RM_Capsule 2.ppsx

Capsule 2
Restructuring Business for
Employee Welfare
BA3510 Integrated Marketing:
Business, Leadership & Innovation
Dr A Theuma
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STMARTINS.EDU | PAGE 2
Mandatory Reading:
• Laasch and Conway,(2015) chapters 6 and 8
BA3510 Integrated Marketing: Business,
Leadership & Innovation Dr A Theuma
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Topic Plan
BA3510 Integrated Marketing: Business, Leadership & Innovation
Dr A Theuma
We will address the following:
• The implications of and for strategic management
and organisational structure and development
• What should strategic management be in 15
years to make a maximum contribution to
sustainable development?
• Why various organisations with responsible
architecture have social and regulatory failures?
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Case Study
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CASE STUDY https://www.betafarma.com/en/
BETAPHARM - small pharmaceutical firm in Germany
• Producer of generic drugs
• Dispensed with push advertising and marketing strategies and
instead it set up a care initiative BETA INSTITUTE - an educational
investment
• Offer health carers training in the use/benefits of the drugs
• EXTREME form of stakeholder outreach - CORE for responsible
management - brand positioning.
• LT results - Betapharm grew rapidly to become one of the biggest
generic drug companies in Germany
• Economic Competitiveness of Betapharm is based on above-
average in social performance -
• Ultimate goal - responsible strategic management.
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Strategic Management
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Strategic Management - this is process - involves a
number of steps - 4 steps:
• To define the business's broad strategic direction by
crafting VISION AND MISSION STATEMENT and the
STRATEGIC OBJECTIVES
• Environmental analysis (SWOT)
• Formulate a strategy either for the business as a whole
or for separate business units
• Implement the strategy
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Step 1 : Strategic Management
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We need to define what it is that the organisation wants
to achieve and its long term vision as well as its short and
medium term objectives
• What is the business about?
• What does the business do?
• Mission Statement: this is a document that frames
the vision of the organisation - the mission statement is
the spring board for dialogue with the stakeholders
• Strategic objectives and goals : clear definition of what
the firm will do to achieve its objectives/ mission/
vision
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Step 2: Strategic Management
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Environmental analysis - here we need to carefully
assess the players in the industry and analyse the
strengths and weakness of the firm in relation to all
the other players.
• Micro & Macro Environment of the firm
• Micro: CCCPMS Consumers, Company,
Competitors, Publics, Marketing Intermediaries,
Suppliers
• MACRO : PESTEL ND: Political, Environmental,
Social, Technological, Economic, Legal, Natural,
Demographic
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Competitor Analysis: Porter’s 5 Forces Model
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Customer analysis : Customer Relationship
Groups
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Value Chain Analysis
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SWOT Analysis
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Step 3 CRAFTING THE STRATEGY
Here we actually plan the LT course of action of the organisation
Strategy is planned at the different levels (hierarchical) levels of the organisation
The corporate level
The business level
The functional level
• The corporate level - we determine the overarching plan of action for the
organisation. Which are the markets the firm will operate in? and to what degree
will we integrate our activities - horizonal, vertical conglomerate integration??
• The business level - focus only on one specific product market - so that we design a
strategy for this business unit such that it can exploit its core competencies to the
full - a question of positioning the business unit
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The business level
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The Functional level
…operates within a business unit. Designing a
strategy for the different departments so that
they can support the business level strategy as
the overall corporate level strategy.
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Execute and evaluate strategy
• Why do we evaluate strategy? We need to
understand whether it is making a difference -
we need to be able to control the extent of
change we are bringing about
• Performance Management
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Balanced Score Card (Kaplan & Norton, 1995)
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• Once we have now determined the stages in the
strategic management, we will look at how best
to STRUCTURE our organisation so that we can
exploit the maximum benefit from our strategies
• Organizational Theory - branch of social science
that studies the design and evolution of social
structures within complex modern organisations.
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Opposing views of organisation theory:
• Individualists vs collectivists
• Realism vs Constructivism:
• Instrumentalists vs Institutionalists:
We also look at other issues:
• Span of control
• Hierarchical or flat organisations etc
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Anand and Daft 2007
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…asked which way is the best to organise the firm as a responsible
organisation. there is no one single way - it depends.
They identified 5 alternatives:
1. Self contained organisation
2. Horizontal organisation
3. Hollow
4. Modular
5. Virtual - Joint Ventures.
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Anand and Daft 2007
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…asked which way is the best to organise the firm as a responsible organisation. there is no one
single way - it depends.
They identified 5 alternatives:
1. Self contained organisation - firm that is organised into functions or divisions and follows a
MATRIX structure.
Great control over the activities and responsibilities of the organisation. Tend to have strong
hierarchies that will impede change
2. Horizontal organisation - core process in the firm that is organised cross-functionally
Such a responsible business structure must be organised around making core processes more
responsible
Opportunity to being about change is more real since teams are made up of different functions of
the organisation
3. Hollow - here we have an organisation that out sources its internal processes . Ensure that
outsources does not create sup optimal labour standards, environmental issues, ethical issues -
who are you outsourcing to?
4. Modular -Firm organised into different subsidiaries -- one sources and treats raw materials,
another produces components, and another assembles the product together - easier to create an
eco system for sustainable innovation together with the other producers. Great potential to
improve one's own social and environmental performance
5. Virtual - Joint Ventures - great potential to pool knowledge and resources in order to quickly
react to social, environmental and economic opportunities and challenges. 24

Structural Elements for Responsible
Infrastructure
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The Organisational Chart
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The organizational chart, which is the scaffold of the responsible business architecture
drafted, can be divided into four main areas.
• Top management: The highest tier of managers is led by the CEO.
• Board of directors: The board (originally developed as a tool of
corporate governance) serves as a control mechanism and includes
internal and external directors, and committees focusing on central
topics.
• Staff function: The support functions provide central services
important for the work of line functions.
• Line functions: The main functions are directly involved in the main
value- creating activities of the company. The decision about which
functions to include in staff and line functions depends on the focus
of the respective organization.

