Dilshan Perera MBA (PIM Sri.J) B.B.Mgt.(Marketing)Spe.(Hons.) Chartered Marketer, Dip. M,MCIM (UK) MSLIM,MIM(SL)

Transcription

1 Principles and Functions of Management Dilshan Perera MBA (PIM Sri.J) B.B.Mgt.(Marketing)Spe.(Hons.) Chartered Marketer, Dip. M,MCIM (UK) MSLIM,MIM(SL) Director Smiles Global Visiting Lecturer / Management & Marketing Consultant/Corporate Trainer

2 Module Contents Management Functions Social Responsibility and Ethical Behavior Environment surrounding a business organization Interacting with stakeholder and use of stakeholder management Porter's Five Force model and its use for assessing the external environment Sources, availability and quality of data for environmental analysis 1 2

3 Learning objective After this lecture participants will be able to identify and undertake PESTLE analysis

4 What is PEST Analysis? It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up from: 1. The internal environment 2. The micro-environment 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors.

5 Similar analysis Other forms of PEST - PESTLE, PESTLIED, STEEPLE and SLEPT: Some people prefer to use different flavors of PEST analysis, using other factors for different situations. The variants are: PESTLE/PESTEL: Political, Economic, Sociological, Technological, Legal, Environmental; PESTLIED: Political, Economic, Social, Technological, Legal, International, Environmental, Demographic; STEEPLE: Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical; and SLEPT: Social, Legal, Economic, Political, Technological

6 PESTLE analysis PESTLE is an analytical tool which considers external factors and helps you to think about their impacts

7 PESTLE analysis Is a useful tool for understanding the big picture of the environment in which you are operating By understanding your environment, you can take advantage of the opportunities and minimize the threats. This provides the context within which more detailed planning can take place to take full advantage of the opportunities that present themselves.

8 The factors in PESTLE analysis P Political The current and potential influences from political pressures E - Economic The local, national and world economic impact S - Sociological The ways in which changes in society affect the project T - Technological How new and emerging technology affects our project / organization L - Legal How local, national and global legislation affects the project E - Environmental Local, national and global environmental issues

9 PESTLE vs. SWOT In contrast to a SWOT, PESTLE encourages you to think about the wider environment and what might be happening now and in the future which will either benefit or be of disadvantage to the organization, individual etc a kind of radar which picks up trends and developments in the external environment which can be used to inform longer term planning and strategy making

10 PESTLE Political: Government type and stability Freedom of the press, rule of law and levels of bureaucracy and corruption Regulation and de-regulation trends Social and employment legislation Tax policy, and trade and tariff controls Environmental and consumer-protection legislation Likely changes in the political environment Economic: Stage of a business cycle Current and projected economic growth, inflation and interest rates Unemployment and supply of labor Labor costs Levels of disposable income and income distribution Impact of globalization Likely impact of technological or other changes on the economy Likely changes in the economic environment

11 PESTLE Sociological: Cultural aspects, health consciousness, population growth rate, age distribution, Organizational culture, attitudes to work, management style, staff attitudes Education, occupations, earning capacity, living standards Ethical issues, diversity, immigration/emigration, ethnic/religious factors Media views, law changes affecting social factors, trends, advertisements, publicity Demographics: age, gender, race, family size Technological: Maturity of technology, competing technological developments, research funding, technology legislation, new discoveries Information technology, internet, global and local communications Technology access, licensing, patents, potential innovation, replacement technology/solutions, inventions, research, intellectual property issues, advances in manufacturing Transportation, energy uses/sources/fuels, associated/dependent technologies, rates of obsolescence, waste removal/recycling

12 PESTLE Legal: current home market legislation, future legislation European/international legislation regulatory bodies and processes environmental regulations, employment law, consumer protection industry-specific regulations, competitive regulations Environmental: Ecological environmental issues, environmental regulations customer values, market values, stakeholder/ investor values management style, staff attitudes, organizational culture, staff engagement

13 Issues of concern The main problem with these external PESTLE factors is that they are continuously changing Therefore PESTLE analysis should include a thorough analysis of what is affecting the organization or a project Now, and what is likely to affect it in the Future The result of a PESTLE analysis is usually a list of positive and negative factors that are likely to affect a project However, by themselves, theses factors they mean very little It is important to bear in mind, that PESTLE analysis requires careful Application of results

14 SUMMARY Political (incl. Legal) Economic Sociocultural Technological Environmental regulations and protection Tax policies International trade regulations and restrictions Contract enforcement law Consumer protection Economic growth Income distribution Government research spending Interest rates & monetary policies Demographics, Population growth rates, Age distribution Industry focus on technological effort Government spending Labor / social mobility New inventions and development Unemployment policy Lifestyle changes Rate of technology transfer Employment laws Taxation Work/career and leisure attitudes Entrepreneurial spirit Government organization / attitude Life cycle and speed of technological obsolescence Exchange rates Education Energy use and costs Competition regulation Inflation rates Fashion, hypes (Changes in) Information Technology Political Stability Stage of the business cycle Health consciousness & welfare, feelings on safety (Changes in) Internet Safety regulations Consumer confidence Living conditions (Changes in) Mobile Technology

