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Strategic Management

1. Differentiate between company philosophy and public image. In your opinion, should organizations address either or both of these in a mission statement? Why or why not.

2. Compare and contrast the three fundamental ethical approaches managers should consider, when adopting a philosophical approach to ethics. Offer your opinion as to why consistency is the most critical quality of ethical decision making.

3. Compare and contrast the factors that determine powerful suppliers and powerful buyers. As a manager, would you least prefer having to deal with the loss of profits brought on my powerful suppliers or powerful buyers? Explain your answer.

4. Differentiate between multi-domestic and global industry. Justify why strategic management planning should be global.

5. Describe the elements of SWOT analysis and its limitations. As a manager, would SWOT analysis be of any value to your firm, in conducting a strategic analysis? Why or why not?

6. Summarize both the benefits and risks of strategic management. Knowing that there are risks involved, justify a manager's decision to employ strategic planning.

Please help me with these questions. I need some news ideas and insights. Thank you.

Solution Preview

Please see response below, as well as two supporting examples.

RESPONSE:

1. Differentiate between company philosophy and public image. In your opinion, should organizations address either or both of these in a mission statement? Why or why not.

The definition of philosophy is a difficult matter and indeed many definitions of philosophy begin by stating that it is famously difficult (http://en.wikipedia.org/wiki/Definition_of_philosophy). However, philosophy is the knowledge and beliefs of the persons or company on every aspect of business. So, the company philosophy is the beliefs and knowledge it has, including the philosophy about the purpose of company, which is written into a mission statement. So, a mission statement is the stated philosophy of the company in terms of the purpose of the company. Although there is no consensus on the definition of either philosophy or mission statement, with varying definitions of what constitutes a 'good' mission statement (or its chief purpose), a mission statement is definitely part of the company's philosophy about who, what and how the company plans to do business.

Conversely, public image is how the public views the company. What image does the company portray to the public and how? Openness, competence, presence and neutrality as an independent third party determine the company's actions and shape a company's public image. However, the mission statement also portrays a public image. That is one of the roles of the mission statement, to portray a positive company image to gain trust from the public. Said another way, the mission statement is an essential tool to guide a team of individuals in their work for a public trust. Teamwork takes consensus on general goals first (the mission); within this general consensus they can then plan and monitor the activities and services of the organization. Thus, company philosophy written into the mission statement functions as a public image tool as well. This is one way to look at the links between company philosophy and public image as they relate to the mission statement. The company philosophy written into the mission statement serves to build trust and a good public image. However, it is not to be confused with the mission statement and company philosophy itself.

Much is said about the importance of mission statements, explaining how drafting a mission statement should be a top priority for just about any organization. You here things like, it will impress your funders, focus your programs, improve your staff morale, and cure your rheumatism. These are other functions served by the mission statement, which include one of public image. Most would agree (not all though) that a mission statement has definite value in having a mission statement that reflects your company's philosophy to the public to gain their trust. In fact, mission statements are often described as articulating the most fundamental commitments of an organization, but in the next breath, they are described in a way as to impress funders e.g., public image -- a slogan for t-shirts and coffee mugs. It is often argued that these two purposes are at not compatible.

It seems that company philosophy is used to write the mission statement, which is also aimed at building public trust, which is linked to public image; so promoting public image is one purpose of the mission statement, but it not to be confused with the mission statement itself, which reflects the company philosophy on purpose and commitment to fill that purpose. Indeed, the mission statement must also be accompanied by a vision, a plan and true commitment to mission/vision focused decision making at all levels of the organization, otherwise it is indeed just words on paper. A mission statement is only one component and by no means a magic bullet. It often implies, however, that knowing where you're going is equivalent to crafting and approving a concise paragraph explaining where you're going in often very abstract and general terms. However, taken together, the mission statement is one component, the company's philosophy about its chief purpose and goals of the organization, which clearly serves several functions, including promoting trust and a positive public image.

Is this close to your view?

2. Compare and contrast the three fundamental ethical approaches managers should consider, when adopting a philosophical approach to ethics. Offer your opinion as to why consistency is the most critical quality of ethical decision-making.

Factors affecting the ethical standards and conduct of organizations are many: the manager (i.e., family needs, ego strengths, religious background and personal needs, self-confidence, independence, leadership style, to name a few); the level of moral development, the organization (i.e., explicit rules, reward system, degree of caring for employees, selection system, emphasis on legal and professional standards, leadership, corporate decision process). Each method has some validity in certain situations.

There are many different approaches. Let's consider the utilitarian, the justice and individual approach to ethics, through discussion and examples are attached.

1. Utilitarian Approach

Ethical criteria for this approach are that moral behaviors that support the greatest good for the greatest number. This is then the right action, based on the consequences. It is often considered a consequential ethical model.

Indeed, the principle of utilitarianism can be traced to the writings of Jeremy Bentham, who lived in England during the seventeenth and eighteenth centuries. Bentham, a legal reformer, sought an objective basis that would provide a publicly acceptable norm for determining what kinds of laws England should enact. He believed that the most promising way of reaching such an agreement was to choose that policy that would bring about the greatest net benefits to society once the harms had been taken into account. His motto, a familiar one now, was "the greatest good for the greatest number." To analyze an issue using the utilitarian approach:

· First, the manager needs to identify the various courses of action available to her or him.
· Second, the managers needs to ask who will be affected by each action and what benefits or harms will be derived from each.
· And third, the manager chooses the action that will produce the greatest benefits and the least harm. (Source: http://www.scu.edu/ethics/practicing/decision/thinking.html).

In other words, decision-making would:

1. Focuses on the consequences that actions or policies have on the well-being ("utility") of all persons directly or indirectly affected by the action or policy.

2. The principle states: "Of any two actions, the more ethical one will produce the greatest balance of benefits over harms." (http://www.ee.scu.edu/eefac/healy/approach.html),

For an illustrative example, see attached example.

2. The Fairness or Justice Approach

The fairness or justice approach to ethics began with the teachings of the ancient Greek philosopher Aristotle. He o said that "equals should be treated equally and unequals unequally." The basic moral/ethical question in this approach is: How fair is an action? Does it treat everyone in the same way, or does it show favoritism and discrimination? Favoritism gives benefits to some people without a justifiable reason for singling them out; discrimination imposes burdens on people who are no different from those on whom burdens are not imposed. Both favoritism and discrimination are unjust and wrong.

The criterion to judge whether an action is morally right or morally wrong are fairness, justice, and impartiality.

1). Focuses on how fairly or unfairly our actions distribute benefits and burdens among the members of a group.

2). Benefits and burdens may be distributed based on ...

Solution Summary

This solution responds to the six question related to various aspects of strategic management e.g. company philosophy, public image, mission, powerful suppliers and powerful buyers, multi-domestic and global industry, SWOT analysis and its limitations, the benefits and risks of strategic management, etc. Supplemented with articles on the role of ethics in management.

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