MANAGEMENT CHAPTER 16-18
Public opinion demanding that firms conduct
CHAPTER 16
BUSINESS ETHICS/SOCIAL
RESPONSIBILITY/ENVIRONMENTAL SUSTAINABILITY
Environmental Sustainability
 Employees, consumers, governments, and
society are especially resentful of firms that
harm rather than protect the natural
environment.
 Conversely people today are especially
appreciative of firms that conduct operations in
a way that mends, conserves, and preserves the
Be Proactive, Not Reactive
natural environment
 According to the International Standards
Organization (ISO), the word environment is
defined as “surroundings in which an
organization operates, including air, water,
land, natural resources, flora, fauna, humans,
and their interrelation.”
ISO 14000/14001 Certification
What Is a Sustainability Report?
 Wal-Mart Stores is one among many companies
today that annually provides a sustainability
report that reveals how the firm’s operations
impact the natural environment.
 This document discloses to shareholders
information about Wal-Mart’s firm’s labor
practices, product sourcing, energy efficiency,
environmental impact, and business ethics
practices.
Lack of Standards Changing
 Uniform standards defining environmentally
Major Requirements of an EMS
responsible company actions are rapidly being
incorporated into our legal landscape.
 It has become more and more difficult for firms
to make “green” claims when their actions are
not substantive, comprehensive, or even true.
Managing Environmental Affairs in the Firm
Environmental strategies can include:
- developing or acquiring green businesses
- divesting or altering environment-damaging
businesses
- striving to become a low-cost producer through
waste minimization and energy conservation
- pursuing a differentiation strategy through
green-product features
Reasons Why Firms Should “Be Green”
1. Consumer demand for environmentally safe
products and packages is high.
2.
business in ways that preserve the natural
environment is strong.
3. Environmental advocacy groups now have over
20 million Americans as members.
4. Federal and state environmental regulations are
changing rapidly and becoming more complex.
5. More lenders are examining the environmental
liabilities of businesses seeking loans.
6. Many consumers, suppliers, distributors, and
investors shun doing business with
environmentally weak firms.
7. Liability suits and fines against firms having
environmental problems are on the rise.
- A proactive policy views environmental
pressures as opportunities and includes such
actions as developing green products and
packages, conserving energy, reducing waste,
recycling, and creating a corporate culture that
is environmentally sensitive.
- The ISO 14000 family of standards concerns the
extent to which a firm minimizes harmful
effects on the environment caused by its
activities and continually monitors and
improves its own environmental performance.
- ISO 14001 is a set of standards adopted by
thousands of firms worldwide to certify to their
constituencies that they are conducting
business in an environmentally friendly manner
- Results in an environmental management
system
 Show commitments to prevention of pollution,
continual improvement in overall
environmental performance, and compliance
with all applicable statutory and regulatory
requirements.
 Identify all aspects of the organization’s
activities, products, and services that could
have a significant impact on the environment,
including those that are not regulated.
 Set performance objectives and targets for the
management system that link back to three
policies: (1) prevention of pollution, (2)
continual improvement, and (3) compliance.
 Meet environmental objectives that include
training employees, establishing work
instructions and practices, and establishing the
actual metrics by which the objectives and
targets will be measured.
 Conduct an audit operation of the EMS
  Take corrective actions when deviations from 8. Power and prestige in domestic markets may be
the EMS occur significantly enhanced

Potential disadvantages of international operations:

CHAPTER 17 1. Foreign operations could be seized

GLOBAL/INTERNATIONAL ISSUES 2. different and often little-understood social,

cultural, demographic, environmental, political,
governmental, legal, technological, economic,
Multinational Organizations and competitive forces

• Organizations that conduct business operations 3. Weaknesses of competitors overestimated

across national borders are called international
4. Language, culture, and value systems differ
firms or multinational corporations.
among countries
• The process is more complex for international
5. understanding of regional organizations
firms due to more variables and relationships.
6. Dealing with two or more monetary systems
• More time and effort are required to identify
and evaluate external trends and events in
multinational corporations than in domestic
The Global Challenge
corporations.
• How to gain and maintain exports to other
• Multinational corporations (MNCs) face unique
nations
and diverse risks, such as expropriation of
International firms or multinational • How to defend domestic markets against
corporations face many complex variables: imported goods
• International firms or multinational
corporations face many complex variables:
Changes in the Global Economy
- Social
• Corporations are obtaining customers globally
- Cultural
• Markets are shifting rapidly and converging in
- Demographic tastes, trends, and prices
- Environmental • Innovative transport systems are accelerating
transfer of technology
- Political
• Nature and location of production systems are
- Governmental
shifting
- Legal

- Technological
Protectionism
- Competitive Opportunities and threats
Countries imposing tariffs, taxes, and regulations on
firms outside the country to favor their own companies
and people.
Advantages and Disadvantages of International

Operations
Globalization
Potential advantages of international operations:
-A process of doing business worldwide
1. Gain new customers
Global Strategy includes:
2. Absorb excess capacity, reduce unit costs, and
spread economic risks  Design

