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Taiz master program Engineering & Management Course Strategic management Strategic position (ECS adapted)

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Taiz master program Engineering & Management Course Strategic management Strategic position (ECS adapted) Lecturer : John L Simons www.jlsimons.org – PowerPoint PPT presentation

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Title: Taiz master program Engineering & Management Course Strategic management Strategic position (ECS adapted)


1
Taiz master program Engineering Management
Course Strategic managementStrategic position
(ECS adapted)
  • Lecturer John L Simons
  • www.jlsimons.org
  • j.l.simons_at_rug.nl

2
Learning Outcomes (1)
  • Identify the components of the governance chain
    of an organisation
  • Understand differences in governance structures
    across the world and the advantages and
    disadvantages of these
  • Identify differences in the corporate social
    responsibility stances taken by organisations and
    how ethical issues relate to strategic purpose

3
How about our ethics ?
4
Learning Outcomes (2)
  • Undertake stakeholder analysis as a means of
    identifying the influence of different
    stakeholder groups in terms of their power and
    interest
  • Consider appropriate ways to express the
    strategic purpose of an organisation in terms of
    statements of values, vision, mission, or
    objectives

5
Exhibit 4.1 Influences on Strategic Purpose
Governance structure
Strategic purpose
Stakeholder expectations
Social responsibility and ethics
6
What are Stakeholders?
  • Stakeholders are those individuals or groups who
    depend on an organisation to fulfil their own
    goals and on whom, in turn, the organisation
    depends.

7
What is Corporate Governance?
  • Corporate governance is concerned with the
    structures and systems of control by which
    managers are held accountable to those who have a
    legitimate stake in an organisation.

8
Exhibit 4.2 The Chain of Corporate Governance
9
Issues Highlighted by the Governance Chain
  • To whom are executives responsible?
  • Who are the shareholders?
  • What is the role of institutional investors?
  • What means of scrutiny and control exist?

10
Reasons for Imperfect Operation of the
Governance Chain
  • Lack of clarity on end beneficiaries
  • Unequal division of power
  • Different levels of access to inform
  • Self-interest among agents
  • Measures and targets reflect agent self-interests
    rather than those of end beneficiaries

11
Exhibit 4.3 Benefits and Disadvantages of
Governance
12
Guidelines for Boards
  • Operate independently of management (no old boys
    networking)
  • Be competent to scrutinize the activities of
    management
  • Have time to do job properly
  • Behave appropriately given expectations for
    trust, role fluidity, collective responsibility,
    and performance

13
Ownership Choices
Private or public ownership of equity
Sale of all or part
Acquisition
Mutual ownership and partnership
Privatisation
14
What is Corporate Social Responsibility?
  • Corporate social responsibility (CSR) is
    concerned with the ways in which an organisation
    exceeds its minimum obligations to stakeholders
    specified through regulation.

15
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16
Stances on Social Responsibility
Laissez-faire
Enlightened self-interest
Forum for stakeholder interaction
Shaper of society
17
BP and The Gulf Disaster
18
Exhibit 4.6 TIs Approach to Ethics
Is the action legal?
Does it comply with values?
Will you feel bad?
How would it look in newspaper?
Do you know it is wrong?
Are you sure?
19
Exhibit 4.7 Stakeholders of a Large Organisation
20
What is Stakeholder Mapping?
  • Stakeholder mapping identifies stakeholder
    expectations and power and
    helps in understanding political priorities.

21
Exhibit 4.9 The Power/Interest Matrix
22
Questions Addressed with Stakeholder Mapping
  • In determining purpose and strategy, which
    stakeholder expectations need to be most
    considered?
  • Do the actual levels of interest and power
    reflect the corporate governance framework?
  • Who are the key blockers and facilitators of
    strategy?
  • Is it desirable to reposition certain
    stakeholders?
  • Can level of interest or power of key
    stakeholders be maintained?

23
What is Power?
  • Power is the ability of individuals or groups to
    persuade, induce, or coerce others into following
    certain courses of action.
  • Different from management ???

24
Sources of Power Within Organisations
Hierarchy
Influence
Involvement
Control of human resources
Control of strategic resources
Knowledge possession
25
Sources of Power For External Stakeholders
Control of strategic resources
Involvement
Knowledge possession
Informal links to internal power
26
Indicators of Power For Within Organisations
Status
Resource claims
Symbols
Representation
27
Indicators of Power For External Stakeholders
Status
Symbols
Resource dependence
Negotiating arrangements
28
Organisational Purposes
  • Values
  • Mission statement
  • Vision statement
  • Objectives

29
What are Core Values?
  • Core values are the underlying
    principles that guide an
    organisations strategy.

30
What are Mission and Vision Statements?
  • A mission statement provides employees and
    stakeholders with clarity about the overall
    purpose of the organisation.
  • A vision statement is concerned with what the
    organisation aspires to be.

31
Mission and Vison in practice
  • Find on the net
  • the mission and vision of
  • A yemeni firm
  • A US or UK firm
  • A multinational
  • Do they underline this difference in mission
    and vision ?

32
What are Objectives?
  • Objectives are statements of
    specific outcomes
    that are to be achieved.
  • Objectives must be measurable. Compare with
    course objectives !!!

33
Chapter Summary (1)
  • The purpose of an organisation will be influenced
    by expectations of shareholders
  • Governance chains reveal the links between
    ultimate beneficiaries and management
  • The shareholder model and the stakeholder model
    are the two generic governance systems
  • Stakeholder analysis reveals the influence of
    different stakeholders

34
Chapter Summary (2)
  • Ethical dimensions of organisational purpose are
    expressed via organisational approach to
    corporate social responsibility as well as by
    individual resolution of ethical dilemmas
  • Managers must decide how the organisation should
    express its strategic purpose through values,
    vision, mission, and objectives

35
Case Example Product Red and Gap (1)
36
Case Example Product Red and Gap (2)
  • (Red) was created by Bono and Bobby Shriver,
    Chairman of DATA, to raise awareness and money
    for The Global Fund.
  • It seeks to do so by teaming up with the worlds
    most iconic brands to produce Red-branded
    products, a percentage of which is then given to
    the Fund.

37
Case Example Product Red and Gap (3)
  • Gap is a brand participant. It seeks to provide
    responsible sourcing of its products, some of
    which are produced in Red beneficiary areas.
  • In contrast, an article in The Times criticised
    the promotion of shopping as a response to
    societal issues, further asking whether this was
    a good use of shareholder funding.

38
Case Example Product Red and Gap (4)
  • What is the rationale of the founders of Product
    Red?
  • What views might shareholders of Gap have of
    Product Red?
  • Is Product Red an appropriate corporate activity?
  • Apply a stakeholder analysis to assess how you
    could convince management of another company to
    join this initiative.
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