JIMMA UNIVERSITY

Collage of Business and Economics

Department of Management
M.A. In Logistics and Supply Chain Management (Regular)

Course Title, Strategic Supply Chain Management

Individual Assignment

On The Topic:- Theoretical Assignment

Prepared by: 1. Munir Shukre ID NO RM0737/14-0

Submitted to: Instructor- Shimalis Zawdie(PhD)

Jimma, Ethiopia December, 2022

1. Staffing and Directing in Strategy Implementation
The implementation of new strategies and policies calls for different use of personnel and new human
resource management priorities.

.Such staffing issues involve hiring new people with new skills, firing people with inappropriate or
substandard skills, or training existing employees to learn new skills.

. Selection and development of staff are important not only to ensure that people with the right mix of
skills and experiences are initially hired but also to help them grow on the job so that they might be
prepared for future promotion.

Examples:

If growth strategies are to be implemented, new people may need to be hired and trained. Experienced
people with the necessary skills need to be found for promotion to newly created managerial positions.

When a corporation follows a growth through acquisition strategy, it may find that it needs to replace
several managers in the acquired company. The organization may also lose a lot of highly skilled people
who are difficult to replace. If a corporation adopts a retrenchment strategy, a large number of people
may need to be laid off or fired. Sometimes corporations find it easier to close or sell off an entire
division than to choose which individuals to fire.

2. Globalization of business, international environment and

international entry strategies.

Globalization in Business
Globalization refers to the way that people around the world have become more connected politically,
economically and socially. We are moving away from self-contained countries and toward a more
integrated world. Globalization of business is the change in a business from a company associated with a
single country to one that operates in multiple countries.

Impact of Globalization
The impact of globalization on business can be placed into two broad categories: market globalization
and production globalization .

Market globalization is the decline in barriers to selling in countries other than the home country. This
change will make it easier for your company to begin selling products internationally, since lower tariffs
keep consumer prices lower and fewer restrictions when crossing borders makes it easier for a company
to enter a foreign market. It also means that companies must consider other cultures when developing
their business strategies and potentially adjust the product and marketing messages if they aren't
appropriate in the target country. This may not be an issue in the camera industry, but a hamburger
company entering India would definitely need to revisit their product and strategies to be successful!

Production globalization is the sourcing of materials and services from other countries to gain advantage
from price differences in different nations. For example, you might purchase materials and components
for your cameras from multiple countries and then assemble the product in yet another international
location to reduce your costs of production. This change should lead to lower prices for consumers since
products cost less to produce. It also impacts jobs, since production may shift from one country to
another, usually from more developed countries to less developed countries with lower average wage
rates.

What are the Benefits of Globalization?

There are many advantages of globalization to different groups of people such as businesses, residents,
and countries. The benefits include increased international productivity, lower prices to consumers,
access to international investment funds, and sharing of technology.

The following sections cover these benefits in detail.

. Increased International Productivity

International productivity measures the number of goods produced worldwide to the number of inputs
used to make those goods. Globalization has contributed immensely to improving global productivity
because when countries trade, they do so when considering the comparative advantage each country
has concerning the goods it produces. This calls for the country that efficiently produces a commodity
while another country specializes in another item after which they trade. This leads to optimal
productivity around the world.

. Lower Prices to Consumers

Globalization presents many opportunities for organizations to optimize production and improve their
knowledge and skills in producing certain commodities. This is possible through labor specialization
within the countries where theyoperate. This helps to lower production costs, which helps in providing
goods and services at lower prices to consumers. In addition, outsourcing is one method companies use
to move specific production processes to other countries. An example of this phenomenon is where
companies such as mobile phone companies outsource production services to China, where cheap
qualified labor is present.

. Access to International InvestmentFunds

Globalization brings together many countries with different levels of development, but who benefits
from globalization? Developed countries are exposed to the poor living conditions of less developed
countries. It leads to agreements between countries for funds to be channeled to developing countries
to help them develop their countries. Globalization led to the establishment of the International
Monetary Fund (IMF), which avails funds to countries that need funding for development projects and
need to understand how to interact with other countries economically by helping them to understand
the currencies of other countries.

