Chapter 2

What are the three basic required capabilities for effective global leadership?

1. Context 2. Complexity 3. Connectedness

Complexity capabilities

Ability to lead in the face of complexity: flexible, creative, and willing to learn from their mistakes.

Identify issue process

Also called "horizon issues." During the identify issue process, managers anticipate emerging concerns. Managers may be aware of these issues by following the media, expert views, or activist opinion, etc.

Motivation

Both sides must be motivated to work with one another to solve the problem. Company (motivation): Needs stakeholder involvement because of their expertise or control of critical resources. Stakeholder/s (motivation): Governmental campaigns, protests perceived as inadequate to change corporate behavior.

Context capabilities

Emerging environmental and social trends affecting the firm.

Public issue

Mutual concern(s) between an organization and its stakeholders.

Connectedness capabilities

The ability to engage with external stakeholders and partners.

Performance-expectation gaps

The gap between what the firm wants to do or is doing and what stakeholders expect.

Issue management

The process in which companies actively manage issues as they arise.

Stakeholder dialogue

"the art of thinking together" When a business its stakeholder come together for face-to-face conversations about issues of common concern. There, they attempt to describe their core interests and concerns, define a common definition of the problem, invent innovative solutions for mutual gain, and establish procedures for implementing solutions. E.g. PacifiCorp initiated a plan to renew the permits of seven hydroelectric dams...page 40

Eight Strategic Radar Screens (Karl Albrecht)

1. Customer environment 2. Competitor environment 3. Economic environment 4. Technological environment 5. Social environment 6. Political environment 7. Legal environment 8. Geophysical environment

Drivers of stakeholder engagement

1. Goal 2. Motivation 3 Organizational capacity

The issue management process

1. Identify issue 3. Analyze issue 4. Generate options 5. Take action 6. Evaluate results

As the nature of business evolves with its stakeholder, what are the four stages characterized by scholars?

1. Inactive 2. Reactive 3. Proactive 4. Interactive

Organizational capacity

Each side must have the organizational capacity to engage the other in a productive dialogue. Company (organizational capacity): Top leaders committed to engagement; well-funded department of external (stakeholder) affairs. Stakeholder/s (organizational capacity): Include experienced staff; core group of activities committed to dialogue with business.

Goal

For stakeholders engagement to occur, both the business and the stakeholder must have an urgent or important problem that they want solved. Company (goal): To improve corporate reputation; to earn a license to operate; to win approval of society. Stakeholder/s (goal): To change corporate behavior on an issue of concern.

Environmental analysis

Is 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.

Environment intelligence

Is the acquisition of information gained from analyzing multiple environments affecting organizations. Acquiring this information will help an organization avoid crises and spot opportunities.

Analyze issue process

Once an issue has been identified, its implications must be analyzed. Organizations must understand how the issue is likely to evolve, and how it is likely to affect them.

Evaluate results process

Once an organization has implemented the issue management program, it must continue to assess the results and make adjustments if necessary.

Take action process

Once the option has been chosen, the organization must design and implement a plan of actions.

Interactive characteristics

Refers to companies who actively engage with stakeholders in an ongoing relationship of mutual respect, openness, and trust.

Reactive characteristics

Refers to companies who generally act only when forced to do so.

Inactive characteristics

Refers to companies who ignore stakeholder concerns. E.g. BRITT produced a hazardous seal grout for tiles, still shipping to retailers like Home Deport after numerous reports of serious illness.

Proactive characteristics

Refers to companies who try to anticipate stakeholder concerns. These companies identify emerging public issues.

External environment (Chapter 2)

Refers to outside organizations

External environment (Chapter 10 & 11)

Refers to the natural environment

Competitive intelligence

Refers to the systematic and continuous process of gathering, analyzing, and managing external information about the organization's competitors that an affect the organization's plans, decisions, and operations. The acquisition of this information benefits an organization by helping it better understand what other companies in its industry are doing.

Generate options process

Selecting an appropriate response often involves a creative process of considering various alternatives and rigorously testing them to see how they work in process. The management process involves generating, evaluating, and incorporate ethical considerations, the organization's reputation and good name, and other nonquantifiable factors.

Stakeholder Networks

Sometimes dialogue between a single firm and its stakeholder is insufficient to address an issue effectively. Public issues will have to be address by other businesses and concerned persons.