a major case study 
• apply skills in thinking strategically and formulating broad strategies for consideration and application in their organisational environment

Segment content

Module 1: An introduction to strategy and leadership

Module 1 provides an overall introduction to the key concepts of strategy and leadership in the global context. It illustrates the need for improved capabilities in both areas because of the rapidly changing and uncertain business environment. The role of accountants in such a changing environment becomes even more crucial. The module is designed to clearly illustrate that the role of the accountant is far more than the traditional ‘number crunching’. Accounting is a dynamic role in the modern business environment, and as such, accountants are contributing increasingly to the high-level, decision-making process within organisations.

The need to craft and implement a strategy in order to translate a vision into reality is described as a key leadership function. The module provides an overview of various theories and perspectives that inform the practices of strategy and leadership. Further, the module helps candidates understand the basic concepts and principles that are elaborated upon in the later modules.

Contents:

• Introducing strategy and leadership 
• The role of the accountant in strategy development
• The global context of business
• Approaches to strategy 
• Strategy process 
• Strategic thinking 
• Levels of strategy 
• Strategic leadership 
• Leadership and ethics

Module 2: Understanding the external environment

In this module we begin the strategic analysis component of this segment. Having discussed the concept of strategy in Module 1, Modules 2 and 3 undertake the analysis component of strategy, focusing on business strategy. These modules focus on approaches used in undertaking strategic analysis of the external industry and internal business environments. Module 2 in particular provides tools for strategic analysis of the external operating environment of the organisation.

Module 2 also provides a framework for analysing the external environment, with the focus on an organisation’s specific industry and markets. This involves evaluating economic, political, technological and other trends to provide an estimate of the level of future industry growth. The industry analysis helps to examine the forces determining industry profitability and concludes with market, competitor and customer analysis.

Contents:

• Understanding the external environment 
• Remote and industry environment analysis 
• Understanding customers and markets
• The basis of competition 

Module 3: Understanding the internal environment

In this module, the focus is on the internal environment—those factors within the organisation that may affect its strategy choice in the future and the implementation of that strategic option. That is, factors within the organisation’s control.

Assessing the internal environment is critical in understanding whether the organisation is successful. It also helps to assess whether its strategy is appropriate in the context of not only the external environment, but also of internal factors, such as key stakeholder requirements, organisational performance and the organisation’s capabilities.

Contents:

• Introduction to strategy
• Key stakeholder requirements 
• The five questions (5Qs) approach to business strategy analysis 
• Other strategy considerations 
• Articulating business strategy
• Measuring organisational performance 
• Capabilities 
• Gap analysis 
• Summarising overall performance 
• Identifying business strategic options

Module 4: Product and market development

With our strategic analysis complete, we turn our attention in this module to using this information to identify strategic options for growth. In this module we begin to combine the results of the external and internal analysis (discussed in Modules 2 and 3). There are a number of factors that must be considered by an organisation before determining which, if any, growth strategy to pursue.

In considering the concepts of product and market development as tools for organisational growth, we also discuss a number of the resources available to inform strategic choices, and the specific accounting impacts that may affect an organisation when it decides to enter a new market or undertake a significant new product development. The consideration of accounting impacts is a key factor in assessing organisational capability, particularly in terms of cost and resourcing implications of any desired changes, and while some of the issues discussed may appear more operational than strategic in nature they are a vital part of an organisation’s capabilities and are thus key in achieving successful implementation of strategy.

Contents:

• Product and market options 
• New product development 
• New market development 
• Development of new geographic markets
• Accounting issues in global strategy 
• Common modes of entry into geographic markets

Module 5: Making strategic choices

In this module we discuss approaches to evaluating strategic options so that an organisation can decide which option or options to implement. The approaches used draw together information and analysis from Modules 2, 3 and 4 so recommendations can be made in the context of an organisation’s strategy for options being evaluated.

What is presented in this module is a rational approach to making strategic choices; however, in practice this is not always the case, and so the final section of this module looks at why decision-making does sometimes vary from the rational approach.

Contents:

• Evaluating options 
• Product and market evaluation criteria 
• Risk assessment 
• Evaluating strategic options 
• Making recommendations to key decision makers 

Module 6: Leading and implementing strategy

Module 6 focuses on the culmination of the strategic process—implementation. The module highlights the strong relationship between the implementation of strategy and the leadership required for successful implementation. It is vital to have strong leadership in order to turn the strategic vision into a reality.

Leaders are required to drive strategy, align structure and culture with strategy, and manage the politics and any resistance encountered. Developing new policies and creating budgets are among the key leadership tasks undertaken by accountants. Assessing the ability of both the culture and structure of the organisation to support the strategy is discussed.

Contents:

• An overview of strategy implementation
• The challenges of implementing strategy 
• How to implement strategy 
• Leading the implementation of strategy 
• Future challenges