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Strategize Experiential Exercises in Strategic Management 4Th Edition Gopinath Solutions Manual Full Chapter PDF
Strategize Experiential Exercises in Strategic Management 4Th Edition Gopinath Solutions Manual Full Chapter PDF
S t r a t e g y S e s s i o n 5
Viewing Strategy from the Stak eholder
Perspective
OBJECTIVE
Students get an understanding of the influence of various stakeholder groups that
management contends with when new strategies are proposed.
TIME: 20 MINUTES
E-Cigarettes Case
1. After reading the information about electronic cigarettes, what are the pros and cons of
this product?
E-cigarettes are considered a product that has the potential of saving lives of four to eight
million current American smokers who will otherwise die of tobacco-related illnesses. The
advantages of the product are that it has no smell, no tar, and no second-hand smoke. The
product contains a moisture producing carrier, such as propylene glycol that often has
nicotine in the solution but no tobacco. Depending on the brand, there are various levels of
nicotine, which is a drug with benefits that are similar to claims about caffeine benefits
(reduction of stress and anxiety for the smoker, faster reaction time, and improved
concentration). The cost is half of traditional cigarettes, since e-cigarettes are not taxed in
the category of traditional cigarettes.
The American Association of Public Health Physicians supported e-cigarette sales to adults,
and a Boston University School of Public Health study found e-cigarettes to be safer than
tobacco cigarettes. The study noted few, if any, chemicals in e-cigarettes that raised serious
health concerns, and carcinogens were up to 1000 times lower than regular cigarettes.
On the other hand, the World Health Organization reported no rigorous, peer-reviewed
studies providing evidence that the product is safe and an effective form of nicotine
replacement therapy. Also, regulation of the product does not exist. The FDA can only
regulate e-cigarettes as tobacco products, which they are not. And they do not fall under
drug legislation because they are not marketed for therapeutic use. That is, they are not
marketed to those seeking to quit smoking.
The product is also more likely to attract youth, particularly since manufacturers include a
wide range of ingredients for different flavors (peppermint, chocolate, cherry, pina colada,
etc.). These flavors encourage under-age youth to try the product and then become addicted
to nicotine.
2. Identify the stakeholders in the e-cigarettes case. List them according to the level of
influence they exert over companies producing the product, showing the stakeholder with
the highest level first, then the stakeholder with the next highest level of influence, and so
on. The last stakeholder on the list should be the one with the lowest level of influence.
Next to each, briefly discuss the reasons behind your ranking.
Because this is a ranking based on student opinion, answers may vary. However, the first two
stakeholders clearly have the authority to affect the future sales of e-cigarettes.
Retail establishments, such as 7- 4. These firms sell the product, which is becoming
Eleven, Walgreens, and Wal-Mart. more popular and provides the retailers with a
new source of profit.
3. Suppose you are a company that manufacturers e-cigarettes. Identify a strategy to deal with
each stakeholder group noted above.
FDA - Manufacturers should join the newly formed Smoke-Free Alternatives Trade
Association (SFATA) to back up the smokeless trend. Also, associations lobby Federal
and State agencies to ensure members’ products are not incorrectly classified and to limit
regulations.
Researchers – The association noted above could fund research of the product by
independent laboratories and at universities such as the Boston University School of
Public Health. Although, clearly, this type of funding is often viewed as self-serving.
Retail establishments – According to a Wells Fargo equity research report, the 2012 e-
cigarettes industry is estimated at $300 million in revenue at retail and could grow to $1
billion over the next few years with gross margins for retailers similar to traditional
cigarettes. The convenience store category was labeled the most popular place to purchase
e-cigarettes in a recent survey1. Given the projections, manufacturers should promote the
product aggressively through convenience stores.
Another NCP was developed by Sentiens LLC, a North Carolina R&D company. The
product is called Novus Twigs, which looks exactly like a cigarette but is a ‘botanically-
based cigarette alternative. 2
1
New Smoke Signals. Convenience Store News, Nov2012, 48 (14): 52-54.
