Final Busa 5200 Exam

Front 1

Issue:

Back 1

A matter in duspute where different views are held of what ought to be the performance of the organization (or the expectations of its stakeholders)

Front 2

Changing mix of issues:

Back 2

Increasingly managers face:

- Political

- Social
- Environmental

- Ethical

In addition to traditional business issues

Front 3

Issues Management Definition

Back 3

Systemic process by which the organization can:

- Identify

- Evaluate

- Respond

to economic, social, political and environmental issues that may impact it significantly

Front 4

Issues Management Purpose

Back 4

Minimize Surprises

Front 5

Issues Management Benefits

Back 5

1. To maintain a competitive advantage

2. Reduce vulnerability - less likely to make a serious social or ethical mistake

3. Corporate behaviour is more likely to align with society's expectations

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Conventional Issues Management

Back 6

Managing communications to influence a specific issue that threatens the organization:

- It is the responsibility of public affairs department

- Issues have public affairs orientation

- Issue is any trend, event, controversy or public development that might affect the firm

- Issues originate in social/political/regulatory/judicial environments

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Issues Management should be Strategic

Back 7

- Proactively identify possible issues

- Align with firm's strategic/ops goals

- Plan both communication efforts and stakeholder relationship efforts

Front 8

Steps in Issues Management (FPA)

Back 8

Foresight: (monitor, identify, prioritize, analyze)

Policy Development: create and action plan

Advocacy: implement action plan - using relevant influence techniques

Front 9

Creation of Public Issues

(Who creates issues?)

Back 9

1. Interest Groups

2. Politician/Party

3. Unanticipated Events

4. Public Interest Groups (media/individuals)

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Who is affected?

Back 10

Universal: Affects many directly, solution seems simple even if its a complex problem

Advocacy: Needs to be promoted, issue seen as important; solution seen as complex

Selective: Smaller group of society, problem/solution affecting group

Technical: Issues only for specialists, often left to experts

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Element of Time

Back 11

1. Current: Currently being considered or implemented by govt. (minor changes)

2. Emerging: Will prob. soon be considered by got. more opportunity for business to influence

3. Societal: Broad changes in societal attitudes and behaviours; little or nothing business can do.

Front 12

Issues Development

Back 12

The development or life-cycle of an issue. How an issue evolves over time:

Stage 1: No or little awareness

Stage 2: Increasing awareness, some media

Stage 3: Prominent: can't be ignored, solutions

Stage 4: Peak awareness

Stage 5: Declining awareness

Front 13

Issues Management Process (IAP.FIE)

Back 13

1. Identify issues

2. Analyze issues

3. Prioritize issues

4. Formulate responses to issues

5. Implement responses

6. Evaluate and monitor effectiveness of responses

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Identify Issues

Back 14

- Scan environment

- Identify emerging issues (can be difficult)

Front 15

Analyzing Issues

Back 15

Which stakeholders are affected:

- Who started the issues? (past)

- Who is now involved? (present)

- Who will get involved? (future)

Front 16

Prioritizing/Ranking Issues

Back 16

Probability-Impact matrix:

- Probability of issue actually developing as you have predicted

- Impact on firm

Front 17

Formulating Issues Responses

Back 17

1. Pre-emption (anticipate)

2. Co-optation (allow participation)

3. Joint Venturing (share full decision making)

4. Confrontation (oppose stakeholders mildly/vigorously)

Front 18

Implementing Issue Response

Back 18

- Develop work plan to implement the chosen response

- Build corpoprate commitment

- Ensure adequate resources for the plan

Front 19

Evaluating & Monitoring

Back 19

1. Regularly evaluate results of issue response plan

2. Is plan working? Need to be changed?

3. Take remedial action if needed

Front 20

Crisis Management
(ie. Tylenol vs. Exxon Valdez)

Back 20

A particular type of issues management

Front 21

Social Licence to Operate

Back 21

- Develop business partnerships with local communities; Train and employ local workforce

- Transfer new technology to local community

- Build and maintain positive corporate reputation

- Understand and respect local culture, customs, history, languages, values, needs.

