Strategic Management Session Ii

Front 1

Shareholder approach

Back 1

1) A clear mission for the firm

2) A single type of clients (shareholders)

3) A system without ambiguity of motivation for the management

4) Clear system for decision making, of responsibility and rewards for the management

Front 2

Stakeholder approach

Back 2

1) More missions with potential conflicts among them

2) Many types of "clients" with different objectives and conflicts among them (shareholders, clients, employees, suppliers, community...)

3) Ambiguous system for motivation for the management

4) Ambiguous system for decision making, of responsibility and rewards

Front 3

Corporate social responsibility, control system, vigilance and punishment from the shareholders point of view

Back 3

The control system and punishment is built by the market (goods, services and finance), laws and public authorities

Front 4

Corporate social responsibility, control system, vigilance and punishment from the stakeholders point of view

Back 4

The company has internal systems of control and punishment, built by a set of objectives of different clients

Front 5

Philosophy from a shareholders approach

Back 5

Economic value is the only interest in the firm

Front 6

Principle from a shareholder approach

Back 6

The strategy has to create value for a shareholder

Front 7

Instrument from a shareholder approach

Back 7

Financial system with quantitative indicators to measure the value creation

Front 8

Control systems from a shareholder approach

Back 8

Externalize the control system, vigilance and punishment to the society

Front 9

Criticism from a shareholder approach

Back 9

A unique focus toward shareholder could facilitate a short-term vision and fraud.

Front 10

Philosophy from a stakeholder approach

Back 10

Conciliate different interest of different groups of interests

Front 11

Principle from a stakeholder approach

Back 11

The strategy reaches a consensus of profits for different stakeholders with the objective of the firm's survival

Front 12

Instrument from a stakeholder approach

Back 12

Subjective and objective measures with a holistic evaluation for the firm's positioning

Front 13

Control system from a stakeholder approach

Back 13

Internalize the complex system, of the society to different levels of organization

Front 14

Criticism from a stakeholder approach

Back 14

The internalization of the social loads to the company makes it lose competitiveness in the market

Front 15

Vision

Back 15

• The ideal for the organization and its future direction
• Short vision statements aimed at hearts and minds
• Vision should be clearly tied to external environment and internal organization of
firm

Front 16

Mission

Back 16

• Concrete view of the firm’s business, its customers and how it will serve
them
• Flows from vision
• Should provide direction for strategic action

Front 17

Value (Philosophy)

Back 17

Understood as ethical, esthetical, or moral values, which is the object of Axiology studies,
a branch of philosophy. The study of this value is extended to the field of sociology, psychology, cultural…

Front 18

Value (economics)

Back 18

An economic concept

Front 19

Management by Values (MBV)

Back 19

a concept based on Management by
Instruction (MBI), and Management by Objectives (MBO).

Front 20

MBI

Back 20

Management by Instructions

Front 21

MBO

Back 21

Management by Objectives

Front 22

Characteristics of MBV

Back 22

- Proposes a theory and methodology to refine the mixture of the shared values as the philosophical essence for business administration.

‐ The flexibility that proposes to facilitate its adaptation in complex and
changing environment.

‐ Integrate different stakeholders and their aligned values, among which the objective of the Company

‐ It measures values and performance in three dimensions: economic,
ethic, and emotional

Front 23

An integral model of management by values

Back 23

• Measure economic, ethic, and emotional
values

• Integrate three levels of organization:
societal, firm, and individual level

• It is about to build sustainability,
innovation, and consciousness

• It generates these competitive
advantages through the capability of
leadership and organizational learning

• The vision of leaders allows a correct
direction of strategy

• The continuous learning constitutes the
adaptive strategy to fight against the
environmental change

Front 24

Is shareholder a part of stakeholder?

Back 24

YES

Front 25

What do financial tools do?

Back 25

They help control and monitor economic profit/value of the firm, beyond accounting profit.

Front 26

What can happen if maximization of value is the only objective of the firm?

Back 26

It could potentially increase fraudulent behavior

Front 27

Mission and value are...

Back 27

High level strategic input

Front 28

Ethical values...

Back 28

Are important for the firm's strategy and management, besides economic values.