3. Allow firms to establish low-cost production  Production

facilities
 Marketing
4. Competition may be less intense

5. reduced tariffs, lower taxes, and favorable

A Weak Economy
political treatment
• Recession
6. Joint ventures can enable firms to learn the
technology, culture, and business practices - two consecutive quarters o a decline in real
gross domestic product
7. Economies of scale
 • Many countries have recently experienced a
recession
• Unemployment rates are high around the world
Cultural Differences
 Time
 Space
 Family roles
 Religious factors
 Family time
 Values
 Eating
 Rules of etiquette
 Importance of relationships
European Business Cultures
 Participatory management
 Most workers are unionized
 More frequent vacations and holidays
 Guaranteed permanent employment common
 Workers often resent pay for performance,
commissions, and objective measurement and
reward systems
Asian Business Cultures
 First names are not generally used in business
 Extended periods of silence are important
 A sale is the beginning, not the end of a
relationship
 Resting, listening, meditating, and thinking are
considered productive
Mexican Business Cultures
 Low tolerance for adversarial relations or
friction at work
 Employers are paternalistic
 Workers do not expect self-expression or
initiative at work
 Business stress collectivism, continuity,
cooperation, belongingness, formality, and
doing exactly what you are told
 Rarely entertain business associates at homes
 Preserving one’s honor, saving face, and looking
important are valued
 Opinions expressed by employees are often
regarded as back talk
 Supervisors are viewed as weak if they explain
the rationale for the orders to workers
 Mexicans often do not follow rules
 Life is slower in Mexico, tardiness is common
Japanese Business Cultures
 Importance of group loyalty and consensus
called “Wa”
 Constant discussion and compromise
 Silence is a plus in formal meetings
 When confronted with disturbing questions,
managers often remain silent
 Managers are reserved, quiet, distant,
introspective, and other oriented
Communication Differences Across Cultures
 Italians, Germans, and French do not soften up
executives with praise before a criticism
 Israelis are accustomed to fast paced meetings
 British executives complain that Americans
chatter too much
 Europeans feel that they are being treated like
children when asked to wear nametags
 Executives in India are used to interrupting each
other
 In Malaysia and Japan periods of silence are
appropriate, no silence is needed in Israel
 “How was your weekend?” is considered
intrusive by many business people
Worldwide Tax Rates
 Europe ---------------------------------------------- 26%
 Asia-Pacific Region ------------------------------- 30%
 US and Japan -------------------------------------- 38%
 Ireland and Former Soviet-Bloc nations near 0%
 Germany -------------------------------------------- 30%
 Great Britain --------------------------------------- 28%
 France –---------------------------------------------- 27%
Joint Ventures in India
 Debt is 80% of GDP
 Gap between rich and poor widening
 Middle class is growing
  Join ventures are mandatory for foreign
companies doing business of India
 Foreign firms restricted to 74% ownership of
India-based firms
 Most joint ventures in India fail
CHAPTER 18
HOW TO PREPARE AND PRESENT A CASE ANALYSIS
Purpose
The purpose of this section is to help you analyze
strategic-management cases. Guidelines for preparing
written and oral case analyses are given, and
suggestions for preparing cases for class discussion are
presented. Steps to follow in preparing case analyses
are provided. Guidelines for making an oral
presentation are described.
What Is a Strategic-Management Case?
Describes an organization’s external and internal
conditions and raises issues concerning the firm’s
mission, strategies, objectives, and policies.
Most of the information in a business policy case is
established fact, but some information may be opinions,
judgments, and beliefs. Strategic-management cases
are more comprehensive than those you may have
studied in other courses. They generally include a
description of related management, marketing,
finance/accounting, production/operations, R&D,
computer information systems, and natural
environment issues.
Guidelines for Preparing Case Analyses
The Need for Practicality
 Do what strategists do every day—make
reasonable assumptions about unknowns
 Clearly state assumptions
 Perform appropriate analyses
 Make decisions
Be practical. For example, in performing a projected
financial analysis, make reasonable assumptions,
appropriately state them, and proceed to show what
impact your recommendations are expected to have on
the organization’s financial position. Avoid saying, “I
don’t have enough information.” You can always
supplement the information provided in a case with
Internet and library research.
The Need for Justification
 The most important part of analyzing cases is
not what strategies you recommend but rather
how you support your decisions and how you
propose that they be implemented.
 There is no single best solution or one right
answer to a case, so give ample justification for
your recommendations.
The Need for Realism
 Avoid recommending a course of action beyond
an organization’s means.
The Need for Specificity
 Do not make broad generalizations such as “The
company should pursue a market penetration
strategy.” Be specific by telling what, why,
when, how, where, and who.
Failure to use specifics is the single major shortcoming
of most oral and written case analyses.
The Need for Originality
 Do not necessarily recommend the course of