. Sharing Technology
Between 2000 to 2015, there was a mass adoption of mobile phone use. Most countries in the world
have witnessed vast numbers of people using recent technology. This is an excellent example of sharing
technology where producers in various countries developed technology that the whole world now uses.
Globalization has helped countries share in the technology they create to help humanity move through
multiple developmental stages.

. Costs of Globalization
Although globalization presents many great opportunities, there are also several costs of globalization
that include causing job insecurity, reducing work and environmental standards, and hurting national
culture and diversity. Increased International Productivity Lower Prices to Consumers Access to
International Investment Funds Sharing Technology

. International Environment
An international business environment refers to the surrounding in which international companies run
their businesses. Therefore, it is mandatory for the people at the managerial level to work on the factors
that comprise of International Business Environment.

* The Difference between Business Environment and International Business

International business is an exchange of goods and services that conducts its operations across national
borders, between two or more countries. International business is also known as Globalization, whereas,
a Business Environment is the surrounding in which the international companies operate.

* Types of International Business Environment

- Political Environment in International Business

The political environment refers to the type of the government, the government relationship with a
business, & the political risk in the country. Doing business internationally, therefore, implies dealing
with a different type of government, relationships, & levels of risk.

There are many different types of political systems, for example, multi-party democracies, one-party
states, constitutional monarchies, dictatorships (military & non- military). Therefore, in analyzing the
political- legal environment, an organization may broadly consider the following aspects:
- Economic Environment in International Business
The economic environment relates to all the factors that contribute to a country’s attractiveness for
foreign businesses. The economic environment can be very different from one nation to another.
Countries are often divided into three main categories: the more developed or industrialized, the less
developed or third world, & the newly industrializing or emerging economies.

Within each category, there are major variations, but overall the more developed countries are the rich
countries, the less developed the poor ones, & the newly industrializing (those moving from poorer to
richer). These distinctions are generally made on the basis of the gross domestic product per capita
(GDP/capita). Better education, infrastructure, & technology, healthcare, & so on are also often
associated with higher levels of economic development. Clearly, the level of economic activity combined
with education, infrastructure, & so on, as well as the degree of government control of the economy,
affect virtually all facets of doing business, & a firm needs to recognize this environment if it is to
operate successfully internationally. While analyzing the economic environment, the organization
intending to enter a particular business sector may consider the following aspects:

An Economic system to enter the business sector.

Stage of economic growth & the pace of growth.

Level of national & per capita income.

Incidents of taxes, both direct & indirect tax

Infrastructure facilities available & the difficulties thereof.

Availability of raw materials & components & the cost thereof.

Sources of financial resources & their costs.

Availability of manpower- managerial, technical & workers available & their salary & wage structures.

- Technological Environment in International Business

The technological environment comprises factors related to the materials & machines used in
manufacturing goods & services. Receptivity of organizations to new technology & adoption of new
technology by consumers influence decisions made in an organization. As firms do not have any control
over the external environment, their success depends on how well they adapt to the external
environment. An important aspect of the international business environment is the level, & acceptance,
of technological innovation in different countries.

The last decades of the twentieth century saw major advances in technology, & this is continuing in the
twenty-first century. Technology often is seen as giving firms a competitive advantage; hence, firms
compete for access to the newest in technology, & international firms transfer technology to be globally
competitive.

In analyzing the technological environment, the organization may consider the following aspects:

Level of technological development in the country as a whole & specific business

sector.

The pace of technological changes & technological obsolescence.

Sources of technology.

Restrictions & facilities for technology transfer & time taken for the absorption of technology.

- Cultural Environment in International Business

The cultural environment is one of the critical components of the international business environment &
one of the most difficult to understand. This is because the cultural environment is essentially unseen; it
has been described as a shared, commonly held body of general beliefs & values that determine what is
right for one group, according to Kluckhohn & Strodtbeck.

National culture is described as the body of general beliefs & the values that are shared by the nation.
Beliefs & the values are generally seen as formed by factors such as the history, language, religion,
geographic location, government, & education; thus firms begin a cultural analysis by seeking to
understand these factors. The most well- known is that developed by Hofstede in1980.

His model proposes four dimensions of cultural values including individualism, uncertainty avoidance,
power distance & masculinity. Lets look at each of these.

Individualism is the degree to which a nation values & encourages individual action & decision making.

Uncertainty avoidance is the degree to which a nation is willing to accept & deal with uncertainty.

