management
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Strategic management
MGMT 490
Yongseok Jang, Ph.D.
Assistant Professor of Entrepreneurship
Organizational Value & Business Ethics
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©McGraw-Hill Education.
Shared Value, Governance and Business Ethics
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©McGraw-Hill Education.
The Shared Value Creation Framework
- A model proposing that managers have a dual focus on:
Shareholder value creation
Value creation for society
- Example: GE’s ecomagination initiative
To provide cleaner and more efficient sources of energy
To provide abundant sources of clean water anywhere in the world
To reduce emissions
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Michael Porter’s Recommendations to Reconnect
Economic & Societal Needs
Expand the customer base
Bring in nonconsumers such as those at the bottom of the pyramid (large / poor socioeconomic group).
Expand traditional internal firm value chains.
Include more nontraditional partners such as nongovernmental organizations (NGOs).
Focus on creating new regional clusters:
Such as Silicon Valley in the United States
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The Role of Corporate Governance
- To provide mechanisms to:
Direct and control an enterprise
Ensure that it pursues strategic goals successfully and legally
- To offer checks and balances
- To ask the tough questions when needed
- Attempts to address the principal-agent problem
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Business Ethics
- An agreed-upon code of conduct in business, based on societal norms
- Lay the foundation and provide training for:
“behavior that is consistent with the principles, norms, and standards of business practice that have been agreed upon by society”
- Can differ in various cultures around the globe
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When Facing an Ethical Dilemma
- Ask whether the intended course of action falls within the acceptable norms of professional behavior.
- Would you feel comfortable explaining and defending the decision in public?
After reading the Uber chapter case, would you say that Lift is in the same position Uber stands in?
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Strategy and Business Ethics
- The foundation for long-term superior performance.
- Law and ethics are not synonymous
- Code of conduct that holds members to a high professional standard and imposes consequences for misconduct.
Does the societal value creation of the shared value creation framework refer to value creation through the products or services or through actions such as donation to charities?
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