Issues Management and Environmental Scanning Chapter 7

1. Issues Managementand Environmental ScanningChapter 7 Organizational and Managerial Communication Peggy Simcic Brønn

2. BUSINESS AS AN ECONOMIC INSTITUTION • Little acknowledgement of external environment • Produce goods • Provide employment • Pay dividends • Success measured in economic terms Peggy Simcic Brønn

3. BUSINESS AS SOCIO-POLITICAL INSTITUTION • 1960’s - economic growth producing detrimental side effects • Emphasis on protecting human health, not environment per se Peggy Simcic Brønn

4. RISE OF PUBLIC ISSUES • Public demand collective action and there is disagreement on solution • civil rights • feminist movement • consumer movement • ecology movement Peggy Simcic Brønn

5. Universal issues: have serious and imminent effects on a large number of people. Government action is expected since the issue is beyond the scope of private organizations Advocacy issues: potential problems foremost of the population that are identified by groups claiming to represent the broad public interest. Scope of problem suggests government intervention. Selective issues: affect special interest group. Costs of dealing with them is passed on to general public. Technical issues: of little direct interest to the population and are left to experts. Note that an advocacy group may shift a technical issue to another group be redefining it. The energy crisis Health insurance reform Medicaid reimbursement that results in cost shifting Hazardous waste disposal that can be characterized as creation of an environmental threat Four Types of Issues Type Example P.N. Reeves, “Issues management: The other side of strategic planning”, Hospital &Health Services Administration 38(2), Summer 1993

6. ISSUES MANAGEMENT • Coined in 1977 • New Type of Corporate Communications • Response to Increasing Criticism of Big Business • Method of Monitoring the Environment • Managing New Challenges and Change • Mid-1970s, Issues Became ‘Strategic’ Issues • Organizations Became Proactive Peggy Simcic Brønn

7. Location of IM Programs • Public/Government Affairs • Corporate Planning • Corporate Communications • Issues Management Peggy Simcic Brønn

8. Source: McGrath, G., Issues Management, IABC

9. Theory and Research Issues Analysis Issues Identification Performance Evaluation Judgement and Priority Setting Results Policy Options Program Design Policy and Strategy Selection Implementation Issues Management ProcessThe Chase-Jones Model

10. The Clarity - Priority Matrix High Issue Priority Low Clear “Fuzzy” Issue Clarity J.C. Camillus and D.K. Datta, “Managing strategic issues in a turbulent environment”, Long Range Planning 24, April 1991

11. Structure of an issues monitoring team

12. Four functions: • Sharpening planning for responsible adapting the organization • Knowing and exceeding standards • Monitoring issues • Communicating to build beneficial relationships Peggy Simcic Brønn

13. Corporate Response to Issues • Reactive - Fight Change • Accommodative - Adapt to Change • Proactive - Influence Change • Interactive - Adjust to and Influence Change Peggy Simcic Brønn

14. Increasing The Public Issues Life Cycle Education reform Global warming Day care Shorter work week Comparable worth Road congestion Groundwater protection Acid rain Clean Air Act Amendments Energy taxes Health care reform Hazardous waste treatment Effectiveness of Integrated Planning Emission standards Environmental permits Gas guzzler taxes Product recalls Plant inspections/fines Fuel economy standards Environmental Protection Agency Motor Vehicle Safety and Health Admin. Energy Policy and Conservation Act Safety belt use laws Social Expectation Political Legislative Social Control T.G. Marx,”Strategic planning for public affairs”, Long Range Planning, 23(1), 1990.

15. IM and Corporate Image • IM now includes fostering and maintaining corporate image • Tied to behavior of organization and communication management • Integrity of the organizational identity

16. ORGANIZATIONS HAVE TWO CHOICES • Reactive business strategy • pursue own financial goals • be forced by external agents to change • Proactive business strategy • actively seek operations that limit consequences • open up dialogue with external agents Peggy Simcic Brønn

17. Environmental Scanning A methodology for collecting and analyzing information about every sector of the external environment that can help management to plan for the organization’s future. . . . A radar-like vigilance used to spot potential or actual issues at their earliest point of development. (Heath) Chun Wei Choo Peggy Simcic Brønn

18. Added value of scanning • Promotes education and mind-stretching experiences for management. • Assists in formulating of policy and strategy. • Promotes the development of operational programs and action plans. • Provides a frame of reference for budgets. Peggy Simcic Brønn

19. Organizational environment • Does the company accept new ideas, concepts and processes? • Are there open communications channels? • Is the company capturing environmental information that is readily available`? Peggy Simcic Brønn

20. Organizational environment • Are the linkages of change to the company’s operations properly assessed? • Is environmental intelligence integrated into strategic planning? Peggy Simcic Brønn

21. Environmental Scanning Dimensions Operational Governments Economies Control Productivity Capacity Resources Governments Economies Capital Markets Money Markets Competitive Governments Economies Industries Markets Products Financial Applied Developed Emerging In Process Conceptualized Boundaries of Knowledge Governments Society Shareholders Customers Suppliers Community Employees Governments Stakeholders Technological

22. Approaches to Scanning • Scientific -- social scientific measures of stakeholders to determine ‘what’s going on out there’ • Tree Diagrams, Trend Impact Analysis • Flow Charting, Morphological Models • Informal -- individualistic, subjective techniques, nonrepresentative samples of publics, and key contacts Peggy Simcic Brønn

23. Sources of Environmental Information PEOPLE SOURCES EVENT, OBJECTS External Business-related Bankers Customers Suppliers Consultants Unrelated Regular associations Friend Professional peers Periodic encounters Adjoining seat occupant Neighbor Media-related Sources General Business & Financial Trade Technical/Academic Other Sources Purchased research reports Technical conferences Trade shows Educational seminars Direct observation

24. Sources of Environmental Information PEOPLE SOURCES EVENT, OBJECTS Internal Line Relationships Superiors Subordinates Staff Relationships Peer Relationships Counterpart Relationships (cross-divisional) Other (motivated by personal relationships, mutual interest) Reports Progress Performance Projection Activity Meetings Scheduled Issue-motivated

25. Ranking of Sources of Environmental Information RankSourcePct. Ranking 1st/2nd 1 Daily Newspapers 91 2 Expert Organizations 59 Publications (Conferences Board, etc..) 3 Business Periodicals 52 4 Futures Consultants 42 and Forecasters 5 Government Publications 42 6 Seminars and Conferences 30 Peggy Simcic Brønn

26. Best Practices • Planning and manage scanning as a strategic activity • Implement scanning as a formal system • Partner with domain experts and IT specialists in designing system • Manage information as the core of the scanning function

27. Starting to think about the future • Read utopian and science fiction. • Read magazines like The Futurist and Futures. Borrow the authors’ predictions. • Monitor the writings of politicians and social scientists. • Watch out for mention of areas of people who adopt innovation early. J. D. Stoffels Peggy Simcic Brønn

28. Two cases • Playtex Company and the Sippy Cup • Intel