Strategic Management Module 7: Strategy Implementation PDF

STRATEGIC MANAGEMENT Module 7: Strategy Implementation Group 7 Members: Basilio, Ma. Jinella Beatriz Cabana, Rowel A. Europeo, Jessca Marl M. Oredina, Cristar C. Vinuya, Maxene B. Module Learning Objectives: 1. Explain the nature of the long-term objectives of an o...

STRATEGIC MANAGEMENT Module 7: Strategy Implementation Group 7 Members: Basilio, Ma. Jinella Beatriz Cabana, Rowel A. Europeo, Jessca Marl M. Oredina, Cristar C. Vinuya, Maxene B. Module Learning Objectives: 1. Explain the nature of the long-term objectives of an organization 2. Discuss the role of policies in strategic implementation. 3. Describe how resource allocation is being done for strategy execution. 4. Understand conflict management in strategy implementation. 5. Explain matching of organizational structure and strategy. 6. Correlate performance and pay to strategy. 7. Differentiate roles of functional areas in strategy implementation. What is Strategy Implementation? ❖ Strategy implementation is the critical process of turning a well-crafted business plan into actionable steps. It involves assigning responsibilities, allocating resources, and fostering clear communication to ensure that everyone understands their role and works collectively to achieve the defined objectives. ❖ Strategy implementation involves: Taking Action Assigning Responsibilities Using Resources Monitoring Progress Dealing with Challenges Staying on Course ❖ To begin the implementation process, strategy makers must consider these questions: Who are the people who will carry the strategic plan? What must be done to align the company’s operations in the new intended direction? How is everyone going to work together to do what is needed? Who Implements the Strategy? ❖ In most large, multi-industry corporations, the implementers are everyone in the organization. Vice Presidents of functional areas and directors of divisions work with their subordinates to put together large-scale implementation plans. Under Strategy Implementation: 1. Annual Objectives ❖ Annual objectives are short-term milestones that bridge the gap between strategy and day-to-day operations. They serve as a guide for departments and individuals, offering a clear focus on what needs to be accomplished within a specific timeframe. ❖ Purpose of Annual Objectives Basis for resource allocation. Mechanism for management evaluation. Major instrument for monitoring progress toward achieving long-term objectives. Establish priorities (organizational, divisional, and departmental) ❖ Key characteristics of effective annual objectives include: Specificity: Objectives should be clear and concise, outlining what needs to be achieved. Measurability: Quantifiable targets allow for easy tracking of progress and adjustments. Achievability: Objectives should be realistic given available resources and capabilities. Relevance: They should align with the overall strategic plan and contribute to long-term goals. Time-bound: Annual objectives must have deadlines to ensure accountability. 2. Policies ❖ Policies provide guidelines for decision-making and behavior throughout the organization. They ensure that the actions taken by employees and departments are consistent with the strategic plan. Policies serve to: Standardize operations: Create uniformity in procedures across the organization. Support strategy execution: Help align employee actions with strategic goals. Facilitate problem-solving: Offer pre-determined solutions for recurring issues. Reduce uncertainty: Provide clarity on how certain situations should be handled. ❖ Policies are essential in areas like customer service, financial controls, HR practices, and ethical standards. Clear, well-communicated policies enable employees to make decisions quickly and in alignment with the overall strategy. 3. Resource Allocation ❖ Resource allocation refers to the distribution of financial, human, and material resources to support strategy implementation. Proper allocation is critical to ensuring that the strategic initiatives have the resources they need to succeed. It involves:  Prioritization: Resources must be allocated to the most critical strategic initiatives. Efficiency: Ensuring that resources are used optimally to avoid waste. Flexibility: Allocating resources in a way that allows for adjustment when necessary. Monitoring: Regularly tracking how resources are used to ensure alignment with objectives. ❖ Resource allocation should be closely tied to annual objectives. A company may allocate resources differently depending on priorities, whether that involves capital expenditure, staffing, or technological investments. ❖ Four Types of Resources: Financial Resources - This refers to the allocation of funds or capital within the organization. Financial resources are essential for funding operations, investments, research, marketing, and other critical business functions. Key considerations include budgeting, investment decisions, and cost management. Example: Allocating funds for a new product development initiative or marketing campaign. Human Resources - This involves assigning the right personnel to the right tasks based on their skills, expertise, and availability. It includes staffing, training, and workforce planning to ensure that the organization has the necessary talent to achieve its objectives. Example: Assigning a team of engineers to work on a new technology project or providing training programs for employee development. Material Resources - Material resources refer to the physical assets and supplies required for production and operations. This can include machinery, raw materials, office space, equipment, and other tangible resources needed to execute business activities. Example: Allocating raw materials for manufacturing or securing office space for an expanding department. Technological Resources - This type of allocation focuses on the technology and systems required to support the organization’s strategic goals. This includes software, hardware, data systems, and other digital tools that enhance operational efficiency and innovation. Example: Investing in new IT infrastructure, software systems, or cybersecurity tools to improve business operations. 4. Conflict Management Matching Structure and Strategy Conflict - a disagreement between two or more parties on one or more issues. Honest differences of opinion, turf protection, and competition for limited resources can inevitably lead to conflict. What may cause Conflict? - Establishing annual objectives can lead to conflict because individuals have different expectations, perceptions, schedules, pressures, obligations, and personalities.  - Establishing objectives can lead to conflict because managers and strategists must make tradeoffs, such as whether to emphasize short-term profits or long-term growth, profit margin or market share, market penetration or market development, growth or stability, high risk or low risk, and social responsiveness or profit maximization. Tradeoffs are necessary because no firm has sufficient resources to pursue all strategies that would benefit the firm. “If everyone is thinking alike, then somebody isn’t thinking.” - General George Patton Conflict is not always bad. An absence of conflict can signal indifference and apathy. Conflict can serve to energize opposing groups into action and may help managers identify problems. Various approaches for managing and resolving conflict range from ignoring the problem in hopes that the conflict will resolve itself or physically separating the conflicting individuals, to compromising, to exchanging members of conflicting parties so that each can gain an appreciation of the other’s point of view, or even holding a meeting at which conflicting parties present their views and work through their differences. Matching Structure with Strategy Changes in strategy often require changes in the way an organization is structured for two major reasons: First, structure largely dictates how objectives and policies will be established. For example, objectives and policies established under a geographic organizational structure are couched in geographic terms. Objectives and policies are stated largely in terms of products in an organization whose structure is based on product groups. The structural format for developing objectives and policies can significantly impact all other strategy-implementation activities. The second major reason why changes in strategy often require changes in structure is that structure dictates how resources will be allocated. If an organization’s structure is based on customer groups, then resources will be allocated in that manner. Changes in strategy lead to changes in organizational structure. Structure should be designed to facilitate the strategic pursuit of a firm and, therefore, follow strategy. Without a strategy or reasons for being (mission), companies find it difficult to design an effective structure.  a. The Functional Structure Figure 1. Example of Functional Structure Source: https://crowjack.com/blog/strategy/organizational-structures/centralized Table 1. Advantages and Disadvantage of Functional Structure Advantages Disadvantages Simple and inexpensive Accountability forced to the top Capitalizes on specialization of Delegation of authority and business activities such as marketing responsibility not encouraged. and finance Minimizes need for elaborate control Minimizes career development system Allows for rapid decision making Low employee and manager morale Inadequate planning for products and markets Leads to short-term, narrow thinking Leads to communication problems The most widely used structure is the functional or centralized type because this structure is the simplest and least expensive. Besides being simple and inexpensive, a functional structure also promotes specialization of labor, encourages efficient use of managerial and technical talent, minimizes the need for an elaborate control system, and allows rapid decision making. A functional structure groups tasks and activities by business function, such as marketing or finance. For example, a university may structure its activities by major functions that include academic affairs, student services, alumni relations, athletics, maintenance, and accounting. Under a functional structure, divisions or segments of the firm are not delegated authority, responsibility, and accountability for revenues or profits; rather, key decisions are made centrally. For example, a small business composed of three restaurants in three adjacent towns is functionally structured if all hiring, firing, promotion, and advertising decisions are made centrally, but this same small business is divisionally structured if those decisions are delegated to each restaurant manager. Besides being simple and inexpensive, a functional structure also promotes specialization of labor, encourages efficient use of managerial and technical talent, minimizes the need for an elaborate control system, and allows rapid