A company must make a competitive return for its shareholders and treat its employees fairly. A company also has wider responsibilities. It should minimize any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility. Bowen argued that corporate social responsibility rests on two premises: social contract, which is an implied set of rights and obligations that are inherent to social policy and assumed by business, and moral agent, which suggests that businesses have an obligation to act honorably and to reflect and enforce values that are consistent with those of society. Companies that operate in a socially responsible way strengthen their reputations. In business, reputation is everything. It determines the extent to which customers want to buy from you, partners are willing to work with you and your standing in the community. Corporate Social Continue reading
Strategic Management Basics
Becoming a Successful Learning Organisation: Case Study of Apple
When faced with the challenges and difficulties in business environment nowadays, business need to improve knowledge continuously to survive and remain competitive with other business. Meanwhile, “learning organization” and “best practices” are two important concepts that can help businesses succeed. From an unknown organization has now become a famous brand with business strategy, the way in breaking success, Apple is one of the business organization encourages continuous personal learning to be able to overcome difficulties in the market today. We should study how organizations learn and practice such as Apple to see the strategic vision and ways of doing business that many companies in the world by surprise. How does Apple become a Learning Organization? Learning organization is one that sought to create their own future, said that learning is a continuous process and innovation for its members, and one in which the development, adaptation, and transform itself to meet Continue reading
Role of Luck in Strategic Management
While some firms hope to yield above expected normal returns from implementing business strategies, they must however be consistently conversant with the future value of those strategies than other firms playing in the same market. Other firms gain advantage in strategy implementation which is either a manifestation of these special insights into the future value of strategies, or a manifestation of a firm’s good fortune and luck, as sometimes, the price of the strategic resource acquired may be based on expectations on the return potential of that strategy However, unexpected greater organisational profits can simply be unexpected, a surprise, and a manifestation of a firm’s good luck and possibly not its ability to accurately anticipate the future value of a strategy. Even well-informed firms can be lucky in this manner. Some organizations’ actual returns on strategies could be greater than the expected returns; this resulting difference is often regarded to Continue reading
Radical Innovation vs Incremental Innovation
Innovation undoubtedly became the “engine” of the progress, competitive ability and economic growth. Innovation regards as a “life-and-death matter for a firm”. However, paradox is that still some difficulties remain in understanding what exactly the innovation is and how important it is in nowadays world. Despite the fact that there are many definitions of processes of innovation, generally all innovations contain three underlying elements: newness, improvement and the overcoming of uncertainty. Newness is probably one of the most important parts of innovation, although such newness could be understood as something novel to the form or industry as a whole. Improvement is related to the fact that firms need to find the superior quality to those products which currently exist in the market. Overcoming uncertainty means that such improvement is determined by the market and that market need have to be clarified. In addition, it is essential to remember that all Continue reading
The Rational and Dynamic Approaches to Strategic Management
Strategic management is a not a new concept. It has been defined as a management system which links strategic planning and decision making with the day-to-day business of operational management. Strategic management is not a simple, step by step process, but a complex and iterative process which needs hard work and dedication from many people in an organization to implement it toward the objective. It is the process for the leading members of an organization to forecast its future and develop the necessary procedures and operations to achieve its future. Strategic management is usually found in high levels of management to help organization gather, analyze and organize useful information to keep up with industry and competitive trends. The rational and dynamic approaches to strategic management are two different schools of thought. The rational approach is well-planed and more prescriptive on strategy selection. However, the dynamic approach is opposite. Rational Approach Continue reading
Takeover Bid – Meaning and Types
This is a technique for affecting either a takeover or an amalgamation. It may be defined as an offer to acquire shares of a company, whose shares are not closely held, addressed to the general body of shareholders with a view to obtaining at least sufficient shares to give the offer or, voting control of the company. Takeover Bid is thus adopted by company for taking over the control and management affairs of listed company by acquiring its controlling interest. While a takeover bid is used for affecting a takeover, it is frequently against the wishes of the management of Offeree Company. It may take the form of an offer to purchase shares for cash or for share for share exchange or a combination of these two firms. Where a takeover bid is used for effecting merger or amalgamation it is generally by consent of management of both companies. It Continue reading