© 2005 by Nelson, a division of Thomson Canada Limited. 1 Strategic Management and Corporate Public...

© 2005 by Nelson, a division of Thomson Canada Limited. 1

Strategic Strategic Management Management and and Corporate Corporate Public AffairsPublic Affairs

Search the WebFor insights into GlaxoSmithKline corporate social policies, visit its web site at::

http://corp.gsk.com/community/workingwith.htm


Chapter Four Objectives• Explain the concept of corporate public policy• Identify the four major strategy levels and

enterprise-level strategy• Describe how social and ethical issues fit into

strategic management• Relate social audits to strategic control• Discuss the four major stages in

environmental analysis


Chapter Four Objectives• Identify the major functions of public

affairs departments• Highlight trends identified with the public

affairs function• Link public affairs strategy and

organizational characteristics• Indicate how public affairs can be

incorporated into every manager’s job


Chapter Four Outline• Corporate Public Policy• Four Key Strategy Levels• The Strategic Management Process• Corporate Public Affairs• Public Affairs as Part of Strategic Management• Evolution of the Corporate Public Affairs Function• Modern Perspectives of Corporate Public Affairs• Public Affairs Strategy• Incorporating Public Affairs Thinking into

Management• Summary


Introduction to Chapter Four

A broad overview of how social, ethical, and public issues fit into the strategic management process of corporate public policy and corporate public affairs


The Concept of CorporatePublic Policy

The overall strategic management of the organization that focuses on the firm’s posture, stance, strategy, or position regarding the public, social, and ethical aspects of stakeholders and corporate functioning

AIDSAIDS

Affirmative Affirmative actionaction

Sexual Sexual harassmentharassment

Product safetyProduct safety

Employee privacyEmployee privacy


Corporate Public Policy and The Strategic Management Process•Strategic management --

focuses on positioning the firm relative to its environment

•Corporate public policy --focuses specifically on the public, ethical, and stakeholder issues


Corporate Public Policy, Strategic Management, and Ethics

• For business ethics to have meaning it must be linked to business strategy because the linkage permits management issues to be addressed in ethical terms.

• Corporate public policy and the linkage between strategic management and ethics can be better understood in terms of:

- Four key strategy levels


Four Key Strategy Levels• Enterprise-level strategy

“What is the role of the organization in society?”• Corporate-level strategy

“What business are we in or should be in?”• Business-level strategy

“How do we compete in a given business or industry?”

• Functional-level strategy“How a firm integrates subfunctional activities

and relates them to finance, marketing, and production?”


Four Key Strategy LevelsHierarchy of Levels

Enterprise-Level Strategy

Corporate-Level Strategy

Business-Level Strategy

Functional-Level Strategy


Emphasis on Enterprise-Level Strategy

Key Questions to Consider• What is the role of our organization in

society?• How is our organization perceived?• What principles or values do we represent?• What obligations do we have to society at

large?• What are the implications for our current

mix of business and allocation of resources?


Emphasis on Enterprise-Level StrategyManifestations of enterprise-level thinking

Codes of ethicsCodes of conductMission statementsValues statementsCorporate creedsVision statements

Search the WebFor an example of enterprise-level strategy in action, visit Hewlett-Packard’s web site at: http://www.hp.com/hpinfo/community/main.htm


Emphasis on Enterprise-Level StrategyBeliefs of Borg-Warner• We believe in the dignity of the

individual -- the responsibility to the common

good -- the endless quest for excellence -- continuous renewal -- the commonwealth of Borg-Warner and its people



Johnson and Johnson Credo• We are responsible to our doctors,

nurses, and patients• We are responsible to our employees• We are responsible to our

communities• We are responsible to our

stockholders


Strategic Managementand Corporate Public Policy

Stakeholder EnvironmentStakeholder Environment(trends, events, issues, forecasts)Stakeholder EnvironmentStakeholder Environment

(trends, events, issues, forecasts)

Consumer

Social Activist

Governmental

Community

Owner

Employee

Environmental

Environmental AnalysisEnvironmental AnalysisGoal Formulation

Goal Formulation

Strategy Formulation

Strategy Formulation

Strategy EvaluationStrategy

Evaluation

Strategy Implementation

Strategy Implementation

Strategic Control

Strategic Control

Organizational EnvironmentOrganizational Environment


Strategic Management ProcessGoal FormulationGoal formulation involves:

•Establishing goals•Setting priorities among goals


Strategic Management ProcessStrategy Formulation


Strategic Management ProcessStrategy Evaluation

The need for continuing assessment of the firm’s current goals and strategy relative to proposed goals and strategic alternatives.