decision making. Some disadvantages of a functional structure are that it forces accountability to the top, minimizes career development opportunities, and is sometimes characterized by low employee morale, line or staff conflicts, poor delegation of authority, and inadequate planning for products and markets. For these reasons, most large companies have abandoned the functional structure in favor of decentralization and improved accountability. A functional structure often leads to short-term and narrow thinking that may undermine what is best for the firm. For example, the research-and-development department may strive to overdesign products and components to achieve technical elegance, whereas manufacturing may argue for low-frills products that can be mass-produced more easily. Thus, communication is often not as good in a functional structure. b. The Divisional Structure Figure 2. Example of Divisional Structure Source: https://crowjack.com/blog/strategy/organizational-structures/centralized Table 2. Advantages and Disadvantage of Divisional Structure Advantages Disadvantages Accountability is clear Can be costly Allows local control of local situations Duplication of functional activities Creates career development chances Requires a skilled management force Promotes delegation of authority Requires an elaborate control system Leads to competitive climate Competition among division can internally become so intense as to be dysfunctional Allows easy adding of new products Can lead to limited sharing of ideas or regions and resources Allows strict control and attention to Some regions/product/customers may products, customers, and/or regions receive special treatment The divisional (decentralized) structure is the second-most common type. Divisions are sometimes referred to as segments, profit centers, or business units. As a small organization grows, it has more difficulty managing different products in different markets. Some form of divisional structure generally becomes necessary to motivate employees, control operations, and compete successfully in diverse locations. The divisional structure can be organized in one of four ways: (1) by geographic area, (2) by product, (3) by customer, or (4) by process. A divisional structure by geographic area is appropriate for organizations whose strategies need to be tailored to fit the needs and characteristics of customers in different geographic areas. This type of structure can be most appropriate for organizations that have similar branch facilities located in widely dispersed areas. A divisional structure by geographic area allows local participation in decision making and improved coordination within a region. The divisional structure by product (or services) is most effective for implementing strategies when specific products or services need special emphasis. Also, this type of structure is widely used when an organization offers only a few products or services or when an organization’s products or services differ substantially. The divisional structure allows strict control over and attention to product lines, but it may also require a more skilled management force and reduced top management control. A divisional structure by customer can be the most effective way to implement strategies. This structure allows an organization to cater effectively to the requirements of clearly defined customer groups. For example, book publishing companies often organize their activities around customer groups, such as colleges, secondary schools, and private commercial schools. A divisional structure by process is like a functional structure because activities are organized according to the way work is performed. However, a key difference between these two designs is that functional departments are not accountable for profits or revenues, whereas divisional process departments are evaluated on these criteria. The divisional structure by process can be particularly effective in achieving objectives when distinct production processes represent the thrust of competitiveness in an industry. c. The Strategic Business Unit (SBU) Structure - Companies can manage several product lines or businesses separately while yet being a part of a wider corporate framework. - Advantages of following this structure includes the following: 1. Focused Strategy: SBUs make it possible to implement customized strategies for particular product lines or markets, which improves audience targeting efficacy. 2. Resource Allocation: Resources can be distributed by each SBU in accordance with its particular needs, maximizing capital and asset usage. 3. Risk Management: SBUs operating independently reduce internal unit risks and shield the organization as a whole from possible failures. 4. Innovation and Agility: Increased autonomy enables SBUs to innovate and quickly adjust to changes in the market, which speeds up the development of new products. 5. Accountability: It improves accountability and clarity in objectives as each SBU has a dedicated manager responsible for its performance. 6. Simplified Financial Tracking: SBUs simplifies financial management for large corporations as it allows easier tracking of revenues and costs. - Disadvantages of following this structure includes the following: 1. Duplication of Efforts: There may be similar functions across SBUs, which leads to inefficiencies in administration and operations. 2. Conflict of Interests: Internal competition may arise due to the tendency of individual SBUs to prioritize their own goals over the organization’s overall objectives. 3. Increased Overhead Costs: Increased administrative cost may happen due to the need for independent support functions. 4. Communication Challenges: Decision making processes may be complicated sue to the decentralized nature of SBUs that may hinder effective communication with corporate headquarters. 5. Resource Allocation Bias: Unequal distribution of resources may happen as resources may be disproportionately allocated to more profitable SBUs, neglecting others that require investment for growth. - Organizations must weigh the different factors carefully when considering the restructuring of their business units in order to ensure that corporate objectives will be met while maximizing operational effectiveness. d. The Matrix Structure -A matrix organizational structure is a hybrid management system that combines functional and project-based approaches. In this setup, employees report to multiple  managers, typically a functional manager and a project manager, allowing for greater flexibility and collaboration across departments. - Advantages of following this structure includes the following: 1. Enhanced Collaboration: The organizational design fosters cross-departmental collaboration, which improves creativity and problem-solving skills. 2. Flexibility: By redistributing resources and assembling new teams as needed, organizations are able to quickly respond to shifting demands. 3. Optimal Resource Utilization: Projects share resources, which lowers redundancy and boosts effectiveness. 4. Employee Development: Employees are exposed to a variety of tasks and responsibilities, which improves their skill set and advances their careers. 5. Improved Decision-Making: Access to diverse perspectives from different departments can lead to more informed decisions. - Disadvantages of following this structure includes the following: 1. Role Ambiguity: Confusion over roles resulting from dual reporting can cause stress and lower productivity. 2. Conflict of Authority: Power struggles and conflicts can arise due to competing priorities held by multiple managers. 3. Slower Decision-Making: Determining a consensus among different managers could cause a delay in the decision-making process. 4. Increased Workload: Employees who handle assignments from several managers may have heavier workloads. 5. Complex Communication: Communicating across several reporting lines can be challenging and raise the possibility of miscommunication. - Organizations must carefully manage these dynamics to maximize the advantages while mitigating potential drawbacks. 5. Performance and Pay to Strategy - The relationship between performance and pay is crucial for aligning employee efforts with organizational goals. This correlation can significantly influence motivation, productivity, and overall business success. - 3 elements of performance management, and how they align with pay: 1. Goals and objectives Goals and objectives define what employees need to achieve within a specific period. These are generally set and evaluated as part of the performance review process. When goals and pay are in line, employees are more likely to concentrate on important company tasks. For this method to function properly, objectives must be measurable and achievable. 2. Performance reviews Performance reviews are comprehensive evaluations of an employee’s overall job performance. Performance reviews can be tied to pay by looking at not just what employees achieve but also how they achieve it. 3. Performance ratings Performance ratings are more specific, quantitative assessments. They usually involve assigning a score or rating to an employee based on how effectively  they’ve met performance expectations over a certain period. It often directly influences variable pay decisions such as merit increases and bonuses. The correlation between performance and pay requires careful consideration of motivation theories, equity perceptions, measurement challenges, and cultural contexts. By effectively linking compensation to performance while ensuring fairness and transparency, organizations can foster a motivated workforce aligned with their strategic goals, ultimately driving better business outcomes. 6. Functional Areas and Strategy Implementation Functional Strategy A plan that outlines how a specific department or function within an organization will operate to support overall business objectives. It focuses on optimizing the performance and efficiency of that function such as marketing, finance, and operations to contribute effectively to the company's success, aligning departmental activities with the broader organizational goals. The Key Responsibilities of Functional Areas Resource Allocation - Determining how to best utilize available resources (human, financial, technological) to achieve short-term goals. Operational Planning - Developing detailed plans and schedules for daily operations. Problem Solving - Identifying and resolving issues that arise during operations. Coordination and Communication - Ensuring effective communication and collaboration among teams. Performance Monitoring - Tracking progress towards short-term objectives and making necessary adjustments. The Tactical Decision-Making Process Problem Identification - Recognizing a deviation from standard operating procedures or unexpected challenges. Data Gathering - Quickly collecting relevant information to understand the situation fully. Option Generation - Identifying potential solutions or courses of action. Evaluation - Assessing the pros and cons of each option, considering factors like feasibility, impact, and risk. Decision Making - Selecting the best course of action based on available information and time constraints. Implementation - Executing the chosen solution efficiently and effectively. Characteristics of Tactical Decision-Making Time-bound - Decisions must be made quickly to address immediate challenges. Data-driven - Relying on available data to inform decisions, but often requiring intuition and experience. Adaptable - Willingness to adjust plans based on changing circumstances. Risk-tolerant - Accepting a certain level of risk to achieve desired outcomes.  