STRATEGY, ETHICS & SOCIAL RESPONSIBILITY

STRATEGY, ETHICS & SOCIAL RESPONSIBILITY

*Shanmukha Rao. Padala  **Dr. N. V.S. Suryanarayana

INTRODUCTION:

            The earlier days’ concept is, the managers focused on ‘today’s decisions for today’s business’. However, the rapid change experienced by companies has made the managers to anticipate the future and prepare for it. They have prepared systems, procedures and manuals and evolved budgets and planning and control systems, which included capital budgeting and management by objectives. The inadequacy of these techniques has led to the emergence of long range planning which in turn gives rise to strategic planning and subsequently to strategic management.

            Strategic management deals with decision making and actions which determine an enterprise’s ability to excel survive or die by making the best use of firms’ resources in a dynamic environment. The main purpose of study of strategic management is to examine why some organizations succeed while others fail and yet others completely change. Before going to discussing about strategic management, it is necessary to point out on ‘Strategy’ in this chapter.

            Strategy is the overall plan of a firm deploying its resources to establish a favourable position and compete successfully against its rivals. Strategy describes a framework for charting a course of action. It explicates an approach for the company that build on its strengths and is a good fit with the firm’s external environment. It is basically intended to help firms achieve competitive advantage. Competitive advantage allows a firm to gain an edge over rivals when competing. Competitive advantage comes from a firm’s unique ability to perform activities more distinctively and more effectively than rivals. A firm’s distinctive competence or unique ability here implies, those special capabilities, skills, technologies or resources that enable a firm to distinguish itself from its rivals and create competitive advantage (such as superior quality, design skills, low-cost manufacturing, superior distribution etc.).

            The term ‘terrain’ is highly relevant in explaining the concept of strategy more clearly. From a business sense, terrain refers to markets, segments and products used to win over customers. The essence of strategy is to match strengths and distinctive competence with terrain in such a way that one’s own business enjoys a competitive advantage over rivals competing in the same terrain. The basic premise of strategiy, as things stand now, is that an adversary can defeat a rival- even a large, more powerful one- if it can manoeuvre a battle or engagement on to a terrain favourable to its own capabilities. The term ‘Capability’ refers to the ability or capacity of a bundle of resources deployed by a firm to perform an activity.

The word strategy came from the Greek word ‘strategy’, which means a ‘general’. At that time, strategy literally meant the art and science of directing military forces. Today strategy is used in business to describe how an organization is going to achieve its objectives. Strategic management may be defined as a systematic approach to positioning the business in relation to its environment to ensure continued success and offer security from surprises. While no approach can guarantee continuous success and total security, an integrated approach to strategy formulation, involving all levels of management, can go some way in this direction. In simple words strategy can be defined as ‘Strategy is ideas and actions to conceive secure the ‘Future’.

DEFINING AND EXPLAINING STRATEGY:

            Management is an art as well as science. Many of the concepts used in building management theory have been derived from practice. Unlike the pure sciences which have their foundation in experimental research, management studies draw upon the practical experiences of managers in defining concepts. Business policy is rooted in the practice of management and has passed through different phases before taking its shape in the from strategic management. One of the earliest contributors to this yoiung subject was Alfred D Chandler.

Alfred D Chandler (1962)

            Chandler made a comprehensive analysis of interrelationships among environment, strategy, and organizational structure. He analysed the history of organizational change in 70 manufacturing firms in the US. While doing so, Chandler defined strategy as: “The determination of the basic long-term goals and objectives of an enterprise and the adoption of the course of action and the allocation of resources necessary for carrying out these goals”. Note that Chandler refers to three aspects:

  • Determination of basic long-term goals and objectives,
  • Adoption of courses of action to achieve these objectives, and
  • Allocation of resources necessary for adopting the courses of action.

Kenneth Andrews (1965)

            Andrews belongs to the group of professors at Harvard Business School who were responsible for developing the subject of business policy and its dissemination through the case study method. Andrew defines strategy as: “The pattern of objectives, purpose, goals and the policies and plans for achieving these goals stated in such a way so as to define what business the company is in or is to be and the kind of company it is or to be”. This definition refers to the ‘business definition’, which is a way of stating the current and desired future position of company, and the objectives, purposes, goals, major policies and plans required to take the company from where it is to where it wants to be.

