HRM EXAM 3
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
