behavioural implementation
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TRANSCRIPT
BEHAVIOURALIMPLEMENTATION
Opening Case Opening case Opening case
“several aspect of behavioural implementation that works behind the scenes adding to its reputation as a company that is respected globally for its value and corporate governance”
INFOSYS CORPORATE GOVERNANCE
TransparencySatisfying the spiritClear communication to outside world of how
company run internally
Facts
company developed guideline for corporate governance
Rated highly on C.G. By national credit rating agency
8 independent director out of 15 directors7 internal directors are all the founders
Succession planning
nomination committee of the board does succession planning
all 7 founders are professional Appointment of strategic leaders is based on
professional standard rather than family relationship.
4th time ranked as most admirable companyIt operates the behavior of strategist
STAKEHOLDER
Stakeholder and strategic management
“Stakeholder are the individuals and group who can affect and are affected by, strategic outcomes achieved and who are enforceable claim on a firm performance.”
Functions of stakeholder
• It give support to the strategic management of organization
• Oppose the top of management in strategy formulation and implementation
“ managing stakeholder relationships is important and critical for the strategic management of an organisation”
Organisational stake holder relationship
External shareholder
CustomerSuppliers
Gov. regulatorsBank/creditorsTrade unions
Employers organisationMass media
NGO/ activistsLocal communities
General public
Internal stakeholders
ShareholdersEmployeesManagersdirectors
organisation
Contributions/supports
Expectations/claims
Identify the stakeholders
Identify the stakeholders Expectations, interests, concerns
Identify the claims of stakeholders Are likely to make on the org.
Stakeholder analysis
Identify the stakeholders who are impFrom the org. prospective
Identify the strategic challenges involvedIn managing the stakeholder relationship
Stakeholder analysis
Stakeholders analysis mapEff
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f str
ateg
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the
stak
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Profitable Org.
Average return
earning org.
Organization notDoing well
Engagement tactics forstakeholder
“The process of fostering an effective relationship with the stakeholder is termed as stakeholder engagement and it is most critical part of the stakeholder management.”
Agency theory and stewardship theory
• Agency theory- When a person delegates the authority to another, an agency relationship is created.
• Stewards theory- an alternative approach to explaining the relationship between the owners and managers of the organization is called stewardship theory.
CORPORATE GOVERNANCE
Corporate governance
According NFCG “it is concerned with the extent to which organizations are managed in an open and honest manner. The corporate governance mechanisms are designed to create conditions that support the stakeholder of an organization being managed in an open and honest manner”
Corporate governance
• Key aspect of good corporate governance , according NFCG
1. Transparency of corporate structures and operations2. The accountability of managers and the board to
shareholder3. Corporate responsibility towards employees, creditors,
suppliers and local communities where the corporation operates
Corporate governance
The burgeoning literature on corporate governance and practice around the world suggest several mechanisms that are being used to ensure good corporate governance. Among these are organisational mechanism
Corporate governance
• Having an effective board of directors• Fostering transparency through disclosure of
information related to the organisation’s financial and operational performancnce
• Framing a code of governance and committing the organisation to its implementation
Corporate governance
• Designing sound internal control systems• Instituting effective auditing and evaluation
system within the organization• Having proper risk management procedures in
place• Designing fair compensation polices for
managers
Relating corporate governance
• Strategic management• Strategic intent• Strategic formulation• strategic implementation• Strategy evaluation
BOARD OF DIRECTORS
Role of board of directors
• Ultimate Legal authority of organization vest with the board of directors
• Members of board are responsible for providing guidance and establishing the directives according to which the organization can operate
Board of directors & strategic management
• Determine the company’s purpose & ethics• Decide the direction, that is, the strategy• Plan• Monitor and control managers and the CEO• Report and make recommendations to
shareholders
STRATEGIC LEADERSHIP
Strategic leadership
• Corporate level managers • Business level managers• Functional level managers• Operational level
Task of strategic leaders
• Determining strategic direction• Effectively managing the organisational
resources portfolio• Sustaining an effective organisational culture• Emphasising ethical practices• Establishing balanced organisational controls
The styles of strategic leaders
• Kurt lewin – democratic , autocratic and laissez faire style.
Role of strategic leaders
• Role of chief executive officer• Role of senior managers • Role of business-level executives• Role of functional and operational managers
Developing strategic leaders
• Choice of future strategic• Career planning and development• Succession planning
Corporate Culture and
Strategic Management
Composition of Culture
Beliefs
Values
Norms
Beliefs are considered to be assumptions about reality and are derived and reinforced by experience.
Values are considered to be assumptions about ideals that are desirable and worth striving for.
Norms are expected standards of behavior.
Impact of culture on corporate life
As a strength: facilitates communication decision making and control create cooperation and commitment
Building of a strong culture
Founder or an influential leader who established desired values.
Sincere and dedicated commitment.
Concern for stakeholders.
Strategy Culture Relationship
To ignore corporate culture
To adapt strategy implementation to suite corporate culture
To change the corporate culture to suit strategic requirements
To change the strategy to fit the corporate cultures
Approaches to create a strategy-supportive culture:
Corporate Politics and
Power
Understanding Politics and Use of Power
Reward PowerCoercive Power Legitimate Power Reference PowerExpert Power
Power and Politics
• Negative• Positive
Strategic use of power and politics
Strategic use of power and politics
Accept the inevitability of politics being there in the organization
Understanding the power structureLead strategyBe sensitive and alert to political signalsReward organizational commitmentUse openness and honesty
Corporate politics and power in the Indian context
Nature of Indian society
Higher level of enviousness
Pervasive enviousness
Personal values
Personal values refers to a conception of what an individual or group regards as desirable.
Business ethics
It is the study of how personal moral norms apply to activities and goals of a commercial enterprise.
It is concerned primarily with the relationship of business goals and techniques to specify human ends.
Personal values and business ethics
A major task of leadership is to inculcate personal values and impart a sense of business ethics to the organizational members.
Personal values and business ethics seek to prevent an indiscriminate use of power politics within organization.
Values : Principles or standards of behavior.
Ethics : The rules of conduct recognized in respect to a particular class of human actions or a particular group,
culture.
Strategy : Strategists take strategic decisions on the basis of values and ethics.
Advantage of business ethics and values
Competitive advantageAttraction of investment and human capitalRetention of valuable employees
Inculcating values and ethics
Transparency in the recruitment and selection
Training and educational programsCommunication of values and ethicsConsistent nurturing of valuesPaying special attention to ethically-
sensitive activities
Reconciling Divergent Values.
Modifying Values to Create Consistency.
Social responsibility Social responsibility is an organization's obligation to
benefit society in ways that transcend the primary business objective of maximizing profits.
Responsibility towards owners Responsibility towards Investors Responsibility towards employees Responsibility towards customers Responsibility towards competitors Responsibility towards suppliers Responsibility towards Government
Social responsibility in Indian context
Models of CSR Operating In India
Gandhian model: voluntary commitment to public welfare based on ethical awareness of social needs.
Nehruvian model: state-driven policies including state ownership and extensive regulation and administration
Contd…
Milton-friedman model: corporate responsibility primarily focused on owners objectives
Freeman model: stakeholders responsiveness which recognizes direct and indirect stakeholders interests.
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