Power distance is the degree to which a national accepts & sanctions differences in power.

This model of cultural values has been used extensively because it provides data for a wide array of
countries. Many academics & the managers found that this model helpful in exploring management
approaches that would be appropriate in different cultures. For example, in a nation that is high on
individualism one expects individual goals, individual tasks, & individual reward systems to be effective,
whereas the reverse would be the case in a nation that is low on individualism.

- Competitive Environment
The competitive environment also changes from country to country. This is partly because of the
economic, political, & cultural environments; these environmental factors help determine the type &
degree of competition that exists in a given country. Competition can come from a variety of sources. It
can be a public or a private sector, come from the large or the small organizations, be domestic or
global, & stem from traditional or new competitors, GST registration . For a domestic firm, the most
likely sources of competition might be well understood. The same isn’t the case when a person moves to
compete in the new environment

* International Entry Strategies

An international strategy is an option for many businesses because they can leverage existing
capabilities and export abroad. A global strategy features cost efficiencies and can work well for
businesses requiring a low need for local responsiveness and localization. An example is Apple, which
sells its products with standardized models and prices. There are few differences between Apple
products for marketing strategies across the globe. No matter what your business sells, it is essential to
research and plan the growth of your business. If your business grows too quickly or expands into too
many markets at once, you could experience financial, legal, staffing, resource, and supplier problems.
Business growth should be sustainable to be successful. Some factors to consider when choosing a
market to expand to include:

Market Size

Local Competition

Shipping Cost and Supply Chain

Government Regulations and Local Laws

Political, Economic, and Operational Risk

Types of International Market Entry Strategies

There are several international market entry strategies to consider when planning. Each strategy has a
unique structure and approach depending on how the business is established, maintained, invested in,
and run.

1. Exporting
Exporting is the marketing and direct saleof domestically produced goods in another country through a
third-party reseller or distributor. This is often the way companies will begin expansion since it allows
companies to enter markets simultaneously and with lower overhead. Since exporting doesn’t require
that the goods be produced in the target country, no investment in foreign production facilities is
required.
Most of the costs associated with exporting are marketing expenses. Exporting is a well-established
strategy to reach foreign markets. It is viewed as relatively low risk and more profitable because
companies export existing products instead of having to develop new ones. In addition, businesses that
face seasonal domestic demand might choose to market their offerings abroad to balance seasonal
needs in their revenue streams.

Finally, some companies may export because there is less competition overseas. However, exporting can
be challenging to scale without hiring in-country resources, such as staff, to manage warehouses and
distribution.

2. Piggybacking
Piggybacking can be a cost-effective and fast international market entry strategy. Piggybacking involves
two non-competing companies working to cross-sell the other’s products or services in their home
country. It is a low-risk method involving little capital. However, piggybacking involves a high degree of
trust because the process allows the partner companies to control how products are marketed abroad.
You may want to consider piggybacking if your company has contacts who work for organizations selling
products overseas.

This market entry strategy involves asking other businesses whether you can add your product to their
overseas inventory. If your company and an international company agree to this arrangement, both
parties share the profit for each sale. Your company can also manage the risk of selling overseas by
allowing its partner to handle international marketing while your company focuses on domestic retail.

3. Countertrade
Countertrade is a resourceful way to arrange for the sale of a product from an exporter to a company in
a country that does not have the resources to pay for it in hard currency.

Countertrade transactions involve trading in goods and services as opposed to money. Countertrade is
used primarily to enable trade in countries that are unable to pay for imports. For example, this can
result from a shortage of foreign currency or a lack of commercial credit. Companies that consider
countertrade typically want to expand into a foreign market, increase sales, build customer and supplier
relationships, overcome liquidity challenges, and gain a competitive edge over competing suppliers.

A disadvantage to countertrade is that the value of a deal may be uncertain, causingsignificant price
volatility. Countertrade can also be a time-consuming and complex negotiation process, resulting in high
transaction costs, including commissions for brokers.

4. Licensing
Licensing gives legal rights to parties within international markets to use your company’s name and
other intellectual property to sell your product. A licensee can produce and sell products under your
name or offer services using your brand. In exchange, you get royalties or other payments. It can be an
effective way of entering a market, especially if you’re a service business that needs a local workforce or
your products would benefit from local manufacturing. A downside of licensing is how a licensee
behaves towards customers, the quality of their output, and how they market your product can affect
the brand. Thorough due diligence is needed to find potential partners. Brands that come to the table
with detailed research on their new market are much more likely to solidify essential factors for a
successful licensing partnership.

