Week 10

CSR strategy and leadership

“After the genocide in Rwanda the situation was awful. There was also no infrastructure to get to the people in

need. And so there were United Nations convoys that just couldn’t get through. This delegation literally just sat there on the road for hours going nowhere. By the time

they finally reached their destination, they discovered that Coke had already been there for two weeks

distributing what they needed. What a fascinating thing – Coke got there before the UN. It shows you just how

powerful the global market is and this brand in particular… I suppose if Microsoft needs to be there,

they’ll be there too.”

NGO administrator

I discern two sorts of inequality in the human species: the first I call natural or physical…. ; the second we might call moral or political inequality because it derives from a sort of convention, and is established, or at least authorised, by the consent of men. This latter inequality consists of the different privileges which some enjoy to the prejudice of others….

Rousseau (1755) - A Discourse on Inequality

Definitions of power

Power is the capacity to affect organisational outcomes Mintzberg

Power is that which enables A to modify the attitudes or behaviour of B Handy

The concept of economic growth

shareholder value predicated in growth growth of the firm:

market share competition

growth in the market globalisation market development product development

Sustainability of growth

maintaining supply / demand equilibrium unpredictability of demand supply of raw materials finiteness of demand

Demand creation

demand creation through: market development product development replacements fashion

costs of demand creation: R & D marketing effects upon supply curve

Goal Congruence

alignment of goals for mutual benefit goals of organisation goals of individual divergence = sub-optimality convergence = optimal performance

Organisational goals

profit maximisation cash flow return on capital employed growth quality long term stability survival satisficing

Managerial goals

rewards financial non - financial

status recognition security promotion

..being the managers of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they ... consider attention to small matters as not for their master's honour and very easily give themselves a dispensation from having it.

Adam Smith – The Wealth of Nations

Operational control

business planning and budgeting reporting system measuring performance correction of deviations feedback

Managerial involvement in the control system

setting of targets taking action to achieve plan receiving rewards for performance

Individual behaviour

“Every managerial decision has behavioural consequences. Successful management depends upon the ability to predict and control human behaviour” McGregor

Theory X people dislike work

Theory Y people are conscientious

Styles of leadership

authoritarian laissez - faire democratic variables

follower leader situation

Individual behaviour

“Every managerial decision has behavioural consequences. Successful management depends upon the ability to predict and control human behaviour” McGregor

Theory X people dislike work

Theory Y people are conscientious

Criteria for an interesting job

demanding but with variety allow learning decision making and responsibility increased understanding meaningful relationship with outside life promise of a desirable future

Emery & Thorsrud (1963)

Motivation Theory

Expectancy Theory Lawler

Two Factor Theory hygiene factors motivators Herzberg

Equity Theory Adams

The Hawthorne Studies

Goal Congruence

goals of organisation goals of individual divergence = sub-optimality convergence = optimal performance

Organisational goals

profit maximisation cash flow return on capital employed growth quality long term stability survival satisficing

Managerial goals

rewards financial non - financial

status recognition security promotion

Risk and rewards

bounded rationality environmental uncertainty short term focus risk minimisation managerial objectives v corporate objectives

Feedback

timeliness relevance meaningfulness accuracy communication rewards

Legitimating decisions

decisions made by individuals / groups decisions implemented by organisations transfer of decision ownership rational basis for decisions empowerment of decision makers through expertise

Governance

The exercise of political authority and the use of institutional resources to manage society's problems and affairs World Bank

Inter-state negotiation Global governance?

The principles of governance

Transparency Rule of Law Participation Responsiveness Equity Efficiency & Effectiveness Sustainability Accountability

Corporate governance

Good governance = Good performance Sustainability Social responsibility

Principles of corporate governance

Transparency Accountability Responsibility Fairness