2
Ibid.
34 Strategy Session 5 Viewing Strategy from the Stakeholder
Perspective
TIME: 75 minutes
ADMINISTRATION
This exercise involves four rounds of meetings:
1. Students meet in stakeholder groups to discuss the case and develop their positions.
2. The class reconvenes to hear the Global Chemical strategy and the stakeholders’ brief
response to the strategy.
3. The groups meet to discuss any modifications as a result of the strategy.
4. The class reconvenes to hear any changes.
Instructions
1. Introduction (10 minutes). The instructor introduces the exercise by briefly reviewing
the Global Chemical case. Each stakeholder team is expected to provide the outline of a
course of action that assures Global Chemical of continued profitability and growth.
It is important that students are familiar with the scenario and have either been
assigned to one of the various stakeholder groups or are aware of the variety of groups in
which they may be placed for the exercise. A preassessment form is included to ensure
student reading before class.
2. Divide Class into Stakeholders (5 minutes). The class is divided into as many as seven
groups:
Global Chemical top management.
Global Chemical stockholders.
Global Chemical employees (union at the plant).
Residents in the towns along the river in Kentucky and the citizen
environmental group that is concerned about the health hazards Global
Chemical causes. (Since these two stakeholder groups have very similar
interests, they may be combined for this exercise.)
Area businesses such as the food stores and theaters whose sales depend on
the spending patterns of Global Chemical employees.
Suppliers to Global Chemical such as office supply stores and the providers
of raw materials.
Local, state, and federal governments that rely on residents in the community
to pay taxes.
Depending on the size of the class and the way in which the instructor wants to guide
the discussion, the number of groups can be expanded or contracted.
Instructions for group discussion are reproduced at the end of this session’s notes and
should be distributed as guidelines for preparation. A time limit of about five to seven
minutes is allotted for reading the guidelines and setting up the groups.
Exercise: Role Playing Global Chemical Corporation Stakeholders’ Interest and
Power 35
3. Stakeholder discussions (30 minutes). The stakeholder groups meet to discuss the case
and develop their specific positions on what the Global Chemical course of action should
be. Each stakeholder group should select one person to act as spokesperson.
4. Stakeholder groups meet together (40–45 minutes). The entire class reconvenes with
each stakeholder group staying intact. The Global Chemical management team presents its
course of action and answers any questions of clarification. Then the stakeholder groups
huddle individually for five minutes to review their positions in light of the presentation by
management.
A spokesperson from each group gives a brief response to the course of action. The
management team in turn is allowed to respond in a very brief manner. Once all
stakeholder groups have presented, a question and answer period directed to the
management team is in order.
6. Stakeholders meet again (10–15 minutes). The entire class reconvenes. Global
Chemical management presents any changes in its course of action. Each stakeholder is
given an opportunity to make a brief statement.
company’s stock price will probably not decline) and the company’s
management team.
b. A local site should be found for a new facility using the same Global
Chemical workforce. This alternative is popular with students
because it satisfies the greatest number of stakeholders: (1) those
who feel that Global Chemical is responsible for the health hazards;
(2) employees who will not lose their jobs; (3) area businesses that
rely on Global employees for patronage; (4) suppliers and creditors
that service Global Chemical needs; and (5) local governments that
collect taxes from Global Chemical employees. Since the costs of
relocation would not be offset by the lower costs noted in alternative
a, the stock market would probably not react favorably to the lower
profits. Stockholders might sell their stock, thus lowering the price
of the company’s stock; management would be held accountable.
c. No action should be taken. The citizen environmental group has
been complaining about the health hazards for two years without
any proof that Global Chemical is causing the health problems. While
the negative publicity could hurt Global Chemical’s image in the
community if a TV special were aired, Global Chemical can stand on
its position that they are completely following the law regarding
levels of pollution. This alternative also is a popular one because it
satisfies many of the stakeholder groups. However, some students
note that a more proactive approach should be taken by
management, particularly since the media plans to develop an
expose of the situation on nationwide television.
