1. Peggy Simcic Brønn1 Informasjon og Samfunnskontakt l Stakeholders l Issues Management l Environmental Scanning 21 February 2001

2. Organization Stockholders Government Regulators Boards of Director Community Leaders Associations Political Groups Professional Societies Employees Unions Suppliers Consumers Industrial Purchasers Users of Service Environmentalists Community Residents Voters Media Minorities Women Other Publics NORMATIVE LINKAGES FUNCTIONAL LINKAGES INPUT OUTPUT DIFFUSED ENABLING EXTERNAL LINKAGES OF AN ORGANIZATION

3. Peggy Simcic Brønn3 Four Key Linkages l Enabling Linkages l Functional Linkages n Input linkages n Output linkages l Normative Linkages l Diffused Linkages

4. Peggy Simcic Brønn4 Enabling Linkage l Organization could not exist without this linkage n Authorities n Shareholders n Legal System

5. 5 Functional Linkage l Linkage that give input and take output l Input Linkage n Employees n Unions n Suppliers l Output Linkages n Customers n Other organizations n Individual consumers

6. Peggy Simcic Brønn6 Normative Linkage l Organizations that have common problems or similar values n Membership organizations n Professional groups n Associations

7. Peggy Simcic Brønn7 Diffused Linkage l Elements in society that are not clearly identified as a formal member of organization n Environmentalists n Community Residents n Media n Other Publics

8. Identifying Organization’s Linkages to Stakeholders l Who are organization’s stakeholders? n No general group, but identified by common problem n Vary from case to case n Dependent on what organization does and how other individuals and organizations react to organization’s behavior l Key: What consequences of organization’s activities will have on its stakeholders and how do these consequences affect each other?

9. Peggy Simcic Brønn9 Job of PR l Decide how activities link to others -- individuals or organizations l Find groups, define exact nature of opportunity/problem and select PR solution

10. Degree of Involvement HighLow Type of Public Type of Public Problem-facing behavior high understanding of problem low constraint Constrained behavior high understanding of problem high constraint Routine behavior low problem understanding constraint recognition Fatalistic behavior low problem understanding high constraint Active Aware/Active Aware/Active Latent/Active Active None/Latent (Reinforcing) Latent None

11. 11 Purpose: To identify those individuals or organizations that will be affected by the decision or solution arrived at by the group and who have the power to prevent its implementation. Reference: Stakeholders of the Organizational Mind, I.I. Mitroff Uncovering Key Publics

12. Peggy Simcic Brønn12 Issues Management

13. Peggy Simcic Brønn13 BUSINESS FIRM AS AN ECONOMIC INSTITUTION l Little acknowledgement of external environment l Produce goods l Provide employment l Pay dividends l Success measured in economic terms

14. Peggy Simcic Brønn14 BUSINESS AS SOCIO-POLITICAL INSTITUTION l 1960’s - economic growth producing detrimental side effects l Emphasis on protecting human health, not environment per se

15. Peggy Simcic Brønn15 RISE OF PUBLIC ISSUES l Public demand collective action and there is disagreement on solution n civil rights n feminist movement n consumer movement n ecology movement

16. Peggy Simcic Brønn16 Corporate Response to Public Issues l Reactive - Fight Change l Accommodative - Adapt to Change l Proactive - Influence Change l Interactive - Adjust to and Influence Change

17. Peggy Simcic Brønn17 ISSUES MANAGEMENT l Coined in 1977 l New Type of Corporate Communications l Response to Increasing Criticism of Big Business l Method of Monitoring the Environment l Managing New Challenges and Change l Mid-1970s, Issues Became ‘Strategic’ Issues l Organizations Became Proactive

18. Peggy Simcic Brønn18 Location of IM Programs l Public/Government Affairs l Corporate Planning l Corporate Communications l Issues Management

19. 19 Broad Categories of Issues l Financial l Operational l Employee Relations/Conditions l Communications/Customer Relations l Community Relations

20. Four Types of Issues l Universal issues: have serious and imminent effects on a large number of people. Government action is expected since the issue is beyond the scope of private organizations l Advocacy issues: potential problems foremost of the population that are identified by groups claiming to represent the broad public interest. Scope of problem suggests government intervention. l Selective issues: affect special interest group. Costs of dealing with them is passed on to general public. l Technical issues: of little direct interest to the population and are left to experts. Note that an advocacy group may shift a technical issue to another group be redefining it. l The energy crisis l Health insurance reform l Medicaid reimbursement that results in cost shifting l Hazardous waste disposal that can be characterized as creation of an environmental threat TypeExample P.N. Reeves, “Issues management: The other side of strategic planning”, Hospital &Health Services Administration 38(2), Summer 1993

21. Theory and Research Judgement and Priority Setting Policy and Strategy Selection Implementation Performance Evaluation Issues Identification Issues Analysis Policy Options Program Design Results Issues Management Process The Chase-Jones Model

22. Peggy Simcic Brønn22 STRATEGIC ISSUES MANAGEMENT (SIM) l Process Whereby a Corporation Enhances its Capacity to Adapt l Varies According to Types of Issues and Scope of Activities l Internal and External Issues l Provides Executives With Powerful Planning and Control Capability

23. Peggy Simcic Brønn23 The SIM Process l Identify Issues/Environmental Scanning l Analyze Issues l Set Priorities l Select Strategic Options l Implement a Program of Action and Communication l Evaluate Effectiveness

