Week 10
CSR strategy and leadership
“After the genocide in Rwanda the situation was awful.
There was also no infrastructure to get to the people in
need. And so there were United Nations convoys that
just couldn’t get through. This delegation literally just sat
there on the road for hours going nowhere. By the time
they finally reached their destination, they discovered
that Coke had already been there for two weeks
distributing what they needed. What a fascinating thing –
Coke got there before the UN. It shows you just how
powerful the global market is and this brand in
particular… I suppose if Microsoft needs to be there,
they’ll be there too.”
NGO administrator
I discern two sorts of inequality in the human
species: the first I call natural or physical…. ; the
second we might call moral or political inequality
because it derives from a sort of convention,
and is established, or at least authorised, by the
consent of men. This latter inequality consists of
the different privileges which some enjoy to the
prejudice of others….
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Rousseau (1755) - A Discourse on Inequality
Definitions of power
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Power is the capacity to affect organisational outcomes
 Mintzberg
Power is that which enables A to modify the attitudes or
behaviour of B
 Handy
The concept of economic growth
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shareholder value predicated in growth
growth of the firm:
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market share
competition
growth in the market
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globalisation
market development
product development
Sustainability of growth
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maintaining supply / demand equilibrium
unpredictability of demand
supply of raw materials
finiteness of demand
Demand creation
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demand creation through:
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market development
product development
replacements
fashion
costs of demand creation:
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R&D
marketing
effects upon supply curve
Goal Congruence
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alignment of goals for mutual benefit
goals of organisation
goals of individual
divergence = sub-optimality
convergence = optimal performance
Organisational goals
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profit maximisation
cash flow
return on capital employed
growth
quality
long term stability
survival
satisficing
Managerial goals
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rewards
 financial
 non - financial
status
recognition
security
promotion
..being the managers of other people's
money than of their own, it cannot well
be expected that they should watch over
it with the same anxious vigilance with
which partners in a private copartnery
frequently watch over their own. Like the
stewards of a rich man, they ... consider
attention to small matters as not for their
master's honour and very easily give
themselves a dispensation from having it.

Adam Smith – The Wealth of Nations
Operational control
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business planning and budgeting
reporting system
measuring performance
correction of deviations
feedback
Managerial involvement in the control system
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setting of targets
taking action to achieve plan
receiving rewards for performance
Individual behaviour
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“Every managerial decision has
behavioural consequences. Successful
management depends upon the ability
to predict and control human behaviour”
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Theory X
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McGregor
people dislike work
Theory Y
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people are conscientious
Styles of leadership
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authoritarian
laissez - faire
democratic
variables
 follower
 leader
 situation
Individual behaviour
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“Every managerial decision has behavioural
consequences. Successful management depends upon
the ability to predict and control human behaviour”
 McGregor
Theory X
 people dislike work
Theory Y
 people are conscientious
Criteria for an interesting job
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demanding but with variety
allow learning
decision making and responsibility
increased understanding
meaningful relationship with outside life
promise of a desirable future
 Emery & Thorsrud (1963)
Motivation Theory
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Expectancy Theory
 Lawler
Two Factor Theory
 hygiene factors
 motivators
 Herzberg
Equity Theory
 Adams
The Hawthorne Studies
Goal Congruence
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goals of organisation
goals of individual
divergence = sub-optimality
convergence = optimal performance
Organisational goals
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profit maximisation
cash flow
return on capital employed
growth
quality
long term stability
survival
satisficing
Managerial goals
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rewards
 financial
 non - financial
status
recognition
security
promotion
Risk and rewards
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bounded rationality
environmental uncertainty
short term focus
risk minimisation
managerial objectives v corporate objectives
Feedback
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timeliness
relevance
meaningfulness
accuracy
communication
rewards
Legitimating decisions
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decisions made by individuals / groups
decisions implemented by organisations
transfer of decision ownership
rational basis for decisions
empowerment of decision makers through expertise
Governance
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The exercise of political authority and the
use of institutional resources to manage
society's problems and affairs
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World Bank
Inter-state negotiation
Global governance?
The principles of governance
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Transparency
Rule of Law
Participation
Responsiveness
Equity
Efficiency & Effectiveness
Sustainability
Accountability
Corporate governance
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Good governance =
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Good performance
Sustainability
Social responsibility
Principles of corporate governance
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Transparency
Accountability
Responsibility
Fairness