Lecture 5

Scope of business
organization
 Contents

1. Stakeholders and Corporate responsibility

2. Mission, Vision and Objectives

 1. Stakeholders and
Corporate responsibility
 Scope

What are stakeholders?

 Stakeholders

Stakeholders: anyone with an interest in an

organization and who is affected by and can

affect its performance.

Stakeholders
Map
 Stakeholders’ interest
Types of Stakeholders Possible principle interest

Employees Wage levels; working conditions; job security; personal development

Job security; status; personal power; organizational profitability; growth of the

Managers
organisation

Market value of the investment; dividends; security of investment; liquidity of

Shareholders
investment

Creditors Security of loan; interest on loan; liquidity of investment

Security of contract; regular payment; growth of organisation; market

Suppliers
development

Safe products; environmental sensitivity; equal opportunities; avoidance

Society
of discrimination
 Stakeholder mapping
• It is important to identify stakeholder’s power and attention in order to
understand priorities.

• Power is the ability of individuals or groups to persuade, induce or coerce

others into following certain courses of action

• Stakeholders vary in the attention they pay to the organisation and particular
issues within it. Even powerful stakeholders may not attend closely to
everything.
 Stakeholder mapping
Sources of power
Within Organisations For external Stakeholders
● Hierarchy (formal power), e.g. autocratic decision- ● Control of strategic resources, e.g. materials, labor,
making money
● Influence (informal power), e.g. charismatic ● Involvement in strategy implementation, e.g.
leadership distribution
● Control of strategic resources, e.g. strategic outlets, agents
products ● Possession of knowledge or skills, e.g.
● Possession of knowledge and skills, e.g. computer subcontractors, partners
specialists ● Through internal links, e.g. informal influence
● Control of the human environment, e.g. negotiating
skills
● Involvement in strategy implementation, e.g. by
exercising discretion
 Stakeholder mapping

Indicators of Power
Within Organizations For External stakeholders
● Status ● Status
● Claim on resources ● Resource dependence
● Representation ● Negotiating arrangements
● Symbols ● Symbols
 Stakeholder mapping

Level of attention
Low High

B
A
Keep
Minimal effort
informed
Power

C
D
Keep
Key Players
Satisfied
High
 Activities

• Discussion:

Stakeholder mapping of BTEC FPT.

 Stakeholders

Legal structure and Size impact on types of Stakeholders and how

their interest are represented.
E.g.
• Sole trader, Partnership and smaller private companies: objectives
set by the owners
• Larger companies: objectives set by controllers (small group of
owners)
 Scope

What is Corporate
Responsibility?
 Corporate Responsibility

• Meet the needs of Owners

• Do not harm to Society (Corporate social
responsibility)
 Corporate Social responsibilities
(CSR)

• Corporate social responsibility means that a corporation

should be held accountable for any of its actions that affect
people, their communities and their environment.

• A balance between corporate benefits and cost of achieving the

benefits

• Here is one example: How eco-tourism help save the ocean

 Corporate Social responsibilities
(CSR)

The social responsibility of an organization may be

defined as the obligations has towards the people and
the environment in which the company operate.
 Benefits of CSR

• Competitive advantages

• Difficult to imitate

• Reputation

• Sustainable development
 Different types of responsibilities

Duty or obligation in order to indicate that they oblige us in the

strictest sense, is the responsibility not to cause harm to others.

To prevent harm even in those cases where one is not the

cause.

To do good (Volunteer and charitable work)

 Corporate social
responsibility

• CSR concern: business culture at present still largely driven by short term profit
and ignore the long term consequences
• Environment is one of the biggest concern
• Bad practice of CSR in Vietnam:
❖ 2016 Vietnam marine life disaster
❖ Sand Mafia
❖ Selling low quality gasoline
❖ The excessive use of pesticide in Son La
❖ Unethical practice in food processing
2. Mission, Vision and
Objectives
Difference between Mission,

Vision and Objectives?

 Vision, Mission and Objectives

• Mission statement
– Outlining the specific role that the organization plans to fulfill over the long term.

• Vision statement
– Setting out the strategic intentions

– Can take many forms

• Objectives
– Setting out more specifically the goals of the organization, the aims to be achieved
and the desired results.

– Primary and secondary objectives

23
Example of
Vision,
Mission
Example of
Vision,
Mission
How are objectives?
 Corporate objectives

1. ECONOMIC objectives: 2. SOCIAL objectives

– Profit maximization
= Responsibilities of
– Product development
organization
– Diversification

– Brand name
 Corporate objectives

• Trade-off between objectives

– Some objectives might be achieved at the expense
of others
 Vision, Mission and Objectives

Measuring Objectives?
 Measuring objectives ?

The balanced scorecard: (Thẻ điểm cân bằng)

• Set of measures that gives top managers a fast but comprehensive view of the
business
• Helping managers to look at business from four perspectives
– Financial perspectives
– Customer perspective
– Internal business processes
– Innovation and learning
http://quantri.vn/dict/details/9806-dinh-nghia-khai-niem-the-diem-can-bang-bsc---balance-scorecard
Example of
Balanced
scorecard
THE END