2. Identify the stakeholders of Global Chemical. List them according to the level of influence
they exert over the company, showing the stakeholder with the highest level first, then the
stakeholder with the next highest level of influence, and so on. The last stakeholder on the
list should be the one with lowest level of influence.
Some argue that the situation should be left as is. Global Chemical
exists to make profits, and as long as the company is not breaking any
laws as it attempts to achieve its profit objectives, it is fulfilling its
primary responsibility to the owners (stockholders). Responsibility lies
with government to change the laws that set pollution levels.
Others feel that Global Chemical should have the responsibility of
investigating ways to limit the level of pollutants, particularly since the
filtering system is old. Given the company’s resources (for example,
engineers, scientists, legal counsel, and so on), the company should
work with local and state governments to help solve the puzzle and limit
the potential harm to community residents.
How has the company taken into account the interests and power of the
key stakeholder groups? Who are the key stakeholder groups? Clearly,
the investors, employees, and local businesses have high levels of
interest in the company’s future direction. From a tax viewpoint, the
38 Strategy Session 5 Viewing Strategy from the Stakeholder
Perspective
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2. In the class role-playing exercise, which group was the most convincing? Explain why.
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Instructions for Stakeholder Group Discussion
Global Chemical Management Team
You are the top management team of Global Chemical charged with developing a
strategy for the company. Time allowed: 5 to 7 minutes.
Æ. xi. 451.
January 2nd.
I went this afternoon, for the second time to-day, to the Soldiers’
Hospital. One of them asked me whether Paris was in Turkey. He
said the Turks were nice. Another asked me whether there wasn’t a
place where it was all water. I described Venice as best I could. On
my way to the hospital I went to the Hôtel Dresden. Metrofan has
been killed. His sister and his wife arrived in tears and in a terrible
state. He was shot by a shell.
January 3rd.
In the hospital a soldier told me two fairy tales; one was about a
wizard, and the other was in octosyllabic verse. It took twenty-five
minutes to tell. When he alluded to the “cloak of darkness” he called
it a “waterproof” cloak.
January 4th.
A cabman who drove me home last night drove me again to-day.
He said it was lucky I had taken him yesterday, because he had not
had another fare; and that he had told his comrades all about it, and
had said he would have been lost had not the Lord sent him a Barine,
and such a Barine too! (I had heavily overpaid him.) I said, “I
suppose you said, ‘God sent you a fool.’” “Oh! Barine, don’t offend
God,” he answered. The cabmen are a constant source of amusement
to me here. The other day, when I was driving, the cabman stopped
and made another one stop to admire his horse. After we drove on
again, we kept on meeting again, and every time we met we slowed
down, and the conversation about the horse and how much it had
cost was continued.
January 5th.
January 6th.
I came back to Moscow on the 10th. I saw the old year out (it is the
Russian New Year’s Eve) with the kind family who live on the floor
above mine, and with whom I always have my meals. They played
Vindt all night. When the New Year came “A happy New Year” was
drunk in champagne.
CHAPTER IX
THE BEGINNING OF THE REACTION
That is, they argue, the motto of the authorities, and that is exactly
the sentiment which arouses the indignation of the citizen. A cabman
asked some one the other day when they were going to punish “him.”
Who is “him”? he was asked. “Admiral Dubassov,” was the answer.
“Surely the Emperor will punish him for shooting at the houses.” The
energetic manner in which the rising was suppressed has, I am told,
produced a good effect in Europe; doubtless energetic measures were
not only necessary but imperative in the first instance; whether the
continuation of them now is a mistake or not only the future can
show. One fact, however, is certain, and that is that these measures
are being conducted with the same arbitrariness which has
characterised the action of the Russian police in the past, and are
causing intense exasperation. There is a word in Russian, “Proisvol,”
which means acting, like Wordsworth’s river, according to your “own
sweet will,” unheedful of, and often in defiance of, the law. It is
precisely this manner of acting which has brought about the
revolution in Russia. It is against the “Proisvol” that all the educated
classes and half the official class rebelled. And it is this very
“Proisvol” against which the whole country rose on strike, which the
Government promised should henceforth disappear, and which is at
the present moment triumphantly installed once more as the ruling
system.
