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February 28, 2012

Alayssa P. Silva

Strategic Management

and Corporate Public

Policy

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The Concept of Corporate Public Policy

Corporate Public Policyis a firms posture,

stance, strategy orposition regarding the

public, social, global,

and ethical aspects of

stakeholders and

corporate functioning

AffirmativeAction

Environment

al

Sustainability

Sexual

Harassment

EmployeePrivacy

AIDS in

Workplace

Product

Safety

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Corporate Public Policy and

Strategic Management

StrategicManagement

The overall management process that

focuses on positioning the firm relative to

its market environment

CorporatePublic Policy

The part of the strategic management

process that focuses specifically on thepublic, ethical, and stakeholder issues the

firm faces

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Relationship of Ethics to

Strategic Management For business ethics to have meaning it must be

linked to strategy because the linkage permits

management issues to be addressed in ethical

terms.

The concept of corporate public policy and thelinkage between strategic management and ethics

can be better understood in terms of:

1. Four key strategy levels2. Steps in the strategic management

process

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Four Key Strategy Levels

Enterprise-LevelStrategy

What is the role of the society of the

organization in society?

Corporate-LevelStrategy

What business(es) are we in or should be

in?

Business-LevelStrategy

How should we compete in a given

business orindustry?

Functional-LevelStrategy

How should a firm integrate a

subfunctional activities and relate them to

its functional areas?

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Emphasis on Enterprise-Level

Strategy Freeman proposes that enterprise-level strategy needs to

address the overriding questions, What do we stand for?.

Thus, at the enterprise level of setting strategic direction

involves understanding the role of a particular firm as a whole

and its relationships to other social institutions.

Key Questions

What is the role of our organization in society?

How is our organization perceived by our stakeholders?

What principles or values does our organization represent?

What obligations do we have to society at large?

What are the implications for our current mix of business and

allocation of resources

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Emphasis on Enterprise-Level

Strategy

Manifestations of Enterprise-LevelThinking

Codes of Ethics

Codes of Conduct

Mission Statements

Values Statements

Corporate Creeds

Vision Statements

Policy-oriented codes and statements

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Strategic Management

ProcessSix-step process identified by Hofer and

Schendel:

1. Goal Formulation

2. Strategy Formulation3. Strategy Evaluation

4. Strategy Implementation

5. Strategic Control6. Environmental Analysis

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Strategic Management Process

Goal FormulationIt involves:

1. Establishment of goals

2. Setting of priorities among goals

Often a politically charged process, goal

formulation integrates the personal values,

perceptions, attitudes, and power of the

managers and owners involved in the process. Economic or financial goals typically dominate

the goal formulation process.

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Strategic Management Process

Strategy Formulation

Four Components of Strategy Formulation

StrategyFormulation

Decision

Personal Values and

Aspirations of

Management

(What we WANT to do)

Organizational

Strengths and

Weaknesses

(What CAN be

done)

Market Opportunities

and Threats

(What MIGHT be

done)

Acknowledged Obligations

to Society

(What OUGHT to be)

3-MANAGEMENT

1- THE COMPANY 2 THE MARKET

4 - SOCIETY

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Strategic Management Process

Strategy Evaluation

The need for continuing assessment of the firms current goals andstrategy relative to proposed goals and strategic alternatives.

Six criteria for evaluating strategy (Seymour Tilles)

1. Is the strategy internally consistent?

2. Is the strategy consistent with the environment?

3. Is the strategy appropriate in view of available resources?

4. Does the strategy involve an acceptable degree of risk?

5. Does the strategy have an appropriate time frame?

6.Is the strategy workable?

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Strategic Management Process

Strategy Implementation

Strategy

Structure Systems Style

McKinsey 7S FrameworkA straightforward identification of seven variables that must be skillfully coordinated in order for

successful implementation to occur

Staff

Skills

Shared

ValuesThe key to the successful use of this framework is achieving fit, or

congruence, among all the elements.

Fit - a process, as well as state, in which there is a dynamic search

that align an organization with its environment and to arrange internal

resources in such a way that the alignment is supported.

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Strategic Management Process

Strategy Control

Three Essential Steps Setting standards against which performance

may be compared

Comparing actual performance with planned

performance Taking corrective action to bring actual and

planned performance in sync

Social audit is a systematic attempt to identify,measure, monitor, and evaluate anorganizations performance with respect to itssocial efforts, goals, and programs.

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Strategic Management Process

Environmental Analysis

Environmental analysis is the linking pinbetween the organization and the stakeholderenvironment, from which information isgathered.

The environment of the business in terms ofthree levels

1. Task Environment : set of customers,suppliers, competitors, and others withwhich a firm interacts on an almost dailybasis;

2. Competitive or Industry Environment:

comprises those firms functioning in thesame markets or industry; and3. General Environment or Macroenvironment

: includes everything else that influencesthe organization.

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Strategic Management Process

Environmental Analysis

Four stages of environmental analysis

Scanning theEnvironment

It focuses on identification of precursors or indicators ofpotential environmental changes and issues. The purpose of

this stage is to alert management to potentially significant

events, issues, or trends before they have fully formed.

Monitoring

EnvironmentalTrends

It focuses on tracking of specific trends and events with an

eye toward confirming or disconfirming trends or patterns.

Monitoring often involves following up on the indicators or

signals that were detected during the scanning stage. The

goal here is to gather and assemble sufficient date to discern

patterns.Forecasting

EnvironmentalChanges

It is the future-oriented stage and is concerned with the

development of plausible and realistic projections of the

directions, scope, speed, and intensity of environmental

change.

Assessment forOrganizationalImplications

It shifts the attention away from gathering and projecting andtoward the task of understanding what the information

means to management. The central question becomes,

Whatare the implications of our analysis of the environment

to ourorganization?. The key is to develop the ability to sift

through all the information that has been generated and

determine what is relevant to management.