15 The Stakeholder Approach to Business, Society and Ethics

16 Learning Objectives Define stake and stakeholder Differentiate between production, managerial, and stakeholder views of the firm Discuss three values of the stakeholder model Consider the concept of stakeholder management Identify the essence of stakeholder management Explain stakeholder management capability (SMC)

17 Stakeholders Stakeholders Individuals and groups with a multitude of interests, expectations, and demands as to what business should provide to society

18 Origins of the Stakeholder Concept What is a stake? An interest or a share in an undertaking and can be categorized as: Interest Right Ownership Legal Moral

19 Origins of the Stakeholder Concept What is a stakeholder? An individual who possesses a stake

20 Who Are Business Stakeholders? Government Employees Business Community Owners Consumers

21 Who Are Business Stakeholders? Production and Managerial Views

22 Who Are Business Stakeholders?

23 Who Are Business Stakeholders? Primary stakeholders are those stakeholders that have a direct stake in the organization and its success Secondary stakeholders are those that have a public or special interest stake in the organization

24 Who Are Business Stakeholders? Core stakeholders are essential to the survival of the firm Strategic stakeholders are vital to the organization and the threats and opportunities the organization faces Environmental stakeholders are all others in the organization's environment

25 Who Are Business Stakeholders? Legitimacy refers to the perceived validity of the stakeholder s claim to a stake Power refers to the ability or capacity of a stakeholder to produce an effect Urgency refers to the degree to which the stakeholder s claim demands immediate attention

26 Who Are Business Stakeholders? 3-14

27 Strategic, Multifiduciary, and Synthesis Views of Stakeholders Strategic approach considers stakeholders primarily as factors managers should manage in pursuit of shareholder profits Multifiduciary approach considers stakeholders as a group to which management has a fiduciary responsibility Synthesis approach considers stakeholders as a group to whom management owes an ethical, but not a fiduciary responsibility

28 Three Values of the Stakeholder Model Descriptive Instrumental Normative

29 Key Questions In Stakeholder Management 1. Who are our stakeholders? 2. What are our stakeholders stakes? 3. What opportunities and challenges do the stakes and stakeholders present? 4. What economic, legal, ethical, and philanthropic responsibilities does our firm have? 5. What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?

30 Key Questions In Stakeholder Management Who are our stakeholders? Management must identify generic stakeholder groups and specific subgroups

31 Key Questions In Stakeholder Management What are our stakeholders stakes? Determine the nature/legitimacy of a group s stakes Determine the power of a group s stakes Determine specific groups within generic groups

32 Key Questions In Stakeholder Management What opportunities and challenges do stakeholders present? Opportunities are to build good productive working relationships with the stakeholders Challenges are representative of how the firm handles the stakeholders

33 Key Questions In Stakeholder Management

34 Key Questions In Stakeholder Management What economic, legal, ethical, and philanthropic responsibilities does our firm have to its stakeholders?

35 Key Questions In Stakeholder Management Stakeholder/Responsibility Matrix Stakeholders Economic Legal Ethical Philanthropic Owners Customers Employees Community Public at large Social Activists Other

36 Key Questions In Stakeholder Management What strategies or actions should our firm take to best manage stakeholder challenges and opportunities? Should we deal directly or indirectly with stakeholders? Should we take the offense or the defense in dealing with stakeholders? Should we accommodate, negotiate, manipulate or resist stakeholder overtures? Should we employ a combination of the above strategies or pursue a singular course of action?

37 Key Questions In Stakeholder Management Types of Stakeholders Stakeholder s Potential for Threat to Organization High Low High Stakeholder s Potential for Cooperation With Organization Low Stakeholder Type 4 Mixed Blessing Strategy: Collaborate Stakeholder Type 3 Nonsupportive Strategy: Defend? Stakeholder Type 1 Supportive Strategy: Involve Stakeholder Type 2 Marginal Strategy: Monitor

38 Effective Stakeholder Management Careful assessment of the five core questions: Who are our stakeholders? What are our stakeholders stakes? What opportunities and challenges do stakeholders present? What economic, legal, ethical, and philanthropic responsibilities does our firm have? What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?

39 Stakeholder Power: Four Gates of Engagement Awareness Knowledge Admiration Action

40 Principles of Stakeholder Management Acknowledge Monitor Listen Communicate Adopt Recognize Work Avoid Acknowledge conflict

41 Principles of Stakeholder Management

42 Thank You!