5. Franchising
One of the most popular international market entry strategies is the franchising process. Franchising is
similar to licensing but requires a lot more heavy lifting. Franchising works well for organizations with a
trustworthy and established business model, such as McDonald’s or Starbucks. Businesses that begin
franchising should ensure that they earn a good brand name, build on it, and promote it. Franchising is a
contractual international market entry mode as a licensing agreement when an organization wants to
enter a foreign market quickly with low risk and resource commitment. In addition to the standard
license process, a company will assist in establishing the business with the design, equipment,
organization, andmarketing support for a contractual partner in the target market. In return for the
franchisor’s services, the franchisee pays a lump sum payment up front and a share of future profits.
Through this contractual relationship, the success of the operations is interdependent, but the
franchisor gains other advantages from the partnership than the franchisee.

6. Joint Ventures
A joint venture is a partnership between a domestic and foreign firm. Both partners invest money, share
ownership, and share control of the project. Typically the foreign partner provides expertise about the
new market, business connections and networks, and access to other in-country elements of business
like real estate and regulatory compliance. Joint ventures require a more significant commitment from
firms than other methods because they are riskier and less flexible. International joint ventures allow for
faster and less costly access to foreign markets instead of a company purchasing an existing company in
the market they are looking to enter or starting an entirely new venture. Joint ventures may enjoy tax
advantages in many countries, particularly where foreign-owned businesses are taxed at higher rates
than locally owned businesses. Some countries require all business ventures to be at least partially
owned by domestic business partners. Joint ventures may also span multiple countries.

7. Foreign Direct Investment

Foreign direct investment (FDI) occurs when a company takes controlling ownership in a business entity
in another country. With FDI, foreign companies are directly involved with day-to-day operations in the
other country. This means they’re bringing money into the investment, knowledge, skills, and
technology. FDI involves creating a lasting relationship with and gaining significant influence in the
foreign market. Through FDI, companies can lower production costs and gain access to markets they
otherwise may not have been able to do on their own. For the destination country, FDI can be a source
of resources and technology and can spur economic growth and development. However, FDI does come
with risks for investors and can raise concerns about foreign influence in target countries.

8. Wholly-Owned Subsidiary
Another way large businesses invest is to set up a wholly-owned subsidiary. With a wholly-owned
subsidiary, a local business is entirely under the parent company’s control, running under the same
brand or another name that may be chosen.

A subsidiary can be created from scratch, but buying a local business outright is often easier than turning
it into a new subsidiary. This model has the same pros and cons as direct foreign investment. The
primary difference is that you have greater control over operations on the ground, as the parent
company manages the subsidiary.

Green-field Investment
A Green-field Investment is a form of Foreign Direct Investment (FDI) in which a company sets up a
foreign subsidiary or operations from scratch. This includes investing in new facilities such as offices,
factories, staff accommodation, and distribution hubs. Green-field investments are named after the idea
that a company launching a new venture starts with nothing but a “green field.” Green-field investments
are associated with much more control since the company can build its infrastructure to its own
specifications. This also gives the company more control over the quality of its products. Green-field
investments also come with several economic benefits because companies may receive incentivization
from governments in the form of tax breaks and subsidies and may be able to bypass trade restrictions
and import tariffs. On the other hand, green- field investments require a tremendous investment which
equals higher risk should the project become unviable for whatever reason. If nothing else, the capital
expenditure required is a substantial barrier to entry.

International Mergers and Acquisitions

International Mergers and Acquisitions (M&As) offer the fastest and largest international expansion
strategy and is a way to gain greater market power in less time. Market power often influences market
share, so large multinational corporations prefer acquisitions to gain that advantage. M&As require the
purchase of a competitor, supplier, distributor, or business to capture a competitive advantage in the
market. Acquisitions carry a lower risk than new investments because acquisition results can be more
quickly and accurately estimated. Overall, acquisitions areattractive if there are well-established firms in
action. However, reaching an M&A can be difficult when trying to merge two different organizational
cultures, control systems, and relationships. Integration is a complex issue, both legally and financially.
In addition, firms engaging in an M&A can increase their debt levels, which needs to be a consideration
during an international expansion.
3.Total Quality Management, Balanced Score Card and Kaizen
A. Total Quality Management
Total quality is called total because it consists of two qualities – quality of return to satisfy the needs of
the shareholders, or quality of products.

