Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management and Corporate Public Affairs

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For insights into GlaxoSmithKline corporate social policies, visit its web site at:: http://corp.gsk.com/community/workingwith. htm

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Chapter 4 Strategic Management and Corporate Public Affairs

Chapter Four Objectives

Explain the concept of corporate public policy Identify the four major strategy levels and enterprise-level strategy Describe how a concern for social and ethical issues fits into the strategic management Relate the notion of social audits to strategic control Discuss the four major stages in environmental analysis
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Chapter Four Objectives

Identify the major functions of public affairs departments Highlight trends identified with respect to the public affairs function Link public affairs strategy and organizational characteristics Indicate how public affairs might be incorporated into every managers job
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Chapter 4 Strategic Management and Corporate Public Affairs

Chapter Four Outline

The Concept of Corporate Public Policy Four Key Strategy Levels The Strategic Management Process Corporate Public Affairs Public Affairs as Part of Strategic Management Evolution of the Corporate Public Affairs Function Modern Perspectives of Corporate Public Affairs Public Affairs Strategy Incorporating Public Affairs Thinking into Managers Jobs Summary
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Introduction to Chapter Four

The chapter provides a broad overview of how social, ethical, and public issues fit into the general strategic management process of corporate public policy and corporate public affairs

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Affirmative action

The Concept of Corporate Public Policy Employee privacy

Corporate public policy is that part of the overall strategic management of the organization that focuses specifically on the firms posture, stance, strategy or position regarding the public, social and ethical aspects of stakeholders and corporate functioning

AIDS

Sexual harassment

Product safety
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Corporate Public Policy as Part of the Strategic Management Process

Strategic management refers to the overall management process that focuses on positioning the firm relative to its environment Corporate public policy is the part of the strategic management process that focuses specifically on the public, ethical, and stakeholder issues the firm faces
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Corporate Public Policy, Strategic Management, and Ethics

For business ethics to have meaning it must be linked to business strategy because the linkage permits management issues to be addressed in ethical terms. The concept of corporate public policy and the linkage between strategic management and ethics can be better understood in terms of:
Four key strategy levels Steps in the strategic management process
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Four Key Strategy Levels

Each level poses a basic question . . .

Enterprise-level strategy
What is the role of the organization in society?

Corporate-level strategy
What business are we in or should be in?

Business-level strategy
How should we compete in a given business or industry?

Functional-level strategy
How should a firm integrate subfunctional activities and relate them to its functional areas in finance, marketing, production?
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Four Key Strategy Levels Hierarchy of Levels

Enterprise-Level Strategy
Corporate-Level Strategy Business-Level Strategy Functional-Level Strategy
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Emphasis on Enterprise-Level Strategy

Key Questions to Consider
What is the role of our organization in society? How is our organization perceived by our stakeholders? What principles or values does our organization represent? What obligations do we have to society at large? What are the implications for our current mix of business and allocation of resources?
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Emphasis on Enterprise-Level Strategy

What are the manifestations of enterpriselevel thinking?
Codes of ethics Codes of conduct Mission statements Values statements Corporate creeds Vision statements

Search the Web

For an example of enterprise-level strategy in action, visit Hewlett-Packards web site at: http://www.hp.com/hpinfo/community/main. htm

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Emphasis on Enterprise-Level Strategy

Beliefs of Borg-Warner
We believe in the dignity of the individual We believe in the responsibility to the common good We believe in the endless quest for excellence We believe in continuous renewal We believe in the commonwealth of Borg-Warner and its people
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Emphasis on Enterprise-Level Strategy

Johnson and Johnson Credo
We are responsible to our doctors, nurses and patients We are responsible to our employees We are responsible to our communities We are responsible to our stockholders
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Chapter 4 Strategic Management and Corporate Public Affairs

Emphasis on Enterprise-Level Strategy

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process and Corporate Public Policy

Consumer
Owner Social Activist

Governmental

Stakeholder Environment
(trends, events, issues, forecasts)

Environmental

Employee

Community

Goal Formulation

Environmental Analysis

Organizational Environment
Strategy Formulation Strategy Evaluation

Strategy Implementation

Strategic Control
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Goal Formulation

Goal formulation involves:
Establishing goals Setting priorities among goals

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Strategic Management Process Strategy Formulation

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Strategy Evaluation

The need for continuing assessment of the firms current goals and strategy relative to proposed goals and strategic alternatives.

