1. Key Topic Ch 5 & 6
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2. Case Discussion… Make sure to follow the format (e.g., single space)
Visit the instruction one the class website
It is a group assignment. Make sure to discuss each case as a group. Otherwise, I will ask you to discuss online thru Blackboard.
Make sure to answer all questions. For example, question # 1 consists of two sub-questions.
Also, make sure to discuss specifically. The first question of Q1 must be discussed specifically based on four responsibilities.
See instructor answer on the website
Group 4 and 7
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3. The Body Shop (A)
TBS is the unusual firm, operated by the unusual business woman (future top management??).
She is more like social activist than manager and the firm seems like one of the government organizations.
Kind of EPA
Unusual marketing strategy
Unusual hiring process
Possibly illegal
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4. New Type of Grocery Store
Amazon Go (1:49)
Post information age phenomenon
Retail, medical, army, etc.
Not happen over night, Based on accumulation and collection of advanced IT
AWS (so, easier than others)
What if a competitor subscribing service?
Technology Ethics Report
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5. 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)
Or just turn a blind eye allowing ‘free-market’ forces to take over and dominate?  
Is Amazon worse than Walmart?
Labor practice
Fair competition
Sustainability
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6. CSR of Amazon Responsibility Societal Expectation Examples Economic
Required
Be profitable. Maximize sales, minimize costs.
Legal
Obey laws, adhere to regulations
Ethical
Expected
Avoid questionable practices. Do what is right, fair, and just
Philanthropic
Desired/ Expected
Be a good corporate citizen. Give back. (smile.amazon.com)
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7. Key Topics Strategic Management and Corporate Public Policy
Strategic Management Process
Public Affairs as a Part of Strategic Management
The Corporate Public Affairs Function Today
Issue Management
Risk Management
Crisis Management
The Relationship Between Issue, Risk, and Crisis Management
The Body Shop (B) & (C) Case Study
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8. 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.
Thus, SM incorporates environmental (sustainability), ethical and social concerns, with the realization that the long-term viability of a corporation is linked with its impact on the economy, society, and the environment.
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9. Corporate Public Policy
Part of the overall strategic management of the organization that focuses specifically on the firm's posture, stance, strategy or position regarding the public, social and ethical aspects of stakeholders and corporate functioning.
Thus, it must be fit into strategic management.
Must be developed as one of functional areas (e.g., finance, MKTG)
Coca-Cola example (website)
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10. Relationship of 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
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11. Four Key Strategy Levels
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?
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12. Emphasis on Enterprise-Level Strategy
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?
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13. The Hierarchy of Strategy Levels
Corporate-Level Strategy
Business-Level Strategy
Functional-Level Strategy
Enterprise-Level Strategy
Feedback
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14. Strategic Management Process
is defined as the way an organization defines its strategy.
It is a continuous process in which the organization decides to implement a selected few strategies, details the implementation plan and keeps on appraising the progress & success of implementation through regular assessment.
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15. Strategic Management Process (con’t)
Components of Strategic Management Process
Strategic Management Process (4:35)
Website: Strategic Management Process
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16. Public Affairs Defined -
“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.”
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17. 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
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18. Issue, Risk & Crisis Management
Issue Mgmt. – a gap between a firm’s actions and stakeholder expectations
Important of all and confusing of all
Risk Mgmt. – a potential issue that may or may not occur
Crisis Mgmt. – an issue that has escalated to a critical state
Managerial decision-making processes should include Issue Management, Risk Management, and Crisis Management.
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19. Relationships Between Issue, Risk, and Crisis Management (1 of 2)
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).
Effective issue management may enable the firm to avoid a crisis, or minimize its impact, and is vital to post-crisis management.
Risk Management may keep issues from arising
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20. Issue Definition -
A gap between what stakeholders expect 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.
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21. Issue Management - is a process by which organizations:
identify issues in the stakeholder environment,
analyze and prioritize them in terms of their relevance to the organization,
plan responses to the issues, and then
evaluate and monitor the results.
It is helpful to think of issue management in connection with strategic management process, enterprise-level strategy, and corporate public policy.
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22. Issue Management: Two Approaches
1. Conventional Approach -
Narrowly focused.
Issues fall within the domain of public policy or public affairs management.
Issues have a public policy or public affairs orientation.
