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• Do you believe American President Donald Trump mean when he says:
Small Group Discussion
I will build a great wall – and nobody
builds walls better than me, believe me –
and I’ll build them very inexpensively.
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Small Group Challenge Canberra, Australia 2014
In groups, prepare a response for Simon to the media criticism.
Simon Hollingsworth, head of the Australian Sports Commission, has a problem. A division of the Commission, the Australian Institute of Sport has spent $500,000 of taxpayer’s money on the design of a new logo:
The AIS now is being heavily criticised in the media for wasting money on ‘five little squiggly lines’.
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Resource allocation
• Most large organisations have formalised budgeting processes that allocate resources across their business units on a yearly basis.
• These budgeting processes must address the overall issue of how resources are allocated to deal with various stakeholder groups.
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Prioritised hierarchies
• Stakeholder groups should be ranked in terms of relative importance to the organisation and its strategic objectives.
• Resources should then be allocated to each stakeholder group in terms roughly equal to their importance, otherwise the system will be inherently biased towards current allocations.
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Rational allocation
• The strategic part of the budget should be separated from the operating part to give clarity and urgency to new strategic programs.
• Otherwise, business unit managers will seek to protect their current resource allocations and new strategic programs will be overlooked.
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Forms of allocation
Resources for new strategic programs can be allocated by:
• Restructuring the organisation
• Building teams and taskforces to manage particular projects
• Sourcing new people and creating new business units
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• What does American systems scientist Peter Senge mean when he says:
Small Group Discussion
Collaboration is vital to sustain what we
call profound or really deep change,
because without it, organisations are
just overwhelmed by the forces of the
status quo.
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Small Group Challenge Martha’s Vineyard, US 1974
Steven Spielberg has problems. There are rumours the 26 year old’s career as a filmmaker is over. His current movie Jaws is 100 days over schedule and $5 million over budget. The script is still incomplete, the mechanical sharks do not work, and filming on the open ocean is proving impossible. The cast and crew are miserable and exhausted from being ravaged, sunburned, and windblown day after day.
The disillusioned production team begrudgingly prepare to shoot a scene where the great white shark launches itself out of the water and becomes visible to the audience for the first time in the movie. It is a crucial moment in the film and Steven understands he will need a great deal of commitment from the cast and crew to make it work.
In groups, offer Steven at least two suggestions to gain commitment from the cast and crew of Jaws.
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Gaining commitment
• A second major issue in implementing strategic programs for stakeholders is how to ensure commitment to the program from the business units involved and the managers responsible for carrying out the program.
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Participation
• An important advantage of strategic management systems is the opportunity they afford for participation in understanding and running the affairs of the organisation.
• The more participation in the creation of strategic programs for stakeholders, the more likely the commitment to implementing the programs.
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Incentives
• It is pointless to hope that managers carefully take stakeholder concerns into account when implementing strategies, and reward them on another basis altogether.
• Reward systems need not be confined to monetary rewards and can include recognition and promotion.
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Shared values
• Each new strategic program must be checked to see if it requires behaviours which will run counter to the accepted “winning behaviours” of the organisation.
• Managers with a yearly bonus dependant on meeting profit commitments are unlikely to divert resources to any new initiatives.
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• Do you agree with English poet Thomas Gray when he says:
Small Group Discussion
Ignorance is bliss.
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Small Group Challenge The Hague, Netherlands 1960
Frank McFadzean, managing director of multinational oil and gas company Shell, has a problem. Five nations – Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela – have formed an intergovernmental organisation in Baghdad. They are calling themselves the Organisation of the Petroleum Exporting Countries (OPEC). Their stated mission includes the coordination and unification of petroleum policies of member countries to ensure the stabilisation of oil markets.
Frank understands OPEC is essentially a cartel cooperating to influence global oil prices (in much the same way Shell and other multinational oil companies do) but their operations are protected by the doctrine of sovereign immunity under international law.
In groups, advise Frank how he should respond to the formation of OPEC.
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Stakeholder interactions
• Effective implementation of strategic programs includes careful assessment of interactions with stakeholders.
• There are four typical processes:
o Ignore the stakeholder
o Public relations approach
o Implicit negotiation
o Explicit negotiation
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Ignore the stakeholder
• Failing to interact with those groups and individuals who can affect or are affected by the organisation is irresponsible and dangerous.
• Major oil companies ignored the formation of OPEC in 1960 until after it had gained almost total control of the production of oil.
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Public relations approach
• This form of interaction typically relies on one way communication with internal or external PR personnel informing stakeholders about the organisation to better manage corporate image.
• But an organisation with a good image is not necessarily effective in terms of meeting stakeholder needs.
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Implicit negotiation
• Implicit negotiation involves taking stakeholder concerns into account in the formulation of strategic programs to mitigate any potential group objections.
• This transactional process is only as good as the attribution of stakeholder positions in the planning stages; it is dependant on best estimates.
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Explicit negotiation
• Explicit negotiation uses two way communication to better understand stakeholder positions and explain organisational positions.
• Informal negotiations conducted outside formal arenas such as government hearings and judicial proceedings are more conducive to creative solutions.
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Effective negotiation
• Organisations must be prepared to make proposals and respond to proposals from stakeholder groups.
• Just because a stakeholder’s position is opposed to the organisation’s does not mean their underlying interests are also opposed.
• Behind opposing positions lie shared and compatible interests.
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• What does British Prime Minister Winston Churchill mean when he says:
Small Group Discussion
True genius resides in the capacity for
evaluation of uncertain, hazardous, and
conflicting information.
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Small Group Challenge Lubang Island, Philippines 1945
Japanese Army intelligence officer Hiro Onoda has a problem. His mission to prevent the United States and Philippine Commonwealth forces from capturing Lubang Island has failed forcing him to flee to the hills with three of his men. Hiro’s orders are that under no circumstances is he to surrender or take his own life.
The four men continue to carry out guerrilla activities against the enemy. One morning whilst on patrol they find a printed leaflet with orders for them to surrender. According to the leaflet the war is over and General Tomoyuki Yamashita of the Fourteenth Area Army wants them to turn themselves in.
This is not the first time Hiro has seen Allied propaganda. The other men are also suspicious and fear the leaflet is a trap.
In groups, advise Hiro and his men what they should do.
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Evaluation
• Another task of strategic management is to constantly evaluate and monitor progress with respect to the strategies that have been developed.
• The pilot must not only set the course for the ship, but must constantly keep watch to see that it is on course, and that the original course is still an appropriate direction.
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Strategic control
• There are four basic concepts that can be used to evaluate strategy:
1. Implementation control
2. Control of strategic programs
3. Control of strategic direction
4. Control of “what we stand for”
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Implementation control
• This involves an analysis of variance from budgets.
• “Did we do what we said we would?”
• “Are there variances from our original allocation of resources?”
• “If so, why?”
• “If not, why not?”
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Control of strategic programs
• Is the strategic program meeting its milestones?
• When milestones are constantly missed, and schedules constantly revised, the program is in trouble.
• Is the stakeholder analysis on which the strategic program is based still accurate and valid?
• Was our stakeholder analysis flawed?
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Control of strategic direction
• Check that the strategic programs are taking the organisation in the desired direction.
• “Are we achieving the results that we desire?”
• “If so, why?
• “If not, why not?”
• “Are we lucky or did things go according to plan?”
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Control of “what we stand for”
• There is no standard measure for the appropriateness of a set of organisational values.
• The process for controlling what an organisation stands for must therefore be flexible.
• It needs to be a process of reaffirmation and revival, and a process where dissent is welcomed and encouraged.
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