Who are stakeholders?
As
commerce became more complicated and dynamic, organizations realized they
needed more guidance to ensure their dealings supported the common good and did
not harm others -- and so business ethics was born. In a survey done by MORI
survey 66% of those polled said industry and commerce do not pay enough
attention to their social responsibilities. In a poll in Guardian newspaper in
November 1996, business leaders came only twelfth out of twenty possible moral
role models which people should ―try to
follow‖. However, the scandals of Enron and other organizations have shaken
the faith of people in organization‘s ethical behaviour. Primary social
Stakeholders
1) Local
communities
2) Suppliers
and Business Partners
3) Customers
4) Investors
5) Employees
and Managers Primary non social stakeholders
1) the
natural environment
2) Non human
species
5) Future
Generations Secondary Social Stakeholders
1) Government
and Civil Society
2) Social
and third world pressure groups and unions
3) Media and
communications
4) Trade
bodies
5) Competitors
6) Secondary
Non Social Stakeholder
1) Environmental
pressure groups
2) Animal
welfare pressure groups
Piggy Backing Strategy
The primary
purpose is to subsidize the service program. It is gaining popularity in recent
time. Educational institutes running commercial complexes hospitals
manufacturing ophthalmic implements such as Arvind Eye Hospital are examples of
piggy backing. It is related to cross subsidizing; for example Government of
India proving kerosene at a lower price by charging higher prices for petroleum
products is an example of piggy backing.
Adoptive culture
The key
to a successful organization lies in its ability to move forward with its
current endeavors while always maintaining an initiative to innovate without
hindering that organization's overall operation. Often an organization will
exhaust too many of its resources trying to ―fix‖ things that have gone wrong.
By becoming trapped in this cycle of ―fixing,‖ an organization is no longer
moving forward and progressing. This can lead to serious problems such as
increased turnover, decreased moral and ineffective communication. By
definition, an Adaptive Culture is simply a way of operating where change is
expected and adapting to those changes is smooth, routine and seamless. With an
Adaptive Culture in place, change, growth, and innovation are a
"given" part of the business environment.
Balanced Scorecard
The
balanced scorecard is a strategic planning and management system that is used
extensively in business and industry, government, and nonprofit organizations
worldwide to align business activities to the vision and strategy of the
organization, improve internal and external communications, and monitor
organization performance against strategic goals. It was originated by Drs.
Robert Kaplan (Harvard Business School) and David Norton as a performance
measurement framework that added strategic non-financial performance measures
to traditional financial metrics to give managers and executives a more
'balanced' view of organizational performance. While the phrase balanced
scorecard was coined in the early 1990s, the roots of the this type of approach
are deep, and include the pioneering work of General Electric on performance measurement
reporting in the 1950‘s and the work of French process engineers (who created
the Tableau de Bord – literally, a
"dashboard" of performance measures) in the early part of the 20th
century.
The
balanced scorecard has evolved from its early use as a simple performance measurement framework to a full
strategic planning and management system. The balanced scorecard transforms an
organization‘s strategic plan from an attractive but passive document into the
active plan for implementation for organization on a daily basis. It provides a
framework that not only provides performance measurements, but helps planners
identify what should be done and measured. It enables executives to truly
execute their strategies.
Recognizing
some of the weaknesses and vagueness of previous management approaches, the
balanced scorecard approach provides a clear prescription as to what companies
should measure in order to 'balance' the financial perspective. The balanced
scorecard is a management system (not only a measurement system) that enables
organizations to clarify their vision and strategy and translate them into
action. Kaplan and Norton describe the innovation of the balanced scorecard as
follows:
"The balanced scorecard retains
traditional financial measures. But financial measures tell the story of past
events, an adequate story for industrial age companies for which investments in
long-term capabilities and customer relationships were not critical for
success. These financial measures are inadequate, however, for guiding and
evaluating the journey that information age companies must make to create
future value through investment in customers, suppliers, employees, processes,
technology, and innovation."