Igor Ansoff (1965)

            Professor Ansoff is a well-known authority in the field of strategic management and has been a prolific writer for the last three decades. In one of his earlier books, Corporate Strategy (1965), he explained the concept of strategy as: “The common thread among the organisation’s activities and product-markets….. that defines the essential nature of business that the organization was or planned to be in future”.

            Ansoff has stress on the commonality of approach that exists in diverse organizational activities including the products and markets that define the current and planned nature of business.

William F Glueck (1972)

            Another well-known author in the area of strategic management was Glueck, who was a Distinguished Professor of Management at the University of Georgia till his death in 1980. He defined stragety precisely as: “A unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved”. The three adjectives which Glueck has used to defined a plan make the definition quite adequate. ‘Unified’ means that the plan joins all the parts of an enterprise together, ‘comprehensive’ means it covers all the major aspects of the enterprise, and ‘integrated’ means that all parts of the plan arte compatible with each other.

Henry Mintzberg (1987)

            Mintzberg of McGill University is a noted management thinker and profile writer on strategy. He advocates the idea that strategies are not always the outcome of rational planning. They can emerge from what an organization does without any formal plan. He defines strategy as: “a pattern in a stream of decisions and actions”. Mintzberg distinguishes between intended strategies and emergent strategies. Intended strategies refer to the plans that managers develop, while emergent strategies are the actions that actually take place over a period of time. In this manner, an organization may start with a deliberate design of strategy and end up with another form of strategy that is actually realized.

Michael E Porter (1996)

            Michael Porter of the Harvard Business School has made invaluable contributions to the development of the concept of strategy. His ideas on competitive advantage, the five-forces model,k generic strategies, and value chain are quite popular. He opines that the core of general management is strategy, which he elaborates as: “….. developing and communicating the company’s unique position, making trade-offs, and forging fit among activities”.

            Strategic position is based on customers’ needs, customers’ accessibility, or the variety of a company’s products and services. A company’s unique position relates to choosing activities that are different from those of the rivals, or to performing similar activities in different ways. However, a sustainable strategic position requires a trade-off when the activities that a firm performs are incompatible. Creation of fit among the different activities is done to ensure that they relate to each other.

            It must be noted that the different approaches referred to above to define strategy cover nearly a quarter of a century. This is an indication of what a complex concept strategy is and how various authors have attempted to define it. To put it in another way, there are as many definitions as there are experts. The same authors may change the approach they had earlier adopted. Witness what Ansoff said 19 years later in 1984 (his earlier definition is of 1965): “Basically, a strategy is a set of decision-making rules for the guidance of organizational behaviour”.

ANALYSIS OF DEFINITIONS OF STRATEGY:

The analysis of various definitions of strategy presents the following points:

  • Strategy is a central understanding of the strategic management process.
  • Strategy is the determination of basic long-term goals and objectives of an organization.
  • Determining the course of action to attain the predetermined goals and objectives.
  • Allocating the necessary resources for implementing the course of action.
  • Developing the company from its present position to the desired future position.
  • Set of decision-making rules making a common thread.
  • The common thread pulls the policies, plans, goals, objectives of the different functional areas of business such as finance, marketing, production/operatins and human resource together and interweaves them as a unified comprehensive and integrated plan, action and evaluation.
  • Set a clear direction.
  • Enterprise knows it strengths and weakness compared with those of its competitors.
  • Enterprise devotes its hard-won resources to projects that employ its set of core competencies, the primary skills within the organization.
  • Identify factors in the political and social environment that requires careful monitoring.
  • Recognize which competitor’s actions need critical attention.
  • The competitive firm should have a rational, clear-headed notion, purged of wishful thinking of (i) its mission, (ii) its external competitive environment (for analyzing opportunities and threats) and (iii) its internal capabilities (including strength and weaknesses).

