unit 8 feedback week 9 read : chapter 3, corporate social responsibility and business ethics chapter...
TRANSCRIPT
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Unit 8 Feedback
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WEEK 9Read : Chapter 3, Corporate Social Responsibility
and Business Ethics Chapter 13, Strategic Control Chapter 14, Innovation and Entrepreneurship
Complete and upload the Final Project (200 Points)Respond to the Discussion Questions
research recent innovations on the Web. Find a recent innovation that you would consider a breakthrough innovation.
What breakthrough innovation did you select? Why? Describe the risk that was taken. What is the target audience for the innovation? Note the size of the company and any other details that you find are important.
Preview of Reflection Paper (due week 10)
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Final Project: Strategic Plan Choose a company and write a strategic
plan for that organization Executive Summary:
Start with an executive summary of your strategic plan.
Company Background: Identify the organization that you have chosen
for your strategic plan. Provide a brief background of this
organization including its products, services and customers.
Include the organization’s strategic planning model (including the history of successes and failures associated with the process).
Mission Statement & Vision Statement: How does the mission, vision and values aid the
organization in reaching its desired end state? Include the mission statement and vision
statement and refer to it in your analysis. Internal Analysis & External Analysis:
Write an assessment of the organization including their ability to accomplish goals and objectives as set in their previous strategic plan(s) and, their ability to respond to internal and external changes and challenges.
SWOT analysis of your plan’s focus area(s): Incorporation of the SWOT findings into clearly
stated goals and objectives for a 3-5 year period focusing on your strategic plan area(s).
You will have 3-4 goals for each year with 3-4 measurable objectives for each goal. Outline your goals and objectives clearly and then provide a narrative explanation for each.
Long Term Objectives: Designate the long term objectives in your
strategic plan. Strategy Analysis and Choice:
Choose the generic strategy and grand strategy. Then chosen and discuss why you have chosen each and how they will fit within the framework of the organization.
Plan Goals and Implementation: Discuss the goals and implementation for the
business strategy. Include in this discussion the organizational structure and the leadership and culture.
Critical Success Factors: Describe the critical success factors.
Controls and Evaluation: List and describe controls and evaluation
methods.
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Chapter 3
McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
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Stakeholder Approach
According to the Stakeholder Approach: In defining or redefining the company
mission, strategic managers must recognize the legitimate rights of the firm’s claimants.
In addition to stockholders and employees, these include outside stakeholders affected by the firm’s actions.
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Perceived Stakeholders
Customers Government Stockholders Employees Society
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Steps to Incorporate Stakeholders:1. Identification of
stakeholders 2. Understanding
stakeholders’ specific claims vis-à-vis the firm
3. Reconciliation of these claims and assignment of priorities
4. Coordination of the claims with other elements of the company mission
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Dynamics of Social Responsibility
Inside vs. Outside Stakeholders
Duty to serve society plus duty to serve stockholders
Flexibility is key Firms differ along:
Competitive Position Industry Country Environmental Pressures Ecological Pressures
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Ex. 3.2 Inputs to the Development of Company Mission
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Types of Social Responsibility
Economic – the duty of managers, as agents of the company owners, to maximize stockholder wealth
Legal – the firm’s obligations to comply with the laws that regulate business activities
Ethical – the company’s notion of right and proper business behavior.
Discretionary – voluntarily assumed by a business organization.
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CSR & Profitability Corporate social
responsibility (CSR), is the idea that business has a duty to serve society in general as well as the financial interests of stockholders.
The dynamic between CSR and success (profit) is complex. They are not mutually exclusive, and they are not prerequisites of each other.
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Factors Complicating a Cost-Benefit Analysis of CSR:
1. Some CSR activities incur no dollar costs at all. In fact, the benefits from philanthropy can be huge.
2. Socially responsible behavior does not come at a prohibitive cost.
3. Socially responsible practices may create savings, and, as a result, increase profits.
4. Proponents argues that CSR costs are more than offset in the long run by an improved company image and increased community goodwill.
