Professional Documents
Culture Documents
Organisational Purpose
Organisational Purpose
OVERVIEW OF SESSION
PART 1
PART 2
Coursework assignment
Case study RS Chemicals
PART 1
THE COMPANYS MAIN PURPOSE IS
PROFIT MAXIMISATION ???
Profit maximisation is fundamental
STRATEGIC PLANNING:
SOME DEFINITIONS RE-VISITED
Mission
Strategies
Programmes
Action plans
2. DEVELOPING A STRATEGIC
VISION FOR THE FUTURE:
MISSION AND OBJECTIVES
Corporate Values
Underlying, core enduring principles that guide
strategy & operations
would these values change with circumstances? If
no, then these are core & enduring
Foresight
Breadth
Uniqueness
Consensus
Actionability
Hamel & Prahalad, Competing for the future, 1994
VISION STATEMENTS
SHELL:
to engage efficiently, responsibly and
profitably in oil, oil products, gas, chemicals
and other selected businesses
McDonalds:
to be the worlds best quick-service
restaurant chain
OBJECTIVES:
WHAT IS TO BE ACHIEVED AND WHEN
2 types:
Financial objectives
Business (strategic) objectives
Objectives at different levels
Corporate
Business unit (SBU)
Functional
S
M
A
R
T
Specific
Measurable
Attainable
Result orientation
Time constrained
FINANCIAL OBJECTIVES
A common objective in the last few years:
Operating Cash Flow
Free Cash Flow
Operating Cash Flow less Capex (Capital
Investment)
BUSINESS OBJECTIVES
Portfolio of activities
Position in sectors
Sustainable competitive advantage
Technology stance
Human resources
Ownership /dividend policy
BUSINESS ETHICS
What are ethics?
Conception of right or wrong conduct
Underpin the ethos and the value of the enterprise
Guides to moral behaviour; what is morally acceptable or
unacceptable
BUSINESS ETHICS:
STANDARDS AND CONDUCT
Why does it matter?
BUSINESS ETHICS
Ethically and socially responsible behaviour
5. CORPORATE GOVERNANCE
AND THE PURPOSE OF THE
ORGANISATION
CORPORATE GOVERNANCE:
RESPONSIBLE USE OF POWER
2 main areas:
selection & conduct of senior management
their relationships with owners, employees &
other stakeholders
Japan
Top management fill the board
Monitoring by banks
cross-shareholdings and contracts
majority stakes in industry
SHAREHOLDER OR STAKEHOLDER?
How does a shareholder differ from a stakeholder?
Shareholders
Investors share financially
in success
Stakeholders
Individuals or groups with
interests
Shareholders are stakeholders
STAKEHOLDERS:
INDIVIDUALS & GROUPS WITH AN
INTEREST
CONTRACTUAL
Shareholders
Managers
Employees
Customers
Distributors
Suppliers
Financial institutions
COMMUNITY
Consumers
Regulators
Government
Pressure groups
The media
Local communities
SHAREHOLDER OR STAKEHOLDER?
DIFFERENT APPROACHES
US, UK more profit-focused
Priority: shareholders interests
Legal obligation
Smoothing earnings & dividend growth
SHAREHOLDER OR STAKEHOLDER?
DIFFERENT APPROACHES
Problems with maximising shareholder value:
Short-term perspective, not building for l/t
Financial manipulation (Enron)
Inadequate emphasis given to risk (bank lending)
BREAK!!!
Touching on Culture
Coursework Assignment
Case study and questions now available on
Study Direct
2000 words (+/- 10%) in essay style
Submission by 16:00 hrs on Monday of
Week 8 (i.e. 9th March 2015)
Questions to tutors in first instance, after
that generic questions via the Forum