5 - Corporate Strategy 2012

8/10/2019 5 - Corporate Strategy 2012

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LEARN. PERFORM. GROW.

Detailed Course Contents:

1. Introducing Strategy

2.The Strategic Pos it ion The Environment; StrategicCapability; Expectations & Purposes

3.Strategic choices (I) - Business-Level, Corporate-Leveland International Strategy

4.Strategic choices (II); Directions and Methods ofDevelopment

5.Strategy into action Organising for Success; EnablingSuccess & Managing Strategic Chance


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Layers of business environment

The macro-environment

Industry (or sector)

Competitors

The Organization


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Analising strategic position

a. External analysis> environment

b. Internal analysis> strategic capability

Expectations

& Purposes


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The Strategic Position (III)

Expectations & Purposes

Corporate governance

Stakeholder expectations

Business ethics and social responsibility

The cultural context

VMV system & organizational purposes


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AGENDA for TODAY5.The Strategic Position (III)

- Expectations & Purposes







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Stakehold er expectat ion s

Bus iness ethics and social responsibi l i ty

The cul tura l context

VMV system & org anizat ional purposes




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The governance framework describes whom the organization is there to

serve and how the purposes and priorities of the organization should be

decided


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The chain of corporate governance: typical reporting structures

Investment managers

Trustees of funds

Beneficiaries

Board

Executive directors

Senior executives

Managers

Limited reports

Investment performance reports

Accountants; Analysts reports

Company briefings; Buying / selling shares

Budgets/targets & Qualitative reporting

Budgets/targets & Qualitative reporting

Budgets/simplified targets & Operating reports

REPORTS / ACTIONS


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Stakeholders those individuals or groups who depend on the

organization to fulfill their own goals and on whom, in turn, the

organization depends

Stakeholder mapping identifies stakeholder expectations and power

and helps in understanding political priorities

Power the ability of individuals or groups to persuade, induce or coerce

others into following certain courses of action


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Some common conflicts of expectations

In order to grow, short-term profitability, cash flow and pay levels may need to besacrificed

short - termism may suit managerial career aspirations, but preclude investmentin long term projects

When family business grow, the owners may lose control if they need to appoint

professional managers New developments may require additional funding through share issue or loans.

In either case, financial independence may be sacrificed

Public ownership of shares will require more openness and accountability fromthe management

Cost efficiency through capital investment can mean job losses

Extending into mass markets may require a decline in quality standards

In public services, a common conflict is between mass provision and specialistsservices

In large multinationals organizations, conflict can result because of a divisionsresponsibilities to the company and also to its host country


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Groups of interest: balancing power

Employees

State ORGANIZATION Creditors

Managers

CustomersSuppliers

Shareholders

Society


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Groups of interest - potential conflicts. Their expectations

Groups of interest

Expectations

Basic Secondary

Shareholders Financial advantages Added value

Employees Salary + other C&B Work satisfaction,

Professional development

Customers Products & Services Quality

Creditors Solvability Paying in due time

Suppliers Paying the invoices Long term relations

Society Protection & Security Contributions to community

State Respecting Laws Higher competitiveness


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Stakeholder mapping: the power/interest matrix

Level of interest

Power

Low High

High

A

Minimal effort

C

Keep satisfied

D

Key players

B

Keep informed


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Sources of power

Hierarchy (formal power),

e.g. autocratic decision making

Influence (informal power),

e.g. charismatic leadership

Control of strategic resources,

e.g. strategic products

Possession of knowledge and skills,

e.g. computer specialists

Control of the human environment,

e.g. negotiation skills

Involvement in strategyimplementation

e.g. by exercising discretion

Control of strategic resources,

e.g. materials, labor, money

Involvement in strategy implementatione.g. distribution outlets, agents

Possession of knowledge or skills,

e.g. subcontractors, partners

Through internal links,

e.g. informal influence

Within organizations For external stakeholders


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Indicators of power

Status

Claim on resources

Representation

symbols

Status

Resource dependence

Negotiating arrangements

symbols

Within organizations For external stakeholders


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Stakeholder expectat ions







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Ethical stance the extentto which an organization will exceed its

minimum obligations to stakeholders and society at large

Corporate social responsibility is concerned with the ways in which an

organization exceeds the minimum obligations to stakeholders specified

through regulation and corporate governance


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Four possible ethical stances