ELEMENTS OF A STRATEGY:

            Any coherent strategy should have four important elements:

  1. Goals: A strategy invariably indicates the long-term goals toward which all efforts are directed. For example long-term goals might to be ‘dominate the market, to be the technology leader or to be the premium quality firm’. Such enduring goals help employees give their best in a unified manner and enable the firm to specify its competitive position very clearly to its rivals. An advertisement from Maruti Suzuki for example, claims: “we don’t just sell more cars than No.2. We sell more cars than the entire competition put together”. Maruti’s commitment to being number one (sales, distribution network, lower cost producer, highest resale value, one stop solution provider etc) or two in the markets it serves sends clear signals to its rivals in more than one way. But at present, the entire automobile world is shaking due to introduce the ‘NANO’ car by the TATA Group of Industries at least cost throughout the world.
  2. Scope: A strategy defines the scope of the firm that is, the kind of products the firm will offer, the markets (geographies, technologies, processes) it will pursue and the broad areas of activity it will undertakes. It will, at the same time, throw light on the activities the firm will not undertake.
  3. Competitive Advantage: A strategy also contains a clear statement of what competitive advantages the firm will pursue and sustain. Competitive advantage arises when a firm is able to perform an activity that is distinct or different from that of its rivals. Firms build competitive advantage when they take steps that help them gain an edge over their rivals in attracting buyers. These steps vary, for example, making the highest quality product, offering the best customer service, producing at the lowest cost or focusing resources on a specific segment or niche of the industry.
  4. Logic: This is the most important element of strategy. For, a firm’s strategy is to dominate the market for inexpensive detergents by being the low-cost, mass-market producer. Here the goal is to dominate the detergent market. The scope is to produce low-cost detergent power for the Indian mass market. The competitive advantage is the firm’s low cost. Yet this example does not explain why this strategy will work. Why the firm will get ahead of others by limiting its scope and by being the low cost producer in the detergent industry. The ‘why’ is the logic of the strategy. To see how logic is the core of a strategy, consider the following expanded version of a strategy. ‘our strategy is to dominate the Indian market for inexpensive detergent power by being the low cost producer selling through mass-market channels. Our low price will generate high volumes. This, in turn, will make us high volume, low-cost producer. The economies of scale would help us improve our bottom-line even with a low price”.

CRITERIA FOR EFFECTIVE STRATEGY:

Although each strategic situation is unique, there are some common criteria that tend to explain an effective strategy. Criteria for effective strategy include:

  1. Clear, Decisive Objectives: All efforts should be directed towards clearly understood, decisive and attainable overall goals. All goals need not be written down or numerically precise but they must be understood and be decisive.
  2. Maintaining the initiative: The strategy preserves freedom of action and enhances commitment. It sets the pace and determines the course of events rather than reacting to them.
  3. Concentration: The strategy concentrates superior power at the place and time likely to be decisive. The strategy must define precisely what will make the enterprise superior in power, best in critical dimensions in relation to its competitors. A distinctive competency yield greater success with fewer resources.
  4. Flexibility: The strategy must purposely be built in resources, buffers and dimensions for flexibility and maneuver. Reserved capabilities, planned maneuverability and repositioning allow one to use minimum resource while keeping competitors at a relative disadvantage.
  5. Coordinated and Committed Leadership: The strategy should provide responsible, committed leadership for each of its major goals. Care should be taken in selecting the leaders in such a way that their own interest and values match with the requirements of their roles. Commitment but not acceptance is the basic requirement.
  6. Surprise: The strategy should make use of speed, secrecy and intelligence to attack exposed or unprepared competitors at an unexpected time. Thus surprise and correct time are important.
  7. Security: The organization should secure or develop resources required, securely maintain all vital operating points for the enterprise, an effective intelligence system to prevent the effects of surprise by the competitors.

KEY AREAS IN DEVELOPING A STRATEGY:

The managers have to consider the following key areas in developing a strategy:

  1. The type of goods and/or services that the firm will produce and will sell.
  2. The mode of producing goods and rendering services.
  3. Who are and will be the firm’s customers.
  4. The methods of financing the various operations of the firm.
  5. The amount of risk that the firm will take.
  6. Method of implementing the strategy.