Perspectives
The balanced scorecard suggests that we
view the organization from four perspectives, and to develop metrics, collect
data and analyze it relative to each of these perspectives:
The Learning & Growth Perspective
This perspective includes employee
training and corporate cultural attitudes related to both individual and
corporate self-improvement. In a knowledge-worker organization, people -- the
only repository of knowledge -- are the main resource. In the current climate
of rapid technological change, it is becoming necessary for knowledge workers
to be in a continuous learning mode. Metrics can be put into place to guide
managers in focusing training funds where they can help the most. In any case,
learning and growth constitute the essential foundation for success of any
knowledge-worker organization.
Kaplan and Norton emphasize that
'learning' is more than 'training'; it also includes things like mentors and
tutors within the organization, as well as that ease of communication among
workers that allows them to readily get help on a problem when it is needed. It
also includes technological tools; what the Baldrige criteria call "high
performance work systems."
The Business
Process Perspective
This perspective refers to internal
business processes. Metrics based on this perspective allow the managers to
know how well their business is running, and whether its products and services
conform to customer requirements (the mission). These metrics have to be
carefully designed by those who know these processes most intimately; with our unique
missions these are not something that can be developed by outside consultants.
The Customer
Perspective
Recent management philosophy has shown an
increasing realization of the importance of customer focus and customer
satisfaction in any business. These are leading indicators: if customers are
not satisfied, they will eventually find other suppliers that will meet their
needs. Poor performance from this perspective is thus a leading indicator of
future decline, even though the current financial picture may look good.
In developing metrics for satisfaction,
customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are
providing a product or service to those customer groups.
The Financial Perspective
Kaplan and Norton do not disregard the
traditional need for financial data. Timely and accurate funding data will
always be a priority, and managers will do whatever necessary to provide it. In
fact, often there is more than enough handling and processing of financial
data. With the implementation of a corporate database, it is hoped that more of
the processing can be centralized and automated. But the point is that the
current emphasis on financials leads to the "unbalanced" situation
with regard to other perspectives. There is perhaps a need to include
additional financial-related data, such as risk assessment and cost-benefit
data, in this category.
Strategy
Mapping
Strategy maps are communication tools
used to tell a story of how value is created for the organization. They show a
logical, step-by-step connection between strategic objectives (shown as ovals
on the map) in the form of a cause-and-effect chain. Generally speaking,
improving performance in the objectives found in the Learning & Growth
perspective (the bottom row) enables the organization to improve its Internal
Process perspective Objectives (the next row up), which in turn enables the
organization to create desirable results in the Customer and Financial
perspectives (the top two rows).
Business process re-engineering:
It is the
analysis and design of workflows and processes within an organization.
According to Davenport (1990) a business process is a set of logically related
tasks performed to achieve a defined business outcome. Re-engineering is the
basis for many recent developments in management. The cross functional team,
for example, has become popular because of the desire to re-engineer separate
functional tasks into complete cross-functional processes. Also, many
management information systems aim to integrate a wide number of business
functions. Business process re-engineering is also known as business process
redesign, business transformation, or business process change management.
Business process reengineering (BPR) is a
technique to help organizations
to rethink how they do their work in order to dramatically improve
customer service and reduce operational costs, and become world-class
organizations. A key enabler for reengineering has been the continuing development and deployment of
information systems. Leading organizations are becoming bolder in using this
technology tosupport innovative business processes, rather than refining
current ways of doing work. It may be defined as the fundamental rethinking and
radical re-design, made to an organization's existing resources. It is more
than just business improvising.
It is an approach for redesigning the way
work is done to better support the organization‘s mission. Reengineering starts
with a high-level assessment of the organization's mission, strategic goals,
and needs of customer. Basic questions are asked, such as "Does our
mission need to be redefined? Are our strategic goals aligned with our mission?
Who are our customers?" An organization may find that it is operating on
questionable assumptions, particularly in terms of the wants and needs of its
customers. Only after the organization rethinks what it should be doing, does
it go on to decide how best to do it.
Within the frame work of this basic
assessment of mission and goals, reengineering focuses on the organization's
business processes—the steps and procedures that govern how resources are used
to create products and services that meet the needs of customers and markets.