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CSR Today Priority of American businesses Resurgence of Environmentalism Increasing Buying Power among
Consumers Globalization of Business
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Sarbanes-Oxley Act of 2002 CEO and CFO must certify every
report containing company’s financial statements
Restricted corporate control of executives, acting, firms, auditing committees, and attorneys
Specifies duties of registered public acting firms that conduct audits
Composition of the audit committee and specific responsibilities
Rules for attorney conduct Disclosure periods are stipulated Stricter penalties for violations
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New Corporate Governance Structure Restructuring governance structure in
American corporations Heightened role of corporate internal
auditors Auditors now routinely deal directly with
top corporate officials CEO information provided directly by the
company’s chief compliance and chief accounting officers
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Ex. 3.8 The New Corporate Governance Structure
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CSR’s Effect on Mission Statement
The mission statement embodies what company believes
Managers must identify all stakeholder groups and weigh their relative rights and abilities to affect the firm’s success
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Social Audit
A social audit is an attempt to measure a company’s actual social performance against its social objectives.
The social audit may be used for more than simply monitoring and evaluating firm social performance.
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Satisfying Corporate Social Responsibility
Conflicting pressures on executives
The CSR Debate: centuries old There are mutual advantages
to using Collaborative Social Initiatives (CSIs)
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Ex. 3.10 Continuum of Corporate Social Responsibility Commitments
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Five Principles of Successful CSIs
1. Identify a Long-Term Durable Mission2. Contribute “What We Do”*
*This is the most important principle
3. Contribute Specialized Services to a Large-Scale Undertaking
4. Weigh Government’s Influence 5. Assemble and Value the Total Package of
Benefits
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The Limits of CSR Strategies Some companies have embedded
social responsibility and sustainability commitments deeply in their core strategies.
Larger companies must move beyond the easy options of charitable donations but also steer clear of overreaching commitments.
CSR strategies can also run afoul of the skeptics—the speed of information on the Internet makes this an issue with serious ramifications.
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The Future of CSR CSR is firmly and irreversibly part of the
corporate fabric Corporations will face growing demands
for social responsibility contributions far beyond simple cash or in-kind donations
The public’s perception of ethics in corporate America is near its all-time low
Even when groups agree on what constitutes human welfare, the means they choose to achieve it may differ
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Management EthicsThe Nature of Ethics in Business: Belief that managers will behave in an
ethical manner is central to CSR Ethics – the moral principles that reflect
society’s beliefs about the actions of an individual or a group that are right and wrong
Ethical standards reflect the end product of a process of defining and clarifying the nature and content of human interaction
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Approaches to Questions of Ethics Utilitarian Approach Moral Rights Approach Social Justice Approach
Liberty Principle Difference Principle Distributive-Justice Principle Fairness Principle Natural-Duty Principle
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Code of Business Ethics To help ensure consistence in the
application of ethical standards, an increasing number of professional associations and businesses are establishing codes of ethical conduct.
The following all have ethics codes: Chemists Funeral directors Law Enforcement Agents Hockey Players Librarians Physicians
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Major Trends in Codes of Ethics 1. Increased interest in codifying business
ethics has led to both the proliferation of formal statements by companies and to their prominence among business documents.
2. Such codes used to be found solely in employee handbooks.
3. Companies are adding enforcement measures to their codes.
4. Increased attention by companies in improving employees’ training in understanding their obligations under the company’s code of ethics.
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Chapter 13
McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
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Establishing Strategic Controls Strategic control is concerned with
tracking a strategy as it is being implemented, detecting problems or changes in its underlying premises, and making necessary adjustments
Characterized as a form of “steering control”
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Types of Strategic Control
Premise controlStrategic surveillanceSpecial alert controlImplementation control
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Ex. 13.1 Four Types of Strategic Control
Chapter 13 exhibit 1.CLP
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Ex. 13.1 (contd.) Characteristics of the Four Types of Strategic Control
Chapter 13 exhibit 2.CLP
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Premise Control
Premise control is designed to check systematically and continuously whether the premises on which the strategy is based are still valid
Environmental factors Industry factors
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Strategic Surveillance
Strategic surveillance is designed to monitor a broad range of events inside and outside the firm that are likely to affect the course of its strategy
Strategic surveillance must be kept as unfocused as possible
Despite its looseness, strategic surveillance provides an ongoing, broad-based vigilance in all daily operations
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Special Alert Control
A special alert control is the thorough, and often rapid, reconsideration of the firm’s strategy because of a sudden, unexpected event
A drastic event should trigger an immediate and intense reassessment of the firm’s strategy and its current strategic situation
Crisis teams Contingency plans
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Implementation Control Implementation control is designed
to assess whether the overall strategy should be changed in light of the results associated with the incremental actions that implement the overall strategy
The two basic types of implementation control are:
Monitoring strategic thrusts Milestone reviews
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The Balanced Scorecard Methodology An alternative approach linking
operational and strategic control, developed by Harvard Business School professors Robert Kaplan and David Norton, is a system they named the balanced scorecard
The balanced scorecard is a management system (not only a measurement system) that enables companies to clarify their strategies, translate them into action, and provide meaningful feedback
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Ex. 13.5 Integrating Shareholder Value and Organizational Activities across Organizational Levels
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Balanced ScorecardFour perspectives:1. The learning and growth perspective: How
well are we continuously improving and creating value?
