682 Chapter 2 Study Guide

What is crisis management? Describe the four stages of the crisis management process and possible conditions, strategies, and tactics that an organization may experience or consider at each stage

Crisis management is the process of handling a high-impact event characterized by ambiguity and the need for swift action. 4 stages (similar to a person with illness): Prodromal stage: warning signs + symptoms Acute stage: Crisis occurs Chronic stage: ongoing crisis requires explanation and decision making Resolution: success and failure outcomes for firm and stakeholders

Name five stakeholder issues and how these could be measured to assess corporate impact and success

Employees - Compensation and benefits The average wage paid versus the industry average Customers - Management of customer number of customer complaints ad availability of complaint procedures to answer them. Investors - Transparency of shareholder Availability of procedures to inform shareholders about corporate activities. Suppliers - Encouraging suppliers in developing countries Prices offered to suppliers in developed countries in comparison to other suppliers Community - public health and safety Availability of emergency response plan protection

Name the three attributes of stakeholders, and explain how these attributes may affect the development of a relationship between a stakeholder and a company

Power Legitimacy Urgency Overall, stakeholders are considered more important to an organization when their issues are legitimate, their claims urgent, and they make use of power

Describe the differences between primary and secondary stakeholders.

Primary stakeholders - those whose continued association is absolutely necessary for the firm's survival. ie: employees, customers, suppliers and shareholders. Secondary stakeholders - do not typically engage in direct transactions with a company and thus, not essential for its survival. ie: AARP, protects the interest of old people, but no real involvement with healthcare.

Using examples, what power do stakeholders have over businesses

Stakeholders ability to withdraw - or threatening to withdraw, needed resources gives them power over the businesses. Ex: shareholders provide capital, suppliers offer material resources or intangible knowledge.

List and describe the six steps involved in implementing a stakeholder perspective into a company's social responsibility strategy.

Step 1: assessing the corporate culture - Identify the organizational mission, values, and norms that are likely to have implications for social responsibility. Step 2: Identifying stakeholder groups - It is important to recognize stakeholder needs, wants, and desires. Stakeholders have a level of power. Step 3: Identifying stakeholder issues - In understanding the nature of the main issues of concern to these stakeholders. Step 4: Assessing the organization's commitment to social responsibility Bringings the first 3 stages together to arrive at an understanding of social responsibility that specifically matches the organization of interest. Step 5: identifying resources and determining urgency - The prioritization of stakeholders and issues along with the assessment of pas performance provides for allocating resources. Step 6: Gaining stakeholder feedback In the process of developing stakeholder relationships, most strategies are focused on increasing the trust that a stakeholder has in a particular company.

What is reputation management? Describe the four components of the reputation management process, and explain how these components work together

The process of building and sustaining a company's good name and generating positive feedback from stakeholders. Organizational identity Image Performance Reputation All these elements must be continually implemented to ensure that the company's reputation is maximized through community relations. How a company responds, reacts and learns from the situation is indicative of its commitment and implementation of social responsibility.

Define ethical misconduct disaster (EMD). Provide two examples of ethical misconduct disasters that have occurred in business over the past several years

Unexpected organizational crisis that results from employee misconduct, illegal activities(fraud), or unethical decisions that threaten the company's continuity of operations. Enron, fraud. The company collapsed. Target, ignored warnings of potential hacking activity resulting in the theft of millions of customers' information.