1. Company Vision and Mission “ WHICH ROAD DO I TAKE?," Asked Alice "WHERE DO YOU WANT TO GO?“ Responded the Cheshire Cat "I DON'T KNOW," Alice Answered. "THEN IT DOESN'T MATTER,” said the Cat. “IF YOU DON'T KNOW WHERE YOU ARE GOING, ANY ROAD WILL GET YOU THERE.”

2. Vision Statement Inspiring Long-term Driven by and evokes passion Broad; Overarching; Brief Fundamental statement of the organization’s Values Aspiration Goals Why does the company exist?

3. 3M: To solve unsolved problems innovatively Cargill: To improve the standard of living around the world Hewlett-Packard: To make technical contributions for the advancement and welfare of humanity Lost Arrow Corp: To be a role model and a tool for social change Mary Kay Cosmetics: To give unlimited opportunity to women Merck: To preserve and improve human life Nike: To experience the emotion of competition, winning, and crushing competitors Wal-Mart: To give ordinary folk the chance to buy the same things as rich people Walt Disney: To make people happy

4. Mission Statement Unique purpose of the company Basis of competition and competitive advantages More specific than vision Focused on the means by which the company will compete What does the company do?

5. It is the mission of Advance Auto Parts to provide personal vehicle owners and enthusiasts with the vehicle related products and knowledge that fulfill their wants and needs at the right price. Our friendly, knowledgeable and professional staff will help inspire, educate and problem-solve for our customers. Ecolab’s mission is to be the leading global innovator, developer and provider of cleaning, sanitation and maintenance products, systems, and services. As a team, we will achieve aggressive growth and fair return for our shareholders. We will accomplish this by exceeding the expectations of our customers while conserving resources and preserving the quality of the environment. CVS will be the easiest pharmacy retailer for customers to use. To nourish and delight everyone we serve. (Darden Restaurants)

6. The purpose of the Cooper Tire & Rubber Company is to earn money for its shareholders and increase the value of their investment. We will do that through growing the company, controlling assets and properly structuring the balance sheet, thereby increasing EPS, cash flow, and return on invested capital. We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.

7. Values Statement Statement of ethical priorities Guidelines for norms and decision making Standards of behavior and practices Basis for moral courage How do we behave?

8. Strategic Objectives Operationalize the mission statement SMART(S) Indicates strategic intent – BHAG Strategic v Financial Long-term v short-term S stretch What will we strive for?

9. Hierarchy of Goals Values Statement

10. Corporate Governance Shareholders – “Principals” Management – “Agents” Board of Directors

11. Corporate Governance The relationship among various participants in determining the direction and performance of the company Mechanisms to ensure that management fulfills its basic purpose: to promote the long-term interests of the shareholders Primary Participants: Shareholders Board of Directors Senior Management

12. Agency Problem Arises because of separation of ownership (principals) and management (agents) Management may act to promote their own interests at the expense of the interests of stockholders (opportunistically)

13. Control Mechanisms  Internal  Responsible BOD  Active shareholders Management Compensation  External  Takeover constraint  Auditors  Banks and investment analysts  Regulations  Media and public activists

14. Corporate Social Responsibility Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It addresses how companies manage their economic, social, and environmental impacts. Corporate social responsibility generally applies to company efforts that go beyond what may be required by regulators or environmental protection groups. Corporate social responsibility may involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change.

15. The Purpose of Business Few Trends could so thoroughly undermine the very foundations of our free society as the acceptance of a [corporate] social responsibility other than to make as much money for the stockholders as possible (within the rules of the game). Milton Friedman A group of people get together and exist as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately – they make a contribution to society. David Packard

16. Approaches to Corporate Social Responsibility Economic/Legal View Businesses are legal entities and have no social or moral purpose Purpose of business is to maximize owner's wealth within the limits of the law Compliance-based ethics encourages meeting legal obligations.

17. Corporate Governance

18. Approaches to Corporate Social Responsibility The Stakeholder View Businesses are social entities and have social and ethical impact on society Purpose of business is to satisfy the needs of multiple stakeholders including the financial interests of stockholders Integrity-based ethics encourages morally responsible behavior

19. Corporate Governance

20. Stakeholders Firm Stakeholders Any individual or group who can influence or is influenced by the operations of a firm

21. Types of Stakeholders  Primary – participation and support required for survival of the firm  Inside: Stockholders, Board of Directors, Managers, Employees, …  Outside: Customers, Suppliers, Creditors, Competitors, Governments, Community, …  Secondary – not directly involved in the activities of the firm but can have influence over its operations Media, Special Interests, Investment & Rating Firms, Unions, …

22. Stakeholder Analysis

23. StakeholderInterestPowerConsequencesImportance Inside …… Outside …….. Secondary …….

24. Stakeholder Management Stakeholder 1 Interest and Consequences Actions taken to address needs Assessment of continued support Stakeholder 2.....