Collaborative - Involving relevant stakeholders in the decision-making process. a. Marketing Strategies Marketing strategy is an organization's overall game plan for reaching and influencing customers - business or consumers of its products and turning them into customers of the products the business offers. Moreover, marketing strategy is concerned with the decisions about markets, their development and how to leverage the opportunities the markets offer. Types of Marketing Decisions Strategic Decision-Making 1. Market Segmentation - Managers decide how to divide the market into distinct segments based on customer characteristics, needs, and behaviors. 2. Target Market Selection - Choosing which segments to target based on factors like profitability, growth potential, and alignment with the organization’s capabilities. 3. Positioning Strategy - Deciding how to position the product or service in the minds of consumers relative to competitors. Product and Service Decisions 1. Product Development - Managers make decisions about product features, design, quality, and branding. 2. Pricing Strategy - Determining the optimal price point based on cost, competition, and perceived value. 3. Product Life Cycle Management - Deciding when to introduce, modify, or phase out products. Promotion and Communication Decisions 1. Advertising and Promotion - Allocating budgets, choosing advertising channels, and creating compelling messages. 2. Sales Promotion - Deciding on promotions, discounts, and incentives to boost sales. 3. Public Relations - Managing the organization’s image and handling crises. Distribution and Channel Decisions 1. Channel Selection - Choosing the most effective distribution channels (e.g., direct sales, retailers, online platforms). 2. Logistics and Supply Chain - Deciding on inventory management, transportation, and warehousing. Digital Marketing Decisions 1. Social Media Strategy - Selecting platforms, content types, and engagement tactics. 2. Search Engine Optimization (SEO) - Deciding on keywords, content optimization, and link-building strategies. 3. Email Marketing - Crafting effective email campaigns. Market Research and Data-Driven Decisions  1. Market Analysis - Using data to understand customer preferences, market trends, and competitive landscapes. 2. Consumer Behavior Insights - Making decisions based on understanding how consumers think, feel, and act. Budget Allocation and Resource Management 1. Marketing Budget - Allocating resources across various marketing activities. 2. Return on Investment (ROI) - Evaluating the effectiveness of marketing efforts. b. Production/Operation Strategies An operations strategy is a set of decisions an organization makes regarding the production and delivery of its goods. Organizations may consider each step they take toward manufacturing or delivering a product an operation, and all decisions regarding these various operations are the operations strategy. Elements of Production Strategy Products and assembly - Product operations managers look to streamline processes, such as team communication or product assembly. They also analyze data regarding their products and use it to prioritize tasks. Delivering and storing inventory - An inventory operations strategy is one that helps businesses decide how to order, maintain and process their inventory. An inventory operations strategy also aims to order the optimal number of goods, maximizing storage capacity without wasting resources. Supply chain optimization - The supply chain element of an operations strategy looks for ways to optimize the movement of products from suppliers to distributors. In a supply chain operations strategy, leaders decide on the structure of the supply chain and the activities of each stage. They also decide where to make products and where to store them. Quality of the final product - Quality operations aim to produce a satisfactory final product. This includes product testing and analyzing customer feedback. They also check for consistency so their customers all receive the same level of quality. In addition, quality operations managers analyze the operations that contribute to production. Scheduling use of resources - Scheduling is the timing and use of resources, and this means ensuring the organization is using its resources at the best possible time. This may include the best time to send out shipments of products or which activities employees should focus on first. Facilities management - Facilities planning and management is the analysis of how the organization's current facilities factor into the organization's goals. This part of your operations strategy determines if your current facilities are performing as needed. In addition, it also discovers if your organization needs new facilities and if so, it conducts a search to find the right ones.  Forecasting for planning - Forecasting operations is where an organization makes plans for the future. It uses data to make assumptions about the future of the organization. c. HR Personnel Strategies HR strategy is a roadmap for solving an organization’s biggest challenges with people-centric solutions. This approach requires HR input during policy creation and elevates the importance of recruitment, talent management, compensation, succession planning and corporate culture. Steps in Creating HR Strategy 1. Understand the business and its objectives - Talk to people throughout the organization to gain a full understanding of the business’s past achievements, the products or services that it offers today, and what it hopes to accomplish in the future. 2. Evaluate employee skill sets - Review employee performance, resumes, project history and continuing education to assess the collective workforce skill level. 3. Conduct a gap analysis - Determine if employees have what they need to maximize their productivity or if investments in additional resources are necessary. 4. Assess talent strategy - Regularly auditing compensation, benefits, work environments and employee engagement can help employers compete for new talent and retain valued workforce members. 5. Develop existing employees - If any employees appear ready for new challenges or have skills outside their current role, create a development plan that will allow them to grow with the business. 6. Limit turnover - Get to the root cause of why people leave an organization and create a comprehensive plan to address the problem and prevent labor shortages. 7. Plan ahead for succession - Knowing which employees can easily fill other positions, should they become vacant, helps lessen disruptions when someone abruptly leaves the organization. 8. Rely on analytics - Compensation history, turnover rates, employee engagement and other HR metrics can guide strategic decisions. d. Finance/Accounting Strategies Finance Department - A finance department manages an organization's financial processes and decisions, overseeing income, expenses, and payroll. Key responsibilities: Accounting: Involves tracking financial transactions, preparing financial statements, and ensuring compliance with legal requirements to monitor the company’s financial performance. Acquiring & Managing Funds: The finance department sources and manages funds through loans, investments, or equity, ensuring optimal use of financial resources to support business growth. Recordkeeping and Administrative Work: Involves maintaining accurate financial records for auditing, budgeting, and tax purposes, ensuring that financial data is organized and up to date. Cash Flow Management: Ensures sufficient liquidity for day-to-day expenses and future needs, preventing financial shortages or excesses and ensuring operational stability. Economic Analysis for Business Strategies: Conducts economic analysis to evaluate market conditions and risks, guiding investment and decision-making to optimize business strategies and performance. FINANCE STRATEGY ISSUE Decisions that may require finance/accounting policies are: 1. To raise capital with short- or long-term debt, a bond issuance, divestiture, or a preferred or common stock issuance 2. To lease or buy fixed assets 3. To determine an appropriate dividend payout ratio 4. To use last-in-first-out (LIFO), first-in-first-out (FIFO), or a market-value accounting approach 5. To extend the time of accounts receivable or not 6. To establish a certain percentage discount on accounts within a specified time 7. To determine the amount of cash to be kept on hand 8. To purchase additional treasury stock or not 9. To determine whether to accept a merger offer 10. To determine how much to ask (or pay) for a division of the firm to be divested Essential for Implementation 1. Acquiring needed capital Sources of Capital: - Net profit from operations - Sale of assets  - Debt and Equity : D vs E Decision Debt and Equity EPS/EBIT analysis Earnings per share Earnings before interest and taxes 2. Developing projected financial statements Allows an organization to: - Examine the expected results of various actions and approaches. - Compute projected financial ratios under various strategy-implementation scenarios - Forecasts the future financial position of the company. 3. Preparing financial budgets - A document that details how funds will be obtained and spent for a specified period of time. - Includes: cash budgets, operating budgets, sales budgets, profit budgets, factory budgets, capital budgets, expense budgets, divisional budgets, variable budgets, flexible budgets, and fixed budgets 4. Evaluating the worth of a business Three main questions: - What a firm owns - What a firm earns - What a firm will bring to the market FOUR APPROACHES 1. Determine firm’s net worth or stockholders’ equity 2. Determine future benefits a firm’s owners may derive through net profits 3. Compute Price-Earnings Ratio Method 4. Compute Outstanding Shares Method e. Research and Development Strategies - The R&D department is responsible for driving innovation by conducting research, developing new products, processes, and technologies, and improving existing ones. Its main goal is to ensure the company remains competitive in the market. - Key responsibilities: Conducting Research Developing New Products Developing New Processes and Technologies Protecting Intellectual Property Collaborating with Other Departments Research and Development Issues 1. Emphasize product or process improvements  2. Stress basic or applied research 3. Be leaders or followers in R&D 4. Develop robotics or manual-type processes 5. Spend a high, average, or low amount of money on R&D 6. Perform R&D within the firm or contract R&D to outside firms 7. Use university researchers or private-sector researchers 8. Lack of Resources Research and Development Strategic Approach 1. Be the first firm to market new technological products 2. Be an innovative imitator of successful products, thus minimizing the risks and costs of start-up 3. Be a low-cost producer by mass-producing products similar to but less expensive than products recently introduced f. Management Information Systems (MIS) Strategies - Responsible for controlling the hardware and software systems that the organization uses to make business-critical decisions. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. MIS is a people-oriented field with an emphasis on service through technology. - Key responsibilities: Provide Easy Access to the Information Data Collection Performance Tracking Protecting Intellectual Property Management Information System Issues 1. Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms. 2. The process of strategic management is facilitated immensely in firms that have an effective information system Business Analytics 1. A management information system technique that involves using software to mine huge volumes of data to help executives make decisions - also called predictive analytics, machine learning, or data mining 2. A key distinguishing feature of business analytics is that it is predictive rather than retrospective, in that it enables a firm to learn from experience and make current and future decisions based on prior information g. Cross-Functional Implications of Strategy Implementation - Cross-functional collaboration involves employees from diverse departments working together towards a common goal. This collaborative approach brings together varied skill sets, perspectives, and experiences, which are essential for innovative decision-making and efficient execution of strategies.  Benefits of Cross-Functional Collaboration Enhanced 1. Innovation: By leveraging diverse skills and perspectives, organizations can foster creativity and innovation, leading to more effective solutions. 2. Improved Efficiency: Breaking down silos allows for better resource allocation and streamlined processes, which can enhance overall operational efficiency 3. Alignment with Strategic Goals: Cross-functional teams can ensure that all departments align their efforts with the organization's broader strategic objectives, facilitating a unified direction Challenges in Cross-Functional Collaboration 1. Communication Barriers: Different departments may have distinct terminologies and communication styles, leading to misunderstandings 2. Misaligned Goals: Without clear overarching objectives, teams may pursue conflicting priorities, undermining collective efforts 3. Lack of Trust: Building trust among team members from different backgrounds is essential but can be challenging in cross-functional settings References: ADP. (2019). HR Strategy: What is It and How to Create One (L. Hardwick, Ed.) [Review of HR Strategy: What is It and How to Create One]. ADP; www.adp.com. https://www.adp.com/resources/articles-and-insights/articles/h/hr-strategy.aspx Course Hero. (n.d.). *Module 7-8: Strategy implementation and functional strategies (SBUs)* [PowerPoint slides]. Retrieved from https://www.coursehero.com/file/93367721/Module-7-8-Strategy-Implementation-and-Fu nctional-Strategies-SBUs-1pptx/ Course Hero. (n.d.). *Module 7: Strategy* [PowerPoint slides]. Retrieved from https://www.coursehero.com/file/120432206/Module-7-Strategy/ Depasse, C. (2016, November 10). A Roadmap for Developing Functional strategies - Operational Excellence Society. Operational Excellence Society. https://opexsociety.org/body-of-knowledge/a-roadmap-for-developing-functional-strategi es/ Functional strategy. (n.d.). Building Sustainable Competitive Advantage and a Winning Organization. http://www.edglabs.com/functional-strategy.html?fbclid=IwY2xjawF02mBleHRuA2Flb QIxMAABHcMQtL4LLRYL0ke36iID5Eni_yVjPU1vWGSBIugiX4bir0TTQIgZxzOTQ w_aem_5EO8uQRwxuVziiwvZvNAY Gouldsberry, M. (2024, June 2). Benefits and drawbacks of tying compensation to performance management. Betterworks. https://www.betterworks.com/magazine/financial-compensation-linked-to-employee-perf ormance/ Gaille, B. (2018, December 4). 10 Strategic Business Unit Structure Advantages and Disadvantages - BrandonGaille.com. BrandonGaille.com. https://brandongaille.com/10-strategic-business-unit-structure-advantages-and-disadvanta ges/ He, G. (2024, March 18). Matrix Organizational Structure: Advantages & Disadvantages. teambuilding.com. https://teambuilding.com/blog/matrix-organizational-structure Indeed Editorial Team. (2024, August 16). What Is an Operations Strategy? Definition and Benefits(Indeed Editorial Team, Ed.) [Review of What Is an Operations Strategy? Definition and Benefits]. Indeed.com. https://www.indeed.com/career-advice/career-development/operations-strategy Mwangi, W.B & Kiambat, K. (2015). Integrating Human Resource Management with Organizational Strategies. Global Journal of Management and Business Research: A Administration and Management. https://globaljournals.org/GJMBR_Volume15/4-Integrating-Human-Resource.pdf Shiksha. (n.d.). *Strategy implementation: Meaning and process*. Retrieved from https://www.shiksha.com/online-courses/articles/strategy-implementation-meaning-and-p rocess/  PAMANTASAN NG LUNGSOD NG MAYNILA PLM BUSINESS SCHOOL DEPARTMENT OF BUSINESS ECONOMICS Strategy Review, Evaluation, and Control In Partial Fulfillment of the Requirements in Strategic Management for the Degree of Bachelor of Science in Business Administration Major in Business Economics Submitted by: Lumbang, Jamie G. Pernia, Ralph Joseph R. Reales, Clarisse Anne L. Sanchez, Cayra Janelle C. Submitted to: Prof. Cyrus O. Gatongay November 2024  A. Strategy Evaluation ○ It is a process of assessing the effectiveness and efficiency of the strategy implemented in a company to achieve goals and objectives. ○ This is done in order to understand how the strategy being implemented can be improved through necessary adjustments, changes, or corrective actions. ○ In the ever changing business environment, strategies can be outdated; through this process, it is possible problems that may arise are identified B. The Strategy Evaluation Process ○ The results of strategy evaluation process can have a significant, long lasting consequences ○ Incorrect strategic decisions can result to negative results which is difficult if not impossible to reverse, ○ Evaluation of the strategy is considered as vital to the organization’s performance. And, timely evaluation can indicate changes in market environment which could lead to potential problems. Identifying this through evaluation is a prevention to business failure and improvement of performance. Strategy Evaluation Process 1. Examination of Underlying bases of a Firm’s Strategy 2. Comparison of Expected and Actual Results 3. Application of Corrective Actions and Alignment of Performance to Plans Understanding the Business’s Competitive Advantage 1. Resources Access to capital, technology, human resources, and materials for production 2. Skills Ability of the business in producing a specific good or service which other businesses do not have. 3. Position It refers to the setting of the company, how it is located, the type of market, branding, and market share. C. Reviewing Bases of Strategy Effective strategy evaluation ensures an organization remains aligned with its goals and adapts to both internal and external changes. Reviewing the underlying bases of an organization’s strategy could be completed by designing a revised EFE Matrix and IFE Matrix. These tools assist organizations in reevaluating their strategic groundwork by examining changes in internal strengths and weaknesses alongside external opportunities and threats.  Internal Factor Evaluation (IFE) Matrix is a A revised IFE Matrix should focus on strategy formulation tool that summarizes and changes in the organization’s management, evaluates a firm’s major strengths and marketing, finance, accounting, production, weaknesses in the functional areas of a and information systems (MIS) strengths and business, providing a basis for identifying and weaknesses. evaluating relationships among those areas. External Factor Evaluation (EFE) Matrix is A revised EFE Matrix should indicate how a widely used strategic planning analytical effective a firm’s strategies have been in tool designed to summarize and evaluate response to key opportunities and threats. economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information. These are some of the questions that should be addressed through the analysis: 1. How have competitors reacted to our strategies? 2. How have competitors’ strategies changed? 3. Have major competitors’ strengths and weaknesses changed? 4. Why are competitors making certain strategic changes? 5. Why are some competitors’ strategies more successful than others? 6. How satisfied are our competitors with their present market positions and profitability? 7. How far can our major competitors be pushed before retaliating? 8. How could we more effectively cooperate with our competitors? Additionally, organizations must quickly identify when their strategies are no longer effective. Several internal and external factors can hinder companies from reaching their long-term goals. On top of that, the question is not whether the critical internal and external factors will change, but rather when and how those changes will occur. Organizations may face both external and internal obstacles such as the following: Internal Factors: Ineffective strategy selection, poor implementation, or overly optimistic objectives External Factors: Actions by competitors, changes in demand, technological advancements, economic conditions, demographic changes, and government policies D. Measuring Company Performance Systematic measurement of organizational performance involves evaluating actual results against expected outcomes, investigating deviations, assessing individual contributions, and monitoring progress toward achieving the company’s objectives. Long-term objectives serve as benchmarks in this process. To ensure effectiveness, criteria for evaluating strategies should be: Measurable Verifiable Predictive  Furthermore, when an organization falls short of its objectives, it signals the need for adjustments. Common reasons for performance gaps include: Unrealistic Policies Economic Shifts Operational Inefficiencies Strategy evaluation incorporates both quantitative and qualitative criteria. Furthermore, selecting the type of criteria depends on the organization’s size, industry, strategies, and management approach. Common quantitative measures used in strategy evaluation include financial ratios, which are often tracked for