Chapter 5- 1 Chapter 5


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  • Chapter 5 2
  • Chapter 5- 1 Chapter 5

    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>ISSUES MANAGEMENT and CRISIS MANAGEMENT </li></ul>Chapter 5 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e
    2. 2. Chapter 5 Outcomes <ul><li>Distinguish between the conventional and strategic management approaches to issues management. </li></ul><ul><li>Identify and explain the stages in the issues management process. </li></ul><ul><li>Describe the major components in the issues development process and factors in actual practice. </li></ul><ul><li>Define a crisis and identify the four crisis stages. </li></ul><ul><li>List and discuss the major stages or steps involved in managing business crises. </li></ul>
    3. 3. Issues Management Conventional Approach <ul><li>Issues fall within the domain of public policy or public affairs management. </li></ul><ul><li>Issues typically have a public policy/public affairs orientation or flavor. </li></ul><ul><li>An issue is any trend, event, controversy, or public development that might affect the corporation. </li></ul><ul><li>Issues originate in social/political/ regulatory/ judicial environments. </li></ul>
    4. 4. Issues Management Strategic Management Approach <ul><li>Issues management is typically the responsibility of senior line management or strategic management staff. </li></ul><ul><li>Issues identification is more important than it is in the conventional approach. </li></ul><ul><li>Issues management is seen as an approach to the management of external/internal challenges to company strategies, plans, and assumptions. </li></ul>
    5. 5. Strategic Issue Management Chapter 5-
    6. 6. Issues Definition Issue A matter that is in dispute between parties. The dispute evokes debate, controversy, or differences of opinion.
    7. 7. Issues Definition Characteristics of an Emerging Issue <ul><li>Terms of the debate are not clearly defined </li></ul><ul><li>Issue deals with matters of conflicting values and interest </li></ul><ul><li>Automatic resolution is not available </li></ul><ul><li>Issue is often stated in value-laden terms </li></ul><ul><li>Trade-offs are inherent </li></ul>
    8. 8. Issues Management Process <ul><li>Issues can be identified earlier, more completely, and more reliably </li></ul><ul><li>Early anticipation widens the range of options </li></ul><ul><li>Early anticipation permits study and understanding of the issues </li></ul><ul><li>Early anticipation permits a positive orientation towards the issues </li></ul><ul><li>Early anticipation allows for better identification of the stakeholders </li></ul><ul><li>Early identification provides the opportunity for the organization to supply information about the issue earlier </li></ul>Basic Assumptions
    9. 9. Model of Issues Management Process Identification of Issues Analysis of Issues Prioritization of Issues Formulation of Issue Responses Implementation of Issue Responses Evaluation, Monitoring, and Control of Results
    10. 10. Identification of Issues Scan the environment Identify emerging issues and trends
    11. 11. Identification of Issues Leading Forces as Predictors of Social Change <ul><li>Leading events </li></ul><ul><li>Leading authorities/advocates </li></ul><ul><li>Leading literature </li></ul><ul><li>Leading organizations </li></ul><ul><li>Leading political jurisdictions </li></ul>
    12. 12. Identification of Issues
    13. 13. <ul><li>Which stakeholders are affected by the issue? </li></ul><ul><li>Who has an interest in the issue? </li></ul><ul><li>Who is in a position to exert influence? </li></ul><ul><li>Who has expressed opinions on the issue? </li></ul><ul><li>Who ought to care about the issue? </li></ul><ul><li>Who started the ball rolling? (Historical view) </li></ul><ul><li>Who is now involved? (Present view) </li></ul><ul><li>Who will get involved? (Future view ) </li></ul>Analysis of Issues
    14. 14. Ranking of Issues Xerox Approach <ul><li>High priority </li></ul><ul><li>Nice to know </li></ul><ul><li>Questionable </li></ul>PPG Approach <ul><li>Priority A </li></ul><ul><li>Priority B </li></ul><ul><li>Priority C </li></ul>Probability-Impact Matrix High Medium Low High Medium Low Probability of Occurrence Impact on Company