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Strategy Implementation

McKinsey 7S Framework
Strategy Structure Systems Style Staff Skills Shared values

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Strategic Control

Three Essential Steps Set standards against which performance may be compared Compare actual performance with planned performance Take corrective action to bring actual and planned performance in sync
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Strategic Control

Social audit is a systematic attempt to identify, measure, monitor, and evaluate an organizations performance with respect to its social efforts, goals, and programs.
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For an example of a social audit, go to: http://www.the-bodyshop.com/global/values/index.asp

Search the Web

For an example of a ranking of social audits, go to www.sustainability.com

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Strategic Management Process Strategic Control

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Strategic Control

Social Auditing
Global Reporting Initiative (GRI) concerns developing standard measures for social reporting.

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Strategic Management Process Environmental Analysis

Environmental analysis is the linking pin between the organization and the stakeholder environment Four stages of environmental analysis
Scanning Monitoring Forecasting Assessing
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Corporate Public Affairs

Corporate public affairs is the management process that focuses on the formalization and institutionalization of corporate public policy. Corporate public affairs also embraces:
Corporate public policy Issue management Crisis management Governmental affairs Corporate Communications
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Public Affairs Management: Relationships

Strategic Management Process

Public Affairs Management

Enterprise-Level Management

Part of which is

Environmental Analysis

Corporate Public Policy

Issues Management

Crisis Management

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Evolution of the Corporate Public Affairs Function Includes

A growing magnitude and impact of government A changing nature of the political system An increasing number of stakeholders outflanking business An expanding recognition that business should be more politically active
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Chapter 4 Strategic Management and Corporate Public Affairs

Public Affairs Activities

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Chapter 4 Strategic Management and Corporate Public Affairs

Public Affairs Activities

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Chapter 4 Strategic Management and Corporate Public Affairs

New Public Affairs Organization

Manages public affairs as an ongoing process both internally and externally Cultivates and harvests the capability to build, develop, and maintain stakeholder relationships Recognizes the importance of managing the grassroots Communicates in an integrated manner Aligns the organizations values and strategies with the publics interests on a continuous basis Focuses both systematically and proactively on helping the organization compete
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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New Public Affairs Organization

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Chapter 4 Strategic Management and Corporate Public Affairs

Design of the Corporate External Affairs Function and Corporate Social Performance Function Institution oriented versus economic franchise Collaborative/problem-solving strategy versus individual/adversarial external affairs strategy
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Chapter 4 Strategic Management and Corporate Public Affairs

Business Exposure and External Affairs Design

Social Environment

Consumer Products Company

Industrial Products Company

External Affairs Design: Breadth, Depth, Influence and Integration
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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Business Exposure and External Affairs Design

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Chapter 4 Strategic Management and Corporate Public Affairs

Public Affairs Thinking Manager

Make Public Affairs Truly Relevant Operating managers should know the way in which their decisions might impact the stakeholder environment. Develop a Sense of Ownership of SuccessOperating managers should participate in the planning and goal setting of public affairs endeavors. Make It Easy for Operating ManagersTrain them to see the relevance of PA initiatives. Show That Public Affairs Makes a DifferenceKeep a scorecard of successes so managers see the potential of the PA function.
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Selected Key Terms

Benchmarking Business-level strategy Collaborative/problem solving strategy Corporate-level strategy Corporate public policy Enterprise-level strategy Environmental forecasting Environmental monitoring Environmental scanning Functional-level strategy Global Reporting Initiative (GRI) Individual/adversarial external affairs strategy Issues and crisis management Public affairs
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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 4 Strategic Management and Corporate Public Affairs

Selected Key Terms (continued)

Public affairs management Social audit Sociopolitical forecasting Stakeholder environment Strategic management Strategy management process

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved.

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