each business segment. However, relying solely on quantitative evaluation may also include several challenges and limitations like overlooking progress toward long-term strategic goals, producing inconsistent results, and reduced objectivity. Hence, to address the gaps left by quantitative analysis, qualitative factors play a crucial role in evaluating strategies. Sample Framework for Assessing Organizational Performance E. Making Corrective Actions Taking corrective actions is another key component of strategy evaluation, enabling organizations to adapt to changing circumstances and maintain their competitive edge. These actions involve making necessary adjustments to realign the organization’s operations or strategies to achieve its objectives effectively. Also, corrective actions may involve refining existing strategies, instead of abruptly abandoning them. Organizations shall learn to anticipate change as no organization can escape it. Failure to adapt can result in stagnation and a loss of competitive advantage. In addition, effective strategy evaluation enhances an organization’s ability to respond to external and internal shifts by identifying areas that need improvement and taking proactive measures. According to Erez and Kanfer, individuals accept change when they clearly understand the changes, feel a sense of control over the circumstances, and know the required steps to implement the changes effectively. Corrective actions aim to: Leverage internal strengths effectively Take advantage of new external opportunities Mitigate or avoid external threats Address internal weaknesses F. The Balanced Scorecard History of the Balanced Scorecard – The idea of the balanced score performance measurement system was first shared by Kaplan and David Norton in 1992 in the Harvard Business Review. It offers a clear structure for defining, expressing, assessing, and prosecuting the strategy, and has grown to be one of the main business ideas of this century. Balanced Scorecard – is an approach in performance evaluation where various approaches that include both financial and non-financial are used. They are strategic and are of significant organizational importance to a firm. It is for this reason that a balanced scorecard can ensure enhancement in a range of fundamental, all-encompassing phases instead of simply enabling a manager to fine-tune one aspect of a business to the detriment of others. Value-Based Management – is a system for reviewing organizational performance relative to a set of benchmarks that comprises purely financial metrics. Overview of the Balanced Scorecard Four Perspectives of the Balanced Scorecard:  1. Financial Perspective – measure reflecting financial performance. Examples: Profit, ROI, cash flow, revenue growth, EVA 2. Customer Perspective – measures having a direct impact on customers. Examples: customer satisfaction, customer retention, market share, customer complaints 3. Learning & Growth Perspective – measures describing the company employees’ learning curve. Examples: employee satisfaction, employee turnover, training and recreation 4. Internal Business Processes Perspective – measures showing key business processes performance. Examples: MCE, rejects and defects, quality costs, productivity measures LAG Indicators – says something about what had happened. (FINANCIAL MEASURES) LEAD Indicators – says something about what is yet to happen. (NON-FINANCIAL MEASURES) G. Characteristics of an Effective Evaluation System T. Lenz suggests the following six requirements for strategic management as a successful and efficient process of planning in the organization. All the guidelines adopted in the paper are aimed at improving the clarity, interest, and flexibility of the strategic management framework that is being considered. 1. Keep the Process Simple and Easily Understandable - Simplicity in the strategic management process helps all the interested parties understand the goals and tools of the process. An obvious way erases ambiguity and increases engagement, where people are able to concentrate on implementation of tasks rather than trying to understand specific terms or complex strategy. Such clarification is necessary to ensure that all the stakeholders in the organization understand the strategic objectives achieving which is a priority for the organization. 2. Eliminate Vague Planning Jargon - Both, using broad or very specialized terms may cause disconnection between team members and hide the big picture. When done effectively, jargon reduces the complexity of communication since everyone concerned with the strategic process will relatively understand what is being set out for them to achieve. This guideline entails direct communication that improves teamwork and decision making. 3. Keep the Process Nonroutine - According to Lenz, application of ToDo, the exchange of activities and groups, change of meetings and locations, and Change of the planning calendar help in encouraging creativity. A nonroutine solution is an effective idea for avoiding the deterioration of thought patterns and compliance with routine solutions and procedures and for stimulating inspiration as the approaches used by different team members will be unique. The mentioned variation ensures that people do not get bored undertaking strategic planning and makes the organizational culture to be vibrant.  4. Welcome Bad News and Encourage Devil’s Advocate Thinking - This study confirms that strategic management requires accepting bad news as a strategic decision. As for stakeholders, it enables them to realize that there is a problem, and adapt the strategy before it gets out of hand. The use of devil’s advocate is useful in troubling patterns of thought and examining previously held presumptions about strategies that may be detrimental. This makes the company’s culture to be transparent since it allows the employees to give negative feedback without fear. 5. Do Not Allow Technicians to Monopolize the Planning Process - Organizational strategic management should not be left to the purview of the technical specialists; it is everyone’s business throughout the organization. Thus, by engaging different managers in the planning process, organizations guarantee that such strategies take a number of factors of the business environment into consideration. This inclusivity also means that all stakeholders feel like ownership of property of the enterprise since everyone is represented. 6. Involve Managers from All Areas of the Firm - Since effective strategies are those that should address the needs of the whole organization, it is crucial to engage the managers from all departments. This cross-functional coordination means that there are different analyses of the issues and therefore robust strategies. It is important to involve a variety of managers in the planning phase not only because such a group brings more ideas, but because they are more likely to be committed to the implementation of this plan. H. Challenges in Strategic Management The four particular challenges that face all strategists today are (1) deciding whether the process should be more an art or a science, (2) deciding whether strategies should be visible or hidden from stakeholders, (3) contingency planning, and (4) auditing. Art or Science Strategists face the ongoing challenge of balancing the art and science of strategic management. The scientific approach advocates for thorough research, systematic analysis, and data-driven decisions. This method relies heavily on evaluating internal and external environments, calculating risks, and determining the most viable courses of action through measurable criteria. It is considered crucial for larger firms where precision and formality are necessary to navigate complexities and competitive pressures. In contrast, the artistic approach, championed by thinkers like Henry Mintzberg, emphasizes intuition, creativity, and imagination. It argues that strategies should emerge informally from a more holistic understanding of the business environment. Advocates of this perspective often see traditional strategic planning as rigid and time-consuming, favoring flexibility and adaptive thinking instead. While smaller firms may benefit from this intuitive approach, blending art and science offers the most effective solution. It allows strategists to combine the precision of analysis with the innovation required to adapt to dynamic market conditions. Visible or Hidden Another significant challenge is determining the level of visibility of strategies within the firm and to stakeholders. With visible strategies: Transparency in strategy fosters collaboration, as employees and stakeholders can contribute valuable insights, align with the firm’s goals, and strengthen commitment to the implementation process. Open strategies promote understanding, boost morale, and facilitate democratic decision-making, especially in environments where inclusivity and shared leadership are prioritized. Visibility can enhance trust among investors, creditors, and other external stakeholders by providing clarity about the firm’s direction. However, keeping strategies hidden has its advantages: It prevents rivals from accessing sensitive information that could give them a competitive edge, reduces second-guessing from within the organization, and limits the risk of losing strategic talent to competitors. This approach also protects the firm’s plans from imitation and ensures that critical decisions remain within a close circle of top management. Ultimately, strategists must find a balance between transparency and secrecy, taking into account the firm’s size, competitive landscape, and organizational culture. Striking this balance is essential to safeguarding sensitive information while fostering collaboration. I. Contingency Planning In an unpredictable business environment, strategists must prepare for unforeseen events through robust contingency planning. This process involves developing alternative plans that address both potential threats and unexpected opportunities. Too often, contingency plans focus solely on minimizing risks, such as market shifts, natural disasters, or regulatory changes. However, preparing for favorable events, such as surging demand for a product or unexpected technological breakthroughs, is equally important. Effective contingency (1) planning involves identifying potential scenarios, (2) evaluating their likelihood and impact, and (3) creating practical responses that can be implemented swiftly. It allows organizations to adapt quickly to crises, avoid decision-making paralysis, and capitalize on emerging opportunities. For instance, plans addressing competitive exits from key markets or major disruptions to supply chains can be instrumental in maintaining stability. Strategists must focus on high-priority areas to ensure plans are actionable and avoid excessive complexity. Contingency planning not only mitigates risks but also fosters adaptability and resilience in navigating an uncertain future. J. Auditing as a Tool for Strategy Evaluation Auditing is an essential tool for evaluating and refining strategies. It involves systematically reviewing financial statements and operational processes to ensure they align with established accounting standards and accurately reflect the firm's activities. Independent auditors assess compliance with standards such as Generally Accepted Accounting Principles (GAAP) and, increasingly, International Financial Reporting Standards (IFRS). The latter is gaining traction globally due to its simplicity and its ability to facilitate cross-border commerce. However, the shift to IFRS presents challenges, particularly for U.S. firms, which may face increased costs and operational adjustments. Key takeaways: Beyond financial accuracy, auditing provides valuable insights into the effectiveness of a firm’s strategies. It helps strategists identify weaknesses, evaluate the success of implemented initiatives, and determine areas for improvement. For multinational firms, adopting international standards such as IFRS can enhance their ability to compete in global markets. While auditing ensures transparency and compliance, it also plays a critical role in supporting strategic decision-making, enabling firms to adapt to changing environments while maintaining financial integrity.  