Chapter 4- 1 Chapter 4


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Chapter 4- 1 Chapter 4

  1. 1. Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved Prepared by Deborah Baker Texas Christian University <ul><li>STRATEGIC MANAGEMENT and PUBLIC AFFAIRS </li></ul>Chapter 4 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e
  2. 2. Corporate Public Policy (CPP) CPP The firm’s position, stance, or strategy regarding the public, social, & ethical issues of SH. AIDS in Workplace Affirmative Action Sexual harassment Product safety Employee privacy
  3. 3. CPP as Part of Strategic Management Strategic Management How the firm positions itself in relation to the environment. Corporate Public Policy The part of the strategic management that focuses specifically on the public, ethical, & SH issues the firm faces.
  4. 4. In order for business ethics to be meaningful…. It must be linked to business strategy.
  5. 5. Strategy Levels Corporate-Level Strategy Business-Level Strategy Functional-Level Strategy Enterprise-Level Strategy <ul><ul><li>“ What business should we be in?” </li></ul></ul>“ How should we compete in a given business or industry?” <ul><ul><li>“ How should a firm integrate functional activities?” </li></ul></ul><ul><ul><li>“ What is the role of the organization in society?” </li></ul></ul><ul><ul><li>CPP </li></ul></ul>
  6. 6. Enterprise-Level Strategy <ul><li>What is our role in society? </li></ul><ul><li>How are we perceived by SH? </li></ul><ul><li>What values do we represent? </li></ul><ul><li>What obligations do we have to society? </li></ul><ul><li>How will we allocate resources? </li></ul>Key Questions to Address to Develop a CPP
  7. 7. Enterprise-Level Strategy Conveyed in: <ul><li>Codes of ethics </li></ul><ul><li>Codes of conduct </li></ul><ul><li>Mission statements </li></ul><ul><li>Values statements </li></ul><ul><li>Corporate creeds </li></ul><ul><li>Vision statements </li></ul><ul><li>See examples in text </li></ul> @
  8. 8. Enterprise Level Strategy <ul><li>ELS determines how a firm will respond to a SH issue or deal with a public crisis </li></ul><ul><ul><ul><ul><li>Proactive? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Defensive? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Insensitive? </li></ul></ul></ul></ul><ul><li>Who is responsible for making ELS decisions? </li></ul><ul><ul><li>Public Affairs Department </li></ul></ul>
  9. 9. The Strategic Management Process How does CPP fit in? Environmental analysis Strategic control (audit) Strategy implementation Strategy evaluation Strategy formulation Goal formulation
  10. 10. Strategy Formulation
  11. 11. Social Audit ( Social performance report ) <ul><li>A way for the co. to “make public” their performance (CSP) </li></ul><ul><li>Audits can be conducted by inside or outside parties </li></ul><ul><li>Society is now demanding it </li></ul><ul><li>There are no standardized means to measure social reporting. </li></ul>
  12. 12. Performance Reporting Three Steps <ul><li>Set standards </li></ul><ul><li>Compare actual performance with planned performance </li></ul><ul><li>Take corrective action. </li></ul> @
  13. 13. Global Reporting Initiative (1997) <ul><li>Mission is to develop & disseminate globally </li></ul><ul><li>applicable ( standardized ) Sustainability Reporting </li></ul><ul><li>Guidelines. </li></ul><ul><li>These Guidelines are for voluntary use by organizations </li></ul><ul><li>for reporting on the economic, environmental, & social </li></ul><ul><li>dimensions of their activities, G/S. </li></ul><ul><li>FYI--- Participating US firms: Ford, Nike, GM, Texaco </li></ul>GRI’s Purpose
  14. 14. Public Affairs <ul><li>Responsible for … </li></ul><ul><ul><ul><li>CPP </li></ul></ul></ul><ul><ul><ul><li>Issue/crisis management </li></ul></ul></ul><ul><ul><ul><li>Community relations </li></ul></ul></ul><ul><ul><ul><li>Governmental relations </li></ul></ul></ul><ul><ul><ul><li>Corporate communications </li></ul></ul></ul>Public Affairs Department Focuses on the formalization & institutionalization of CPP.
  15. 15. Public Affairs Activities
  16. 16. <ul><li>More successful when : </li></ul><ul><li>Top management philosophies adapt to changing society </li></ul><ul><li>Adopt a collaborative/problem-solving strategy instead of an adversarial strategy (encourage win-win, long term relationship with SH) </li></ul>Public Affairs strategies & CSP
  17. 17. Public Affairs “Thinking” Make public affairs truly relevant (impact) Help managers develop a sense of ownership (involve them) Make it easy for operating managers (training) Show how public affairs makes a difference (scorecards)
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