HRM EXAM 3

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Example of a smart goal?

"By the fall of 2018, I will seriously train for and enter four marathons in southeastern pennsylvania and I will finish first in my age class in at least one of them"

Ethical culture- Infrastructure

Formal compliance systems Background checks Whistle blowing systems Policy Performance management system

Financial crisis causes- regulatory climate

Glass-steagall act Debt regulations for banks eased Markets can self-regulate revolving door between regulators and companies govt is the problem

Financial crisis contributing factors-Investment banks

Go public No "skin" in the game

Google's Mission statement?

Google's mission is to organize the world's information and make it universally accessible and useful.

Elements of strategy (Its a circle)

Mission Vision Long-term strategic goals Short term goals Tactics and actions

How J&J recovered-Employees and retirees

Videos Letters "ask your pharmacist to restock"

How J&J recovered- Public

Videos for TV Tamper resistant packaging execs interviewed by various media

What do plans consist of?

Vision of where you want to be goals who is responsible for what deadlines everything needed to keep a project on track

Vision Statements?

Vision= Our highest aspirations Must be clear and compelling Must inspire Paints a picture of a future state to which the organization can aspire

Financial crisis contributing factors- "herd mentality"

Wall street Consumers "real estate is safe"

Long term plans

1-5 years

Secondary Stakeholder

Indirectly affected by an organizations actions

Business strategy- Vertical integration

Seeking cost savings and efficiency through operating businesses along the supply chain.

how important is communication

boom or bust- if a company fails it was due to poor communication

Financial crisis contributing factors- Lots of cheap money

Fed( low interest rates) demand from china and middle east

Good reputation Benefits

Customers want to buy your products and services and will pay more Best talent wants to work for you Investors want to buy your stock Other companies want to do business with you Regulators and press are willing to give you the benefit of the doubt Communities want you to do business in their area

Downward communication

Flows downward from top of organization

Values statements?

"How we intend to do business" Underpinning of culture Should form basis of performance management Critical that it reflects actual business practice

Financial crisis causes- Sub prime mortgages

"Liar" loans No money down, no income verification Consumers bought more than they could afford Big hedge funds saw the problem with the market and bet these would fail (after working with the banks to ensure the riskiest offerings) they made billions

Goals/Results Loop

1. Organization Goals 2. Business unit/ Dept. Goals 3. Individual Goals 4. Individual Results 5. Business unit/ Dept. Results 6. Organization Results

Financial crisis in order

1. Rotten mortgages sold to investment agencies 2. Investment banks package them in securities 3. credit agencies say they are AAA(incredibly safe) 4. Banks sell rotten mortgage packages to investors 5. AIG sells credit default swaps ("Insurance") 6. Hedge funds and bankers bet against what they have sold

Corporate social responsibility (CSR)

A.K.A Corporate conscience, Corporate citizenship, or responsible business Self-regulation built into an organizations business model whereby it monitors and ensures compliance with Spirit of the law Ethical standars International norms

Barron's

Annual most respected companies as determined by professional investors Only survey of corporate reputation from this group 100 largest companies in the world determined by stock market capitalization

what is a stakeholder

Any person, group, or organization that could be impacted by an organizations actions

Business strategy- Cost leadership

Being most competitive (lowest price) In terms of cost of product or service (Wal-Mart)

Corporate reputation

Beliefs, Impressions, opinions about an organization all create reputation reputation is formed and comminicated by several stakeholder groups: Employees, Customers, Suppliers, Business, Partners, the media, the general public, regulators etc.

financial crisis causes- incentives

Big rewards for short term thinking among companies and individuals

Business strategy- Niche

Catering to a particular segment of the market or a particular demand (IKEA)

Michael Porters five forces

Competitive rivalry within an industry (at the center) Bargaining power of suppliers Bargaining power of customers Threat of new entrants Threat of substitute products (all pointing at center)

Financial crisis contributing factors-Rating agencies

Conflicts of interest rating financial products

financial crisis causes - Shadow financial market

Credit default swaps Securitized Mortgages (slice and dice) Derivatives hedge funds

Effective communication creates:

Culture Values Goals Strategic direction

Corporate Strategy- Retrenchment

Defensive posture to hold off threats while turning a company around (JC penney)

What is trust?

