Strategic Management and Corporate Public Affairs

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Strategic Management and Corporate Public Affairs
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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

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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 managers job

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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

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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

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The Concept of CorporatePublic Policy
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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

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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

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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?

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Four Key Strategy LevelsHierarchy of Levels
Enterprise-Level Strategy
Corporate-Level Strategy
Business-Level Strategy
Functional-Level Strategy
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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?

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Emphasis on Enterprise-Level Strategy

• Manifestations of enterprise-level thinking

Codes of ethics Codes of conduct Mission
statements Values statements Corporate
creeds Vision statements
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Emphasis on Enterprise-Level Strategy

• Beliefs 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

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Emphasis on Enterprise-Level Strategy

• 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

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Emphasis on Enterprise-Level Strategy
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Strategic Managementand Corporate Public Policy
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Strategic Management ProcessGoal Formulation

• Goal formulation involves
• Establishing goals
• Setting priorities among goals

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Strategic Management ProcessStrategy Formulation
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Strategic Management ProcessStrategy Evaluation

• The need for continuing assessment of the firms
  current goals and strategy relative to proposed
  goals and strategic alternatives.

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Strategic Management ProcessStrategy
Implementation
McKinsey 7S Framework

• Strategy
• Structure
• Systems
• Style

• Staff
• Skills
• Shared values

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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

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Strategic Management Process Strategic Control

• Social audit is a systematic attempt to
  identify, measure, monitor, and evaluate an
  organizations performance with respect to its
  social goals and programs.

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Strategic Management Process Strategic Control

• Social Auditing
• Global Reporting Initiative (GRI) concerns
  developing standard measures for social reporting.

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Strategic Management ProcessEnvironmental
Analysis

• Environmental analysis links the organization and
  stakeholder environment
• Four stages of environmental analysis
• Scanning
• Monitoring
• Forecasting
• Assessing

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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

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Public Affairs Management Relationships
Enterprise-Level Management
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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

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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 organizations values and
  strategies with the publics interests
• Focuses both proactively on helping the
  organization compete

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Designing the Corporate External and Social
Performance Function

• Institution oriented versus economic franchise
• Collaborative/problem-solving strategy versus
  individual/adversarial strategy

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Business Exposure and External Affairs Design
Consumer Products Company
Social Environment
Industrial Products Company
External Affairs Design Breadth, Depth,
Influence and Integration
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Business Exposure and External Affairs Design
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The Public Affairs Thinking Manager
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Selected Key Terms

• Environmental scanning
• Functional-level strategy
• Global Reporting Initiative
• Individual/adversarial external affairs strategy
• Issues and crisis management
• Public affairs

• Benchmarking
• Business-level strategy
• Collaborative/problem solving strategy
• Corporate-level strategy
• Corporate public policy
• Enterprise-level strategy
• Environmental forecasting
• Environmental monitoring

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Selected Key Terms (contd)

• Public affairs management
• Social audit
• Sociopolitical forecasting
• Stakeholder environment
• Strategic management
• Strategy management process