TQM is a continuous process of improvement for individual, groups as well as the entire organisation,
whereby managers attempt to change the organization’s way of working by developing people’s
knowledge about what to do, how to do, doing it with the right methods and measuring the
improvement of the process and the current level of achievement.

Total Quality Management (TQM) is a business management strategy aimed at embedding awareness of
quality in all organizational processes.TQM is widely used in manufacturing, education, hospitals, call
centers, government, and service industries, as well as space and science programs.

Total Quality Management is the organization-wide management of quality. Management consists of

planning, organizing, directing, control, and assurance.

Total Quality Management (TQM) is an operational philosophy committed to customer satisfaction and
continuous improvement.

TQM is committed to quality/excellence and to being the best in all functions.

Because TQM aims to reduce costs and improve quality, it can be used as a program to implement an
overall low-cost or a differentiation business 11

. Objectives of TQM
An analysis of the successes and failures of TQM concluded that the key ingredient is top management.
Successful TQM programs occur in those companies in which “top managers move beyond defensive
and tactical orientations to embrace a developmental orientation.

TQM has four objectives:

1. Better, less variable quality of the product and service

2. Quicker, less variable response in processes to customer needs

3. Greater flexibility in adjusting to customers’ shifting requirements

4. Lower cost through quality improvement and elimination of non-value-adding work.11

B. Balanced Score Card

The Balanced Scorecard concept involves creating a set of measurements for four strategic perspectives.
These perspectives include: 1) financial, 2) customer, 3) internal business process and 4) learning and
growth. The idea is to develop between four and seven measurements for eachperspective.

The measurements should be focused on a single strategy and be linked, consistent and mutually
reinforcing. Some generic measurements are presented below.

Perspective Generic Measurements

A. Financial

Return of Capital Employed, Economic value added, Sales growth, Cash flow

B. Customer

Customer satisfaction, retention, acquisition, profitability, market share

C. Internal business process

Includes measurements along the internal value chain for:

Innovation - measures of how well the company identifies the customers’ future needs.

Operations - measures of quality, cycle time, and costs.

Post sales service - measures for warranty, repair and treatment of defects and returns.

D. Learning and growth

Includes measurements for:

People - employee retention, training, skills, morale.

Systems - measure of availability of critical real time information needed for front line employe

C. Kaizen
Kaizen is an approach to creating continuous improvement based on the idea that small, ongoing
positive changes can reap significant improvements. Typically, it is based on cooperation and
commitment and stands in contrast to approaches that use radical or top- down changes to achieve
transformation. Kaizen is core to lean manufacturing and the Toyota Way . It was developed in the
manufacturing sector to lower defects, eliminate waste, boost productivity, encourage worker purpose
and accountability and promote innovation.
Kaizen is a compound of two Japanese words that together translate as "good change" or
"improvement." However, Kaizen has come to mean "continuous improvement" through its association
with lean methodology and principles.

10 principles of Kaizen

Because executing Kaizen requires enabling the right mindset throughout a company, 10 principles that
address the Kaizen mindset are commonly referenced as core to the philosophy. They are:

1. Let go of assumptions.

2. Be proactive about solving problems.

3. Don't accept the status quo.

4. Let go of perfectionism and take an attitude of iterative, adaptive change.

5. Look for solutions as you find mistakes.

6. Create an environment in which everyone feels empowered to contribute.

7. Don't accept the obvious issue; instead, ask "why" five times to get to the root cause.

8. Cull information and opinions from multiple people.

9. Use creativity to find low-cost, small improvements.

10. Never stop improving.

4. Mission vs Vision
What are mission and vision statements? A mission statement defines the organization’s business, its
objectives, and how it will reach these objectives. A vision statement details where the organization
aspires to go.

mission statement is what your company is doing right now, while your vision statement is what you
hope to achieve in the future – where you are in this moment versus where you’re going.

A mission statement describes the current state of an organization and its primary goals or objectives. It
provides detailed information about what the organization does, how it does it, and who it does it for.
Unlike the vision statement, it is short-term in nature. However, it is related to the vision statement in
that it outlines the primary goals that will help to achieve the future the organization desires (i.e, the
vision).