Degree to which behavior, experience, and reputation give us confidence in a person, institution, or organization. reputation and trust are joined at the hip with trust- almost anything is possible without it everything is more difficult

Kinds of plans- Single-use

Developed to achieve a set of goals that are unlikely to be repeated in the future

How J&J recovered- retailers

Discounts Advertising allowances Full refunds

CSR negatives

Distracts from core missions: to maximize profit for shareholders Can distract from unethical business practices (Like ronald mcdonald houses distracting from unhealthy food) Can provide cover for controversial industries (Tobacco, Alcohol etc.)

PESTLE scan? (No clue what that stands for)

Economic environment Sociocultural environment Legal/ regulatory environment Political Environment Technological environment Natural Environment

Identifying audiences

Employees (Internal/Hr) Shareholders (Investor relations) Customers (customer relations) Public (public relations) Government(Govt relations)

CSR activities

Environmental Philanthropic Community involvement Ethics training and activities for employees

Corporate strategy- Growth

Expansion into new market(s) and or increasing market share->Expanding business, acquiring or merging with other businesses, or joint ventures. (google, ford)

Behavior affects trust- Negative effects

Exxons valdez 1.Mishandled the problem from the beginning 2.Leadership did not take responsibility, blamed others 3. 40,000 customers cut up their exxon credit cards 4. Exxon is still paying reparations- 4.5 billion in punitive damages alone 5 Press and regulators are hyper vigilant for any missteps by exxon 6 Limited trust because of past behavior

Communications

Face to face ("Most rich") Technology print bulletin board("Least rich")

Why is Planning important?

Helps employees attain goals/dreams if you dont know where youre going any path will take you there plans need to contain metrics so you know where you are

How J&J recovered- Consumers and Physicians

Hotline Coupons Letters 1 million presentations to MDs

Stakeholder analysis

Identify all stakeholders and analyze how each will be affected by an organizations decisions and/or actions

CSR in action

In global research conducted by the reputation institute: Who you are matters more than what you do. In other words, your corporate reputation means more to people than what you make

Why should companies care about ethics?

Its the right thing to do Expensive to ignore (damaged reputation, legal fees etc.) When companies align elements of internal brand (strategy, values, leadership, and rewards) around ethics and integrity-- and effectively communicate them, it helps create an ethical culture 1. Aids in talent attraction and retention 2. results in a better decision making process across the organization 3. Builds reputation with all stakeholder groups- the "trust bank" 4. increases employee engagement (or committment)

Behavior affects trust- positive effects

J&J's Tylenol Benchmark for how to do it right experts declared the tylenol brand dead J&J introduced tamper resistant packaging Tylenol regained market share within months Press and regulators give J&J the benefit of the doubt with other difficulties, Halo effect lasted years.

Experts analysis of J&J success- Five factors

Kept communcation channels open Took quick corrective action Kept faith in the product Protected the public image at all costs aggressively brought back the brand

What are the purposes of goals and plans?

Legitimacy/ Mission statement Source of motivation and commitment Rationale for decisions Guides to action Resource allocation Standard of performance

Corporate Strategy- Stability

Maintaining current market position (Coca-cola)

Ethical culture- Training

Manager training Identifying risk Training around risks Multiple venues

Good reputation Negatives

No negatives to a good reputation takes time to build easily damaged and hard to repair

What happened to tylenol?

October 1982 1. Seven chicago area consumers died after ingesting tylenol that had been laced with cyanide 2. No indication whether the sabotage was internal or external or at what point in the supply chain it occured 3. 100 FBI agents investigated 2,000 leads 4. No one was ever charged with a crime

Scenario Planning

Often used by businesses and the military Imagine the "what ifs" in future situations

Kinds of plans- Standing

On-Going plans that guide tasks that are performed repeatedly within an organization

Ethical culture-Communication

Open culture Manager training Values everywhere robust communication up, down, and across

Amazon Vision Statement?

Our vision is to be the earths most customer centric company; to build a place where people can come and discover anything they want to buy online.

what are ethics?

Principals, values, and beliefs that define what is right and wrong behavior

Strategic Planning

Process of defining strategy or direction and making decisions on the allocation of resources to pursue this strategy Generally involves a big picture view of the organization Internal and external Providing an honest assessment of where the company is now and how it is going to achieve its future vision.

