Chapter 6 Flashcards
Purpose
Purpose is concerned with the value an organisation seeks to create for its stakeholders, potentially including both financial and non-financial forms of value.
Stakeholder mapping
Stakeholder mapping identifies stakeholder power and attention in order to understand strategic priorities.
Higher attention + higher power = Key Players
Lower attention + higher power = Sleeping Giants
Lower attention + lower power = Irrelevant
Higher attention + lower power = Gadflies
Power
Power is the ability of individuals or groups to persuade, induce or coerce others into following particular strategies.
Some people may be influential because of their informal status within the organisation.
Attention
Attention refers to how closely stakeholders monitor the activities of an organisation.
Depends on criticality, channels and cognitive capacity.
Corporate social responsibility
Corporate social responsibility is the commitment by organisations to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.
CSR is, therefore concerned with the ways in which an organisation exceeds its minimum legal obligations.
Different organisations take different approaches to CSR:
Laissez-faire view: Proponents argue that the only responsibility of business is to make a profit and provide for the interests of shareholders. Only responsibility is what is prescribed by law.
Enlightened self-interest: is guided by recognition of the potential long-term financial benefit to the shareholder of well-managed relationships with other stakeholders. For example, an inspiring organisation purpose will generate employee energy and improve internal collaboration.
A forum for stakeholder interaction: Explicitly incorporates multiple stakeholder interests and expectations rather than just shareholders as influences on organisational purpose and strategies. Performance should be measured in a more pluralistic way => triple bottom line.
Shapers of society: Regard financial considerations as of secondary importance or a constraint. Visionary organisations seeking to transform society and social norms.
Hybrid organisations
Hybrid organisations combine values and structures that would not normally go together.
Businesses strive to reconcile economic motives with social and environmental commitments.
Virtous circle model = Strategy is set to serve both social objectives and financial objectives at the same time. The social and financial feed into each other in a self-reinforcing circle. (enlightened self-interest model)
