business and society ethics and stakeholder management 5e4246

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Business and Society: Ethics and Stakeholder Management, 5E Carroll & BuchholtzCopyright 2003 by South-Western, a division of Thomson Learning. All rights reserved. 4-1

Chapter 4Strategic Management and Corporate Public Affairs

1

Strategic Management and

Corporate Public Affairs

Search the Web

For insights into GlaxoSmithKline corporate

social policies, visit its web site at::http://corp.gsk.com/community/workingwith.htm
http://corp.gsk.com/community/workingwith.htmhttp://corp.gsk.com/community/workingwith.htmhttp://corp.gsk.com/community/workingwith.htmhttp://corp.gsk.com/community/workingwith.htm


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2

Chapter Four Objectives

Explain the concept of corporate public policy

Identify the four major strategy levels and

enterprise-level strategy Describe how a concern for social and ethical

issues fits into the strategic management

Relate the notion of social audits to strategic

control Discuss the four major stages in environmental

analysis


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2

Chapter Four Objectives

Identify the major functions of public affairsdepartments

Highlight trends identified with respect to thepublicaffairs function

Link public affairs strategy and organizational

characteristics Indicate how public affairs might be incorporated

into every managers job


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Chapter Four Outline

The Concept of Corporate Public Policy

Four Key Strategy Levels

The Strategic Management Process


Public Affairs as Part of Strategic Management

Evolution of the Corporate Public Affairs Function

Modern Perspectives of Corporate Public Affairs

Public Affairs Strategy

Incorporating Public Affairs Thinking into Managers Jobs

Summary


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Introduction to Chapter Four

The chapter provides a broad overview ofhow social, ethical, and public issues fit into

the general strategic management processofcorporate public policy and corporatepublic affairs


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The Concept of Corporate

Public Policy

Corporate public policy is that part

of the overall strategic managementof the organization that focusesspecifically on the firms posture,

stance, strategy or positionregarding the public, social and

ethical aspects of stakeholders andcorporate functioning

AIDS

Affirmative

action

Sexual

harassmentProduct safety

Employee privacy


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Corporate Public Policy as Part of

the Strategic Management Process Strategic management refers to the overall

management process that focuses on

positioning the firm relative to itsenvironment

Corporate public policy is the part of the

strategic management process that focusesspecifically on the public, ethical, andstakeholder issues the firm faces


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Corporate Public Policy, Strategic

Management, and Ethics For business ethics to have meaning it must be

linked to business strategy because the linkage

permits management issues to be addressed inethical terms.

The concept of corporate public policy and thelinkage between strategic management and ethics

can be better understood in terms of: Four key strategy levels

Steps in the strategic management process


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Enterprise-level strategy

What is the role of the organization in society?

Corporate-level strategy

What business are we in or should be in?

Business-level strategy

How should we compete in a given business or industry?

Functional-level strategy

How should a firm integrate subfunctional activities and relatethem to its functional areas in finance, marketing,

production?

Each level poses a basic question . . .


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Hierarchy of LevelsEnterprise-Level Strategy

Corporate-Level Strategy

Business-Level Strategy

Functional-Level Strategy


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Emphasis on Enterprise-Level

StrategyKey Questions to Consider

What is the role of our organization in society?

How is our organization perceived by our stakeholders?

What principles or values does our organizationrepresent?

What obligations do we have to society at large? What are the implications for our current mix of

business and allocation of resources?


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StrategyWhat are the manifestations of enterprise-level thinking?

Codes of ethicsCodes of conductMission statements

Values statements

Corporate creedsVision statements

Search the Web

For an example of enterprise-level strategy in

action, visit Hewlett-Packards web site at:http://www.hp.com/hpinfo/community/main.htm
http://www.hp.com/hpinfo/community/main.htmhttp://www.hp.com/hpinfo/community/main.htmhttp://www.hp.com/hpinfo/community/main.htmhttp://www.hp.com/hpinfo/community/main.htm


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Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz

Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved. 4-14



StrategyJohnson and Johnson Credo

We are responsible to our doctors, nurses andpatients

We are responsible to our employees

We are responsible to our communities

We are responsible to our stockholders


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Strategy


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Strategic Management Process and

Corporate Public Policy

Stakeholder Environment(trends, events, issues, forecasts)

