Strategic Business Areas and Management Models in CSR

Organization: Strategic Business Areas (SBA)

SBAs are useful for companies with a wide range of different products operating in various markets. They provide transparency and reduce complexity. SBA’s are cubs with three coordinates which can be applied to different competition strategies.

dimensional search area by Abell for the determination of SBA

1. Target group – WHO: customers to be appealed (e.g. car industry). 2. Needs of the target group – WHAT: which need shall be satisfied by our offer – not the offered products (e.g. Injection pump), but the needs from the customer point of view, (e.g. motor control in general), because technology might change. 3. Technology – HOW: procedures how to cover the needs (e.g. Handmade, small machinery, assembling line, roboter-line, buy and sell products…).

Strategic Business Units (SBU)

SBU’s are organizational units responsible for one or more SBA’s to run a single strategy, act autonomously on a limited range, make up for independent economic areas (Profit enter) and ensure transparency and limit complexity. Although there must be an own market task, i.e. the market must be distinguished from other market segments, be independent from other SBUs, profit contribution must be large enough to justify an independent and possibly, several SBA can be summarized to one single SBU.

Comparison SBA-SBU

SBA: environment-oriented, market segmentation reduces complexity, targeted market work around. SBU: internally oriented, building organizational units, division of labor, resource allocation and created responsibility for formulation and execution of strategies.

Management models

Partial Models

Specific elements of the Management process brought to the foreground. – Management by Exception: management only in exceptional situations. – Management by Delegation: management by transfer of tasks. – Management by Decision Rules: default decision rules are given. – Management by Results: management by control of results. Total Models: Inclusion of all elements of the Management process. – St.Gallener Leadership Model: overall integrating model. – Harzburger Leadership Model: management with autonomous employees. – 7-S-Model: Mc.Kinsey Model, hard and soft factors. – Management by objectives: – Management and employees agree jointly on targets. – Employee has discretion – no specific order for the route to achieve his targets. – This shall motivate the employee and boost his creativity. – Leadership activity is mainly the agreement of targets and check of achievement. – Revolving operation: re-defining goals… after reaching the previous target, when there are problems to achieve the objectives and when changing environmental situations. Process: 1) General business objectives 2) Adjustment of the Organizational Structure. 3a) Vision supervisor 3b) Vision employees. 4) Jointly agreed objectives. 5) Fee-back by Mile-stone results. 5a) New impulses. 5b) Singling out unsuitable targets. 6) Regular comparison actual vs. target 7) If necessary adaptation work behaviour.

CSR = Corporate Social Responsibility

Stakeholder approach

:Implicitly included. * Shareholder approach:“License to Operate”: The Company must generate a social benefit in order to be successful in the long term.* Moral Approach: Company has direct responsibility for the well-being of its employees (working conditions, security).Indirect responsibility for their families (income security). -Indirect responsibility for economically dependents (suppliers and their workers), ecological environment and dependent persons (health / nutrition) and political and other society (taxes, donations).* Claims and justification:- Social requirements:  pay suppliers on time, protect the environment (noise, air and water pollution), company nursery and pay taxes.– Companies are in the market competition: must save costs, laws and contracts must be respected (institutions), environmental protection causes costs and activity beyond legal requirements lowers competitiveness (water temperature in small streams/CO2 emissions…) and environmental protection or job security- In certain situations you must also be able to say ”NO”. *What is Greenwashing? Company communicates its activities to meet ever-increasing legal environmental requirements as a proper achievement. The public perceives this negatively; however, because there is no over-fulfilment of the requirements and as consequence, reputation suffers. * What is reputation and what is for? Reputation is the consideration and confidence of the stakeholders. Mistakes are more easily excused.* Who is responsible when a supplier is acting irresponsibly?– Examples of supplier misconduct: Working conditions at supplier factories are un-human and noble wood is cut down uncontrolledà Consequence: loss of reputation for end-manufacturers.

* What are the tasks of the company management in the CSR? CSR is voluntary.The task of the company’s management is to improve reputation by:Identifying relevant stakeholders.Checking the justification of the claims.Finding balance between contradictory claims.Communicating found balance or the non-fulfilling of claims. Not fulfilled promises are worse than denied commitments.Not covering / erasing errors – communicate them clearly.Creating culture and processes that will promote the entire prior. Like early warning systems, rules for error handling, opening crisis communication and do not hiding errors cause it destroys reputation.