BUSINESS ETHICS:

            Ethics is defined as the discipline dealing with good and bad and with moral duty and obligations. Business ethics is concerned with truth, justice and a variety of aspects such as the expectations of society, fair compensation, advertising, public relations, social responsibilities, consumer autonomy and corporate behaviour at home country and abroad. Managers and top management have a responsibility to institutionalize ethics by framing a code of ethics for the organization.

            Fred R. David defined the term business ethics as, “Conduct or actions within organizations that constitute and support human welfare”. Good business ethics is a prerequisite for good strategic management through it is also said that there is no room for ethics in business. However, there is a rising tide of consciousness about the significance of business ethics. Strategies are primarily responsible for assuring that high ethical principles are accepted and practiced in an organization. All strategy formulation, implementation and evaluation decisions have ethical ramifications.

            A business code of ethics can provide a basis on which politics can be guide daily behaviour and decision at the work site. Organizations need to conduct periodic ethics workshops to ensure that all the employees understand them in true spirit and ensure the implementation properly. Code of ethics spell out the standards of behaviour expected of all managers and employees.

            Gelleman offers a piece of advice for martagers: “All managers risk giving too much because of what their companies demand from them. But the same superiors who keep pressing you to do more, or to do it better, or faster, or less expensively, will turn on you should you cross that fuzzy line between right and wrong. They will blame you for exceeding instructions or for ignoring their warnings. The smartest managers already know that the best answer to the question, ‘How far is too far?’ is don’t try to find out”.

            Drucker, offers a piece of advice for managers: “A man (or woman) might know too little, perform poorly, lack judgment and ability, and yet not do too much damage as manager. But, it that person lacks in character, and integrity – no matter how knowledgeable, how brilliant, how successful – he destroys. He destroys people, the most valuable resource of the enterprise. He destroys spirit. And he destroys performance. This is particularly true of the people at the head of an enterprise. For the sprit of an organization is created from the top. If an organization is great in spirit, it is because the spirit of its top people is great. If it decays, it does so because, the top rots; as the proverb has it, “Trees die from the top”. No one should even become a strategist unless he or she is willing to have their character serve as the model for subordinates”.

Gene Laczniak’s fourteen ethical propositions are presented as follows:

  1. Ethical conflicts and cloths are inherent in business decision-making.
  2. Proper ethical behaviour exists on a plane above the law. The law merely specifies the lowest common denominator of acceptable behaviour.
  3. There is no single satisfactory standard of ethical action agreeable to everyone that a manager can use to make specific operational decisions.
  4. Managers should be familiar with a wide variety of ethical standards.
  5. The discussion of business cases or of situations having ethical implication can make managers more ethically sensitive.
  6. There are diverse and sometimes conflicting determinants of ethical action. These stem primarily from the individual, from the organization, from professional norms, and from the values of society.
  7. Individual values are the final standard, although not necessarily the determining reason for ethical behaviour.
  8. Conensus regarding what constitutes proper ethical behaviour in a decion-making situation diminishes as the level of analysis proceeds from abstract to specific.
  9. The moral tone of an organization is set by top management.

10.  The lower the organizational level of a manager, the greater the perceived pressure to act unethically.

11.  Individual managers perceive themselves as more ethical than their colleagues.

12.  Effective codes of ethics should contain meaningful and clearly stated provisions, along with enforced sanctions for noncompliance.

13.  Employees must have a nonpunitive, fall-safe mechanism for reporting ethical abuses in the organization.

14.  Every organization should appoint a top-level manager or director to be responsible for acting as an ethical advocate in the organization.

These propositions enable strategists to deal with the subject of business ethics with confidence. Personal financial gain is an underlying motive for many cases of unethical conduct in organizations.

History has proved that greater the trust and confidence of the people in ethics of an institution or society, the greater its economic strength. Business relationships are mostly built on mutual trust, confidence and reputation. Therefore managers should formulate code of ethic and make themselves sure that these ethics are followed in strategy formulation, implementation and evaluation.