By addressing these four challenges—art vs. science, visible vs. hidden strategies, contingency planning, and auditing—strategists can position their organizations for long-term success, balancing innovation, precision, adaptability, and accountability.  PAMANTASAN NG LUNGSOD NG MAYNILA Gen. Luna corner Muralla Street, Intramuros, Manila | https://plm.edu.ph Business Ethics, Social Responsibility, & Environmental Sustainability Reporters: Aquitania, Juan Miguel G. Padora, Micahella T. Rodil, Eunice Cielita C. Romero, Bert P. Submitted to: Prof. Cyrus O. Gatongay December, 2024  Business Ethics Reporter: Romero, Bert P. Question: Imagine you are the CEO of a tech company preparing to launch an app. Excitement is high, and your marketing campaign is ready to go. But just before the launch, your team discovers a critical software bug that compromises user privacy. As the CEO, you face a dilemma: Do you delay the launch to address the issue, ensuring transparency but risking delays and financial loss? Do you push forward, hoping no one notices the flaw despite knowing the risks to privacy, aiming to capitalize on the hype and generate immediate revenue? What would you do and why? The discussion revolves around that very question: What would you do and why? This scenario isn't just hypothetical—it's a real business ethics challenge that many leaders face. This situation highlights the critical importance of ethics in decision-making. Business ethics isn’t just about following the law—it’s about aligning actions with core values, maintaining trust, and prioritizing the well-being of all stakeholders. What is Business Ethics? Business ethics refers to the moral principles and standards that guide the behavior of individuals and organizations in the business world. It involves making decisions that are not only legally correct but also morally sound, ensuring that the actions of a company contribute positively to society, employees, and the environment. It also aligns to the economic theory “the triple bottom line” which says that states firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line. In simple terms, business ethics is about making or choosing the right choices in business, even when no one is checking, even if it is difficult, costly and inconvenient. It’s about doing what is good, fair, and responsible, not just what makes the most money. If you create a certain amount of harm to a society, your customers, or employees over a period, that’s going to have a negative impact on your economic value. So, businesses need to ask themselves:  Is this decision legal and aligned with our values? Will this benefit our employees, customers, and society? Are we protecting and caring for the environment? For Example: The Johnson & Johnson Tylenol Crisis: In 1982, Tylenol capsules were tampered with, leading to multiple deaths. Johnson & Johnson immediately recalled 31 million bottles and disposed properly, prioritizing consumer and environmental safety over profit. This ethical decision cost the company millions but preserved its reputation as a trustworthy brand. A business ethics should clearly outline the procedure that the employees in a company should be following and when business ethics are clearly communicated and followed, it helps create a work environment where employees feel respected, valued, and guided by shared principles. Without this clarity, it can disrupt our ability to make fair decisions, leading us to favor our personal commitments over collective values, norms, and principles, or it may distort our reasoning, making unethical actions seem less damaging or not wrong at all or leads to confusion, distrust, and even potential legal or financial issues. Code of Business Ethics Reporter: Romero, Bert P. What is the Code of Business Ethics? This code is a formalized set of guidelines and standards that define what is acceptable behavior within the organization. It outlines the values and standards the company expects everyone to follow, ensuring that actions are fair, just, honest, and responsible. A well-written code helps employees understand the ethical boundaries of their actions and encourages them to make responsible decisions. Example: SMB Code of Business Ethics Common Elements of the Code of Business Ethics Transparency: Transparency involves being open and honest about your company’s actions, especially when things go wrong. Example: Johnson & Johnson’s Tylenol Recall. When bottles of Tylenol were tampered with, the company immediately recalled millions of bottles to protect consumers. This quick and transparent action helped restore consumer trust. Social Responsibility: Social responsibility means making decisions that benefit society as a whole, not just the company. This can include supporting the environment, social justice, and ethical labor practices. Example: Unilever, with its Sustainable Living Plan, has reduced its carbon footprint while promoting fair wages and ethical working conditions in its supply chain. Compliance with the Rule of Law: Ethical businesses comply with all laws and regulations in their industry, ensuring that they operate within legal boundaries.  Example: Financial institutions ensure they follow strict anti-money laundering laws to protect themselves and their customers. Accountability: Accountability means taking responsibility for your actions and their outcomes. Ethical companies hold themselves and their employees accountable for both positive and negative results. Example: Tesla’s response to vehicle safety concerns: They take quick action to address any issues related to their cars, ensuring customers feel safe and valued. Fairness: Treating all employees and customers equally and ensuring that no one is taken advantage of. Example: Retailers ensure that workers in their supply chain are paid fair wages and work in safe conditions. Respect: Ethical businesses treat people with dignity and respect, valuing their rights and privacy. Example: Apple has a strong focus on user privacy, emphasizing that protecting customer data is a fundamental part of its business model. An Ethics Culture Reporter: Romero, Bert P. What is an Ethics Culture? An ethics culture refers to the environment within an organization that encourages and supports ethical decision-making and behavior. It's how the principles of the Code of Business Ethics are lived out every day by employees and leaders. An ethical culture makes doing the right thing feel natural and part of the company's identity. It goes beyond just following the rules and includes the mindset and values that shape how people behave within the company. How is an Ethical Culture Built? Leadership by Example: Company leaders must act ethically themselves. When leaders make good decisions and follow ethical principles, employees are more likely to do the same. Encouraging Honesty: Employees feel comfortable speaking up when they see wrongdoing, knowing that their concerns will be taken seriously. Recognition of Good Behavior: Companies should take active steps to ensure that the code is read, understood, believed, and remembered. Employees who demonstrate ethical behavior must be recognized and rewarded, reinforcing the importance of doing the right thing. Punish wrongdoing swiftly and severely when detected. Integrate Ethics into Daily Operations and Decisions - Ethics should not be a distant concept relegated to HR documents or annual workshops. It needs to be embedded into the day-to-day activities, decision-making processes, and overall operations. Whether it’s negotiating a contract, resolving a conflict, or  developing a product, employees should be consistently asking themselves how they can uphold the organization’s ethical values in those moments. Returning to the scenario presented earlier—what should a CEO do if they discover a bug in the app that compromises user privacy? If the company has a strong ethics culture in place, they will most likely act transparently, addressing the flaw openly and taking immediate steps to fix it. In this case, the company's ethics culture would guide the CEO to prioritize the well- being of the users and protect their privacy, even at the cost of immediate profit. This reflects accountability and respect for users, as well as a commitment to transparency. In contrast, if the company lacks an ethics culture and places more emphasis on short-term gains, the CEO might ignore the issue, launch the app, and hope to fix the bug later. This approach, however, could harm the company’s reputation and alienate customers once the bug is discovered. Importance of Code of Business Ethics and an Ethics Culture A Code of Business Ethics and an Ethics Culture are essential for any company to succeed and maintain trust. The code serves as a guide for employees, showing them how to make good choices and act responsibly. It helps the company stay fair and honest, which builds trust with customers, employees, and the community. An Ethics Culture ensures these values are not just written but practiced daily by everyone in the organization. Together, they prevent mistakes or bad behavior that could harm the company’s reputation. They also show that the company cares about doing the right thing, not just making money. In the long run, this commitment to fairness and responsibility leads to stronger relationships and lasting success. Bribes Reporter: Padora, Micahella T. According to inquirer, the Philippines is considered one of the most corrupt countries globally, ranking 116th out of 180 nations on the Corruption Perceptions Index (CPI) by Transparency International, placing it in the top one-third of the most corrupt countries. Bribery is defined by Black’s Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in discharge of a public or legal duty. Forms of Bribery The gift may be money, goods, actions, property, preferment, privilege, object of value, advantage, or merely a promise or undertaking to induce the action, vote, or influence of a person in an official or public capacity. 