Key Topics Ch 5 & 6 © 2015 Cengage Learning

Today’s Class Oral presentation schedule and instruction Instruction for case discussion thru BB No participation  No points Cover Ch 5 & 6 (foundation chapters: 1-6) Essential topics but fragmented (many different topics) Case 15 & 32 for in-class case discussion © 2015 Cengage Learning

Individual Oral Presentation Online course after today’s class. So, only come for your presentation Review your presentation schedule on the class website - check your date! Let me know if you are not on the schedule All students in AVC on Thursday, June 29 It will be graded based on the “Rubric” and the instruction on the class website © 2015 Cengage Learning

Individual Oral Presentation con’t 10 minutes for your presentation (+,_ 30 sce). less than 9 minutes and 30 seconds (penalty) more than 10 minutes and 30 seconds (penalty) Only one media file is allowed e.g., video clip from YouTube Video length of a media file must be between 1:00 and 1:30 minutes. Otherwise, penalized. Make sure NOT to read from your full report or slides (penalty). © 2015 Cengage Learning

Case Discussion Thru BB Instruction on the website Make sure to use your group discussion board. Make sure to discuss before the due date Your answers must be posted by the end (11:59pm) of each due date. Due dates: June 13, June 15, and June 20 Any postings after the due date will receive zero points. © 2015 Cengage Learning

Case Discussion Thru BB con’t Post your opinion for each question first based on facts from the case. It must be minimum quarter page long based on single-space with one inch margin (top, bottom, left, & right) and Times New Roman 12 point-font size. Then, post your reply to other’s opinion. that is, you must assess other’s opinion © 2015 Cengage Learning

Thoughts about Future… Future Stakeholder IBM Watson as Cancer Specialist (2:50) Already cancer centers all over the world Future of Grocery & Society Amazon Go (1:49) Plan to open 2000 stores…. © 2015 Cengage Learning

Business & Society Concerns Where do we draw a line when it comes to disruptive technologies gradually replacing human labor? Should governments take measures to protect our job market (and citizens)? Should machines pay taxes? Or just turn a blind eye allowing ‘free-market’ forces to take over and dominate?   © 2015 Cengage Learning

Key Topics Strategic Management Corporate Public Policy Strategic Management Process Public Affairs as a Part of Strategic Management Issue Management Risk Management Crisis Management The Relationship Between Issue, Risk, and Crisis Management © 2015 Cengage Learning

Strategic Management Highest level of overall planning is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals & objectives and to position a firm to succeed in its market environment. That is, strategic management incorporates environmental, ethical, and social concerns as well. © 2015 Cengage Learning

Strategic Management Process Strategic management consists of different level of strategies (e.g., enterprise level) is simply defined as the way an organization defines and implements its strategies. In detail, it is a continuous process in which the organization decides to implement a selected strategies, details the implementation plan and keeps on appraising the progress & success of implementation through regular assessment. © 2015 Cengage Learning

Strategic Management Process (con’t) Components of Strategic Management Process Strategic Management Process (4:35) Website: Strategic Management Process © 2015 Cengage Learning

Four Key Strategy Levels (in SM) Enterprise-level strategy - What is the role of our firm in society? Corporate public policy must be embedded Corporate-level strategy - What business should we be in? Business-level strategy - How should we compete in this business or industry? Functional-level strategy - How should we integrate subfunctional activities and relate them to changes in our functional areas? © 2015 Cengage Learning

The Hierarchy of Strategy Levels: Continuous Process Corporate-Level Strategy Business-Level Strategy Functional-Level Strategy Enterprise-Level Strategy Feedback © 2015 Cengage Learning

Emphasis on Enterprise-Level Strategy (ELS) What is the role of our organization in society? How is our organization perceived by our stakeholders (e.g., reputation)? What principles or values does our organization represent? What obligations do we have to society at large, including to the world? What are the broad implications for our current mix of businesses and allocation of resources? © 2015 Cengage Learning

Other Additional ELS Emphasis's Establishment of public-policy committees - Sustainability Ethics CSR, Corporate Citizenship, etc. Establishment of a Public affairs Office - Included in strategic decision-making Identification of social or public issues – Integrated into strategic management processes © 2015 Cengage Learning

Corporate Public Policy Part of the strategic management of the organization that focuses specifically on the firm's posture, stance, or position regarding the public, social and ethical aspects of stakeholders and corporate functioning. Thus, it must be fit into enterprise-level strategy. © 2015 Cengage Learning