- Fully inform local stakeholders about corporate projects

- Ensure open, honest communication with all stakeholders; Invest time to build relationship

Front 22

Communities Grant Social Licences

Back 22

Level 0: Rejection of firm because interests are not met

Level 1: Approval of firm because the firm has met certain min. standards (usually legal)

Level 2: Acceptance of firm because the firm has earned their trust by building/maintaining relationships that go beyond compliance with legal standards.

Front 23

Stakeholder Management

Back 23

- Individuals and groups

- With numerous: interests, expectations and demands

- As to what business should provide to them and/or society in general

Front 24

Stake:

Back 24

Interest (being affected by a decision)

Right (legal or moral claim to certain treatment)

Ownership (legal title to property)

Front 25

What is a stakeholder?

Back 25

An individual or group who ows a stake in a firm, financially, legally or ethically

Stakeholders are influenced by the firm and/or can influence a firm

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Primary & Secondary Stakeholders

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Primary: Those that have a direct interest in the firm and its success (owners, employees, shareholders, customers, suppliers)

Secondary: Those that have a public or special interest in the firm (interest groups, news media)

Front 27

Stakeholder Management Capability

(the ability for managers to..)

Back 27

1. Identify stakeholders and their level of influence

2. Develop the org. practices to understand stakeholders

3. Undertake direct contact with stakeholders

Front 28

Key Questions in Stakeholder Management

Back 28

1. Who are the firms stakeholders

2. What are stakeholders stakes

3. What opps/threats do stakeholders present

4. What Economic, Legal, Ethical, Philanthropic responsibilities does the firm have

5. What strategies and actions should the firm take to manage stakeholders opportunities and challenges

Front 29

Stakes

Back 29

Power

Legitimacy

Urgency

Front 30

Power

Back 30

Stakeholders ability to get the firm to do something that it would not otherwise do based on:

- Force

- Threats

- Incentives

Ability of a stakeholder to produce an effect upon the firm

Front 31

Legitimacy

Back 31

Perceived validity of a stakeholders claim to a stake in the firm

Perception or assumption that actions of a stakeholder are legitimate, desirable, proper or appropriate.

Front 32

Urgency

Back 32

Degree to which a stakeholder's claim or relationship calls for immediate attention

Front 33

Latent St.H

Expectant St.H

Definitive St.H

Back 33

Possess 1 of the stakes

Possess 2 of the stakes

Posses 3 of the stakes

Front 34

Opportunities & Challenges

Back 34

Proactive: Productive working relationships, develop opportunities with St.H

Reactive: Understand challenges (problems) regarding stakeholders and take action to address them.

Front 35

Types of stakeholders

Back 35

Supportive: Involve

- Low threat, High Cooperation

Marginal: Monitor

- Low threat, Low cooperation

Non-supportive: Defend

- High threat, low cooperation

Mixed-blessing: Collaborate

- High threat, high cooperation

Front 36

Firm Power

Back 36

Firm has relative power over these stakeholders (non-union,some suppliers, charities receiving aid)

Front 37

Stakeholder Power

Back 37

Firm is dependent on these stakeholders (government regulation, organized customer boycott)

Front 38

Interdependence: Low

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Low: firm and the SH are not dependent on one another; neither party has direct influence over the other and SH must involve others in order to exercise influence indirectly.

Eg. Environmental groups, human rights groups

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Interdependence: High

Back 39

Firm and SH are dependent on each other, complex situation

Eg. Firm tells its suppliers in developing world to meet min. labour standards

Front 40

Social Capital 1

Back 40

Any aspect of a firms social organizational arrangement that creates value and facilitates the acton of stakeholders

From firms: culture, systems, norms, networks, internal/external relationships.

Includes: Trust and goodwill, value and can be beneficial to firms (less chance of boycott, lawsuit)

Front 41

Social Capital 2

Back 41

Collective features of social structure, such as networks, participation and trust. They facilitate interaction between people and intensify the attainment of collective and individual goals and economic activity.

The concept is based on the view that besides physical and human capital the economic development well-being and performance of societies is also influenced by the social environment.