Business strategy- Differentiation

Providing unique products, services or features (Apple)

How real estate crashed the economy

Real estate values rose rapidly. -You buy a house for 200k -Six years after you buy the home it is appraised for 350k and you still owe 150k on first mortgage -You then take out a home equity loan for 150k -pay your childs first two years of college -re-model your kitchen -buy a sports car. -real estate values then plummet and now your house is worth 150k -You have a total mortgage obligation of 300k "under water"

Feedback

Receiver lets sender know that the message has bee received or two send more information.

9/11 head of security at morgan stanley

Rick Rescorla- Planned for disaster, specifically attack by plane on wtc only employee to die from morgan stanley

Ethical culture- Leadership

Role models Communciators discipline/reward keepers of the culture

Corporate Strategy- Divestiture

Selling off or folding a particular division (Citigroup, AIG)

Mission Statements

Serves to unite organization Articulates how we differ from our competition Provides a rationale for decision making and allocation of resources.

communication is critical because

Share information Influence others Communicate our values(personal and organizational) Inspire others and create a culture that promotes excellence Create resonant workplaces and relationships through positive and powerful communication

STAR method

Situation Task Action Results

CSR

Some models go beyond what is required by law and the interests of the organization to further some societal good.

Mortgage failure-- 1990s and earlier

The bank gave you the mortgage and kept it until you paid it off: 1 you had to have a substantial down payment in cash-5-20% of the cost of the total home 2 you had to have a steady job 3 your mortgage could not equal more than 25-30% of your monthly income 4 you had to have an excellent credit rating

SMART goals

Specific Measurable Attainable Relevant Time Based

How do plans create high performance?

Start with a strong mission and vision Set stretch goals for excellence create a culture that encourages learning understand that planning still begins and ends at the top of the organization

Alignment Builds- Plans

Step-By-Step Plans of how we get from point A to point B

Alignment Builds- Goals

Steps and metrics with the plan

What is strategy?

Strategy is a "Big picture" Directional approach- Generally long term- that helps an organization achieve something major: a new business, a competitive position, a vision etc.

SWOT analysis

Strengths WSeaknesses Opportunities Threats

Mortgage failure-- 2000-2008

The bank that gave you the mortgage sold it to wall street investors 1. you could get 100% financing for a home- 0% down payment 2. Most lenders didn't require that you have a job 3. Most lenders didn't check to see how much your mortgage was as a percentage of your take-home pay 4. Credit ratings weren't important

Alignment Builds- Mission

The business we are in right now

Skills for a job seeker

Think about the job description and how the company describes itself Think about your background Handling a difficult customer working on a team being innovative or taking initiative being goal oriented having high standards

Nike's Mission Statement?

To bring inspiration and innovation to every athlete* in the world *if you have a body, you are an athlete.

How should companies be aligned?

Top to bottom, everyone pulling in same direction

CSR benefits

Triple bottom line "People, Profit, Planet" Helps recruit and retain talent Helps limit risks Differentiates brand Reduces scrutiny Improves supplier relations

Leaders use eq to shape:

What they communicate How they share information and build relationships

Alignment Builds- Vision

Where we want to be in the future- The "dream"

how human communication is complex:

Words: spoken and written Nonverbal: facial expressions, posture, gestures content: our thoughts and emotions

Efficient communication

communication using least resources possible

Primary stakeholder

directly affected by an organizations actions

horizontal communication

flows between individuals at the same level or similar in the organizations

Upward communication

flows upward from bottom of organization

Alignment Builds-Strategy

how we will fulfill our vision- the overarching approach

Financial crisis contributing factors-Innovation

math whiz kids create complex products no one really understood what these products are

Short term plans

one year or less

Effective communication

receiver understands the message

Resonant workplace characteristics

respect inclusion open and honest dialogue ability to effectively deal with conflict

Feedback loop

sender and receiver both communicate until they feel message is fully received.

Kinds of plans- Contingency

special plans to handle emergencies, setbacks, or other conditions outside of the norm.

Alignment Builds- Values

the qualities that define "how" we do business and that drive our culture


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