Chapter 2 - Objectives and Stakeholders Flashcards
Ashridge College model of mission
links business strategy to culture and ethics
Purpose - why does co exist
Values - beliefs and morale principles
Strategy - commercial logic (resources
Policies + Standards of behaviour - how business should be conducted
Mission statement - Definition (by CIMA)
A published statement, apparently of the entity’s fundamental objectives.
A Mission is an entity’s fundamental objectives expressed in general terms.
Mission statement criticism
- PR exercise
- Generalization
- may ignore formulation or implementation of strategy
Mission statement upsides
- Inspires and informs
- Screening
- Implementation
Vision statement
Answers:
- What do we want to achieve?
- Where is the Org going?
Goals can be
Hierarchically: top mission, underneath are goals
Functionally: colleagues work on a project
Logistically: resources shared or used in sequence
In wider Org sense: set priorities
Objects should be SMART:
Specific Measurable Achievable Relevant Timed
Functions of objectives are:
Planning (enables)
Responsibility (assigns)
Integration (consistent)
Motivation (what has to be done - in all areas)
Evaluation (performance vs objectives = control)
Examples of financial and non-financial objectives
profitability
market share
growth
cash flow
customer satisfaction
quality of products
HR
New products
Levels of objectives
Corporate: establish objectives and derive strategy
Department: Mfg or Mrkting Objectives
Operational level: Scheduling programs and action plans
Time horizon of objectives
Strategic: overall, long-term
Tactical: used for operational goals, mid term
Operational: day2day
Marketing goal samples:
Market leadership
Coverage
Positioning
Expansion
Product and service goal samples:
Labour productivity or output per employee
Capital productivity
Quality objectives
Technology
Methods for dealing with conflicting goals:
rational evaluation bargaining among managers just satisfying some targets in order to achieve multiple goals sequential priority setting exercise power
Critical success factors (CSF’s)
Elements of the org activity which are central to its success. CSF may change over time and may include: product quality, employee attitudes, mfg flexibility, brand awareness
Setting CSF’s
Identify them
Identify underlying competences
Ensure match between competences and CSF’s
develop performance std’s
ensure std’s cannot be match by competitors (to form competitive advantages)
Monitor competitors
Short vs long term goals
trade-off between short vs long term objectives occur if they are in conflict or resources are scarce.
Stakeholder definition
Persons or Org’s with an interest in the strategy of the Org. These include shareholders, customers, staff and local community.
Mendelow’s stakeholder map
Interest vs Power
LOW LOW: minimal effort
HIGH LOW: keep informed
LOW HIGH: keep satisfied
HIGH HIGH: key player - communicate regularly
Groups of stakeholders
Internal: managers, employees
Connected ones: Shareholders, Bankers, Suppliers, Customers
External ones: Government, Interest/Pressure Groups, Industry associates, trade unions, NGO’s
Resolution of stakeholder issues
satisfying
sequential attention
side payments
exercise power
Business ethics (by CIMA): 5
integrity objectivity professional competence (and due care) confidentiality professional
Threats to ethical prinicples
self-interest: own benefit self-review: revising own past decision advocacy: promoting client or employer beyond objectivity familiarity: too close relations intimidation: by threaths
Ethical safeguards
Public: professional bodies, legislation, regulation
In the work environment: complaint systems, draw attention to unprofessional or unethical behaviour.
Resolve conflict of ethics: 9
establish facts establish ethical issues identify fundamental ethical principles follow internal procedures investigate alternatives and consider consequences determine action consult with other people and/or line manager professional advice or legal advisors resign from current role
Ethics pressure for: 4
from: 6
stakeholders
environmental issues
the disadvantaged
dealings with unethical countries or companies
by: government legislation international treaties (ie Kyoto) consumers employers pressure groups
Corporate Social Responsibility (CSR) 4 main kinds:
Economic: shareholders, employees, customers
Legal: law-abiding citizen
Ethical: fair and just
Philanthropic: act based on societies desires not obligations
Social responsiveness
Reaction: deny
Defense: accept only basic responsibility
Accommodation: social issues and reacts to stakeholders
Proaction: effort and actively addresses concerns
CSR stances: 4
laissez-faire: short term interests of shareholders
enlightened self-interest: long term shareholder benefit
multiple stakeholder obligations: include other S.H. than shareholders
shaper of society: financial considerations are secondary to changing society or social norms
CSR criticism: 3
- people, not businesses have responsibilities
- main goal is profit (according to social custom)
- social responsible means against the interest of the employer
- corporations are not supposed to act as governments
or
- maximization of wealth is the best way to make society benefit from business activities
CSR pro’s: 7
customer expectations brand name lower environmental costs trading opportunities (with everybody) access to staff investment and funding sustainable business
Triple bottom line
Social justice
Environmental quality
Economic prosperity
Drivers of business sustainability
Regulatory requirements
Managing reputation risks
Cost.cutting and efficiency
10 elements for sutainability
Strat and oversight:
- Board and senior mgmt commitment
- understand and analyse sustainability drivers
- integrate sustainability in strategy
Execute and align
- everybody’s responsibility
- break down sustainability targets into sub org’s
- implement process to integrate sustainability in day2day processes
- sustainability training
Performance and reporting
- targets and objectives
- elect champions
- monitor and report performance
Not For Profit (NFP)
targets: max usage match capacity producer satisfaction client satisfaction
special stakeholders: target public client public donors and volunteers local and national gov's