24. The Clarity - Priority Matrix High Low Clear“Fuzzy” J.C. Camillus and D.K. Datta, “Managing strategic issues in a turbulent environment”, Long Range Planning 24, April 1991 Issue Clarity Issue Priority

25. The Public Issues Life Cycle T.G. Marx,”Strategic planning for public affairs”, Long Range Planning, 23(1), 1990. Increasing Effectiveness of Integrated Planning Social Expectation PoliticalLegislativeSocial Control Education reform Global warming Day care Shorter work week Comparable worth Road congestion Groundwater protection Acid rain Clean Air Act Amendments Energy taxes Health care reform Hazardous waste treatment Environmental Protection Agency Motor Vehicle Safety and Health Admin. Energy Policy and Conservation Act Safety belt use laws Emission standards Environmental permits Gas guzzler taxes Product recalls Plant inspections/fines Fuel economy standards

26. Evolutionary Phases... Increasing Effectiveness of Decision Making Phase 2Phase 3Phase 4Phase 1 Business Planning P A Mgmt Financial Planning Forecast-based Planning Externally Oriented Planning Strategic Business Management ReactivePro-ActiveInter-Active Strategic Public Affairs Management Annual Budgets Multiyear Budgets Gap Analysis Business Planning Integrated Planning Systems Communications Monitoring Incentives Thorough environmental analysis Strategic relations with external constituencies Propose solutions “Social Expectations” stage Well defined strategic framework Coherent reinforcing management practices Negotiations of objectives Progress review Incentives Supportive value system and climate Environmental scanning Manage solutions “Political” stage Maintain status quo “Legislative”/”Social Control” stage Thorough situation analysis and competitive assessments Evaluation of strategic alternatives T.G. Marx,”Strategic planning for public affairs”, Long Range Planning, 23(1), 1990.

27. Peggy Simcic Brønn27 IM Payoffs... l Competitive Advantages l Changes in Corporate Behavior l Avoidance of Serious Mistakes l Ability to Detect Issues and Develop Corporate Responses While in Emerging State l Enhancement of Firm’s Credibility l Reduced Vulnerability to “the Slings and Arrows of Outrageous Fortune”

28. Peggy Simcic Brønn28 ORGANIZATIONS HAVE TWO CHOICES l Reactive business strategy n pursue own financial goals n be forced by external agents to change l Proactive business strategy n actively seek operations that limit consequences n open up dialogue with external agents

29. Peggy Simcic Brønn29 Environmental Scanning l A methodology for coping with external competitive, social, economic and technical issues that may be difficult to observe or diagnose but that cannot be ignored and will not go away. J. D. Stoffels

30. Peggy Simcic Brønn30 Added value of scanning l Promotes education and mind- stretching experiences for management. l Assists in formulating of policy and strategy. l Promotes the development of operational programs and action plans. l Provides a frame of reference for budgets.

31. Peggy Simcic Brønn31 Organizational environment l Does the company accept new ideas, concepts and processes? l Are there open communications channels? l Is the company capturing environmental information that is readily available`?

32. Peggy Simcic Brønn32 Organizational environment l Are the linkages of change to the company’s operations properly assessed? l Is environmental intelligence integrated into strategic planning= Operation?

33. Peggy Simcic Brønn33 Four Reasons for Scanning l Industrial Evolution l Speed of Change and Increasing Complexity l Evolution in Planning Methodology l Asymmetry of Environmental Impacts

34. Operational Competitive Stakeholders Financial Technological Governments Economies Control Productivity Capacity Resources Governments Economies Capital Markets Money Markets Governments Economies Industries Markets Products Society Shareholders Customers Suppliers Community Employees Governments Applied Developed Emerging In Process Conceptualized Boundaries of Knowledge Governments Environmental Scanning Dimensions

35. Peggy Simcic Brønn35 Approaches to Scanning l Scientific -- social scientific measures of stakeholders to determine ‘what’s going on out there’ n Tree Diagrams, Trend Impact Analysis n Flow Charting, Morphological Models l Informal -- individualistic, subjective techniques, nonrepresentative samples of publics, and key contacts

36. Sources of Environmental Information External PEOPLE SOURCESEVENT, OBJECTS Business-related Bankers Customers Suppliers Consultants Unrelated Regular associations Friend Professional peers Periodic encounters Adjoining seat occupant Neighbor Media-related Sources General Business & Financial Trade Technical/Academic Other Sources Purchased research reports Technical conferences Trade shows Educational seminars Direct observation

37. Sources of Environmental Information PEOPLE SOURCESEVENT, OBJECTS Internal Line Relationships Superiors Subordinates Staff Relationships Peer Relationships Counterpart Relationships (cross-divisional) Other (motivated by personal relationships, mutual interest) Reports Progress Performance Projection Activity Meetings Scheduled Issue-motivated

38. Peggy Simcic Brønn38 Ranking of Sources of Environmental Information RankSource Pct. Ranking 1st/2nd 1Daily Newspapers91 2Expert Organizations59 Publications (Conferences Board, etc..) 3Business Periodicals52 4Futures Consultants42 and Forecasters 5Government Publications42 6Seminars and Conferences30

39. Peggy Simcic Brønn39 l Read utopian and science fiction. l Read magazines like The Futurist and Futures. Borrow the authors’ predictions. l Monitor the writings of politicians and social scientists. l Watch out for mention of areas of people who adopt innovation early. Starting to think about the future