Nestle Infant Formula

1
Societys Expectations versus Businesss Actual
Social Performance
Societys Expectation of Businesss
Performance Social Problem Businesss Actual
Social Performance
Social Performance Expected and Actual
Social Problem
1960s 1990s
Time
2
Production View of the Firm
Environment
Firm
Suppliers
Customers
Managerial View of the Firm
Owners
Customers
Corporation and Its Management
Suppliers
Employees
3
Types of Stakes
An Interest A Right Ownership
When a person or group Legal Right When a
person When a person or group will be
affected by a or group has a legal claim
has a legal title to an decision, it has an to
be treated in a certain asset or a
property. interest in that decision. way or to
have a particular right protected. Examples
This plant Examples Employees Examples
This company closing will affect the expect
due process, is mine, I founded it, and
community. This TV privacy customers or
I own it, or, I own commercial
demeans creditors have certain 1,000
shares of this women, and Im a legal
rights. Corporation. woman. Moral
Right When a person or group thinks it has a
moral right to be treated in a certain
way or to have a particular right
protected. Examples Fairness,
justice, equity.
4

Laws or Regulations Rules of the Game
Society or Society Groups
Business
Two-Way Shared Understandings of Each Other
5
Stakeholder Typology
6
Level of Corporate Social Responsibility
Philanthropic
Ethical
Legal
Economical
7
Forces Driving Industry Competition
Potential Entrants
Other Stakeholders
Buyers
Industry Competitors
Suppliers
Substitutes
8
Four Components of Strategy Formulation
Personal Values and Aspirations of Management
Market Opportunities and Treats
Organizational Strengths and Weaknesses
Strategy decision
Acknowledged Obligations to Society
9
Board Of Directors Continuum
Degree of Involvement in Strategic Management
Rubber Stamp
Minimal Review
Nominal Participation
Active Participation
Phantom
Catalyst
10
The Issues Management Process
Identification of Issues
Analysis of Issues
Ranking or Prioritization of Issues
Formulation of Issue Responses
Implementation of Issue Responses
Evaluation, Monitoring, and Control of Results
11
Flow of Authority
Management (control)
Board of Directors
Shareholders Investors (ownership)
12
Levels of Moral Development
Focus Self
Focus Others
Focus Humankind
Level 3 Postconventional, Autonomous, or
Principled Level
Level 2 Conventional Level
Stage 6 Universal Ethical
Principal Orientation Stage 5 Social-Contract
Orientation
Level 1 Preconventional Level
Stage 4 Law Order Morality Stage 3 Good
Boy/Nice Girl Morality
Stage 2 Seeking of Rewards Stage 1 Reaction to
Punishment
13
The Hierarchy of Strategy Levels
Enterprise-Level Strategy
Corporate-Level Strategy
Business-Level Strategy
Functional- Level Strategy
14
Corporate Motivation and Social Responsiveness
Motivation for Acting
Business Response
Management values beliefs
Voluntary Response
Leads to
Leads to
Pressure from Stakeholders
Forced Response
Legally Mandated Requirements
Leads to
Involuntary Response
15
Ethical Climate
Focus of Ethical Concern
Ethical Criteria
Individual Person
Company
Society
Economic Efficiency
Egoism (self-centered)
Company Interest
Self-Interest
Benevolence (Concern-for-others)
Social Responsibility
Friendship
Team Interest
Company Rules Procedures
Laws Professional Codes
Principle (Integrity)
Personal Morality
16
Levels of Culture Their Interaction
Visible but not Decipherable
Values Testible in the Physical
Environment Testible only by Social Consensus
Greater Awareness
Basic Assumptions Relationship to
Environment Nature of Reality, Human
Nature, Human Activity, Human Relationships
Taken for Granted
17
The Hierarchy of Strategy Levels
Enterprise-Level Strategy
Corporate-Level Strategy
Business-Level Strategy
Functional- Level Strategy
18
Primary Versus Secondary Stakeholder Groups
Secondary Stakeholders
Primary Stakeholders
19
Strategic management Process and Corporate Policy
Stakeholder Environment
Consumer
Owner
Employee
Community
Environmental
Social Activist
Government
Environmental Analysis
Goal Formulation
Organizational Environment
Strategy Formulation
Strategy Evaluation
Strategy Implementation
Strategic Control
20
Dealing with Environmental Uncertainty
The Environment
Dont Change Corporation
The Corporation
Change Corporation
21
The Wheel of Competitive Strategy
22
Ethical Choices in Home versus Host Country
Situations
International Law Global Codes of Conduct
Cultural Relativism
Ethical Imperialism
Broad Middle Ground
Host Country
Home Country
Cultural Standards Ethical/Moral Standards
of Host Country
Cultural Standards Ethical/Moral Standards of
Home Country
Mix of Home and Host Country Standards
Application of Ethical Principles
Questions to be resolved by Management Which
ethical standards will be used? Which ethical
standards will transcend national boundaries?
Worker and product safety? Fair treatment?
Health? Discrimination? Freedom? Minimum pay?
Consumer rights? Environmental protection? What
constitutes moral minimums in each category?
23
The Clash of Ethical Systems Between Business
and Government
Business Beliefs Government
Beliefs

• Individualistic ethic
• Maximum concession to self-interest
• Minimizing the load of obligations
• society imposes on the individual
• (personal freedom)
• Emphasizes inequalities of individuals

• Collectivistic ethic
• Subordination of individual goals
• and self-interest to group goals
• and group interests
• Maximizing the obligations
• assumed by the individual and
• discouraging self-interest
• Emphasizes equality of individuals

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3 Management
Four Components of Strategy Formulation
Personal Values and Aspirations of Management
(What we WANT to do )
1 The Company
2 The Market
Strategy Formulation Decision
Market Opportunities and Threats
Organizational Strengths and Weaknesses
(What CAN be done)
(What MIGHT be done)
Acknowledged Obligation to Society
( What OUGHT to be done)
4 The Society
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Issue Development Life Cycle Process
Stage 4 Regulation Litigation
Stage 3 Leading political jurisdictions (cities,
states, countries) adopt policies. Federal
government attention --- hearings,
studies. Legislation and regulation Businesses
often begin lobbying action if issues appear to
be headed to new laws that may constraint them
Stage 2 Media Coverage--- public awareness, TV
(60 Minutes, 20/20, news), articles,
radio Interest group development and growth
Stage 1 Felt need---leading events,
advocates, groups, books, movies,
political jurisdictions
Public Awareness of Issue
Businesses notice issues but frequently take no
action at Stages 1, 2, or 3. at Stages 1, 2, or 3.
Time
26
Four Stages in a Management Crisis
Acute Crisis Stage Point of no return Crisis has
occurred
Prodromal Crisis Stage Warning---precursor Sympto
m--precrisis
Learning
Chronic Crisis Stage Lingering
on---perhaps indefinitely period of self-doubt,
self -analysis
Crisis Resolution Stage Patient is well/ whole
again