The Concept of Corporate Public Policy Corporate public policy is a firm’s posture, stance, strategy or position regarding the environmental, social, global, and ethical aspects of stakeholders and corporate functioning Affirmative Action Sexual harassment Product safety Employee privacy Environmental Sustainability © 2015 Cengage Learning

Corporate Public Policy includes.. Corporate Social Responsibilities Corporate citizenship Sustainability Stakeholder issues Corporate governance Business ethics Privacy issues © 2015 Cengage Learning

This linkage can be better understood when we think based on: Relationship of Business Ethics in Corporate Public Policy to Strategic Management To promote business ethics in corporate public policy, it should be linked to corporate strategy. This linkage can be better understood when we think based on: Four key strategy Strategic management process © 2015 Cengage Learning

Public Affairs Defined - Also, part of the strategic management and embrace corporate public policy “Public affairs represents an organization's efforts to monitor and manage its business environment. It combines government relations, communications, issues management and corporate citizenship strategies to influence public policy, build a strong reputation and find common ground with stakeholders.” © 2015 Cengage Learning

Public Affairs As a Part of Strategic Management Strategic Management Process Corporate Public Policy Issues Management Crisis Management Public Affairs Management (1:35) Part of which is Enterprise-Level Strategy Environmental Analysis © 2015 Cengage Learning

Issue, Risk & Crisis Management Issue Mgmt. – a gap between a firm’s actions and stakeholder’s expectations Important of all and confusing of all More straightforward than issue mgmt. Risk Mgmt. – a potential issue that may or may not occur Crisis Mgmt. – an issue that has escalated to a critical state © 2015 Cengage Learning

Relationships Between Issue, Risk, and Crisis Management Goal: To be effective issue, risk and crisis management, firms must close the gap between the firms’ situation and its stakeholders’ expectations. Many of the crises firms face arise out of issue categories (so, firms should be monitoring and prioritizing through issue management systems). © 2015 Cengage Learning

Relationships Between Issue, Risk, and Crisis Management con’t Effective issue management may enable the firm to avoid a crisis, or minimize its impact, and is vital to post-crisis management. On the other hand, effective risk management is keep issues from arising © 2015 Cengage Learning

Issue Definition A gap between what stakeholder’s expectation and what the firm is doing. The gap typically involves debate, controversy, or differences of opinion that must be resolved. At some point, the organization must make a decision on the matter, but that does not mean the issue can be resolved 100%. Once an issue becomes public, its resolution becomes increasingly more difficult. Issues are ongoing, and require ongoing responses. © 2015 Cengage Learning

© 2015 Cengage Learning

Analysis of Issues - Which stakeholder is affected by the issue? Who started the ball rolling? (Historical view) Who is now involved? (Contemporary view) Who will get involved? (Future view) Who is in a position to exert influence? Who has expressed opinions on the issue? Who should care about the issue? © 2015 Cengage Learning

Model of Issues Management Process Identification of Issues Analysis of Issues Prioritization of Issues Formulation of Issue Responses Implementation of Issue Responses Evaluation, Monitoring, and Control of Results © 2015 Cengage Learning

The Nature of Crises A crisis is an extreme event that may threaten organization’s existence. Damage: physical, reputation, financial, etc. An organizational crisis is a low-probability, high-impact event that threatens the viability of the organization Characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly. © 2015 Cengage Learning

Types of Crises Economic Physical Personnel Criminal Information Reputational Natural disasters © 2015 Cengage Learning

Relationships Between Issue, Risk, and Crisis Management Difference Between Issues & Crisis Management? (2:40) © 2015 Cengage Learning

Risk Management (1 of 2) How to manage risks and issues (2:10) Risk management concerns potential issues; it addresses an issue that has not yet occurred, and tries to keep the issue from arising. A “rules” approach to risk management can help prevent internal risks, but not those that stem from firm strategy or risks in the external environment. © 2015 Cengage Learning

Risk Management (2 of 2) A new framework for Risk management divides it into three categories: Preventable risks – internal risks that offer no strategic benefit (breakdown of CSUB’s admission processes). Strategic risks – risks taken to achieve greater returns (BP’s deep drilling) External risks – external risks that cannot be controlled (natural disasters and economic shocks) © 2015 Cengage Learning

Relationships Between Issue, Risk, and Crisis Management How to manage risks and issues (2:10) © 2015 Cengage Learning