BUS 100 - Chapter 2
Dialogue
"the art of thinking together"
Businesses addressing social issues
-4/5 millennial "need business to get involved in addressing social issues and believe business can make a greater impact" -"compared to governments, businesses have the potential and the possibility to make real change in society happen faster and more efficiently"
Eight Strategic Radar Screens
-Customer environment (Includes the demographic factors, such as gender age, marital status, and other factors, of the organization's customers as well as their social values, or preferences and technology usage) -Competitor environment (Includes information on the number and strength of the organization's competitors, whether they are potential or actual allies, patterns of aggressive growth versus static maintenance of market share, and the potential for customers to become competitors if they "Insource" products or services previously purchased from the organization) -Economic environment (Includes information about costs, prices, international trade, and any other features of the economic environment) -Technological environment (Includes the development of new technologies and their applications affecting the organization, its customers, and other stakeholder groups) -Social environment (Includes cultural patterns, values, beliefs, trends, and conflicts among the people in the societies where the organization conducts business or might conduct business) -Political environment (Includes the structure, process, and actions of all levels of government) -Legal environment (Includes patents, copyrights, trademarks, and considerations of intellect property, as well as antitrust considerations and trade protectionism and organizational liability issues) -Geophysical environment (relates to awareness of the physical; surroundings of the organization's facilities and operations, whether it is the organization's headquarters or its field offices and distribution centers, and the organization's dependency and impact on natural resources)
The four stages that the nature of business's relationship with its stakeholders often evolves through
-Inactive (companies simply ignore stakeholder concerns) -reactive (companies generally act only when forced to do so, and then in a defensive) -proactive (companies try to anticipate stakeholder concerns) -Interactive (stance means that companies actively engage with stakeholders in an ongoing relationship of mutual respect, openness, and trust)
Public issues and company responses: protection of personal information
-Instances of the illegal acquisition, or hacking of individuals' personal identification and financial information
Three basic capabilities required for effective global leadership
-an understanding of the changing business context (emerging environmental and social trends affecting the firm) -an ability to lead in the face of complexity (leaders needed to be flexible, creative, and willing to learn from their mistakes) -connectedness (the ability to engage with external stakeholders in dialogue and partnership)
How can public affairs professionals help companies and nonprofits manage their operations?
-anticipate governmental concerns and actions -understand how stakeholders influence a firm's license to operate -help their organization deal with emerging threats and opportunities
Motivation
-both sides must also be motivated to work with one another -best way to bring about change is to help a company alter its behavior -both sides DEPEND on each other
Five drivers fueling a change in stakeholder engagement
-communication -Individual empowerment -automation of work -climate change and other sustainable issues -supply chain impact
Organizational capacity
-each side must have organizational capacity to engage the other in a productive dialogue -may include support from top leadership and an adequately funded external affairs, or an issue management process that provides an opportunity for leaders to identify and respond quickly to shifts in the external environment
Forces that shape stakeholder relations
-evolving government regulation -globalization -explosion of new technology -dynamic natural environment -changing societal expectations -growing emphasis on ethical values
Goals
-for a stakeholder engagement to occur, both the business and the stakeholder must have a problem that they want to solve
Coca Cola's "World Without Waste" vision
-green peace identified them as the worlds worst polluters -company has pledged to collect and recycle the equivalent 100% of its packing worldwide -50% of its plastic is recyclable by 2030 -geophysical environment radar (global warming and climate change) -have to set up collect and recycle facilities -launch education plans to inspire actions
How to erect an internal networking platform
-hire numerous specialists -once platform is constructed, employees create profiles, maintain updates, and network within a corporate social networking group
Issue management process (continuously cycles back to the beginning and repeats)
-identify issue (Involves anticipating emerging concerns, sometimes called "horizon issues" because they seem to be just coming up over the horizon like the first morning sun) -analyze issue (organizations must understand how the issue is likely to evolve, and how it is likely to affect them) -generate options (generating, evaluating, and selecting among possible options) -take action (organization must design and implement a plan of action) -evaluate results (must continue to assess the results and make adjustments if necessary)
