In
stakeholder theory, R Edward Freeman (1984) identified a corporation's
stakeholders and suggested methods to manage their interests,
saying that management has a fiduciary responsibility to stakeholders.
The approach was adopted essentially to figure out who matters
most to the organization, build a priority list of each stakeholder,
and manage them separately based on their importance to the
organization. This approach was removed from the traditional
approach of creating wealth for shareholders. Stakeholder
management looks beyond the primary stakeholders—investors,
suppliers, customers, and employees—to also include the
interests of other involved parties, such as different associations,
institutions, communities and society at large. Further, corporate
stakeholder management can be seen as a strategy that integrates
the resource-based view and the market-based view to achieve
competitive advantage. With the power tilting towards the
stakeholders—other than shareholders—companies are
now forced to wake up to meet the demands of other stakeholders
to ascertain their own long-term survival. It becomes imperative
for the corporate now to analyze and manage different stakeholders,
and the first paper, "Corporate Stakeholder Management
Analysis Tools: A Review", is an attempt to address the
essential. The paper assesses various analysis tools that
are commonly used to retain the balance in corporate stakeholders,
evaluates some select articles, based on the importance of
their contribution towards analysis, and highlights some major
tools in corporate stakeholder management, covering, among
other things, the value system design and synthesis, the reachability
matrix and the interpretive structural model. Some of the
tools highlighted in the paper facilitate planning and implementation
of corporate stakeholder management as a concept for practical
use.
The
organizational structure can be primarily divided into functional,
matrix and divisional structure, based on the standardization,
organization, management and control of organizational tasks.
The (de)centralized structure necessity is based on strategy
deployment, responsibility and communication requirement
of the organization. An organization's requirement to be
(non)bureaucratic is a function of management in terms of
authority or consensus, where the organization may be seen
as a network, rather than a hierarchy. In terms of complexity,
organizations may exhibit simple structure to achieve great
adaptability to the environment. An organization's strategy
is a direct function of the changes in the environment and
is dependent on the inherent structure of the organization.
In this context, the second paper, "Organization Structure
and Inter-Organizational Dependency: An Environmental Imperative",
highlights two theories—the contingency theory and
the systems theory—to provide a refined view of the
implications of the environment and structure on the organization
and its strategy. The paper covers related areas such as
the effect of environment on leadership, other environment
effects, and so on. Taking the help of the contingency theory
and the systems theory, the paper tries to explain the organizational
adaptation, organizational networks and their interdependency,
and throws up several areas of investigation and research.
A
financial performance measure that calculates the true economic
profit of an organization seems essential to put the dollar
value on profits and costs involved across the organization.
Economic Value Added (EVA) is a theory applied by many organizations
to set their organizational goals, valuation, and communication
with shareholders, performance measurement and even remuneration.
Theoretically, the intrinsic value of the organization will
increase with increase in EVA. During the late 1980s, Stern,
Stewart and Co. popularized the EVA as a compensation system
based on real corporate performance. The third paper, "Value-Based
Management Strategy: An Alternative Approach to Executive
Compensation at TCS", looks at one of the oldest and
biggest information technology companies of India, TCS (Tata
Consultancy Services), and highlights the executive compensation
practice there which embraces EVA. Specifically, the paper
showcases the implementation process of EVA at TCS by getting
inspired Stern-Stewart's 4M Model that covers measurement,
management, motivation and mindset of managers to establish
the link between EVA and executive compensation. The paper
goes on to explain how TCS is successful, as it is primarily
driven by a strong leadership that is committed to creating
shareholder value.
Power
loom can be seen as one of the path-breaking inventions
of the industrial revolution. With technology, power loom
has come a long way from water- and steam-driven to air-jet
and water-jet looms; from shuttle looms to shuttle-less
to flying shuttle. Power looms are now used for weaving
not only natural cloth, but also synthetic fabrics and plastics.
With the success of power looms, came an industry that manufactured
them. Power loom manufacturing units have been reasonably
successful in some areas of Tamil Nadu in India, but not
without overcoming some fundamental problems, some of which
remain. Although, it is necessary for each power loom firm
to come up with winning strategies, most of the problems
are industry-specific. A closer look at the value chain
of the power loom manufacturing industry inevitably draws
attention to issues such as choice of location of the unit,
source of capital (procurement, interest rate, capital utilization,
etc.), market attractiveness (government support, entry-exit
barriers, family business, risks, etc.), marketing (competition,
seasonality, price, transport, etc.), labor (availability,
skill, turnover, productivity, etc.) and power. The fourth
paper, "Strategic Approach to Power Loom Business:
An Empirical Evaluation", suggests ways to overcome
these inherent impediments of the industry that will help
individual firms to grow more and be competitive.
When
a business (strategy) fails, managers become philosophical.
The fifth paper, "Philosophy and Strategy: Learning
from Great Thinkers", is not an attempt to illustrate
the above statement, but actually tries to converge two
established fields of social enquiry: philosophy and strategy.
Convergence of knowledge from different fields is not new
for business strategy, as the subject was built from various
corporate applications of different management functional
fields, such as marketing, operations, human resources,
finance, and so on. The paper tries to draw similarities
between the business strategy practice and the philosophies
propounded by great thinkers from the ancient era to the
modern era, through the renaissance period. This conceptual
paper showcases philosophy being practiced in strategy.
- Rajnandan Patnaik
Consulting
Editor |