Strategic Management ProcessStrategy Implementation

• Strategy• Structure• Systems• Style

• Staff • Skills• Shared values

McKinsey 7S Framework


Strategic Management ProcessStrategic Control

Three Essential Steps• Set standards which may be

compared to performance• Compare actual performance with

planned performance• Take corrective action to bring

actual and planned performance in sync


Strategic Management Process Strategic Control

Social audit is a systematic attempt to identify, measure, monitor, and evaluate an organization’s performance with respect to its social goals and programs.Search the Web

For an example of a social audit, go to:

http://www.the-body-shop.com/global/values/index.asp

Search the WebFor an example of a ranking of social audits, go to www.sustainability.com


Strategic Management Process Strategic Control

Social AuditingGlobal Reporting Initiative (GRI) concerns developing standard measures for social reporting.


Strategic Management ProcessEnvironmental Analysis• Environmental analysis links the

organization and stakeholder environment

• Four stages of environmental analysis– Scanning– Monitoring– Forecasting– Assessing


Corporate Public Affairs• Corporate public affairs focuses on the

formalization and institutionalization of corporate public policy.

• Corporate public affairs also embraces:– Corporate public policy– Issue management– Crisis management – Governmental affairs– Corporate Communications


Public Affairs Management: Relationships

Enterprise-Level ManagementEnterprise-Level Management

Strategic Management ProcessStrategic Management Process

Environmental AnalysisEnvironmental Analysis

Corporate Public Policy

Corporate Public Policy

Issues Management

Issues Management

Crisis Management

Crisis Management

Public Affairs Management


Evolution of the Corporate Public Affairs Function Includes• The growing impact of

government• The changing political system• The increase of stakeholders

over business• The belief that business should

be more politically active


New Public Affairs Organization• Manages ongoing public affairs both

internally and externally• Cultivates and harvests the capability to

build, develop, and maintain stakeholder relationships

• Recognizes the importance of managing the grassroots

• Communicates in an integrated manner• Continually aligns the organization’s

values and strategies with the public’s interests

• Focuses both proactively on helping the organization compete


Designing the Corporate External and Social Performance Function•Institution oriented versus

economic franchise•Collaborative/problem-solving

strategy versus individual/adversarial strategy


Business Exposure and External Affairs Design

SocialEnvironment

External Affairs Design: Breadth, Depth, Influence and Integration

Consumer Products Company

Industrial Products Company


Business Exposure and External Affairs Design


The Public Affairs Thinking Manager

Make Public Affairs Truly Relevant— Operating managers should know how their decisions impact the stakeholder environment.

Develop a Sense of Ownership of Success—Operating managers should participate in the planning and goal setting of public affairs endeavors.

Make It Easy for Operating Managers—Train them to see the relevance of PA initiatives.

Show That Public Affairs Makes a Difference—Keep a “scorecard” of successes so manager’s see the potential.


• Benchmarking• Business-level strategy• Collaborative/problem

solving strategy• Corporate-level

strategy• Corporate public policy• Enterprise-level

strategy• Environmental

forecasting• Environmental

monitoring

• Environmental scanning

• Functional-level strategy

• Global Reporting Initiative

• Individual/adversarial external affairs strategy

• Issues and crisis management

• Public affairs

Selected Key Terms


Selected Key Terms (cont’d)• Public affairs management• Social audit• Sociopolitical forecasting• Stakeholder environment• Strategic management• Strategy management process

© 2005 by Nelson, a division of Thomson Canada Limited. 1 Strategic Management and Corporate Public...

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