Effective issue management
-requires involvement by professional staff bandleader at top levels of the organization -Involves communicating across organizational boundaries, engaging with the public, and working creatively with stakeholders to solve complex problems
Importance of engaging iwith stakeholders
-stakeholder groups are often aware of shifts in popular sentiment before companies are (can alert companies of emerging issues) -gives firm access to information in these networks -stakeholders provide resources that are critical to a firm's long-term success -resources are tangible and intangible -stakeholders ability to withdraw which gives them power over business
Obstacles that must be overcome in business environments
-structural (reporting relationships between groups of managers) -cultural (changing traditional ways of doing things)
Requirements of taking a strategic approach to the management of public issues
-thinking ahead -understanding what is important to stakeholders -scanning the environment -formulating action plans to anticipate changes in the external environment
Public issues and company responses: sexual harassment
-when sexual harassment occurs, the perpetrator either resigns or is fired
Public issues and company responses: consumer safety
-with E. coli and salmonella outbreaks, corporations like Chipotle have pledged $10 million to help local growers meet new safety standards
Environmental Analysis
A method managers use to gather information about external issues and trends, so they can develop an organizational strategy that minimizes threats and takes advantage of new opportunities
Stakeholder expectations
A mixture of people's opinions, attitudes, and beliefs about what constitutes reasonable business behavior
What do the eight strategic radar screens represent?
A system of interrelated segments, each one connected to and influencing the others
Stakeholder materiality
Adaptation of an accounting term that focuses on the importance or significance of something. -In this case, it describes a method used to prioritize the relevance of the stakeholders and their issues to the company
Stakeholder dialogue
a business and its stakeholders come together for face-to-face conversations about issues of common concern -describe their core interests and concerns -define a common definition of the problem -Invent innovative solutions for mutual gain -establish procedures for implementing solutions
Contemporary Issue Management
an interactive, forward-thinking process
Public issue
any issue that is of mutual concern to an organization and one or more of its stakeholders -sometimes called social issues or sociopolitical issues -sometimes have public policy or legislative implications
Stakeholder networks
corporations sometimes encounter public issues that they can address effectively only by working collaboratively with other businesses and concerned persons and organizations
Issues management
managing issues when a company has identified it and detected a gap between society's expectations and its own practices
How emerging public issues are an opportunity and risk
opportunity: correctly anticipating the emergence of a public issue can confer a competitive advantage risk: issues that firms do not anticipate and plan for effectively can seriously hurt a company
Stakeholder engagement
refer to the process of ongoing relationship building between a business and its stakeholders
Competitive Intelligence
refers to the systematic and continuous process of gathering, analyzing and managing external information about the organization's competitors that can affect the organization's plans, decisions, and operations -benefits an organization by helping it better understand what other companies in its industry are doing -enables managers in companies of all sizes to make informed decisions ranging from marketing, research and development, and investing tactics to long-term business strategies
Environmental intelligence
the acquisition of information gained from analyzing the multiple environments affecting organizations
Performance-expectations gap
the gap between what the firm wants to do or is doing and what stakeholders expect -emergence of a new public issue indicates a performance-expectations gap -failure to understand stakeholder concerns and to respond appropriately causes the performance-expectations gap to GROW -LARGER the gap, the greater the risk of stakeholder backlash or of missing major business opportunity
Businesses may be tempted to use unethical or illegal means to obtain information but...
they must balance the importance of acquiring information about its competitors' practices with the need to comply with all applicable laws
Why have businesses and their public affairs managers turned to social media platforms?
to engage with multiple stakeholders, resulting in communication that has become faster and more effective
When does the public affairs function become even more necessary?
when political risk and economic uncertainty are high
Engagement
when the company and its stakeholders both have an urgent and important goal, the motivation to participate, and the organizational capacity to engage with one another
What gives companies an advantage?
when they successfully gather and analyze competitive information, then implement strategic decisions