Development Paths toward
Responsible organisations
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Characteristics of the responsible
leader
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leader
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leader
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Leaders typically have to fulfill three main tasks to lead followers to the ful- fillment of
goals. Quinn and Dalton (2009) researched good practices of sustainability leaders,
moving businesses toward organizational sustainability, and found the following
three phases of leadership for sustainability, which also apply more broadly to the
other responsible leadership domains. Leaders recommended the following:
1. Create direction: Leaders must convincingly convey the vision and goals associ- ated
with the change to be implemented. Good practices are:
a. Framing and delivery of the message: Avoid “gloom and doom,” and frame
sustainability as a positive message of opportunities. Use vivid examples and involve
emotions and creativity. Use the language of business, of financial factors and
feasibility. Appeal to employees’ inherent motivation to do the right thing, by
reframing the activities in the light of social value.
b. Initiating, implementing, and advising: Make sure you have a powerful initiator, who
can push off the change, someone doing the actual work and implementing, and an
expert in an advisory role.
c. Focusing the effort: Do not lose energy by trying to convince skeptics, but focus on
the early adopters who can deliver the energy to carry on the momentum.

leader
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• 2. Create alignment: Leaders must ensure the initial implementation of internal responsible business practices.
• Implementing internal business practices: If internal processes and structures are in place for sustainability,
employees do not necessarily have to believe in sustainability to make it happen. Structures that were mentioned
as especially important are job functions, and controlling systems based on sustainability indicators,
communication and feedback systems, and a company-wide sustainability training system.
• Engaging with stakeholders: Sustainability goals cannot be reached alone. Leaders must collaborate in a broader
stakeholder system to build long- term partnerships and try to also convince other companies to do the same
thing.
• Implementing sustainability in building, products, and services: Integrating sustainability here creates a constant
reminder for all involved in the pro- duction process and consuming products and services. Also this implemen-
tation has the potential to create new revenue streams and to show the business case for sustainability.
• 3. Maintain commitment: Reaching sustainability, a stakeholder responsibility, is a long-term goal. It is of crucial
importance for successful sustainability leaders to ensure that followers’ commitment is maintained over long
periods of time.
• Treating employees as assets: When employees are treated as assets, as car- riers of the organization’s
sustainability knowledge, skills, and culture, this will reduce their fluctuation, increase motivation, and keep the
sustainability movement alive.
• Building reputation: Once a company has created a reputation for being an ethical, sustainable, and responsible
business, this becomes a self-fulfilling prophecy. Stakeholders expect the company to stay the course. The orga-
nization will be held accountable for noncompliance with the reputational image created.
• Engaging in networks: Sustainability and responsibility networks, such as industry initiatives, are an external
anchor that helps in maintaining efforts.

leader
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Simon Sadeck (The Path to corporated responsibility, HBR,
2004) pioneered main global responsibility standards and led
the development and promotion of concepts such as
responsible competitiveness and materiality.
How can responsible managers and businesses create
sufficient scale to reach truly sustainable development?
Product, process, people, and public policy—the four Ps.
New products, redesigned business processes, citizens who
behave differently as consumers and voters, and public
policies that shape markets to incentivize the right business
behaviour.

leader
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Simon Sadeck (The Path to corporate responsibility, HBR, 2004)
Organizations’ learning pathways are complex and iterative.

leader
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Simon Sadeck (The Path to corporate responsibility, HBR, 2004
As issues mature, they become absorbed
into mainstream professional debate and
eventually into practice. Once leading
companies adopt unconventional
commitments and practices around certain
societal issues, laggards must either follow
suit or risk the consequences.
EXAMPLE:
When the Body Shop adopted human
rights policies in the mid-1990s, most
mainstream companies deemed its
practices unfeasible, and yet today firms
adopt human rights policies.

FOOD FOR THOUGHT
Do you work or manage in an organization that tends to view
employees as a means to an end, as “cogs in a machine?” If so,
consider these questions:
– Do you consider your organization to be a vertical one or more
horizontal? If vertical, what impact do more structural levels, tighter
spans of control, top-down decision making, and less involvement of
work teams have on your company?
– What changes in organizational structure in your company will allow
better responsible management of employees?
– How can employees be more involved in decision-making processes?
Perhaps your company is “vertically challenged” and wider spans of
control and a flatter design could help. How can you help consolidate
middle levels for better communication about sustainable activities?
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Schembri Street, Hamrun HMR1541, Malta
T: +356 2123 5451 | F: +356 2123 2630 | E: infodesk@stmartins.edu
WWW.STMARTINS.EDU
Dr A Theuma
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