Issues Management and Environmental Scanning Chapter 7

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Issues Managementand Environmental
ScanningChapter 7
Organizational and Managerial Communication
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BUSINESS AS AN ECONOMIC INSTITUTION

• Little acknowledgement of external environment
• Produce goods
• Provide employment
• Pay dividends
• Success measured in economic terms

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BUSINESS AS SOCIO-POLITICAL INSTITUTION

• 1960s - 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

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Four Types of Issues
Type
Example

• 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

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 1977
• New Type of Corporate Communications
• Response to Increasing Criticism of Big Business
• Method of Monitoring the Environment
• Managing New Challenges and Change
• Mid-1970s, Issues Became Strategic Issues
• Organizations Became Proactive

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Location of IM Programs

• Public/Government Affairs
• Corporate Planning
• Corporate Communications
• Issues Management

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Source McGrath, G., Issues Management, IABC
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Issues Management ProcessThe Chase-Jones Model
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The Clarity - Priority Matrix
High
Issue Priority
Low
Clear
Fuzzy
Issue Clarity
J.C. Camillus and D.K. Datta, Managing strategic
issues in a turbulent environment, Long Range
Planning 24, April 1991
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Structure of an issues monitoring team
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Four functions

• Sharpening planning for responsible adapting the
  organization
• Knowing and exceeding standards
• Monitoring issues
• Communicating to build beneficial relationships

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Corporate Response to Issues

• Reactive - Fight Change
• Accommodative - Adapt to Change
• Proactive - Influence Change
• Interactive - Adjust to and Influence Change

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The Public Issues Life Cycle
Education reform Global warming Day care Shorter
work week Comparable worth Road congestion
Groundwater protection Acid rain Clean Air
Act Amendments Energy taxes Health care
reform Hazardous waste treatment
Effectiveness of Integrated Planning
Emission standards Environmental permits Gas
guzzler taxes Product recalls Plant
inspections/fines Fuel economy standards
Environmental Protection Agency Motor Vehicle
Safety and Health Admin. Energy Policy and
Conservation Act Safety belt use laws
Social Expectation
Political
Legislative
Social Control
T.G. Marx,Strategic planning for public
affairs, Long Range Planning, 23(1), 1990.
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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 organizations 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 companys
  operations properly assessed?
• Is environmental intelligence integrated into
  strategic planning?

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Environmental Scanning Dimensions
Operational
Governments Economies Control Productivity Capacit
y Resources
Governments Economies Capital Markets Money
Markets
Competitive
Governments Economies Industries Markets Products
Financial
Applied Developed Emerging In Process Conceptualiz
ed Boundaries of Knowledge Governments
Society Shareholders Customers Suppliers Community
Employees Governments
Stakeholders
Technological
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Approaches to Scanning

• Scientific -- social scientific measures of
  stakeholders to determine whats going on out
  there
• Tree Diagrams, Trend Impact Analysis
• Flow Charting, Morphological Models
• Informal -- individualistic, subjective
  techniques, nonrepresentative samples of publics,
  and key contacts

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Sources of Environmental Information
PEOPLE SOURCES EVENT, OBJECTS
External
Business-related Bankers Customers
Suppliers Consultants Unrelated Regular
associations Friend Professional
peers Periodic 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, OBJECTS
Internal
Line Relationships Superiors
Subordinates Staff Relationships Peer
Relationships Counterpart Relationships
(cross-divisional) Other (motivated by personal
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 91
• 2 Expert Organizations 59
• Publications (Conferences
• Board, etc..)
• 3 Business Periodicals 52
• 4 Futures Consultants 42
• and Forecasters
• 5 Government Publications 42
• 6 Seminars and Conferences 30

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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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Starting to think about the future

• 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.

J. D. Stoffels
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Two cases

• Playtex Company and the Sippy Cup
• Intel