Chapter 5-1

Chapter 5

BUSINESS & SOCIETYEthics and Stakeholder Management

Carroll & Buchholtz 6e

Business and Society: Ethics and Stakeholder Management, 6e • Carroll & BuchholtzCopyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved

Prepared by Deborah BakerTexas Christian University

ISSUES MANAGEMENT and CRISIS MANAGEMENT

Chapter 5-2

Chapter 5 Outcomes

1. Distinguish between the conventional and strategic management approaches to issues management.

2. Identify and explain the stages in the issues management process.

3. Describe the major components in the issues development process and factors in actual practice.

4. Define a crisis and identify the four crisis stages.

5. List and discuss the major stages or steps involved in managing business crises.

Chapter 5-3

Issues Management

Conventional Approach

Issues fall within the domain of public policy or public affairs management.

Issues typically have a public policy/public affairs orientation or flavor.

An issue is any trend, event, controversy, or public development that might affect the corporation.

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

Chapter 5-4

Issues Management

Strategic Management Approach

Issues management is typically the responsibility of senior line management or strategic management staff.

Issues identification is more important than it is in the conventional approach.

Issues management is seen as an approach to the management of external/internal challenges to company strategies, plans, and assumptions.

Chapter 5-5

Strategic Issue Management

Chapter 5-5

Chapter 5-6

Issues Definition

IssueA matter that is in dispute between parties. The dispute evokes debate, controversy, or differences of opinion.

Chapter 5-7

Issues Definition

Characteristics of an Emerging Issue

Terms of the debate are not clearly defined

Issue deals with matters of conflicting values and interest

Automatic resolution is not available

Issue is often stated in value-laden terms

Trade-offs are inherent

Chapter 5-8

Basic Assumptions

Issues Management Process

Issues can be identified earlier, more completely, and more reliably

Early anticipation widens the range of options

Early anticipation permits study and understanding of the issues

Early anticipation permits a positive orientation towards the issues

Early anticipation allows for better identification of the stakeholders

Early identification provides the opportunity for the organization to supply information about the issue earlier

Chapter 5-9

Model of Issues Management Process

Identification of IssuesIdentification of Issues

Analysis of IssuesAnalysis of Issues

Prioritization of IssuesPrioritization of Issues

Formulation of Issue ResponsesFormulation of Issue Responses

Implementation of Issue ResponsesImplementation of Issue Responses

Evaluation, Monitoring, and Control of ResultsEvaluation, Monitoring, and Control of Results

Chapter 5-10

Identification of Issues

Scan the environmentScan the environment

Identify emerging issuesand trends

Identify emerging issuesand trends

Chapter 5-11

Identification of Issues

Leading Forces as Predictors of Social Change

Leading events

Leading authorities/advocates

Leading literature

Leading organizations

Leading political jurisdictions

Chapter 5-12

Identification of Issues

Chapter 5-13

• WhichWhich stakeholders are affected by the issue?

• WhoWho has an interest in the issue?

• WhoWho is in a position to exert influence?

• WhoWho has expressed opinions on the issue?

• WhoWho ought to care about the issue?

• WhoWho started the ball rolling? (Historical view)

• WhoWho is now involved? (Present view)

• WhoWho will get involved? (Future view)

Analysis of Issues

Chapter 5-14

Ranking of Issues

Xerox Approach

High priority

Nice to know

Questionable

PPG Approach

Priority A

Priority B

Priority C

Probability-Impact Matrix

HighMediumLowH

igh

Med

ium

Lo

w

Probability of Occurrence

Imp

act

on

Co

mp

any

Chapter 5-15

Filtering and Ranking of Issues

Chapter 5-16

Other Issues-Ranking Techniques

Polls/SurveysPolls/Surveys

Expert panelsExpert panels

Content analysisContent analysis

Delphi TechniqueDelphi Technique

Trend extrapolationTrend extrapolation

Scenario buildingScenario building

Use of precursor events or bellwethersUse of precursor events or bellwethers

Chapter 5-17

Formulation and Implementation of Responses

Formulation The response design process

Implementation The action design process

Plan clarity Resources needed Top management support Organizational structure Technical competence Timing

Chapter 5-18

Evaluation, Monitoring, and Control

Constant evaluation of results of responses to the issues to keep strategy on track

Stakeholder audit

Chapter 5-19

Issues Development Process

Issues Development

Process

The growth process or life cycleof an issue

Chapter 5-20

Issue Development Life Cycle Process

Chapter 5-21

Issues Management in Practice

Benefits of Issues Management Processes

Companies …

develop better overall reputations

develop better issue-specific reputations

perform better financially

Provides a bridge to crisis management

Chapter 5-22

Crisis Management

To manage a crisis one first must understand that crises:

• Occur abruptly

• Cannot always be anticipated or forecast

• May not occur within an issue category

http://www.crisisexperts.com@

Chapter 5-23

The Nature of Crises

Crisis Definitions

A major, unpredictable event that has potentially negative results that can significantly damage an organization

A low-probability, high-impact event that threatens the viability of the organization that has an ambiguous cause, effect and resolution

http://www.crisismanagement.comhttp://www.wilson-group.com@

Chapter 5-24

Types of Crises

EconomicEconomic

PersonnelPersonnel

PhysicalPhysical

CriminalCriminal

InformationInformation

ReputationalReputational

Natural disastersNatural disasters

Chapter 5-25

Types of Crises

Outcomes of Major Crises

Escalated in intensity

Subjected to media and government scrutiny

Interfered with normal business operations

Damaged the companies bottom line

Resulted in major power shifts

Chapter 5-26

Crisis Management: Four Stages

Prodromal Crisis StageWarning—precursorSymptom —precrisis

Prodromal Crisis StageWarning—precursorSymptom —precrisis

Acute Crisis StagePoint of no return

Crisis has occurred

Acute Crisis StagePoint of no return

Crisis has occurred

Crisis Resolution StagePatient is well/Whole again

Crisis Resolution StagePatient is well/Whole again

Chronic Crisis StageLingering on—perhaps

indefinitely; period of self-doubt and self-analysis

Chronic Crisis StageLingering on—perhaps

indefinitely; period of self-doubt and self-analysis

Learning

Chapter 5-27

Managing Business Crises

Fink’s Three-Stage Model

1. Identifying the crisis

2. Isolating the crisis

3. Managing the crisis

Chapter 5-28

Business Week’s Five Steps in Managing Crises

1. Identify areas of vulnerability

2. Develop a plan for dealing with threats

3. Form crisis teams

4. Simulate crisis drills

5. Learn from experience

Managing Business Crises

Chapter 5-29

Managing Business Crises

Augustine’s Six Stages of Crisis Management

1. Avoiding the crisis

2. Preparing to manage the crisis

3. Recognizing the crisis

4. Containing the crisis

5. Resolving the crisis

6. Profiting from the crisis

Chapter 5-30

1. Identify crisis communication team

2. Identify key spokespersons

3. Train your spokespersons

4. Establish communications protocols

5. Identify and know the audience

6. Anticipate crises

7. Assess the crisis situation

8. Identify key messages to communicate

9. Decide on communication methods

10. Prepare to ride out the storm

Crisis Communications