Corporate Strategy in Europe (Subject) / Corporate Purpose (Lesson)
There are 9 cards in this lesson
<3
This lesson was created by Janaw55.
This lesson is not released for learning.
- CONCEPT 25: COROPRATE PURPOSE AND RESOURCES Environment: 1. Resources: What the firms develop, share or buy 2. Advantages: The competitive advantages derived from resources 3. Position: The resultion positioning (business portfolio) 4. Purpose: The resulting performance♥ Beliefs + Values l What are the core assumption and vallues Motivation, engagement Sense of direction, alignment Measure of success, assessment
- CONCEPT 26: CORPORATE MISSION DIFFERENCES USA: “Individualistic” economies l Near-term betterment of the individual (profit) l kurzfristige VerbesserungEUROPE: “Social-market economics” l Long-term benefits of all stakeholders (mixed) JAPAN: “Producer economies” l Market-share maximization (growth)
- CONCEPT 26: CORPORATE MISSION CLASSIC VIEWS: Corporate mission: What is the measure of success? SHAREHOLDES: Invest in shares wit hthe best risk-adjusted return BOARDS: Controls that management acts in line with shareholder interest to minimize agency costs MANAGEMENT: Defina and execute strategy that minimizes shareholders value EMPLOYRRS: Execute job description CRITICS: Corporations are not “owned” like goods = coalitions between shareholders, employees, suppliers.. Corporations have a major impact on people and the environment, beyond regulatory compliance (externalities) “Exit” if one is not happy is not always a (good) option (entrenches status quo, negative loop, exit costs) CSR and value creation are aligned objectives Managers are responsible persons, with moral obligations and trust (no moral immunity) Financial measures are reductive and biased towards the short-term
- CONCEPT 26: CRITICS OF THE CLASSIC VIEWS 1. Corporations are not “owned” like goods = they are coalitions between shareholders, employees, suppliers.. 2. Corporations have a major impact on people and the environment, beyond regulatory compliance (externalities) 3. “Exit” if one is not happy is not always a (good) option (entrenches status quo, negative loop, exit costs) 4. CSR and value creation are aligned objectives 3. Managers are responsible persons, with moral obligations and trust (no moral immunity) 5. Financial measures are reductive and biased towards the short-term "Individuals controlling shares which they had owned for only a few days or weeks determined the destiny of a company [Cadbury] that had been built over almost 200 years.” 6. “Exit” if one is not happy is not always a (good) option (entrenches status quo, negative loop, exit costs)
- CONCEPT 27: THE INPUT/OUTPUT MODEL OF A CORPORATION Shareholders l Investment vs. Return Suppliers l Goods vs. Cash Emplyees l Work vs. Cash Customers l Cash vs. Goods
- CONCEPT 27: CORPORATE GOVERNANCE To whom are we accountable? Shareholders: - Owners of voting shared - Informed through annual and analysts reports - Sell shares if not happy (exit Boars: - Nominated by shareholders - Review major decisions and corporate results Managemet: - Recruited by CEO with Board approval - Responsible for corporate strategy and management Employees: - Recruited by management - Perform job for a given salary - Leaves firm if not happy
- CONCEPT 29: MANAGING EXTERNAL STAKEHOLDER + GOVERNMENTS: MANAGING GOVERNMENTS: Accumulate resources by ad-hoc cooperation with other firms Identify the political actors as producers of given business rules Manage the agenda Co-operate with political actors to influence political decisions Lobbyism MANAGING POLITICAL GROUPS & COMMUNITIES Climate change and renewable energy Genetically modified goods and biotechnology NESTLE Waste management (vehicles, chemical, air, water, ...) and recycling VOLKSWAGEN Environmental diversity and ecosystems DHL Safety and health BAYER International conflicts PROXIMUS ARCELOR
- CONCEPT 29: SHAREHOLDERS AND STAKEHOLDERS SHAREHOLDERS Those that own the company and invest their money at risk Property rights and personal values Instrumental stakeholder management STAKEHOLDERS Those that own the company and those whose life is affected by the company (employees, customers, suppliers, government, communities, ... ) to whom the organization depends Legal protection and bagaining powers Normative stakeholder management
- CONCEPT 28: STAKEHOLER MODEL CRITICS OF THE STAKEHOLDERS VIEW Managers are agents of principals, the shareholders, serving their self-interest Shareholders are owners, they deserve the benefit... and will leave otherwise. CSR and value creation involve trade-offs Stakeholders are everybody. Who decides who you serve first? CSR is philanthropy at other people’s expense => (in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other) The social responsibility of business is to increase its profit l milton friedman FIRM - Shareholders - Suppliers - Customers - Communities - Associations - Employees - Governments