As a structured ordering of work steps across time and place, a
business process can be broken down into specific activities, measured,
modeled, and improved. It
can also be completely redesigned or eliminated altogether. Reengineering
identifies, analyzes, and redesigns an organization's core business processes
with the aim of achieving dramatic improvements in critical performance
measures, such as cost, quality, service, and speed.
Reengineering
recognizes that an organization's business processes are usually fragmented
into sub processes and tasks that are carried out by several specialized functional areas within the
organization. Often, no one is responsible for the overall performance of the
entire process. Reengineering maintains that optimizing the performance of sub
processes can result in some benefits, but cannot yield dramatic improvements
if the process itself is fundamentally inefficient and outmoded.
For that
reason, reengineering focuses on redesigning the process as a whole in order to achieve the greatest
possible benefits to the organization and their customers. This drive for
realizing dramatic improvements by fundamentally rethinking how the
organization's work should be done distinguishes reengineering from process
improvement efforts that focus on functional or incremental improvement.
A marketing
co-operation or marketing
cooperation is a partnership of at least two companies on the value chain
level of marketing with the objective to tap the full potential of a market by
bundling specific competences or resources. Other terms for marketing
co-operation are marketing alliance, marketing partnership, co-marketing, and
cross-marketing. Marketing co-operations are sensible when the marketing goals
of two companies can be combined with a concrete performance measure for the end
consumer. Successful marketing co-operations generate ―win-win-win‖ situations
that offer value not only to both partnering companies but also to their
customers. Marketing co-operations extend the perspective of marketing. While
marketing measures deal with the optimal organization of the relationship
between a company and its existing and potential customers, marketing
co-operations audit to what extent the integration of a partner can contribute
to improving the relationship between companies and customers. In recent years,
marketing co-operations have been increasingly popular between brands and
entertainment properties.
Importance
The importance of marketing co-operations
has significantly increased over the last few years: Companies recognize partnerships
as an effective means for untapping growth potentials they cannot
realize on their own. In the big merger and acquisition wave at the end of the
nineties it became apparent, that co-operations (especially on the value chain level of marketing) often
present a much more flexible approach with a more immediate growth impact than
merging or acquiring entire business entities. Studies show, that companies
recognize the increasing relevance and potential of co-operations.
Objectives
There are
five main objectives of marketing co-operations:
•
Build-up and/or strengthening of brandimage/traffic
by implementing joint or exchange communication measures
•
Access to new markets/customers by directly
addressing the co-operation partner‘s
customers or by using its distribution points
•
Increase of customer loyalty by addressing own customers with value added offerings from the partner - often
useful for community building
•
Reduction of
marketing costs by bundling or exchanging marketing measures
•
Measure the potential value of an intangible asset
through how much consumers
are willing to pay the premium
3M's corporate
site describes the value they see in Joint Marketing:
Joint marketing refers to any situation
where a product is manufactured by one company and distributed by another
company. Both parties invest in commercialization dollars. Joint marketing
differs from a joint venture in that it deals with commercialization and
marketing dollars, rather than equity. The prominence of each logo generally is
relative to its use as a primary or secondary contributor. Joint marketing
differs from third-party relationships because both brands are present on the
product itself. Normally, third-party relationships have both brands on
literature and sales materials, but only the manufacturer is present on the
product.
Forms
Marketing
co-operations can take on many different forms, for instance:
Examples
Examples
of marketing co-operations include:
Apple
Inc. and Nike
Inc. have formed a long term partnership to jointly
develop
and sell ―Nike+iPod‖ products. The "Nike + iPod Sport Kit"
links Nike+ products with Apples MP3-Player iPod nana, so that performance data
such as distance, pace or burned calories can be displayed on the MP3-Player‘s
interface. Diversification strategies are used to expand firms' operations by
adding markets, products,
services, or stages of production to the existing business. The purpose of
diversification is to allow the company to enter lines of business that are
different from current operations. When the new venture is strategically
related to the existing lines of business, it is called concentric
diversification. Conglomerate diversification occurs when there is no common
thread of strategic fit or relationship between the new and old lines of
business; the new and old businesses are unrelated.
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