Session 3 HighlightsSession 3 Objectives include understanding:Outsourcing and OffshoringCorporate Governance and Stakeholder ManagementNew Rules for DirectorsStakeholder ManagementKey StakeholdersSocial ResponsibilityTriple Bottom Line (TBL) Think of applying this at your organization. Come up with measures in each of the 3 areasSomething to Think AboutSession 3 HighlightsThe Context of Strategic ManagementMGT 670Session 3 Objectives include understanding:The effects of globalization and business ethics on today’s organizations and on the nature of competition.The sources of national advantage, that is, why an industry in a given country is more (or less) successful than the same industry in another country.The potential benefits and risks of international expansion.The vital role of corporate governance and stakeholder management as well as how “symbiosis” can be achieved among an organization’s stakeholders.The importance of social responsibility, including environmental sustainability2-2Outsourcing and Offshoring–Outsourcing occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house.–Offshoring takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.–Outsourcing and offshoring are related to stakeholder management and social responsibility2-3Corporate Governance and Stakeholder ManagementCorporate governance: the relationship among various participants in determining the direction and performance of a corporation–Shareholders (for-profits only. Non-profits have no owners)–Management (led by the CEO)–Board of Directors2-4New Rules for DirectorsIn light of numerous corporate scandals, the role and rules for board of directors are being redefined. Few areas of focus :–Numbers Knowledge –Strategy Focus –Time & Understanding–WatchdogSource: Tipsheet, Business Week, January 22, 2007 2-5Stakeholder ManagementTwo views of stakeholder management–Zero sum•Stakeholders compete for attention and resources of the organization•Gain of one is a loss to the other–Symbiosis•Stakeholders are interdependent•Mutual benefits2-6Key Stakeholders2-7Social Responsibility Social responsibility: –the expectation that businesses or individuals will strive to improve the overall welfare of society–refers to the obligation of an organization to protect and/or enhance societyManagers need to manage stakeholders to take active steps to make society betterToday’s situation cries for social responsibility in the area of environmental sustainability Triple bottom line – measuring performance in environmental, socials costs and financial terms2-8Triple Bottom Line (TBL)Think of applying this at your organization. Come up with measures in each of the 3 areas TBL = an accounting method which means expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance. TBL’s ideology is that a company’s responsibility is to the stakeholders and its makeup is one of social, economic, and environmental factors. “People, planet, and profit” concisely defines TBL and the goal of sustainability.People (human capital) – pertains to fair and advantageous business practices toward labor and the community and area in which a corporation conducts its businessPlanet (natural capital) – refers to sustainable environmental practicesProfit – is the bottom line shared by all commerce and is the lasting economic impact the organization has on its economic environmentSlide contents provided by Yellow team Spring 2009Something to Think About Possible exam questions: –Analyze the stakeholders of your organization. Include an assessment of the implications for management. –Propose a way that your organization could promote social responsibility thru an initiative for environmental sustainability. Source: