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Issues Managementand Environmental Scanning

Chapter 7

Organizational and Managerial Communication

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BUSINESS AS AN ECONOMIC INSTITUTION

Little acknowledgement of external environment

Produce goodsProvide employmentPay dividendsSuccess measured in economic

terms

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BUSINESS AS SOCIO-POLITICAL INSTITUTION

1960’s - economic growth producing detrimental side effects

Emphasis on protecting human health, not environment per se

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RISE OF PUBLIC ISSUES

Public demand collective action and there is disagreement on solution civil rights feminist movement consumer movement ecology movement

Four Types of Issues

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

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.

Selective issues: affect special interest group. Costs of dealing with them is passed on to general public.

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.

The energy crisis

Health insurance reform

Medicaid reimbursement that results in cost shifting

Hazardous waste disposal that can be characterized as creation of an environmental threat

Type Example

P.N. Reeves, “Issues management: The other side of strategic planning”, Hospital &Health Services Administration 38(2), Summer 1993

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ISSUES MANAGEMENT

Coined in 1977New Type of Corporate CommunicationsResponse to Increasing Criticism of Big

BusinessMethod of Monitoring the EnvironmentManaging New Challenges and ChangeMid-1970s, Issues Became ‘Strategic’

IssuesOrganizations Became Proactive

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Location of IM Programs

Public/Government Affairs

Corporate Planning

Corporate Communications

Issues Management

Source: McGrath, G., Issues Management, IABC

Theory andResearch

Judgement and Priority

Setting

Policy andStrategy Selection

Implementation

PerformanceEvaluation

IssuesIdentification

IssuesAnalysis

PolicyOptionsProgram

Design

Results

Issues Management Process

The Chase-Jones Model

The Clarity - Priority MatrixAssess impact of issue onobjectives, current strategiesand operational plans forimmediate action.

Closely monitor issue.Actively seek additionalinformation.

Evaluate impact of issue andidentify nature of response, ifany.

Monitor issue.Drop, if unimportant.

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

Issu

e P

rior

ity

Structure of an issues monitoring team

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Four functions:

Sharpening planning for responsible adapting the organization

Knowing and exceeding standardsMonitoring issuesCommunicating to build beneficial

relationships

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Corporate Response to Issues

Reactive - Fight ChangeAccommodative - Adapt to ChangeProactive - Influence ChangeInteractive - Adjust to and

Influence Change

The Public Issues Life Cycle

T.G. Marx,”Strategic planning for public affairs”, Long Range Planning, 23(1), 1990.

Incr

easi

ng

Eff

ect

ive

ne

ss

of

Inte

gra

ted

Pla

nn

ing

Social Expectation

Political Legislative Social Control

Education reformGlobal warmingDay careShorter work weekComparable worthRoad congestion

Groundwater protectionAcid rainClean Air ActAmendmentsEnergy taxesHealth care reformHazardous waste treatment

Environmental Protection AgencyMotor Vehicle Safety and Health Admin.Energy Policy and Conservation Act Safety belt use laws

Emission standardsEnvironmental permitsGas guzzler taxesProduct recallsPlant inspections/finesFuel economy standards

IM and Corporate Image

IM now includes fostering and maintaining corporate image

Tied to behavior of organization and communication management

Integrity of the organizational identity

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ORGANIZATIONS HAVE TWO CHOICES

Reactive business strategy pursue own financial goals be forced by external agents to change

Proactive business strategy actively seek operations that limit

consequences open up dialogue with external agents

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Environmental Scanning

A methodology for collecting and analyzing information about every sector of the external environment that can help management to plan for the organization’s future.

. . . A radar-like vigilance used to spot potential or actual issues at their earliest point of development. (Heath)

Chun Wei Choo

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Added value of scanning

Promotes education and mind-stretching experiences for management.

Assists in formulating of policy and strategy.

Promotes the development of operational programs and action plans.

Provides a frame of reference for budgets.

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Organizational environment

Does the company accept new ideas, concepts and processes?

Are there open communications channels?

Is the company capturing environmental information that is readily available`?

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Organizational environment

Are the linkages of change to the company’s operations properly assessed?

Is environmental intelligence integrated into strategic planning?

OperationalC

ompe

titiv

eSt

akeh

olde

rs

Financial

Tech

nolo

gica

l

GovernmentsEconomies

ControlProductivity

CapacityResources

Governm

ents

Econom

ies

Capital M

arkets

Money

Markets

Gov

ernm

ents

Econ

omie

s

Indu

strie

sM

arke

tsPr

oduc

ts

Society

Shareholders

Custom

ers

Suppliers

Com

munity

Employees

Governm

ents

App

lied

Dev

elop

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mer

ging

In P

roce

ssC

once

ptua

lized

Bou

ndar

ies

of

Kno

wle

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Gov

ernm

ents

EnvironmentalScanningDimensions

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Approaches to Scanning

Scientific -- social scientific measures of stakeholders to determine ‘what’s going on out there’ Tree Diagrams, Trend Impact Analysis Flow Charting, Morphological Models

Informal -- individualistic, subjective techniques, nonrepresentative samples of publics, and key contacts

Sources of Environmental Information

External

PEOPLE SOURCES EVENT, OBJECTS

Business-related Bankers Customers Suppliers ConsultantsUnrelated Regular associations Friend Professional peersPeriodic 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

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Sources of Environmental Information

PEOPLE SOURCES EVENT, OBJECTSInternal

Line Relationships Superiors Subordinates

Staff RelationshipsPeer RelationshipsCounterpart Relationships (cross-divisional)Other (motivated bypersonal relationships,mutual interest)

Reports Progress Performance Projection Activity

Meetings Scheduled Issue-motivated

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Ranking of Sources of Environmental Information

Rank Source Pct. Ranking 1st/2nd

1 Daily Newspapers 912 Expert Organizations 59

Publications (Conferences Board, etc..)

3 Business Periodicals 524 Futures Consultants 42

and Forecasters5 Government Publications 426 Seminars and Conferences 30

Best Practices

Planning and manage scanning as a strategic activity

Implement scanning as a formal system

Partner with domain experts and IT specialists in designing system

Manage information as the core of the scanning function

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Read utopian and science fiction.Read magazines like The Futurist

and Futures. Borrow the authors’ predictions.

Monitor the writings of politicians and social scientists.

Watch out for mention of areas of people who adopt innovation early.

Starting to think about the future

J. D. Stoffels

Two cases

Playtex Company and the Sippy Cup

Intel