Chapter 5- 1 Chapter 5


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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. Corporate public policy <ul><li>The firm’s position, stance, or strategy regarding the public, social, & ethical issues of SH. </li></ul><ul><li>How do we know? </li></ul><ul><li>Handled by … ? </li></ul>AIDS in Workplace Affirmative Action Sexual harassment Product safety Employee privacy
  3. 3. Issues Management Conventional Approach <ul><li>Issues handled by Public Affairs Department as they arise (reactive) </li></ul>
  4. 4. Strategic Management Approach <ul><li>Issues handled by strategic management staff (ethical decisions incorporated into strategy)-  proactive </li></ul><ul><li>More emphasis on anticipation of threats/opportunities & issue identification </li></ul><ul><li>Newer way of thinking. </li></ul><ul><li>What is an ISSUE? </li></ul>
  5. 5. Issue A dispute between parties that evokes public debate, controversy, or differences of opinion. High visibility, media exposure, special interest SH involved . -Requires the Co. make a decision- Example: ATV safety
  6. 6. Issues Management Benefits of Early Anticipation of Issues? <ul><li>More options (prevent crisis!) </li></ul><ul><li>Clear understanding of the issues </li></ul><ul><li>Can develop a positive attitude </li></ul><ul><li>Faster & better identification of SH </li></ul><ul><li>Opportunity to supply information to public & media. </li></ul>
  7. 7. First Step of SH Mgmt— Identification of Issues Scan the environment How? Identify emerging issues & trends “ Trend spotting services”
  8. 8. Identification of Issues Predictors of Social Change <ul><ul><li>Triggering events </li></ul></ul><ul><ul><li>Authorities/ advocates </li></ul></ul><ul><ul><li>New literature </li></ul></ul><ul><ul><li>Special interest groups (Websites) </li></ul></ul><ul><ul><li>Political jurisdictions </li></ul></ul>
  9. 9. <ul><li>Which SH are affected? </li></ul><ul><li>Who is in a position to exert influence? </li></ul><ul><li>Who has expressed opinions? </li></ul><ul><li>Who started the ball rolling? </li></ul><ul><li>Who is now involved? </li></ul><ul><li>Who is likely to get involved? </li></ul><ul><li>Analyzing cases, paper… </li></ul>Analysis of Issues
  10. 10. Prioritize Issues <ul><li>Consider SH legitimacy, urgency, power </li></ul><ul><li>Assign top priorities to an issues management team (part of Public Affairs Department) </li></ul><ul><li>Begin to mobilize resources to deal with issue </li></ul>
  11. 11. Response To Issues <ul><li>Create Strategy </li></ul><ul><li>Take Action </li></ul><ul><ul><li>Things to consider… </li></ul></ul><ul><ul><ul><li>Have resources needed? </li></ul></ul></ul><ul><ul><ul><li>Top mgmt support? </li></ul></ul></ul><ul><ul><ul><li>How to deal with media? </li></ul></ul></ul><ul><ul><ul><li>Ready for government scrutiny? </li></ul></ul></ul><ul><ul><ul><li>Can we turn threat into opportunity? </li></ul></ul></ul>
  12. 12. Evaluation <ul><li>Constant evaluation of SH responses, activities, opinions to the issues </li></ul><ul><li>Is our strategy on track? </li></ul><ul><li> SH audit </li></ul>
  13. 13. Issue Development Life Cycle (Page 146)
  14. 14. Benefits of Issues Management <ul><li>Better reputation & financial performance </li></ul><ul><ul><ul><li>Johnson & Johnson vs. Dow Corning </li></ul></ul></ul><ul><li>Provides a bridge to crisis management </li></ul><ul><ul><ul><li>And maybe even prevention! </li></ul></ul></ul><ul><li>Avoid governmental action. </li></ul><ul><li>Example: McDonalds & Bird-Flu </li></ul><ul><li>What is CRISIS? </li></ul>
  15. 15. What is a Crisis? <ul><ul><ul><li>Abrupt </li></ul></ul></ul><ul><ul><ul><li>Unpredictable </li></ul></ul></ul><ul><ul><ul><li>Involves a major SH </li></ul></ul></ul><ul><ul><ul><ul><li>(hurt, killed, “unfair” treatment) </li></ul></ul></ul></ul><ul><ul><ul><li>High visibility (media) </li></ul></ul></ul><ul><ul><ul><li>Usually involves ethical issue </li></ul></ul></ul><ul><ul><ul><li>“ A turning point for better or worse ” </li></ul></ul></ul><ul><ul><ul><li>Potential threat to organization- What kind? </li></ul></ul></ul>
  16. 16. Types of Crises Economic Personnel (HR) Physical Criminal Information Reputational Natural disasters
  17. 17. Outcomes of Major Crises <ul><li>Escalate in intensity </li></ul><ul><li>Subject to media & government scrutiny </li></ul><ul><li>Interfere with normal business operations </li></ul><ul><li>Damage the company’s bottom line </li></ul><ul><li>Result in major power shifts. </li></ul>
  18. 18. 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><ul><li>Skip the others </li></ul>
  19. 19. Crisis Communication <ul><li>Most important step in managing a crisis  communicate effectively with SH </li></ul><ul><ul><ul><ul><li>Which SH first? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Why? </li></ul></ul></ul></ul><ul><li>Communicate with all media at the same time </li></ul><ul><li>Use trained spokespersons (consistency) </li></ul><ul><li>Tell the truth ! </li></ul>