2. The business process perspective: What are our core competencies and areas of operational excellence?
3. The customer perspective: How satisfied are our customers?
4. The financial perspective: How are we doing for our shareholders?
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DashboardA user interface that organizes and
presents information from multiple digital sources simultaneously in a user-designed format on the computer screen
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Chapter 14
McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
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Innovation Invention is the creation of new
products or processes through the development of new knowledge or from new combinations of existing knowledge
Innovation is the initial commercialization of invention by producing and selling a new product, service, or process
Product innovation Service innovation Process innovation
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Incremental Innovation Incremental innovation refers to
simple changes or adjustments in existing products, services, or processes
Continuous improvement, what in Japanese is called kaizen, is the process of relentlessly trying to find ways to improve and enhance a company’s products and processes from design through assembly, sales, and service
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Incremental Innovation Toyota’s CCC21: construction of cost
competitiveness for the 21st century
Six Sigma is a rigorous and analytical approach to quality and continuous improvement with an objective to improve profits through defect reduction, yield improvement, improved consumer satisfaction, and best-in-class performance
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10 Essential Elements that Lead to Incremental Innovation
1. Define quality and customer value
2. Develop a customer orientation
3. Focus on the company’s business processes
4. Develop customer and supplier partnerships
5. Take a preventive approach
6. Adopt an error-free attitude
7. Get the facts first8. Encourage every
manager and employee to participate
9. Create an atmosphere of total involvement
10.Strive for continuous improvement
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Breakthrough Innovation
A breakthrough innovation is an innovation in a product, process, technology, or the cost associated with it that represents a quantum leap forward in one or more of those ways
Breakthrough approaches to innovation are inherently more risky than incremental innovation approaches
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Ex. 14.3 From Idea to Profitable Reality
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Idea Factors
Need spotting Solution spotting Mental inventions Random events Market research Trend following
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Risks Associated with Innovation Innovation involves creating something
that doesn’t now exist Long odds for success Market risk Technology risk
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Ex. 14.4 Risks Associated with Innovation
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Treacy’s Useful Points about Managing Risks The point of innovation is growth Get the most from the minimum innovation Incremental product innovations can lock
in existing customers Incremental business process innovations
can generate more revenue gain or cost savings with less risk than radical ones
Radical innovations are often too radical The time to launch breakthrough
innovations is when they are essential to the marketplace
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Ways to Lower Risk
Product teams Cross-functional groups Joint ventures Cooperation with lead users “Do it yourself” innovation Acquiring innovation Outsourcing innovation
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Ideagoras
A web-enabled, virtual marketplace which connects people with unique ideas, talents, resources, or capabilities with companies seeking to address problems or potential innovations in a quick, competent manner.
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Ex. 14.7 Who is the Entrepreneur?
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Entrepreneurship Entrepreneurship is the process of
bringing together creative and innovative ideas and actions with the management and organizational skills necessary to mobilize the appropriate people, money, and operating resources to meet an identifiable need and create wealth in the process
Inventors Promoters Administrators Entrepreneurs
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Three Elements Central to Entrepreneurial Process
1. Opportunity
2. Entrepreneurial Teams
3. Resources
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Resources1. Debt financing is generally obtained
from a commercial bank to pay for property, equipment, and maybe provide working capital
2. Equity financing is usually obtained from one or more of three sources: friendly sources, informal venture investors, or professional venture capitalists
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Intrapreneurship Intrapreneurship, or entrepreneurship
in large companies, is the process of attempting to identify, encourage, enable, and assist entrepreneurship within a large, established company so as to create new products, processes, or services that become major new revenue streams and sources of cost savings for the company
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Pinchot’s 10 Freedom Factors
1. Self-selection2. No hand-offs3. The doer
decides4. Corporate
“slack” 5. End the
“home run” philosophy
6. Tolerance of risk, failure, and mistakes
7. Patient money8. Freedom from
turfness9. Cross-functional
teams10.Multiple options
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