2 types of bribery: Direct Bribery Direct bribery occurs when a person explicitly offers, gives, or accepts something of value (e.g., money, gifts, favors) to influence the actions or decisions of another person in a position of authority. This is a straightforward transaction where the intent to gain undue advantage is clear. Indirect Bribery Indirect bribery involves using intermediaries or less obvious means to offer or receive bribes. The bribe might be funneled through a third party, such as a relative, charity, or company, to obscure the unethical transaction. Bribery Case: A Zamboanga City deputy prosecutor and a lawyer were sentenced to six to 10 years in prison for bribing a policeman to drop frustrated murder cases against two suspects. The Sandiganbayan's Sixth Division found Deputy City Prosecutor Roselyn Murillo-Mamon and defense counsel Pherhram Surian Saiddi guilty of violating the Anti-Graft and Corrupt Practices Act. Mamon is also barred from holding public office. The charges stemmed from a 2013 incident where they offered PHP 200,000 to Police Officer Flavio Enriquez Jr. to dismiss cases against the suspects. Legal Implications Revised Penal Code (RPC): Articles 210 to 212 specifically address bribery. Direct bribery can lead to imprisonment ranging from four to twelve years, depending on the nature of the act and whether it involves a criminal act or not. Indirect bribery carries penalties of two to six years of imprisonment without fines. Anti-Graft and Corrupt Practices Act (Republic Act No. 3019): This law outlines various corrupt practices by public officials and imposes penalties of one to ten years of imprisonment and perpetual disqualification from holding public office for violators. Presidential Decree No. 46: This decree prohibits public officials from receiving gifts under certain circumstances and imposes penalties similar to those under the RPC. Anti-Money Laundering Act (AMLA): This act addresses money laundering linked to bribery, imposing severe penalties on those found guilty, including imprisonment and fines. Tips on dealing with bribery in the workplace. When you are offered a bribe directly, assess the situation first. Someone attempting to bribe you may apply a great deal of pressure on you to accept it. Assess whether declining the bribe could make things more complicated or could lead to a hostile situation. Be particularly cautious when dealing with someone who has power or is part of the same organization you are in. Maintain presence of mind. A bribe can come in moments when you least expect it. In the event that you get caught off guard, try your best to take note of important details - who is bribing you; when and where you were approached; and what is being offered and what is at stake. These are specifics that can help back up your claim. Be sure to notify your superior immediately and provide a full account of what took place. Timing is essential here. Choosing to delay notifying the proper authorities could put your integrity and credibility in question. Informing your supervisor or a person in authority is the most important thing to do if you are ever offered a bribe. When declining is no longer an option, make no promises. You may have to accept the offer, but do not commit in any way to what you are expected to deliver. Make the necessary documentation. You now have physical evidence. Handle it well. Keep it in its original form and avoid having others see or get a hold of it as you proceed to report to the authorities. The same principles also apply when a bribe is sent to you anonymously via mail or courier. Upon delivery, take photographs of the contents and packaging, which could have additional information that could lead to identifying the briber. In all cases, it is necessary to keep all information confidential until an appropriate action is taken as a result of an investigation. Integrity - the quality of being honest and having strong moral principles that you refuse to change. Love Affairs in Work Reporter: Padora, Micahella T. Workplace romance is an intimate relationship between two consenting employees, as opposed to sexual harassment, which the Equal Employment Opportunity Commission (EEOC) defines broadly as unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. Workplace romance could be detrimental to workplace morale and productivity for a number of reasons that include: 1. Favoritism complaints can arise.  2. Confidentiality of records can be breached. 3. Reduced quality and quantity of work can become a problem. 4. Personal arguments can lead to work arguments. 5. Whispering secrets can lead to tensions and hostilities among coworkers. 6. Sexual harassment (or discrimination) charges may ensue. 7. Conflicts of interest can arise, especially when the well-being of the partner trumps the well-being of the company Workplace romance case The Supreme Court upheld the dismissal of two workers caught engaging in sexual intercourse at their workplace in the Imasen case, similar to a previous Stanford Microsystems case involving guards having an affair. Both rulings emphasized professional misconduct. In another instance, two teachers at Hagonoy Institute faced criticism for publicly displaying a scandalous relationship, while a principal in Bohol resigned over an affair with a student, leading to his wife’s dismissal for attempting a cover-up. However, a Bacolod teacher’s marriage to her 16-year-old student was not deemed immoral, with Justice Florenz Regalado stating that "the heart has its own reasons that reason itself does not know. Workplace relationship policy A workplace relationship policy, also called a fraternization policy, dating policy, workplace romance policy or a non-fraternization policy, is an organization's policy regarding romantic relationships in the workplace. The policy outlines whether relationships between coworkers are permitted, what steps need to be taken if employees are in a relationship and the standards for employees in romantic relationships. HR managers should keep workplace relationships policies in the employee manual and make sure all employees read and understand the policy Balancing Professional Boundaries and Personal Freedom 1. Know the Company Policy: Before engaging in a workplace relationship, it's essential to be aware of your company's policies on office romance. Some organizations may require you to disclose the relationship to HR, especially if there is a power imbalance. Understanding these guidelines can help you make informed decisions and avoid potential conflicts. 2. Maintain Professionalism: Even in the midst of a romance, it's crucial to maintain professionalism at work. Avoid public displays of affection, and ensure that your relationship doesn't interfere with your job responsibilities or affect the team dynamics. Remember that your actions can impact not just your own reputation but also that of your partner and the overall work environment. 3. Communicate Openly: Open communication with your partner is vital to managing the complexities of an office romance. Discuss potential challenges and agree on how to handle any issues that may arise. It's also important to have a plan for how to manage the relationship if things don't work out. 4. Consider the Impact: Think carefully about the potential impact of your relationship on your colleagues and the workplace culture. If there's a chance that your romance could lead to tension or disruption, it may be worth reconsidering the relationship or finding ways to minimize its impact on your work environment.  Social Policy Reporter: Padora, Micahella T. Social policy Guidelines and practices a firm may institute to guide its behavior toward employees, consumers, environmentalists, minorities, communities, shareholders, and other groups. Social policy is concerned with the ways societies across the world meet human needs for security, education, work, health and wellbeing. Social policy addresses how states and societies respond to global challenges of social, demographic and economic change, and of poverty, migration and globalisation. Corporate Social Responsibility Corporate Social Responsibility (CSR) is a self-regulating business model where companies take accountability for their impact on society, the economy, and the environment. By engaging in CSR, businesses aim to operate ethically and positively contribute to societal and environmental well-being, rather than causing harm. Philippine Companies: Aboitiz The Aboitiz Foundation continues to invest heavily on quality education-related projects including the Purposive College Scholarship, and technical-vocational scholarships. For decades, we have been working closely with the Department of Education, schools, and training institutions. We support the youth in becoming productive workforce members. San Miguel Corporation (SMC) Handog Lusog Nutrisyon Para Sa Nasyon evolved from a child nutrition program into Handog, SMF's flagship Corporate Social Responsibility (CSR) initiative. It now covers five areas: Karunungan (Education), Kalusugan (Health), Komunidad (Community), Kalikasan (Environment), and Kabuhayan (Livelihood). Key achievements include: Two scholars graduating in 2017, with one passing the Accountancy board exams. Rehabilitating 12 schools, constructing classrooms, and providing supplies. Conducting health programs benefiting 1,000 children and improving their nutrition. Offering cooking demonstrations to promote family meals and livelihood. Leading environmental activities like tree planting and coastal management. Employees also contributed over PHP 1.2 million to support future CSR efforts, reflecting SMF's culture of malasakit(compassion). San Miguel Brewery Inc. focuses on long-term social development through programs like the Trees Brew Life project under the Buhayin ang Kalikasan program, ensuring water supply sustainability and national development. Ginebra San Miguel, Inc. integrates CSR into its corporate culture by uplifting communities. Key initiatives include: Providing scholarships to students in state universities. Partnering with TESDA for the Technopreneur Program, offering training in mixology and bar operations to support mobile bar businesses. These efforts exemplify the commitment of San Miguel Corporation to nurturing communities and driving national progress. Examples of Ethical Social Policies in the Philippines Labor Rights and Fair Treatment Labor Code of the Philippines: Ensures fair wages, proper working hours, and just compensation for employees. Ecological Solid Waste Management Act of 2000 (RA 9003): Promotes proper waste segregation, recycling, and management to protect the environment. Philippine Clean Air Act of 1999 (RA 8749): Establishes guidelines to reduce air pollution from industrial and vehicular sources. Social Policies on Retirement Reporter: Rodil, Eunice Cielita C. Retirement is a Point where a person chooses to permanently leave the workforce. Key Ethical Questions: 1.Is it ethical for families to consider their children as their "retirement plan"? -Some parents believe having many children ensures care in old age. This raises important social and moral questions about dependency and personal responsibility. 