Chp 2: Stakeholders, governance and ethics

Question 1

What does a Corporate Mission Statement typically look like?

Answer 1

A statement that covers WHAT an organisation does, WHO it does it for and HOW it does it.

Question 2

What does a Vision Statement typically look like?

Answer 2

Where the organisation wants to be in the future and the future it seeks to create

Should answer: what do we want to achieve?

Question 3

What does a Values Statement typically look like?

Answer 3

Communicates the underlying and enduring core principles that guide an organisation’s strategy

Helps to establish why an organisation does what it does and what it stands for

Question 4

What do SMART objectives stand for?

Answer 4

Specific
Measurable
Achievable
Relevant
Time-bound

Question 5

What are the four steps when considering stakeholders and developing strategy?

Answer 5

1. Identify relevant stakeholders
2. Rank and prioritise stakeholders
3. Assess the needs of high priority stakeholders (key players)
4. Develop strategy that meets the needs of key stakeholders

Question 6

What are the four ways that Cyert and March (1992) suggested to resolve stakeholder conflict?

Answer 6

1. Satisficing - using negotiation to find an acceptable resolution for all
2. Sequential attention - address each group in turn
3. Side payments - making a concession or payment if unable to meet a groups needs
4. Exercise of power - a senior figure imposing a decision

Question 7

What are the 11 key concepts of governance and ethics that Johnson et al (2017) suggested when translating purpose into strategy?

Answer 7

1. Fairness
2. Openness and transparency
3. Innovation
4. Scepticism
5. Independence
6. Probity and honesty
7. Responsibility
8. Accountability
9. Reputation
10. Judgement
11. Integrity

Question 8

What are the strong and weak views in relation to CSR?

Answer 8

Strong: a company exists for the benefit of all of its stakeholders
Weak: a company exists to maximise shareholder wealth

Question 9

What are the four parts to Carrol’s (1991) CSR pyramid?

Answer 9

• Economic - the fundamental level requiring employees are paid, shareholders get returns, and customers receive value
• Legal - the organisation must obey the law
• Ethical - doing what is right and fair, even if not required by law
• Philanthropic - the highest level, charitable donations etc.

Question 10

What four ways did Carroll identify for organisations to respond to CSR and social issues?

Answer 10

1. Reaction - denies responsibility
2. Defence - accepts basic responsibility
3. Accommodation - accepts responsibiltiy and does what is asked
4. Proaction - makes considerable effort to address issues

Question 11

What are the four different CSR stances?

Answer 11

1. Short-term shareholder interest - exists to make a profit for shareholders but will abide by government
2. Long-term shareholder interest - will go over and above minimum legal requirements where there is a shareholder benefit
3. Multiple stakeholder obligation - accepts the firm exists for the wider stakeholder community
4. Shaper of society - ideologically driven view, resulting in financial interest being secodnary to the wider vision

Question 12

What is Elkington’s triple bottom line?

Answer 12

• People - social justice of operations
• Planet - environmental impact
• Profit - economic benefit enjoyed by host society