Slides to go with the handout on

1
BUSINESS STRATEGY

• Slides to go with the handout on
• Stakeholders, corporate governance, and
  business ethics
• MGT 498
• Anderson School of Management
• University of New Mexico

2
What is a stakeholder?

• Freeman (1984)
• Any group that affects or is affected by the
  corporation
• Langtry (1994)
• Stakeholders are groups or individuals who
  either are such that the firms decisions to act,
  or decisions not to act, have been or will be to
  a significant extent casually responsible for
  their level of well being, or else have some
  independently identifiable moral or legal claim
  on the firm which the firms actions violate or
  respect

3
Stakeholder Analysis
Who are stakeholders? Any group of people or
organizations who have an interest in the
business, and whom the business wants to
influence. Owners Suppliers Regulators Customers L
enders Society Employees Community Others?
WHO ARE THEY?
WHAT DO THEY WANT?
What do stakeholders want from the business?
WHAT DO WE WANT?
What impact does the business want to have on its
stakeholders?
WHAT ARE THE PRIORITIES?
What are the businesss priorities for its
stakeholders?
4
Business Definition
Who is being satisfied? CUSTOMER GROUPS
What is being satisfied? CUSTOMER NEEDS
DEFINITION Of BUSINESS
How are customer needs being satisfied? DISTINCTIV
E COMPETENCIES
5
Business Definition and Strategic Intent

• VISIONWhat will we be?
• MISSIONWhat will our impact be?
• DRIVING VALUESHow will we behave? What do we
  stand for?
• GOALS
• Address important issues
• Precise
• Measurable
• Challenging but realistic
• Time-specific
• BUSINESS MODEL

6
Business Model
PRODUCT What value are you creating and
delivering?
 TARGET MARKETS and OTHER STAKEHOLDERS To whom
are you delivering value?  
 VALUE CHAIN How do you create and deliver value?
What are the main processes?
 FINANCIAL DYNAMICS How will you make money and
build company value?  
7
Financial Dynamics
BREAKEVEN ANALYSIS
DOLLARS
SALES REVENUE
PROFIT
TOTAL COSTS
FIXED COSTS
LOSS
BREAKEVEN POINT
SALES VOLUME
8
Corporate Governance

• Board of Directors
• Insiders vs Independent outsiders
• Roles and degrees of authority
• Chairman
• CEO
• Members
• Responsibilities fiduciary, stewardship, and
  others
• Regulators and legislation
• Cooperation (or conflict) with management
• Strategic parameters
• Long-term vs short-term
• Profitability vs growth
• Stakeholder priorities
• Governing philosophies
• Degree of activism (aggressive vs passive)
• Corporate performance objectives and standards

9
Strategy and Ethics
EXAMPLES PERSONAL ADVANTAGE vs THE INTERESTS
OF OTHER STAKEHOLDERS SOCIAL ISSUES ENVIRONMEN
TAL ISSUES   BAD NEWS   SHORT-TERM PROFITS vs
LONG-TERM VALUE   PRESSURES TO TAKE THE EASY
WAY   EXCESSIVE RISKPRUDENCE, DUE DILIGENCE,
FIDUCIARY RESPONSIBILITY, STEWARDSHIP   PERSONAL
VALUES and ETHICS vs DEMANDS FROM THE BOARD OF
DIRECTORS or OTHERS
10
Resolving Ethical Issues
IMPACT ASSESSMENT
DEFINITION
RIGHT ACTION