Strategy: Who Benefits? Session 4

Aims of the Lecture Consider the forces affecting organisations. Consider the forces affecting organisations. Identify and ‘Map’ the differing stakeholders. Identify and ‘Map’ the differing stakeholders.

Organisational purposes Mission Objectives Exhibit 5.1 Influences on organisational purposes Corporate governance Whom should the organisation serve? How should purposes be determined? Business ethics Which purposes should be prioritised? Why? Cultural context Which purposes are prioritised? Why? Stakeholders Whom does the organisation serve?

Growth versus profitability Growth versus profitability Short term versus investment Short term versus investment Control versus professional managers Control versus professional managers Ownership versus funding Ownership versus funding Ownership versus accountability Ownership versus accountability Efficiency versus jobs Efficiency versus jobs Mass appeal versus quality Mass appeal versus quality Exhibit 5.3 Some common conflicts of expectations

Exhibit 5.5 Stakeholder mapping: the power/interest matrix Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1991 LEVEL OF INTEREST POWER

STAKEHOLDER MAPPING - SOME GUIDELINES Positioning related to specific strategies Stakeholders may need to be sub-divided Stakeholders may need to be sub-divided Distinguish the role for the individual Distinguish the role for the individual Identify “political” priorities by: Identify “political” priorities by: plot how stakeholders would line up plot how stakeholders would line up plot how stakeholders would need to line up plot how stakeholders would need to line up identify mismatches identify mismatches include key maintenance activities include key maintenance activities

(a) Within organisations Hierarchy (formal power), Hierarchy (formal power), e.g. autocratic decision making Influence (informal power), Influence (informal power), e.g. charismatic leadership Control of strategic resources, Control of strategic resources, e.g. strategic products Possession of knowledge and skills, Possession of knowledge and skills, e.g. computer specialists Control of the environment, Control of the environment, e.g. negotiating skills Involvement in strategy implementation, Involvement in strategy implementation, e.g. by exercising discretion (b) For external stakeholders Control of strategic resources Control of strategic resources e.g. materials, labour, money Involvement in strategy Involvement in strategy implementation, implementation, e.g. distribution outlets, agents Possession of knowledge (skills), Possession of knowledge (skills), e.g. subcontractors Through internal links, Through internal links, e.g. informal influence Exhibit 5.6a Sources of power

(a) Within organisations Status Status Claim on resources Claim on resources Representation Representation Symbols Symbols (b) For external stakeholders Status Status Resource dependence Resource dependence Negotiating arrangements Negotiating arrangements Symbols Symbols Exhibit 5.6b Indicators of power

Exhibit 5.7 Four possible ethical stances Short-term shareholder interests Longer-term shareholder interests Multiple stakeholder obligations Shaper of society

Should organisations be responsible for... INTERNAL ASPECTS Employee welfare... providing medical care, assistance with mortgages, extended sickness leave, assistance for dependants, etc.? Working conditions... enhancing working surroundings, social and sporting clubs, above minimum safety standards, etc.? Job design... designing jobs to the increased satisfaction of workers rather than for economic efficiency? Exhibit 5.8a Some questions of corporate social responsibility

Should organisations be responsible for... EXTERNAL ASPECTS Green issues Green issues Products Products Markets and marketing Markets and marketing Suppliers Suppliers Employment Employment Community activity Community activity Exhibit 5.8b Some questions of corporate social responsibility

Task for next week In a group research and prepare a presentation on a key writer in strategy. You are expected to include in the presentation the following information: In a group research and prepare a presentation on a key writer in strategy. You are expected to include in the presentation the following information: The background of the writer The background of the writer The key theories introduced The key theories introduced Their influence on strategy and management. Their influence on strategy and management.