Consumer

Social Activist

Governmental

Community

Owner

Employee

Environmental

Environmental AnalysisGoalFormulation

StrategyFormulation

StrategyEvaluation

StrategyImplementation

StrategicControl

Organizational Environment


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Strategic Management Process

Goal FormulationGoal formulation involves:

Establishing goals

Setting priorities among goals


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Strategy Formulation

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Strategy Implementation

Strategy

Structure

Systems

Style

Staff

Skills

Shared values

McKinsey 7S Framework


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Strategic ControlThree Essential Steps

Set standards against which performance may

be compared

Compare actual performance with plannedperformance

Take corrective action to bring actual andplanned performance in sync


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Strategic ControlSocial audit is a systematic attempt toidentify, measure, monitor, and evaluate an

organizations performance with respect to itssocial efforts, goals, and programs.

Search the Web

For an example of a social audit, go to:

http://www.the-body-shop.com/global/values/index.asp

Search the Web

For an example of a ranking of social audits,go to www.sustainability.com
http://www.the-body-shop.com/global/values/index.asphttp://www.the-body-shop.com/global/values/index.asphttp://www.sustainability.com/http://www.sustainability.com/http://www.the-body-shop.com/global/values/index.asphttp://www.the-body-shop.com/global/values/index.asphttp://www.the-body-shop.com/global/values/index.asphttp://www.the-body-shop.com/global/values/index.asphttp://www.the-body-shop.com/global/values/index.asp


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Strategic Control

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Strategic Control

Social Auditing

Global Reporting Initiative (GRI) concernsdeveloping standard measures for social

reporting.


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Environmental Analysis Environmental analysis is the linking pin

between the organization and the stakeholder

environment Four stages of environmental analysis

Scanning

Monitoring

Forecasting

Assessing


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Corporate public affairs is the managementprocess that focuses on the formalization and

institutionalization of corporate public policy. Corporate public affairs also embraces:

Corporate public policy

Issue management

Crisis management

Governmental affairs

Corporate Communications


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Public Affairs Management:

Relationships

Enterprise-Level Management


Environmental Analysis

CorporatePublic Policy

IssuesManagement

CrisisManagement

Public Affairs Management Part ofwhich is


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Evolution of the Corporate Public

Affairs Function Includes A growing magnitude and impact of

government

A changing nature of the political system

An increasing number of stakeholdersoutflanking business

An expanding recognition that businessshould be more politically active


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Public Affairs Activities


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Public Affairs Activities


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New Public Affairs Organization

Manages public affairs as an ongoing process both internallyand externally

Cultivates and harvests the capability to build, develop, and

maintain stakeholder relationships Recognizes the importance of managing the grassroots

Communicates in an integrated manner

Aligns the organizations values and strategies with the

publics interests on a continuous basis Focuses both systematically and proactively on helping the

organization compete


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New Public Affairs Organization

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Design of the Corporate External

Affairs Function and Corporate SocialPerformance Function

Institution oriented versus economicfranchise

Collaborative/problem-solving strategy

versus individual/adversarial externalaffairs strategy


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Business Exposure and External

Affairs Design

Social

Environment

External Affairs Design: Breadth, Depth, Influence and Integration

Consumer Products

Company

Industrial ProductsCompany


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Business Exposure and External

Affairs Design

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Public Affairs Thinking Manager

Make Public AffairsTruly RelevantOperating managersshould know the

way in which theirdecisions mightimpact thestakeholderenvironment.

Develop a Sense ofOwnership of

SuccessOperatingmanagers shouldparticipate in theplanning and goalsetting of publicaffairs endeavors.

Make It Easy forOperatingManagersTrainthem to see therelevance of PAinitiatives.

Show That PublicAffairs Makes aDifferenceKeep ascorecard of

successes somanagers see the

potential of the PAfunction.


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Benchmarking

Business-level strategy

Collaborative/problemsolving strategy

Corporate-level strategy

Corporate public policy

Enterprise-level strategy Environmental forecasting

Environmental monitoring

Environmental scanning

Functional-level strategy

Global Reporting Initiative(GRI)

Individual/adversarialexternal affairs strategy

Issues and crisismanagement

Public affairs

Selected Key Terms


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Copyright 2003 by South Western a division of Thomson Learning All rights reserved 4 38


Selected Key Terms

(continued)

Public affairs management

Social audit Sociopolitical forecasting

Stakeholder environment

Strategic management

Strategy management process

business and society ethics and stakeholder management 5e4246

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