BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011 Lecture Week 7 Purpose and Culture (Readings –Chapters

BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011

Lecture Week 7 Purpose and Culture

(Readings –Chapters 4 & 5 – see handbook for details)


Expectations and Purposes - Outline

• Corporate governance – a brief overview

• Organisational stakeholders

• Stakeholder mapping

• Organisational Culture and the Cultural web

• Vission, Mission & Strategic Objectives

• Communication of organisational purposes


• Complex role that people play in strategy development

• Strategy is about

– what people expect an organisation to achieve

– what influence people can have over an organisation’s purposes

Role of People


Expectations and Purposes

Exhibit 4.1


Vision, Mission, Objectives & Strategies

A model showing how Vision and Mission fit in with the strategy process (Thomson J.L. 2001 – See Strategist Download Chapter 2)


What is Path Dependency?

Path dependency is where early events and decisions establish policy

paths that have lasting effects on subsequent events and decisions.


Exhibit 5.3 Path Dependency and Lock-In


Communicating Organisational Purposes

• Corporate Values– Core values, the principles guiding actions

• Vision/Mission– Statement of overriding direction and purpose of

organisation

• Objectives– Statement of specific outcomes to be achieved

• Financial, market-based• Sometimes measurable• Relevant


What are Mission and Vision Statements?

A mission statement provides employees and stakeholders with clarity about the overall purpose

of the organisation.

A vision statement is concerned with what the organisation aspires to be.


Strategic Vision• Although less popular than mission statements

firms may also produce a “Vision Statement” ---intended to reflect the firms vision of some future state.

• A lack of published vision statement does not necessarily indicate a lack of vision.

• The inputs to Vision are, the standards of behaviour and values and beliefs which define and drive the organisation (Thomson 2001 & 2006).

• Entrepreneurs often have a vision for the organisation, but which may not be articulated.


Mission

• A ‘Mission’ is a general expression of the overriding premise of the organisation, and should be in line with the values and expectations of major stakeholders.

• It is likely to be concerned with the overall purpose of the organisation, its scope and its boundaries.

• It is sometimes referred to in terms of the apparently simple, but actually quite challenging question: ‘What business are we in?'.


To be useful Mission Statements: • Should be visionary and likely to exist for a significant

period of time. It should form the backcloth against which more detailed objectives and strategies can be developed, delivered and changed over time.

• Should clarify the main purposes of the organisation, and the reasons why the organisation exists.

• Should describe the organisation's main activities and the position it wishes to attain in its industry.

• There should be a statement of the key values, particularly regarding attitudes towards stakeholder groups.

• The organisation should have the intention and capability to live up to the mission statement.


Strategic and Financial ObjectivesIt is usual for companies to set objectives in the following two

main ways: • 1. Financial Objectives,

– e.g. earnings per share, return on shareholders' funds (quantified).

• 2. Strategic Objectives, – e.g. market share increase (quantified), higher product quality

(quantified), greater customer satisfaction (partially quantified), employee job satisfaction (supported by research survey but not necessarily quantified).

• Conflicting Objectives/Expectations, – Often there is conflict between objectives – for example, growth

objectives are often in conflict with the short-term requirement to provide returns to shareholders, the owners of the company.

– Taking money out of the business today will not provide the investment for the future. Objectives therefore need to reach a compromise between short and long-term.


What are Stakeholders?Stakeholders are those individuals or groups who depend on an organisation

to fulfil their own goals and on whom, in turn, the organisation depends.

External vs. Internal Stakeholders


Conflict of Expectations

• Short-term profitability versus growth• Family control versus professional managers• Financial independence versus share/loan funding• Public share ownership demands openness and

accountability• Cost efficiency may mean job losses• Mass markets may compromise quality• Mass public service provision versus specialist

services• Multinational division loyalty versus host country

loyalty


What is Stakeholder Mapping?Stakeholder mapping identifies stakeholder

expectations and power and helps in understanding political priorities.


Use of Stakeholder Mapping

• Do actual levels of interest and power reflect corporate governance framework?

• Who are key blockers and facilitators of a strategy?

• Is repositioning of stakeholders desirable/feasible?

• Which are the key stakeholders whose interest and power must be maintained to support the strategy?


Sources and Indicators of Power

Within organisations External stakeholders

Status Status

Claim on resources Resource dependence

Representation Negotiating arrangements

Symbols Symbols

See exhibit 4.10 in Johnson et al. (2008) for Sources of power- internal and external


Business Ethics – the Social expectations of organisations

Macro level – from Laissez Fair to shapers of society

Ethical stance of the organisation in society

Corporate social responsibility (CSR) is concerned with the ways in which an

organisation exceeds its minimum obligations to stakeholders specified

through regulation.


Four Possible Ethical Stances

Exhibit 4.7


BP and The Texas City Disaster


What is Path Dependency?

Path dependency is where early events and decisions establish policy

paths that have lasting effects on subsequent events and decisions.


Exhibit 5.3 Path Dependency and Lock-In


Organisational Culture

“The basic assumptions and beliefs that areshared by members of an organisation, thatoperate unconsciously and define in a basictaken-for-granted fashion an organisation’sview of itself and its environment”

Schein 1997

“The basic assumptions and beliefs that areshared by members of an organisation, thatoperate unconsciously and define in a basictaken-for-granted fashion an organisation’sview of itself and its environment”

Schein 1997


Exhibit 5.4 Cultural Frames of Reference

The Individual

NationalOrganisational

field

Functional/divisional Organisational


Organisational Field

• Organisations within a filed have– Common business environment– Common norms and values– Shared set of assumptions

• A recipe of organisational purpose & shared vision

– Dangers• Institutional managers may be blinkered• Transitions between sectors diffciult – why?

– Legitimacy• Need to meet the expectations in terms of

assumptions, behaviours and strategies


Exhibit 5.5 Culture in Four Layers


Exhibit 5.7 The Cultural Web of an Organisation

Stories Symbols

Structures

Powerstructures

Controlsystems

Rituals/routines

Paradigm


The Cultural Web: some useful questions

Exhibit 4.12


Further readings

• Further readings in workbbok – also Blackboard and

• essential readings in chapters 5 and 6 of exploring corporate strategy


Key Points

• Expectations and purposes influenced by:– Corporate governance, stakeholder expectations, business ethics

and culture• Stakeholders’ power and influence

– Stakeholder mapping• Ethical stance

– Corporate social responsibility• Culture

– Levels of cultural frames of reference– Layers of values, beliefs, behaviours and taken-for-granted

assumptions– Cultural web

• Communication of organisational purposes– Values, mission, objectives – see Strategist download chapter 6

Documents

BLB10089-3 PJConsidine Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2008/2011 Lecture Week 7 Purpose and Culture (Readings –Chapters