Part I: BUSINESS, SOCIETY, AND STAKEHOLDERS. 1. The Business and Society Relationship. 2. Corporate Citizenship: Social Responsibility, Performance and Sustainability. 3. The Stakeholder Approach to Business, Society, and Ethics. Part II: CORPORATE GOVERNANCE AND STRATEGIC MANAGEMENT ISSUES. 4. Corporate Governance: Foundational Issues. 5. Strategic Management and Corporate Public Affairs. 6. Issue, Risk, and Crisis Management. Part III: BUSINESS ETHICS AND MANAGEMENT. 7. Business Ethics Fundamentals. 8. Personal and Organizational Ethics. 9. Business Ethics and Technology. 10. Ethical Issues in the Global Arena. Part IV: EXTERNAL STAKEHOLDER ISSUES. 11. Business, Government, and Regulation. 12. Business Influence on Government and Public Policy. 13. Consumer Stakeholders: Information Issues and Responses. 14. Consumer Stakeholders: Product and Service Issues. 15. Sustainability and the Natural Environment. 16. Business and Community Stakeholders. Part V: INTERNAL STAKEHOLDER ISSUES. 17. Employee Stakeholders and Workplace Issues. 18. Employee Stakeholders: Privacy, Safety, and Health. 19. Employment Discrimination and Affirmative Action. Cases.
© 2015 Cengage Learning Chapter Strategic Management and Corporate Public Policy © 2015 Cengage Learning Learning Outcomes Describe the concept of corporate public policy and relate it to strategic management Articulate the four major strategy levels and explain enterprise-level strategy Explain social entrepreneurship and relate it to the benefit corporation Explain sustainability reports and integrated reporting Link public affairs with the strategic management function Indicate how public affairs may be incorporated into every manager’s job © 2015 Cengage Learning Chapter Outline • • • • • • The Concept of Corporate Public Policy Four Key Strategy Levels The Strategic Management Process Public Affairs as a Part of Strategic Management The Corporate Public Affairs Function Today Summary © 2015 Cengage Learning The Concept of Corporate Public Policy Affirmative Action Environmental Sustainability Employee privacy 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 Sexual harassment Product safety © 2015 Cengage Learning Corporate Public Policy and Strategic Management Strategic management •Refers to the overall management process that strives to identify corporate purpose, and to position a firm to succeed in its market environment Corporate public policy •Incorporates sustainability as that part of the overall strategic management of the organization that focuses on the environmental, economic, social and ethical stakeholder issues that are embedded in the decision processes of the firm © 2015 Cengage Learning Relationship of Ethics to Strategic Management • For business ethics to have any meaning beyond pompous moralizing, it should be linked to corporate strategy • Corporate strategy can be revitalized because the linkage permits addressing management issues in ethical terms • This linkage can be better understood when we think about the: • Four key strategy levels (decisions are made at several levels) • Steps in the strategic management process © 2015 Cengage Learning Four Key Strategy Levels Enterprise-level strategy • • What is the role of our firm in society? For what we stand? 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 Enterprise-Level Strategy Corporate-Level Strategy Business-Level Strategy Functional-Level Strategy © 2015 Cengage Learning Feedback Emphasis on Enterprise-Level Strategy For what we stand? • • • • • What is the role of our organization in society? How is our organization perceived by our stakeholders? What principles or values does our organization represent? What obligations 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 10 The Benefit Corporation• • • • Unlike the traditional corporation, the Benefit Corporation has a broader mission that includes having a positive impact on society The societal mission does not take a backseat to shareholder wealth maximization The Benefit Corporation offers managers, investors and customers the opportunity to participate in or patronize businesses that promise to make social responsibility an important goal 12 states now have laws permitting companies to incorporate as Benefit Corporations © 2015 Cengage Learning 13 The Importance of Core Values Core Values •Are the deeply ingrained principles that guide all of a company’s actions and decisions •Serve as cultural cornerstones •Having a set of core values that are not followed will no good •To be effective, firms need to weave core values into everything they •If a firm’s core values are not upheld, they become hollow, and more harm than good © 2015 Cengage Learning 14 Other Manifestations of Enterprise-Level Thinking Establishment of public-policy committees •Sustainability •Ethics •Corporate philanthropy, 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 15 The Strategic Management Process1 Goal formulation Strategy formulation Strategy evaluation Strategy implementation Strategic control Environmental analysis © 2015 Cengage Learning 16 Strategic Management Process and Corporate Public Policy © 2015 Cengage Learning 17 Components of Strategy Formulation © 2015 Cengage Learning 18 Strategic Corporate Social Responsibility (1 of 2) CSR & Competitive Advantage •3 ways corporations intersect with society: • • • Generic social issues (firm’s operations not affect society and issue is not material to firm’s long-term competitiveness) Value chain social impacts (a firm’s normal operations significantly affect society) Social dimensions of competitive context (social issues affect the underlying drivers of a firm’s competitiveness) •These categories divide into modes of corporate involvement: © 2015 Cengage Learning 19 Strategic Corporate Social Responsibility (2 of 2) Responsive CSR •Addresses generic social impacts through good corporate citizenship and value chain social impacts by mitigating harm Strategic CSR •Transforms value chain social impacts into activities that benefit society while reinforcing corporate strategy •Advances strategic philanthropy that leverages competitiveness © 2015 Cengage Learning 20 Measuring Sustainable Corporate Performance • Achieving sustainability requires performance accountability • When firms measure only financial performance, environmental and social considerations become side issues • To achieve sustainability, the triple bottom line must be reflected in every aspect of the firm’s operation • Sustainability reports (integrated reports – IR) reflect the extent to which the firm is creating value in the triple bottom line • Social Audits, Social Responsibility Reports and Environmental Impact Reports focus on specific areas © 2015 Cengage Learning 21 Public Affairs As a Part of Strategic Management Strategic Management Process Public Affairs Management Enterprise-Level Strategy Corporate Public Policy Part of which is Environmental Analysis Issues Management © 2015 Cengage Learning Crisis Management 22 The Corporate Public Affairs Function Today Public Affairs grew in the U.S because of: 1.The growing magnitude and impact of government 2.The changing nature of the political system 3.The recognition by business that it was being outflanked by interests counter to its own 4.The need to be more active in politics outside traditional community-related aspects © 2015 Cengage Learning 23 Public Affairs Defined The Public Affairs Council (PAC), the leading organization of executives who the PA work of companies, defines PA as: •“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 24 Public Affairs Activities & Functions • Public Affairs (PA) began from isolated company initiatives designed to handle diverse activities, but was sometimes managed by Public Relations staffers, but they are not the same • Public relations focuses on selling a product, while public affairs is designed to influence public policy • PA activities may include lobbying, global public affairs, social media, corporate responsibility, campaign finance, grassroots advocacy, crisis communication, and more © 2015 Cengage Learning 25 Future of Corporate PA • If the PA function is to be effective, it must have influence at the top management level • Because of corporate ethical crises, PA specialists have an ideal opportunity to help transform business and society relationships There are primary opportunities: • Help develop value-based enterprises; and work cooperatively with them on social issues • PA executives can be thought leaders in their firms, and collaborate with those outside the firm on current issues • Be mindful of global issues, including those which begin as domestic issues and migrate © 2015 Cengage Learning 26 Key Terms • • • • • • • • • benefit corporation bottom of the pyramid business-level strategy corporate-level strategy corporate public affairs corporate public policy enterprise-level strategy functional-level strategy Global Reporting Initiative • issues and crisis management • public affairs (PA) • public affairs departments • public affairs management • public affairs strategy • shared value • social audit • social entrepreneurship • social responsibility report • strategic management strategic management processes • sustainability report • value shif © 2015 Cengage Learning 27 [...]... Audits, Social Responsibility Reports and Environmental Impact Reports focus on specific areas © 20 15 Cengage Learning 21 Public Affairs As a Part of Strategic Management Strategic Management Process Public Affairs Management Enterprise-Level Strategy Corporate Public Policy Part of which is Environmental Analysis Issues Management © 20 15 Cengage Learning Crisis Management 22 The Corporate Public Affairs... 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.” © 20 15 Cengage Learning 24 Public Affairs Activities & Functions • Public Affairs (PA) began from isolated company initiatives designed to handle diverse... crisis communication, and more © 20 15 Cengage Learning 25 Future of Corporate PA • If the PA function is to be effective, it must have influence at the top management level • Because of corporate ethical crises, PA specialists have an ideal opportunity to help transform business and society relationships There are 3 primary opportunities: • Help develop value-based enterprises; and work cooperatively... processes © 20 15 Cengage Learning 15 The Strategic Management Process1 Goal formulation 2 Strategy formulation 3 Strategy evaluation 4 Strategy implementation 5 Strategic control 6 Environmental analysis © 20 15 Cengage Learning 16 Strategic Management Process and Corporate Public Policy © 20 15 Cengage Learning 17 Components of Strategy Formulation © 20 15 Cengage Learning 18 Strategic Corporate Social... hollow, and do more harm than good © 20 15 Cengage Learning 14 Other Manifestations of Enterprise-Level Thinking Establishment of public-policy committees Sustainability Ethics •Corporate philanthropy, etc Establishment of a Public affairs Office •Included in strategic decision-making Identification of social or public issues – •Integrated into strategic management processes © 20 15 Cengage Learning 15 The... strategy Global Reporting Initiative • issues and crisis management • public affairs (PA) • public affairs departments • public affairs management • public affairs strategy • shared value • social audit • social entrepreneurship • social responsibility report • strategic management strategic management processes • sustainability report • value shif © 20 15 Cengage Learning 27 ... leverages competitiveness © 20 15 Cengage Learning 20 Measuring Sustainable Corporate Performance • Achieving sustainability requires performance accountability • When firms measure only financial performance, environmental and social considerations become side issues • To achieve sustainability, the triple bottom line must be reflected in every aspect of the firm’s operation • Sustainability reports (integrated... Social Responsibility (1 of 2) CSR & Competitive Advantage •3 ways corporations intersect with society: • • • Generic social issues (firm’s operations do not affect society and issue is not material to firm’s long-term competitiveness) Value chain social impacts (a firm’s normal operations significantly affect society) Social dimensions of competitive context (social issues affect the underlying drivers... education, the environment, and the arts The bottom-of-the-pyramid (BOP) is term used to characterize the largest and poorest socio-economic group of people, those who live on less than $2/day © 20 15 Cengage Learning 12 The Benefit Corporation• • • • Unlike the traditional corporation, the Benefit Corporation has a broader mission that includes having a positive impact on society The societal mission... them on social issues • PA executives can be thought leaders in their firms, and collaborate with those outside the firm on current issues • Be mindful of global issues, including those which begin as domestic issues and migrate © 20 15 Cengage Learning 26 Key Terms • • • • • • • • • benefit corporation bottom of the pyramid business- level strategy corporate-level strategy corporate public affairs corporate .. .Chapter Strategic Management and Corporate Public Policy © 20 15 Cengage Learning Learning Outcomes Describe the concept of corporate public policy and relate it to strategic management. .. safety © 20 15 Cengage Learning Corporate Public Policy and Strategic Management Strategic management •Refers to the overall management process that strives to identify corporate purpose, and to position... are embedded in the decision processes of the firm © 20 15 Cengage Learning Relationship of Ethics to Strategic Management • For business ethics to have any meaning beyond pompous moralizing, it