Ethical stances

Short-term

shareholder

interest

Multiple

stakeholder

obligations

Shaper of

society

Longer-term

shareholder

interest


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Should organizations be responsible for

INTERNAL ASPECTS:

Employee welfare?

providing medical care, assistance with housing finance, extended sick leave,assistance for dependants, etc?

Working conditions?

job security, enhancing job surroundings, social and sporting clubs, above-minimum safety standards, training and development, etc?

Job design?

designing jobs to the increased satisfaction of workers rather than just foreconomic efficiency? This would include issues of work / life balance?

Intellectual property?

respecting the private knowledge of individuals and not claiming corporateownership?


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EXTERNAL ASPECTS (I):

Environmental issues?

reducing pollution to below legal standards if competitors are not doing so?

energy conservation?

Products?

dangers arising from the careless use of products by consumers?

Markets and marketing?

deciding not to sell in some markets?

advertising standards?

Suppliers?

fair terms of trade?

blacklisting suppliers?


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EXTERNAL ASPECTS (II):

Employment

positive discrimination in favor of minorities?

maintaining jobs?

Community activity?

sponsoring local events and supporting local good works?

Human rights?

respecting human rights in relation to: child labor, workers and union rights,oppressive political regimes? Both directly and in the choice of markets, suppliers

and partners?


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AGENDA for TODAYCourse 5:

The Strategic Position (III)



Stakeholder expectat ions

Bu siness ethics and socia l respo nsib i l i ty




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National (or regional) cultures

Organizational

field

Organizational culture

Functional /

Divisional

subcultures

The

individual


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Organizational field a community of organizations that partake of a common

meaning system and whose participants interact more frequently with one

another than with those outside the field

Organizational culture the basic assumptions and beliefs that are shared bymembers of an organization, that operate unconsciously and define in a basic

taken-for-granted fashion an organizations view of itself and its environment

Paradigm set of assumptions held relatively in common and taken for granted in

an organization


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Organizational culture in four layers

Paradigm

Taken-for-granted

assumptions

BEHAVIORS

BELIEFS

VALUES


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VMV system Vision , Miss ion , Values

Vision Where?

Mission Why?

Values What?

Value Proposition Why are we on the market?

Organizational purposes / Strategic goals Which are

the milestones?


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Criteria for developing vision

5 criteria that may support elaborating vision:

Anticipation

Deepness

Dimension

Unique

Consensus

Feasibility


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How are the objectives settled?

Specific

Measurable

Achievable

Realistic

Time related

Challenging, dar always SMART


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VMV system & org anizat ional purposes




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Summary (I)

The Five Phases of Strategy

Phase One

Strategic

Intel l igence

Gatheringand

Analys is

Phase Two

StrategyFormulat ion

PhaseThree

Strategy

Implementa

t ion

Planning

Phase Four

Strategy

Implementat ion

Phase FiveStrategy

Moni tor ing

andUpdat ing

What is our strategic time frame? (How far into the future do we want to look?)

> What are our assumptions about the external business environment during this

time frame? Economy

Regulation

Labor

Society

Technology

Market

Competition

Supply/Suppliers

Parent corporation if

subsidiary


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Summary (II)

> What are our most significant external threats during this time frame?

> What are our most significant external opportunities during this time frame?

> What are currently our most significant strengths?

> What are currently our most significant weaknesses?

> What are our Basic Beliefs (core values/guiding principles)?

Customers Suppliers

Employees Environment

Shareholders Society / Community

Competitors Ethics

How would you grade your top teams thinking and documentation of Phase 1

(Strategic Intelligence Gathering and Analysis)?


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For more information:

Cosmin Jolde

cosmin. jo ldes@achieveglobal . ro

Thank you!


5 - Corporate Strategy 2012

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