An issue is any trend, event, controversy, or public development that might affect the corporation.
Issues originate in social, political, regulatory, or judicial environments.
2. Strategic Management Approach -
Broadly inclusive.
IM 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 anticipation and management of external and internal challenges to the company’s strategies, plans, and assumptions.
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23. 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
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24. Relationships Between Issue, Risk, and Crisis Management
….will be able to develop better understanding of both definition and relationships
Difference Between Issues & Crisis Management? (2:40)
How to manage risks and issues (2:10)
Watch later………
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25. The Nature of Crises Many definitions of crisis; here are two:
A crisis is an extreme event that may threaten your very existence. At the very least, it causes substantial injuries, deaths, and financial costs, as well as serious damage to your reputation.
An organizational crisis is a low-probability, high- impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.
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26. Types of Crises Economic Physical Personnel Criminal Information
Reputational
Natural disasters
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27. Successful Crisis Management (1 of 2)
Be prepared for a crisis:
Example: After Hurricane Katrina, both Walmart and Home Depot stood out for their preparedness and assistance.
Learn from Crises:
CEOs coping with Katrina learned:
Take care of your employees
Keep communication lines open
Get ready for the next disaster
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28. Successful Crisis Management (2 of 2)
Schwan’s was notified of a possible salmonella outbreak involving its products.
It immediately shut down, halted all sales and production, and invited the state health department, the department of agriculture, and the FDA in to the plant to investigate.
Within 24 hours, it set up a hotline to answer consumer questions, contacted employees and managers to staff the hotline, prepared for a product recall, and began working with its insurer.
Medical treatment was given, bills paid and losses reimbursed to those affected, and after one year, most claims were resolved. The source of contamination was discovered, (a supplier), and Schwan’s began preparing to prevent a reoccurrence.
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29. 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.
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30. 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)
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31. The Body Shop Review of (A) (end @ 2:19)
Case 3: The Body Shop (B)
Skip questions 2 and 3
Case 4: The Body Shop (C)
Skip questions 2, 3, and 4
Review of (A) 2:19)
Details of issue Management continues
From next slide…
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32. Identification of Issues (1 of 2)
Scan the environment
Identify emerging issues and trends
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33. Identification of Issues (2 of 2)
Five Leading forces as predictors of social change:
Events
Authorities or advocates
Literature
Organizations
Political jurisdictions
If these five forces are monitored closely, impending social change can be identified, and sometimes predicted.
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34. Examples of Forces Leading Social Change
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35. Analysis of Issues - To help with issue analysis:
Who (which stakeholder) is affected by the issue?
Who has an interest in the issue?
Who is in a position to exert influence?
Who has expressed opinions on the issue?
Who ought to care about the issue?
To help with issue analysis:
Who started the ball rolling? (Historical view)
Who is now involved? (Contemporary view)
Who will get involved? (Future view)
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36. Ranking or Prioritization of Issues
Two essential questions -
How likely is the issue to affect the organization?
How much impact will the issue have?
Once these questions are answered, it is necessary to prioritize them as to their importance or relevance to the organization.
Those listed at the top will receive the most attention and resources; those at the bottom may be removed from consideration.
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37. Other Issues: Ranking Techniques
Polls / Surveys
Expert panels
Content analysis
Delphi Technique
Trend extrapolation
Scenario building
Use of precursor events or bellwethers
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38. Formulation and Implementation of Response
The response design process.
Implementation -
The action design process.
Clarity of the plan
Resources needed to implement the plan
Top management support
Organizational structure
Technical competence
Timing
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39. Evaluation, Monitoring, and Control
Companies should continually evaluate the results of their responses to issues.
Ensure that actions are kept on track.
Includes careful monitoring of stakeholder opinions.
A form of stakeholder audit (similar to a social audit) can be used.
Information from this stage helps firms to make adjustments to the process as needed.
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40. Issue Development Process
Issues Development Process -
The growth process or life cycle of an issue helps management recognize when an event or trend is becoming an issue.
The process has five stages:
Early
Emerging
Current
Crisis
Dormant
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41. Issues Development Life Cycle Process
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42. Issue Management in Practice
Companies that adopt issues management processes:
Develop better overall reputations
Develop better issue-specific reputations
Perform better financially
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