Of course it may be objected that anarchy and lawless revolution
can only be met by severe repression; but the question is: Must it be
met by arbitrary and lawless repression? Hang the insurgents if you
like, but why shoot a doctor who has got nothing to do with it before
you know anything about him? To stop a newspaper like the Russkie
Viedomosti, for instance, is an act of sheer “Proisvol,” the reason
given being that it had subscription lists for workmen’s unions,
which it denies, saying that the money was for the wounded. Here I
point to my second text. All this repression seems to me utterly futile.
The future, however, can show whether this is indeed so.
In the meantime election programmes are appearing. That of the
Constitutional Democrats has come out, and is moderate in tone,
although its clauses are extensive. It insists, among other things, on
universal suffrage and an eight-hours’ day for the workmen. Here I
would point to text 3. Everybody whom I have seen in Russia in any
way connected with the working man is agreed in saying that an
eight-hours’ day is an absolute impossibility. That a Russian
workman’s eight hours means in reality about six hours. That no
factory in Russia could exist on these terms. The Constitutional
Democrats seem in this case to have omitted the factor of human
egoism and interest.
One of the gravest factors of the general situation is that Eastern
Siberia seems to be entirely in the hands of the revolutionaries, who
are apparently managing the railway and everything else with perfect
order, while the troops, anxious only to get home, are taking any
engines they can lay hands on and racing back, one train literally
racing another!
Altogether it cannot be said that the outlook is particularly
cheerful. There is one bright point so far, and that is that all parties
seem anxious to convoke the Duma. The Liberals want it, the
Conservatives want it, the Extreme Radicals sanction the elections.
The Radicals say it will be packed by the Government; but I do not
see how this is possible. They say they will let it meet, and that if it
proves “a Black Hundred Duma” they will destroy it. They call
everything which is not Radical “Black Hundred.” But, as I have said
before, and as I cannot tire of saying, it is useless to blame these
extreme parties for talking nonsense. They have been driven to this
nonsense by the still greater want of sense on the part of the
Government of Russia during the last twenty years, and in wanting to
wipe out this system altogether they are, after all, in the right. Unfair
they may be, hysterical, and absurd. So were the Jacobins; but the
absurdity, extravagance, and violence of the Jacobins were only the
logical result of the “Ancien Régime.” So it is here, although it is
misleading to compare the present movement in Russia with the
French Revolution.
And behind all the rumours and conflicts of various parties looms
the agrarian question; the ninety million peasants who till the land in
the same manner in which they tilled it four hundred years ago;
whose land from generation to generation dwindles by partition,
while the population increases. How and when is this question going
to be solved? It can only be solved by the education of the peasants
themselves; but the question is what can be done to gain time and to
make this education possible. My outlook is, perhaps, too
pessimistic. I do not know. I only feel that the whole revolutionary
movement is beyond all forces of control, and that no measures in
the world can put it back now; whether it could by wisdom be led
into safe channels is another question. Such a thing has seldom been
seen in the history of the world, and it is, after all, only out of the
past that we make the future.
To get rid of these gloomy ideas I went to the hospital, where New
Year’s Day was celebrated with great gusto; there was a Christmas-
tree, dancing and song, and it was delightful to see a little tiny boy
and a huge soldier dancing opposite each other. The Russian
peasants dance to each other, and separately, of course, like
Highlanders when they dance a reel or a schottische. It was gay and
yet rather melancholy; there were so many cripples, and it reminded
me a little of the Christmas feast described in Dostoievski’s “Letters
from a Dead House.”
January 18th.
January 20th.