2.How do we address cultural expectations? -Filipino families often face the debt of gratitude mindset: “We raised you; therefore, you owe us your earnings.” This creates pressure on adult children, potentially limiting their own financial stability and growth. Normal Retirement Age Standard Age: Typically set at 65 years, aligning with common pension eligibility. Some organizations allow extensions for exceptional employees, while others have no fixed retirement age, letting employees choose based on personal circumstances. Early Retirement Options Eligibility: Available as early as 50 or 55, depending on service length and company rules. Some policies permit early retirement for reasons like ill health. Reduced Benefits: Opting for early retirement usually means reduced pensions due to the longer payout period, a common feature in many plans. Social Pension Program for Indigent Senior Citizens (SPISC) Purpose: Provides a ₱1,000 monthly stipend (as of 2024) to indigent seniors aged 60+. Objectives: Support daily and medical needs, Reduce hunger and prevent neglect & Improve living conditions. Eligibility: Seniors must be frail, have no pension, and lack regular income or family support. Social Security System (SSS) Pension Range: ₱5,000 to ₱18,000, based on contributions and service years. Types: o Monthly Pension: For those with at least 120 monthly contributions. o Lump Sum: For those with fewer than 120 contributions, equal to total contributions plus interest. Government Service Insurance System (GSIS) Provides various retirement options for government employees. Lump sum option available for those not qualifying for monthly pensions. Corporate Pension Systems Optional Plans: Companies can establish retirement plans (Republic Acts 4917 & 7641). SMEs: Many rely on "pay-as-you-go" systems instead of formal funds. Capital Markets Development Act (2021): Aims to create fully funded, portable private pension plans. Retirement Challenges Low Pension Amounts: Insufficient to cover rising living costs. Family Dependence: Many retirees rely on family support. Lack of Mandatory Corporate Plans: SMEs often lack structured retirement plans. Retirement Process and Support Notice Requirements: Typically 3 to 12 months’ notice before retirement. Final Benefits: Exit interviews clarify pensions and health insurance, ensuring timely benefit distribution. Phased Retirement: Allows gradual workload reduction with partial pensions. Ongoing Support: Resources and guidance help employees navigate their retirement options smoothly.  What is a Sustainability Report? Reporter: Rodil, Eunice Cielita C. Sustainability Reporting A sustainability report details a company's environmental, social, and governance (ESG) performance, promoting transparency in corporate responsibility and ethical practices. Key Components: 1. Labor Practices: Ensures fair treatment, safety, and equality. 2. Product Sourcing: Describes ethical sourcing and fair-trade adherence. 3. Energy Efficiency: Highlights efforts to reduce energy use and manage resources. 4. Environmental Impact: Covers carbon emissions, waste, and biodiversity. 5. Business Ethics: Demonstrates fairness, transparency, and anti-corruption measures. ESG Breakdown: 1. Environmental (E): Focuses on sustainable practices like energy efficiency, carbon emission reduction, and biodiversity. Importance: Reduces financial and regulatory risks, drives innovation. 2. Social (S): Evaluates community and employee relations, diversity, and CSR initiatives. Importance: Enhances productivity, reputation, and stakeholder trust. 3. Governance (G): Examines leadership integrity, board practices, and risk management. Importance: Ensures accountability, reduces risk, and builds stakeholder confidence. Why ESG Matters: ESG initiatives are crucial for regulatory compliance, investor appeal, and competitive advantage. Trends: The SEC is moving toward mandatory climate disclosures & Rising interest in ESG investing reflects a shift in stakeholder expectations. Challenges: Avoiding greenwashing is essential. Genuine, transparent practices build trust and ensure compliance. Global Sustainability Reporting Landscape: EU: CSRD mandates large companies disclose ESG impacts from 2024. US: Voluntary, but mandatory climate disclosures are pending. Philippines: Publicly listed companies must report ESG data under a "comply or explain" framework.  Asia: Countries like Thailand and Singapore also mandate sustainability reporting. Lack of Standards Changing Reporter: Rodil, Eunice Cielita C. Refers to a scenario where established norms, guidelines, or criteria remain static, failing to adapt to advancements in industries, technology, or societal expectations. This stagnation can impact business practices, regulatory compliance, and organizational resilience. Consequences of Static Standards 1. Operational Inefficiencies: Without standardized processes, organizations may struggle with consistency, leading to decreased productivity and increased errors. Example: Outdated manufacturing protocols might result in frequent defects or product recalls. 2. Quality Control Issues: Inconsistent standards can compromise product or service quality. Without clear benchmarks, maintaining quality across different teams or departments becomes challenging. Example: In the medical field, outdated safety standards for equipment could jeopardize patient safety. 3. Increased Risk: Organizations lacking updated standards expose themselves to operational and legal risks, particularly if they fail to meet evolving regulatory requirements. Example: Companies relying on old cybersecurity protocols may fall prey to modern cyber threats, risking data breaches. 4. Stakeholder Confusion: Employees, customers, and investors may be unclear about expectations and processes when standards are not well-defined or outdated, potentially eroding trust. Example: Conflicting information about product safety standards can undermine customer confidence. The Role of Stakeholders: Regulators: Must proactively establish and revise standards to reflect current realities. Industry Leaders: Should collaborate on best practices and push for continuous improvement. Organizations: Need to adopt a mindset of continuous learning and adaptability to stay ahead of changes. The Connection Between Evolving Standards and Sustainability Reporting 1. Inconsistent Reporting Frameworks - A lack of standardized frameworks results in diverse reporting practices across companies. Organizations often rely on multiple frameworks (e.g., GRI, SASB, TCFD), leading to a fragmented approach. This inconsistency makes it difficult for stakeholders to compare data accurately and assess a company's true sustainability performance. 2. Challenges in Data Accuracy - Without clear, standardized guidelines, companies face challenges in data collection and reporting accuracy. This complexity can lead to incomplete or inconsistent sustainability reports, undermining their credibility and hindering effective decision-making. 3. Barriers to Effective Change - The absence of recognized standards serves as a major barrier to achieving sustainability goals, such as net-zero emissions. Inconsistent measurement tools make it difficult for companies to track and demonstrate progress. 4. Increased Regulatory Pressure - Regulatory bodies worldwide are pushing for more comprehensive and standardized sustainability reporting (e.g., the EU’s Corporate Sustainability Reporting Directive). The lack of consistent standards complicates compliance and increases the risk of penalties. 5. Meeting Stakeholder Expectations - Investors, customers, and other stakeholders demand transparency in ESG practices. Inconsistent reporting can lead to confusion and skepticism about a company’s commitment to sustainability, affecting trust and financial performance. Managing Environmental Affairs in the Firm Reporter: Aquitania, Juan Miguel G. Environment - According to the International Standards Organization the word environment is defined as surroundings in which an organization operates, including air, water, land, natural resources, flora, fauna, humans, and their interrelation. Management of Environmental Affairs - a strategic priority for businesses due to the ecological challenges of resource conservation and pollution control. Key issues include global warming, habitat destruction, waste management, and protecting endangered species. Firms increasingly adopt green initiatives, such as biodegradable products and recycled materials, to meet these challenges. Its Strategic Importance: - Environmental management is no longer a task for specialists but a responsibility shared by all employees and managers. Firms that integrate environmental stewardship into their operations gain a competitive advantage. Mark Starik emphasizes that reversing ecological deterioration is a critical strategic issue requiring immediate attention. Its Global Considerations: - Understanding the connection between international trade, competitiveness, and global resources is crucial. Businesses must adopt practices that conserve and protect the environment rather than exploit it. Stakeholder Expectations:  - Consumers, governments, and societies expect businesses to maintain ecological balance. Companies that protect and preserve the environment enjoy greater public support, while those that harm it face backlash. Green products, aligned with consumer demand for sustainability, are increasingly popular. Environmental Strategies - Firms that manage environmental affairs will enhance relations with consumers, regulators, vendors, and other industry players, substantially improving their prospects of success. - Environmental strategies could include the following: 1. Developing or acquiring green businesses 2. Divesting or altering environment-damaging businesses 3. Becoming involved in environmental issues and programs 4. Acquiring “green” skills 5. Providing environmental training programs for company employees and managers. 6. Incorporating environmental values in mission statements Reasons Why Firms Should Adapt the Concept of “Be Green” 1. Consumer demand for environmentally safe products and packages is high. 2. Public opinion demanding that firms conduct business in ways that preserve the natural environment is strong. 3. Environmental advocacy groups now have over 20 million Americans as members. 4. Federal and state environmental regulations are changing rapidly and becoming more complex. 5. More lenders are examining the environmental liabilities of businesses seeking loans. 6. Many c