action that the firm plans to take or actually
undertook, even if those actions resulted in
improved revenues and earnings.
 Compare and contrast what you recommend
versus what the company plans to do or did.
Support your position with charts, graphs, ratios,
analyses, and the like—not a revelation from the library.
You can become a good strategist by thinking through
situations, making management assessments, and
proposing plans yourself. Be original.
The Need to Contribute
 Strategy formulation, implementation, and
evaluation decisions are commonly made by a
group of individuals rather than by a single
person.
 Therefore, your professor may divide the class
into three- or four-person teams and ask you to
prepare written or oral case analyses.
Be a good listener and a good contributor.
Preparing a Case for Class Discussion
The Case Method versus Lecture Approach
 The case method involves a classroom situation
in which students do most of the talking; your
professor facilitates discussion by asking
questions and encouraging student interaction
regarding ideas, analyses, and
recommendations.
The case method of teaching is radically different from
the traditional lecture approach, in which little or no
preparation is needed by students before class.
The Cross-Examination
 Apply strategic-management concepts and too
 Seek defensible arguments and positions
 Support opinions and judgments with facts,
reasons, and evidence
 Crunch the numbers before class
 Be willing to describe your recommendations
 Respect the ideas of others but be willing to go
against the majority opinion
Cross-examination discussions commonly arise, just as
they occur in a real business organization. Avoid being a
silent observer.
Preparing a Written Case Analysis
The Executive Summary
(1) To identify and evaluate the organization’s
existing mission, objectives, and strategies; or
(2) To propose and defend specific
recommendations for the company; or
(3) To develop an industry analysis by describing
the competitors, products, selling techniques,
and market conditions in a given industry.
The Comprehensive Written Analysis
• When preparing, picture yourself as a
consultant.
• Prepare exhibits to support your
recommendations.
• Highlight exhibits with some discussion in the
paper.
Comprehensive written analyses are usually about 10
pages in length, plus exhibits.
Steps in Preparing a Comprehensive Written
Analysis
Step 1 Identify the firm’s existing vision, mission,
objectives, and strategies.
Step 2 Develop vision and mission statements for the
organization.
Step 3 Identify the organization’s external opportunities
and threats.
Step 4 Construct a Competitive Profile Matrix (CPM).
Step 5 Construct an External Factor Evaluation (EFE)
Matrix.
Step 6 Identify the organization’s internal strengths and
weaknesses.
Step 7 Construct an Internal Factor Evaluation (IFE)
Matrix.
Step 8 Prepare a Strengths-Weaknesses-Opportunities-
Threats (SWOT) Matrix, Strategic Position and Action
Evaluation (SPACE) Matrix, Boston Consulting Group
(BCG) Matrix, Internal-External (IE) Matrix, Grand
Strategy Matrix, and Quantitative Strategic Planning
Matrix (QSPM) as appropriate. Give advantages and
disadvantages of alternative strategies.
Step 9 Recommend specific strategies and long-term
objectives. Show how much your recommendations will
cost. Clearly itemize these costs for each projected year.
Compare your recommendations to actual strategies
planned by the company.
Step 10 Specify how your recommendations can be
implemented and what results you can expect. Prepare
forecasted ratios and projected financial statements.
Present a timetable or agenda for action.
Step 11 Recommend specific annual objectives and
policies.
Step 12 Recommend procedures for strategy review
and evaluation.
Making an Oral Presentation
- Two parts
1. Content and
2. Delivery
Content refers to the quality, quantity, correctness, and
appropriateness of analyses presented, including such
dimensions as logical flow through the presentation,
coverage of major issues, use of specifics, avoidance of
generalities, absence of mistakes, and feasibility of
recommendations. Delivery includes such dimensions as
audience attentiveness, clarity of visual aids,
appropriate dress persuasiveness of arguments, tone of
voice, eye contact, and posture.
Organizing the Presentation
• Begin by introducing yourself and giving a clear
outline of topics to be covered
• Capture your audience’s interest and attention
(display products by telling interesting sort
story/experience/ develop or obtain a video
show).
Controlling Your Voice
• 100 to 125 words per minute
• Avoid a monotone by placing emphasis on
different words or sentences
• Speak loudly and clearly, but don’t shout
• Stop at the end of each sentence
Managing Body Language
• Be sure not to fold your arms, lean on the
podium, put your hands in your pockets, or put
your hands behind you
 • Keep a straight posture

• Do not turn your back to the audience

• Maintain good eye contact throughout the

presentation

• Use humor and smiles

Speaking from Notes

• Be sure not to read to your audience because

reading puts people to sleep.

Constructing Visual Aids

• Make sure your visual aids are legible to

individuals in the back of the room.

Answering Questions

• It is best to field questions at the end of your

presentation, rather than during the
presentation itself.

Tips for Success in Case Analysis

Two basic sections:

(1) Content Tips- relate especially to the content of

your case analysis

(2) Process Tips- relate mostly to the process that

you and your group mates undergo in preparing
and delivering your case analysis/presentation.