blb10089-3 pjconsidine exploring corporate strategy, seventh edition, © pearson education ltd...
TRANSCRIPT
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Lecture Week 7 Purpose and Culture
(Readings –Chapters 4 & 5 – see handbook for details)
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Expectations and Purposes - Outline
• Corporate governance – a brief overview
• Organisational stakeholders
• Stakeholder mapping
• Organisational Culture and the Cultural web
• Vission, Mission & Strategic Objectives
• Communication of organisational purposes
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
• Complex role that people play in strategy development
• Strategy is about
– what people expect an organisation to achieve
– what influence people can have over an organisation’s purposes
Role of People
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Expectations and Purposes
Exhibit 4.1
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Vision, Mission, Objectives & Strategies
A model showing how Vision and Mission fit in with the strategy process (Thomson J.L. 2001 – See Strategist Download Chapter 2)
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
What is Path Dependency?
Path dependency is where early events and decisions establish policy
paths that have lasting effects on subsequent events and decisions.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Exhibit 5.3 Path Dependency and Lock-In
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Communicating Organisational Purposes
• Corporate Values– Core values, the principles guiding actions
• Vision/Mission– Statement of overriding direction and purpose of
organisation
• Objectives– Statement of specific outcomes to be achieved
• Financial, market-based• Sometimes measurable• Relevant
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
What are Mission and Vision Statements?
A mission statement provides employees and stakeholders with clarity about the overall purpose
of the organisation.
A vision statement is concerned with what the organisation aspires to be.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Strategic Vision• Although less popular than mission statements
firms may also produce a “Vision Statement” ---intended to reflect the firms vision of some future state.
• A lack of published vision statement does not necessarily indicate a lack of vision.
• The inputs to Vision are, the standards of behaviour and values and beliefs which define and drive the organisation (Thomson 2001 & 2006).
• Entrepreneurs often have a vision for the organisation, but which may not be articulated.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Mission
• A ‘Mission’ is a general expression of the overriding premise of the organisation, and should be in line with the values and expectations of major stakeholders.
• It is likely to be concerned with the overall purpose of the organisation, its scope and its boundaries.
• It is sometimes referred to in terms of the apparently simple, but actually quite challenging question: ‘What business are we in?'.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
To be useful Mission Statements: • Should be visionary and likely to exist for a significant
period of time. It should form the backcloth against which more detailed objectives and strategies can be developed, delivered and changed over time.
• Should clarify the main purposes of the organisation, and the reasons why the organisation exists.
• Should describe the organisation's main activities and the position it wishes to attain in its industry.
• There should be a statement of the key values, particularly regarding attitudes towards stakeholder groups.
• The organisation should have the intention and capability to live up to the mission statement.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Strategic and Financial ObjectivesIt is usual for companies to set objectives in the following two
main ways: • 1. Financial Objectives,
– e.g. earnings per share, return on shareholders' funds (quantified).
• 2. Strategic Objectives, – e.g. market share increase (quantified), higher product quality
(quantified), greater customer satisfaction (partially quantified), employee job satisfaction (supported by research survey but not necessarily quantified).
• Conflicting Objectives/Expectations, – Often there is conflict between objectives – for example, growth
objectives are often in conflict with the short-term requirement to provide returns to shareholders, the owners of the company.
– Taking money out of the business today will not provide the investment for the future. Objectives therefore need to reach a compromise between short and long-term.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
What are Stakeholders?Stakeholders are those individuals or groups who depend on an organisation
to fulfil their own goals and on whom, in turn, the organisation depends.
External vs. Internal Stakeholders
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Conflict of Expectations
• Short-term profitability versus growth• Family control versus professional managers• Financial independence versus share/loan funding• Public share ownership demands openness and
accountability• Cost efficiency may mean job losses• Mass markets may compromise quality• Mass public service provision versus specialist
services• Multinational division loyalty versus host country
loyalty
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
What is Stakeholder Mapping?Stakeholder mapping identifies stakeholder
expectations and power and helps in understanding political priorities.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Use of Stakeholder Mapping
• Do actual levels of interest and power reflect corporate governance framework?
• Who are key blockers and facilitators of a strategy?
• Is repositioning of stakeholders desirable/feasible?
• Which are the key stakeholders whose interest and power must be maintained to support the strategy?
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Sources and Indicators of Power
Within organisations External stakeholders
Status Status
Claim on resources Resource dependence
Representation Negotiating arrangements
Symbols Symbols
See exhibit 4.10 in Johnson et al. (2008) for Sources of power- internal and external
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Business Ethics – the Social expectations of organisations
Macro level – from Laissez Fair to shapers of society
Ethical stance of the organisation in society
Corporate social responsibility (CSR) is concerned with the ways in which an
organisation exceeds its minimum obligations to stakeholders specified
through regulation.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Four Possible Ethical Stances
Exhibit 4.7
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
BP and The Texas City Disaster
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
What is Path Dependency?
Path dependency is where early events and decisions establish policy
paths that have lasting effects on subsequent events and decisions.
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Exhibit 5.3 Path Dependency and Lock-In
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Organisational Culture
“The basic assumptions and beliefs that areshared by members of an organisation, thatoperate unconsciously and define in a basictaken-for-granted fashion an organisation’sview of itself and its environment”
Schein 1997
“The basic assumptions and beliefs that areshared by members of an organisation, thatoperate unconsciously and define in a basictaken-for-granted fashion an organisation’sview of itself and its environment”
Schein 1997
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Exhibit 5.4 Cultural Frames of Reference
The Individual
NationalOrganisational
field
Functional/divisional Organisational
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Organisational Field
• Organisations within a filed have– Common business environment– Common norms and values– Shared set of assumptions
• A recipe of organisational purpose & shared vision
– Dangers• Institutional managers may be blinkered• Transitions between sectors diffciult – why?
– Legitimacy• Need to meet the expectations in terms of
assumptions, behaviours and strategies
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Exhibit 5.5 Culture in Four Layers
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Exhibit 5.7 The Cultural Web of an Organisation
Stories Symbols
Structures
Powerstructures
Controlsystems
Rituals/routines
Paradigm
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
The Cultural Web: some useful questions
Exhibit 4.12
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Further readings
• Further readings in workbbok – also Blackboard and
• essential readings in chapters 5 and 6 of exploring corporate strategy
BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011
Key Points
• Expectations and purposes influenced by:– Corporate governance, stakeholder expectations, business ethics
and culture• Stakeholders’ power and influence
– Stakeholder mapping• Ethical stance
– Corporate social responsibility• Culture
– Levels of cultural frames of reference– Layers of values, beliefs, behaviours and taken-for-granted
assumptions– Cultural web
• Communication of organisational purposes– Values, mission, objectives – see Strategist download chapter 6