The vision statement focuses on tomorrow and what the organization wants to become. The mission
statement focuses on today and what the organization does. While companies commonly use mission
and vision statements interchangeably, it’s important to have both. One doesn’t work without the other,
because having purpose and meaning are critical for any business.

A vision statement is used to describe the future state of the organization, i.e., what the organization
hopes to become in the future. It is, therefore, a long-term goal provides direction for the organization.
It also communicates the purpose of the organization to the employees and other stakeholders and
provides them with the inspiration to achieve that purpose.

The process of developing mission and vision statement

Conducting "public forums" or "listening sessions" with members of the community to gather ideas,
thoughts, and opinions about how they would like to see the community transformed.

Holding focus groups with the people interested in addressing the issue(s), including community leaders,
people most affected by the issues, businesses, church leaders, teachers, etc.

Obtaining interviews with people in leadership and service positions, including such individuals as local
politicians, school administrators, hospital and social service agency staff, about what problems or needs
they believe exist in your community.

Vision statement
. Will it draw people to common work?

. Does it give hope for a better future?

. Will it inspire community members to realize their dreams through positive, effective action?

. Does it provide a basis for developing the other aspects of your action planning process?

Mission statement
. Does it describe what your organization will do and why it will do it?

. Is it concise (one sentence)?

. Is it outcome oriented?

. Is it inclusive of the goals and people who may become involved in the organization?

Importance of mission and vision statement

Both the vision and mission statements play an important role in the organization. Below is a look at
these roles:
1. The vision and mission statements define the purpose of the organization and instill a sense of
belonging and identity to the employees. This motivates them to work harder in order to achieve
success.

2. The mission statement acts as a “North Star” , where it provides the direction that is to be followed by
the organization while the vision statement provides the goal (or the destination) to be reached by
following this direction.

3. The vision and mission statements help to properly align the resources of an organization towards
achieving a successful future.

4. The mission statement provides the organization with a clear and effective guide for making
decisions , while the vision statement ensures that all the decision made are properly aligned with what
the organization hopes to achieve.

5. The vision and mission statements provide a focal point that helps to align everyone with the
organization, thus ensuring that everyone is working towards a single purpose. This helps to increase
efficiency and productivity in the organization.

The vision and mission statements are important tools of strategic planning, and thus they help to shape
the strategy that will be used by an organization to achieve the desired future.

There are certain characteristics that most vision statements have in common. In general, vision
statements should be:

Understood and shared by members of the community

Broad enough to include a diverse variety of local perspectives

Inspiring and uplifting to everyone involved in your effort

Easy to communicate - for example, they are generally short enough to fit on a T-shirt

5. Corporate Social Responsibility and Business Ethics

Social Responsibility of Strategic Decision Makers
The concept of social responsibility proposes that a private corporation has responsibilities to society
that extend beyond making a profit. Strategic decisions often affect more than just the corporation. A
decision to retrench by closing some plants and discontinuing product lines, for example, affects not
only the firm's workforce but also the corrununities where the plants are located and the customers
with no other source for the discontinued product. Such situations raise questions of the
appfopriateness of certain missions, objectives, and strategies of business corporations. Managers must
be able to deal with these conflicting interests in an ethical manner to formulate a viable strategic plan.

What are the responsibilities of a business firm and how many of them must be fulfilled?
Milton Friedman and Archie Carroll offer two contrasting views of the responsibilities of bus iness firms
to society.

Friedman's Traditional View of Business Responsibility

Urging a return to a laissez-faire worldwide economy with a minimum of government regulation, Milton
Friedman argues against the concept of social responsibility. A business person who acts "responsibly"
by cutting the price of the firm's product to prevent inflation, or by making expenditures to reduce
pollution, or by hiring the hard-core unemployed, according to Friedman, is spending the shareholder's
money for a general social interest. Even if the businessperson has shareholder permission or
encouragement to do so, he or she is still acting from motives other than economic and may, in the long
run, harm the very society the firm is trying to help. By taking on the burden of these social costs, the
business becomes less efficienteither prices go up to pay for the increased costs or investment in new
activities and research is postponed. These results negatively affect-perhaps fatally-the long-term
efficiency of a business. Friedman thus referred to the social responsibility of business as a
"fundamentally subversive doctrine" and stated that:

There is one and only one social responsibility of business-to use its resources and engage in activities
designed to increase its profits so long as it stays within the rules of the game, which is to say, engages
in. open and free competition without deception or fraud.16

Relationship between social responsibility and corporate performance

Corporate Social Responsibility is a management concept whereby companies integrate social and
environmental concerns in their business operations and interactions with their stakeholders. CSR is
generally understood as being the way through which a company achieves a balance of economic,
environmental and social imperatives (“Triple-Bottom- Line- Approach”), while at the same time
addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a
distinction between CSR, which can be a strategic business management concept, and charity,
sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty
reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of
CSR clearly goes beyond that.

Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective needs and
capacities of these businesses, and do not adversely affect their economic viability. UNIDO based its CSR
programme on the Triple Bottom Line (TBL) Approach, which has proven to be a successful tool for SMEs
in the developing countries to assist them in meeting social and environmental standards without
compromising their competitiveness. The TBL approach is used as a framework for measuring and
reporting corporate performance against economic, social and environmental performance. It is an
attempt to align private enterprises to the goal of sustainable global development by providing them
with a more comprehensive set of working objectives than just profit alone. The perspective taken is
that for an organization to be sustainable, it must be financially secure, minimize (or ideally eliminate)
its negative environmental impacts and act in conformity with societal expectations.
Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder
engagement, labour standards and working conditions, employee and community relations, social
equity, gender balance, human rights, good governance, and anti-corruption measures.

A properly implemented CSR concept can bring along a variety of competitive advantages, such as
enhanced access to capital and markets, increased sales and profits, operational cost savings, improved
productivity and quality, efficient human resource base, improved brand image and reputation,
enhanced customer loyalty, better decision making and risk management processes.

Ethical Decision Making

What is ethical decision making?

Ethical decisions inspire trust and with it fairness, responsibility and care for others. The ethical decision
making process recognizes these conditions and requires reviewing all available options, eliminating
unethical views and choosing the best ethical alternative.

Good decisions are both effective and ethical. In professional relationships, good decisions build respect,
trust, and are generally consistent with good citizenship. Effective decisions are effective when they
achieve what they were made for. A choice that produces unintended results is ineffective and therefore
not good.

The key to making good decisions is to think about the different choices that lie ahead in order to
achieve the objectives. For that reason, it is also very important to understand the difference between
short-term vs. medium to long term objectives.

Making ethical decisions requires a certain sensitivity to ethical issues and a method of examining all the
considerations associated with a decision. Having a method or structure for making ethical decisions is
therefore essential. After this process has been performed a few times, the method is trusted and it is
easier to walk through the steps.

Framework for ethical decision making

If ethics is not based on religion, feelings, law, social practices or science, what is it based on? Countless
philosophers and ethicists have attempted to answer this critical question. At least five different ethical
norms or standards have been proposed. The most important are explained below.

The Utilitarian Approach

This approach dictates that the action that is the most ethical is the action that produces the most good
and causes the least harm. In other words, the decision that strikes the greatest balance between good
and evil.

In a business environment, it is therefore the decision that yields the most benefits and causes the least
damage to customers, employees, shareholders, the environment, etc.
The Right Approach
The right approach suggests that the most ethical decision is the one that best protects and respects the
moral rights of all concerned. This approach argues that people have a dignity based on human nature
or their ability to freely choose what they want to do with their lives.

Based on that dignity, they have the right to be treated equally by others and not just as a means to
an(other) end.

The Fairness or Justice Approach

All equals should be treated equally. The Greek philosopher Aristotle and others contributed to that
idea. Today, this idea is used to indicate that ethical decisions treat everyone equally. If not equal, this
must be based on a standard that is explainable.

People are paid more for their hard work when they contribute more to the organization. That is fair.
But many wonder whether the salaries of CEOs, some 100 times higher than others, are fair. Is this
standard defensible?

The Common Good Approach

The Greek philosophers also contributed to the idea that living in a community is a good thing. People’s
actions and actions must contribute to this. This approach suggests that relationships within society are
the basis of ethical reasoning and acting. Respect and compassion for all others, especially the
vulnerable, are prerequisites for maintaining an ethical way of life.