Front 42

Sources + Mechanisms + Outcomes

Back 42

Sources: Individuals, Community, Society

Mechanisms:

- Trust (in people/institutions)

- Communication: Flow of info. Understanding of info.

Outcomes: Consumption/capital benefits

Front 43

Business Ethics

Back 43

Systematic thinking about the moral consequences of decisions (right/wrong)

Business - ethics applied to business and management situations

Front 44

Why study business ethics?

Back 44

- Business is not only economic-based but often trust-based

- To improve ethics in business and orgs.

- To remind us that our decisions in orgs. have consequences for others

Front 45

Consequences of Unethical Decisions

Back 45

- Loss of job/harm to career

- Loss of customers

- Poor public image

- Whistleblowing

- Potential legal liability

- Additional government regs.

- Unethical culture develops inside or.

Front 46

Paying Attention to Ethics

Back 46

- Gives individual a good reputation

- Provides a positive image for the firm

- Improves stakeholder relations

- Is an "insurance policy" against unethical behaviour

- Has often improved society

Front 47

Sources of Influence on Ethics

Back 47

Cultural

Legal

Organizational

Individual

Front 48

Cultural

Back 48

- Culture, religion, media

Front 49

Legal

Back 49

Laws: Is it legal is useful starting point for ethics

Front 50

Organizational

Back 50

- Behaviours by orgs leaders

- Organizational culture

- Role models in organization

- Perceived pressure for results

- What is rewarded/punished

Front 51

Org. Cont'd

Back 51

- Corporate codes of conduct/ethics

- Professional codes of conduct/ethics

- Business/industry groups (BBB)

- Behaviour of competing firms (copycats)

- The Ivey Ring

Front 52

Social Licence

Back 52

"Community acceptance of an organization's activities in a an area. It doesn't come on a piece of paper and it's a moving target based on public perception at any moment in time"

Front 53

Social Licence2

Back 53

Organizations must create value for stakeholders as well as shareholders.

It is the end result of steps that companies take to address the expectations that other affected parties have of them.

Front 54

Patagonia

Back 54

Yvon Chouinard, Founder & Private owner

Long-time commitment to environmental issues

Reputation as a company that:

- Turns a profit ($414 million in 2011)

- Minimizes ecological impact

- Company flex-time policy.

Front 55

Patagonia CSR

Back 55

Communicate, monitor, and implement solutions for social and environmental responsibility.

1% for the Planet donor ($41.5 million since 1985)

Front 56

Patagonia Approach

Back 56

MBA: Managing by absence, Yvon goes away for months at a time, "wear testing" his products.

The company is a resource to something good

It’s a way to demonstrate that corps canlead examined lives.

Performance art - less about the bottom line than about providing a road map for future entrepreneurs.

Front 57

Yvons Book

Back 57

The responsible company: offers detailed checklists for making money without inflicting undue societal harm.

Front 58

Patagonia + Walmart Partnership

Back 58

Partnered to advise Walmart on reducing packaging and water use in its supply chains.

Together the 2 companies teamed up to create the Sustainable Apparel Coalition.

Front 59

Patagonia - Sustainable Apparel Coalition

Back 59

A coalition that crafts clear, quantifiable standards for environmentally responsible clothing production.

- Fleece jackets made from recycled soda bottles

- Organic cotton (3x more expensive to manufacture)

- Durable items that could be replaced less often

Front 60

Patagonia - Customer satisfaction

Back 60

Patagonia will:

- Replace an item if the customer is dissatisfied with it.

- Repair it (at a reasonable fee)

- Help re-sell it (through an exchange section on its website)

- Recycle it

Front 61

Patagonia - Workplace

Back 61

- A more fulfilling, happier workplace atracts and retains better workers, who in turn design superior products and develop smarter strategies.

- Flex-time allows customers to come and go when they want (as long deadlines are met)

- Yoga room availability

- On-site subsidized daycare

Front 62

Patagonia is about the future

Back 62

Thinking now about environmental impacts helps companies get in front of inevitable future regulation - offering a jump on unprepared competitors.

Customers are increasingly aware of and organizations social ethics.