Lecture Business and society - Chapter 5: Strategic Management and Corporate Public Policy

used
toCengage
characterize
the largest and


The Benefit Corporation•

•

•

•

Unlike the traditional corporation, the
Benefit Corporation has a broader mission
that includes having a positive impact on
society.
The societal mission does not take a
backseat to shareholder wealth
maximization.
The Benefit Corporation offers managers,
investors and customers the opportunity to
participate in or patronize businesses that
promise to make social responsibility an
important goal.
2015 Cengage
Learning
13
12 states©now
have

laws permitting


The Importance of Core
Values

Core Values -

•Are the deeply ingrained principles that
guide all of a company’s actions and
decisions.
•Serve as cultural cornerstones.
•Having a set of core values that are not
followed will do no good.
•To be effective, firms need to weave core
values into everything they do.
•If a firm’s core values are not upheld, they
become hollow, and do more harm than
© 2015 Cengage Learning
14
good.


Other Manifestations of
Enterprise-Level Thinking Establishment of public-policy
committees •Sustainability
•Ethics
•Corporate philanthropy, etc.

Establishment of a Public affairs Office •Included in strategic decision-making

Identification of social or public issues –
•Integrated into strategic management
processes
© 2015 Cengage Learning

15


The Strategic Management
Process1. Goal formulation
2. Strategy formulation
3. Strategy evaluation
4. Strategy implementation
5. Strategic control
6. Environmental analysis

© 2015 Cengage Learning

16


Strategic Management Process
and Corporate Public Policy

© 2015 Cengage Learning

17

Components of Strategy
Formulation

© 2015 Cengage Learning

18


Strategic
Corporate Social
Responsibility (1 of 2)
CSR & Competitive Advantage •3 ways corporations intersect with society:
•
•
•

Generic social issues (firm’s operations do
not affect society and issue is not material to
firm’s long-term competitiveness)
Value chain social impacts (a firm’s normal
operations significantly affect society)
Social dimensions of competitive context
(social issues affect the underlying drivers of
a firm’s competitiveness)

•These categories divide into 2 modes of
corporate involvement:
© 2015 Cengage Learning

19

Strategic
Corporate Social
Responsibility (2 of 2)
Responsive CSR
•Addresses generic social impacts
through good corporate citizenship and
value chain social impacts by mitigating
harm.

Strategic CSR
•Transforms value chain social impacts
into activities that benefit society while
reinforcing corporate strategy.
•Advances strategic philanthropy that
© 2015 Cengage Learning
20
leverages competitiveness.


Measuring
Sustainable Corporate
Performance

• Achieving sustainability requires performance
accountability.
• When firms measure only financial performance,
environmental and social considerations become
side issues.

• To achieve sustainability, the triple bottom line
must be reflected in every aspect of the firm’s
operation.
• Sustainability reports (integrated reports – IR)
reflect the extent to which the firm is creating
value in the triple bottom line.
• Social Audits, Social Responsibility Reports
and Environmental
Impact Reports focus on 21
© 2015 Cengage Learning
specific areas.


Public Affairs
As a Part of Strategic
Management
Strategic Management Process

Public Affairs Management
Enterprise-Level Strategy

Corporate
Public Policy

Part of
which is

Environmental Analysis

Issues

Management
© 2015 Cengage Learning

Crisis
Management
22


The Corporate Public Affairs
Function Today
Public Affairs grew in the U.S.
because of:
1.The growing magnitude and impact of
government.
2.The changing nature of the political
system.
3.The recognition by business that it was
being outflanked by interests counter to its
own.
4.The need to be more active in politics
outside traditional community-related
23
aspects. © 2015 Cengage Learning


Public Affairs Defined The Public Affairs Council (PAC), the
leading organization of executives who do
the PA work of companies, defines PA as:

•“Public affairs represents an organization's

efforts to monitor and manage its business
environment. It combines government
relations, communications, issues
management and corporate citizenship
strategies to influence public policy, build a
strong reputation and find common ground
with stakeholders.”
© 2015 Cengage Learning

24


Public Affairs Activities &
Functions • Public Affairs (PA) began from isolated
company initiatives designed to handle
diverse activities, but was sometimes
managed by Public Relations staffers, but
they are not the same.
• Public relations focuses on selling a
product, while public affairs is designed to
influence public policy.
• PA activities may include lobbying, global
public affairs, social media, corporate
responsibility, campaign finance,
grassroots advocacy, crisis
© 2015 Cengageand
Learning more.
25
communication,

Future of Corporate PA
• If the PA function is to be effective, it must have
influence at the top management level.
• Because of corporate ethical crises, PA
specialists have an ideal opportunity to help
transform business and society relationships.
There are 3 primary opportunities:
• Help develop value-based enterprises; and
work cooperatively with them on social
issues.
• PA executives can be thought leaders in their
firms, and collaborate with those outside the
firm on current issues.
• Be mindful of global issues, including those
which begin
as domestic issues and migrate.26
© 2015 Cengage Learning


Key Terms
•
•
•
•
•
•
•
•
•

•
•

• public affairs
benefit corporation
departments
bottom of the pyramid
business-level strategy • public affairs
management
corporate-level
• public affairs strategy
strategy
• shared value
corporate public affairs • social audit
corporate public policy
• social entrepreneurship
enterprise-level
• social responsibility
report
strategy
• strategic management
functional-level
strategic management
strategy
processes
Global Reporting
• sustainability report
Initiative
• value shift
issues and crisis

management
27
© 2015 Cengage Learning
public affairs (PA)