The Virtue Approach

An ancient approach to ethics is the belief that acting ethically must be in accordance with certain
virtues that ensure the development of humanity in general. Virtues are tendencies and habits that
enable man to act with the highest potential of human character.

6.Corporate Governance
Corporate governance is the system of rules, practices, and processes by which a firm is directed and
controlled. Corporate governance essentially involves balancing the interests of a company's many
stakeholders , such as shareholders, senior management executives, customers, suppliers, financiers,
the government, and the community.

The Board of Directors

The board of directors is the primary direct stakeholder influencing corporate governance. Directors are
elected by shareholders or appointed by other board members. They represent shareholders of the
company. The board is tasked with making important decisions, such as corporate officer appointments,
executive compensation, and dividend policy. In some instances, board obligations stretch beyond
financial optimization, as when shareholder resolutions call for certain social or environmental concerns
to be prioritized.

Boards are often made up of insiders and independent members. Insiders are major shareholders,
founders, and executives. Independent directors do not share the ties that insiders have. They are
chosen for their experience managing or directing other large companies. Independents are considered
helpful for governance because they dilute the concentration of power and help align shareholder
interests with those of the insiders.

Role and Responsibility

Role of The B of D
A board of directors (B of D) is the governing body of a company, elected by shareholders in the case of
public companies to set strategy and oversee management. The board typically meets at regular
intervals. Every public company must have a board of directors. Some private companies and nonprofit
organizations also a board of directors.

Responsibility of The B of D

Responsibility
The board is responsible for the oversight of corporate matters and management activities. It must be
aware of and support the successful, ongoing performance of the company. Part of its responsibility is to
recruit and hire a CEO. It must act in the best interests of a company and its investors.

Trends in Corporate Governance

Emerging Trends in Corporate Governance 2022

. ESG (Environmental and Social Governance) is here to stay. Sustainability and good governance are
linked nowadays. ...

. Human capital concerns.

. Hybrid and virtual board and shareholder meetings.

. Data privacy regulations.

. Increased shareholder accountability.

. “Tone in the middle” culture.

Important of Executive Leadership for Strategic Management

“Leadership,” is sometimes thought of as merely guiding a group and having responsibility for outcomes.
When viewed this way, leadership can often be reactive.

“Executive leadership” demands a way of thinking and behaving that is more proactive and methodical.
“Executive leaders think differently and think for the future. They are able to reframe situations and
implement innovative long-term solutions,” says Cannon.

Executive leaders know how to ask the right questions. When presented with a challenging situation,
they take the time to fully understand the problem and reflect before formulating a solution. Ultimately,
this approach enables more creative and effective action.

Cannon also notes that executive leaders operate with high situational awareness and see the big
picture. While leaders usually focus on immediate results, executive leaders create short-term value
while simultaneously enhancing the long-term strength of the organization.

What are the qualities of an effective executive leader?

Executive leadership is less about personality type and more about learning agility and a commitment to
continual development. “Executive leaders evaluate situations, establish priorities, and execute wise
plans,” said Cannon.

Leadership has significant impact on strategic management process. Especially it helps to determine the
vision and mission of the organization . Further, it facilitates the organization to execute effective
strategies to achieve that vision.

The Principles of Corporate Governance

While there can be as many principles as a company believes make sense, some of the more well-known
include the following.

Fairness

The board of directors must treat shareholders, employees, vendors, and communities fairly and with
equal consideration.

Transparency

The board should provide timely, accurate, and clear information about such things as financial
performance, conflicts of interest, and risks to shareholders and other stakeholders.

Risk Management

The board and management must determine risks of all kinds and how best to control them. They must
act on those recommendations to manage them. They must inform all relevant parties about the
existence and status of risks.
Responsibility

The board is responsible for the oversight of corporate matters and management activities. It must be
aware of and support the successful, ongoing performance of the company. Part of its responsibility is to
recruit and hire a CEO. It must act in the best interests of a company and its investors.

Accountability

The board must explain the purpose of a company's activities and the results of its conduct. It and
company leadership are accountable for the assessment of a company's capacity, potential, and
performance. It must communicate issues of importance to shareholders.

References

1. Wikipedia

2. Investopedia

3. Google

4. Friedman's Traditional View of Business Responsibility

5.Canon's Excutive Leadership Managementn View