    15. 15. Filtering and Ranking of Issues
    16. 16. Other Issues-Ranking Techniques Polls/Surveys Expert panels Content analysis Delphi Technique Trend extrapolation Scenario building Use of precursor events or bellwethers
    17. 17. Formulation and Implementation of Responses Formulation The response design process Implementation The action design process <ul><ul><li>Plan clarity </li></ul></ul><ul><ul><li>Resources needed </li></ul></ul><ul><ul><li>Top management support </li></ul></ul><ul><ul><li>Organizational structure </li></ul></ul><ul><ul><li>Technical competence </li></ul></ul><ul><ul><li>Timing </li></ul></ul>
    18. 18. Evaluation, Monitoring, and Control <ul><li>Constant evaluation of results of responses to the issues to keep strategy on track </li></ul><ul><ul><li>Stakeholder audit </li></ul></ul>
    19. 19. Issues Development Process The growth process or life cycle of an issue Issues Development Process
    20. 20. Issue Development Life Cycle Process
    21. 21. Issues Management in Practice Benefits of Issues Management Processes <ul><li>Companies … </li></ul><ul><ul><li>develop better overall reputations </li></ul></ul><ul><ul><li>develop better issue-specific reputations </li></ul></ul><ul><ul><li>perform better financially </li></ul></ul><ul><li>Provides a bridge to crisis management </li></ul>
    22. 22. Crisis Management <ul><ul><li>To manage a crisis one first must understand that crises: </li></ul></ul><ul><ul><ul><li>Occur abruptly </li></ul></ul></ul><ul><ul><ul><li>Cannot always be anticipated or forecast </li></ul></ul></ul><ul><ul><ul><li>May not occur within an issue category </li></ul></ul></ul> @
    23. 23. The Nature of Crises Crisis Definitions <ul><li>A major, unpredictable event that has potentially negative results that can significantly damage an organization </li></ul><ul><li>A low-probability, high-impact event that threatens the viability of the organization that has an ambiguous cause, effect and resolution </li></ul> @
    24. 24. Types of Crises Economic Personnel Physical Criminal Information Reputational Natural disasters
    25. 25. Types of Crises Outcomes of Major Crises <ul><li>Escalated in intensity </li></ul><ul><li>Subjected to media and government scrutiny </li></ul><ul><li>Interfered with normal business operations </li></ul><ul><li>Damaged the companies bottom line </li></ul><ul><li>Resulted in major power shifts </li></ul>
    26. 26. Crisis Management: Four Stages Prodromal Crisis Stage Warning —precursor Symptom —precrisis Acute Crisis Stage Point of no return Crisis has occurred Crisis Resolution Stage Patient is well/ Whole again Chronic Crisis Stage Lingering on —perhaps indefinitely; period of self-doubt and self-analysis Learning
    27. 27. Managing Business Crises <ul><li>Identifying the crisis </li></ul><ul><li>Isolating the crisis </li></ul><ul><li>Managing the crisis </li></ul>Fink’s Three-Stage Model
    28. 28. Managing Business Crises Business Week ’s Five Steps in Managing Crises <ul><li>Identify areas of vulnerability </li></ul><ul><li>Develop a plan for dealing with threats </li></ul><ul><li>Form crisis teams </li></ul><ul><li>Simulate crisis drills </li></ul><ul><li>Learn from experience </li></ul>
    29. 29. Managing Business Crises <ul><li>Avoiding the crisis </li></ul><ul><li>Preparing to manage the crisis </li></ul><ul><li>Recognizing the crisis </li></ul><ul><li>Containing the crisis </li></ul><ul><li>Resolving the crisis </li></ul><ul><li>Profiting from the crisis </li></ul>Augustine’s Six Stages of Crisis Management
    30. 30. <ul><li>Identify crisis communication team </li></ul><ul><li>Identify key spokespersons </li></ul><ul><li>Train your spokespersons </li></ul><ul><li>Establish communications protocols </li></ul><ul><li>Identify and know the audience </li></ul><ul><li>Anticipate crises </li></ul><ul><li>Assess the crisis situation </li></ul><ul><li>Identify key messages to communicate </li></ul><ul><li>Decide on communication methods </li></ul><ul><li>Prepare to ride out the storm </li></ul>Crisis Communications