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Strat Man 5th Ed Ch6 Slctd Slides
 

Strat Man 5th Ed Ch6 Slctd Slides

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Explores the main issues in developing and defining the strategic purpose of an organisation: more on www.global-strategy.net

Explores the main issues in developing and defining the strategic purpose of an organisation: more on www.global-strategy.net

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    Strat Man 5th Ed Ch6 Slctd Slides Strat Man 5th Ed Ch6 Slctd Slides Presentation Transcript

    • How do we develop the purpose of the organisation? Video Summary Chapter 6 © Copyright Richard Lynch 2009. All rights reserved
    • Understanding the organisation’s purpose - 1 Environment Resources Purpose Options Options Options Choice Implement This session
    • Purpose Vision of the future Stakeholder power Governance, Ethics and Corporate Social Responsibility Organisation’s mission and objectives Understanding the organisation’s purpose - 5 Each of these topics forms part of the study of ‘purpose’
    • Developing the purpose of the organisation - 2
      • Five main questions to be considered:
      • What is our area of activity - and what should it be?
      • What kind of organisation do we wish to be?
      • What is the relative importance of shareholders and stakeholders?
      • Do we want to grow the organisation?
      • What is our relationship with our immediate environment and with society in general?
    • Identifying a vision for the future - 2
      • “ ...A vision articulates a view of a realistic, credible, attractive future for the organisation, a condition that is better in some important ways than what now exists.”
      • - Bennis & Nanus
      • Vision may help to point the way ahead for organisations
      • Vision needs to be distinguished from purpose:
        • Vision : A challenging and imaginative picture of the future of the organisation
        • Purpose : The long-term, specific strategic direction of the organisation
    • Identifying a vision for the future -3
      • Reasons for developing vision:
      • In competing for business and resources, most organisations will benefit from a vision that articulates where they wish to be
      • Stimulates development of mission and objectives
      • Explores new strategic opportunities
      • Extrapolating the current picture unlikely to be sufficient for strategy development
      • Challenge for management
      • Keypoint : there is no ‘strategic formula’ for developing a vision
      • Stakeholders are the individuals and groups who have an interest in the organisation and, therefore, may wish to influence aspects of its mission, objectives and strategies
      • For example at Starbucks, stakeholders will include shareholders, managers and employees
      • In developing the organisation’s purpose, there are two sets of interests:
        • Those who have to carry out the purpose: employees, managers, directors
        • Those who have a stake in the outcome: shareholders, suppliers, government, customers and other interested parties
      • Importantly, stakeholding extends beyond those who own and work in the organisation
      Coping with stakeholder power - 2
      • Typical stakeholders:
        • Owners : wanting a financial return
        • Employees : wanting high salaries and wages
        • Customers : buying quality goods and services
        • Creditors : assessing the creditworthiness of the organisation
        • Suppliers : wanting payment
        • Local community : wanting safety and local contribution to society
        • Government : needing compliance with law and also a contribution to society
      Coping with stakeholder power - 2 Typically, there are conflicts of interest between stakeholders
    • Corporate Governance, Ethics and Corporate Social responsibility
      • Corporate Governance refers to the influence and power of the stakeholders to control the strategic direction of the organisation in general and, more specifically, the authority of the chief executive and other senior officers of the organisation.
      • Corporate governance is primarily concerned with the power vested in the chief executive and other senior managers
      • Ethics and Corporate Social Responsibility (often shortened to CSR) refers to the standards and conduct that an organisation sets itself in its dealings within the organisation and with the outside environment
    • What is Corporate Governance?
      • Corporate Governance relates to two main areas:
        • Selection and conduct of the senior officers of the organisation
        • Relationships of the senior officers with owners, employees and other stakeholders of the organisation
      • Its importance relates to the power given to senior officers to run the organisation
      • Various checks on such power:
        • information relayed to stakeholders
        • Appointment of non-executive directors
      • Corporate Governance is more a matter of principles of conduct than a series of simple rules
    • Ethics and CSR -1
      • Ethics and Corporate Social Responsibility (CSR) are the standards and conduct that an organisation sets itself in its dealings within the organisation and outside with its environment: they need to be reflected in the organisation’s mission statement
      • Ethics is particularly concerned with the basic standards of conduct set by an organisation such as honesty and the treatment of employees
      • CSR is a broader concept concerned with the role and contribution of the organisation in society: topics will vary but may include environmental ‘green’ issues, treatment of employees and suppliers, charitable work and contribution to the nation
    • Ethics and CSR -3
      • Three prime considerations in developing ethics and CSR:
        • extent of ethical considerations
        • their cost and
        • the recipient of the responsibility
      • There are numerous differences between organisations over what should be covered under ethics, reflecting fundamentally different approaches to doing business and to directing public sector organisations
      • There are no simple rules
      • Fundamentally, ethics and CSR must be part of the organisation’s purpose and guide the development of its strategy
    • How to formulate a mission statement - 1
      • Some basic questions to be considered in developing mission :
      • What is our area of activity - and what should it be?
      • What kind of organisation do we wish to be?
      • What is the relative importance of shareholders and stakeholders?
      • Do we want to grow the organisation?
      • What is our relationship with our immediate environment and with society in general?
      “ Mission : a summary of the broad directions that the organisation should and will follow, together with the reasoning and values that lie behind it.”
    • “ What’s the difference between vision, mission and objectives?”
      • There is some confusion in this area – no absolute rules
      • Vision : a challenging and imaginative picture of the future role of an organisation
      • Mission : outlines the broad general directions that an organisation should and will follow, summarising the reasoning
      • Objectives : take the generalities of the mission and turn them into more specific commitments
    • How to develop objectives - 1
      • ‘ Objectives take the generalities of the mission and turn them into more specific commitments: usually this will cover what is to be achieved and over what timescale’
      • Developing objectives can begin by analysing the external strategic context:
        • What is the purpose and objectives of our competitors?
        • Are there any relevant possible and probable outside events, such as economic growth or rise in raw material costs?
        • Is it possible and appropriate to have clearly and specifically defined objectives?
    • How to develop objectives - 2
      • Development of objectives then needs to analyse the internal strategic context:
        • Ownership of the organisation: what are the requirements of the owners?
        • History of the organisation: how have objectives been set in the past?
        • Organisational culture – aggressive? mild? etc will impact on objective setting
      • Consider implications for objective-setting, especially on style of process – consultative, imposed from above, etc.
      • Consider competitive advantage both now and future
      • Translate into some outline business objectives – not necessarily quantified at this stage– with relevant timescales