Some people call business ethics an oxymoron- a ceoncept that combines opposite or contradictory ideas. Other people believe the corporate world divided into so-called ethical corporations with “good intentions” and most of the rest of the world. These ‘evil’ corporations are led by businessmen who are ascribed the most selfish motivations to grow their wealth at all costs.

The modern business ethics movement was born the late 1970s, part of the post-Watergate reform movement. Ethics is defined as the consensually accepted standards of behaviour for an occupation, trade, or profession. Business ethics is based on broad principles of integrity and fairness and focuses on internal stakeholder issues such as product quality, customer satisfaction, employee wages and benefits, and local community and environmental responsibilities. These are issues that a company can actually influence.

These, on the face of it seem to be reasonable requirements, yet why are many business people perceived to be acting unethically? Perhaps Mark Twain has provided the answer, he once said, “The secret of success is honesty and fair dealing. If you can fake these, you’ve got it made.”

SOCIAL RESPONSIBILITY:

            Social responsibility determines whom the organization should serve, and how the direction and purposes of the organization should be determined. Advocates of corporate social responsibility view the stakeholders in a larger perspective of the organisation’s and argue that business organizations must not only maximize profit but also contribute to the communities in which they operate.

            “We will not either buy from or sell to companies” that do not measure up to Tata Steel’s social responsibility stands, Mr. B. Muthuraman, Managing Director, Tata Steel Ltd, said at the 15th anniversary of The Institute of Directors, recently. In the context of this increasing awareness of corporate responsibility and Tisco’s value systems, it is not surprising that Mr. Muthuraman gave this assurance. But what are these standards of social responsibility?

            At this broadest, the term is used to capture the whole set of values, issues and processes that companies must address in order to minimize any harm resulting from their activities, and to create economic, social and environmental value. This requires that before a corporation decides on an action, it must try to predict which stakeholders will be affected by given actions. The form of the interaction between a corporation and its stakeholders should be such that is a clear understanding of the anticipated effects of the corporation’s actions on those stakeholders.

            For example, Nestle aggressively marketed its infant formula in Eat Africa. Nestle’s failure to anticipate that the lack of availability of clean water lead mothers to dilute it in contaminated water, resulted in the death of thousands of infants. The development of a corporation’s moral imagination, or its ability to “envision the potential help and harm that are likely to result from a given action”, should be informed by scientific and social modes of rationality. In Nestle’s cse, a failure to do so led to tragic results.

            Companies develop strategies where they voluntarily integrate social and environmental concern in their business operation. Organizations that are exemplary within one domain, e.g., environment or employee relations, can exhibit egregious behaviour in another, e.g., community relations or product quality. Corporate practices affect stakeholders and their environment, but no one practice can be said to fully define a company’s responsibly. Making that assessment, even if we all agreed on a definition, always is a judgment call in the face of complexity and dynamism. The question that arises is, ‘Responsible to whom’?

            For example, a business organization may decide to use only recycled materials in its manufacturing processes. This may have a positive effect on environmental groups, but may have a negative effect on the bottom line. Shareholders who depend on dividends from the organization for their survival may be negatively affected.

            It should clear to advocates of Corporate Social Responsibility (CSR) that given the wide range of interests and concerns present in a business organisation’s work environment, one or more groups at any one time will probably be unhappy with the organisation’s activities; even when the organization is trying to be socially responsible. CSR is about putting out a quality product at reasonable prices; treating employees, vendors, franchisees, and investors fairly; acting responsibility towards the local environment and community; and most of all, embracing transparency in operations and accountability to critics, internal and external.

            The critics of CSR should understand the CSR is not about corporations simply “giving away” money which rightly belongs to other people. CSR is about building relationships with customers, about attracting and retaining talented staff, about managing risk, and about assuring reputation. Therefore, before making a strategic decision, management should consider how each option will affect various stakeholder groups. What may initially seem the best option may actually result in the set of consequences.

CORPORATE SOCIAL RESPONSIBILITY:

            Corporate social responsibility is more commonly addressed as Corporate Social Responsibility (CSR). It determines whom should the organization be there to serve, and how the direction and purposes of the organization should be determined. The difference between Corporate Governance and CSR is that CSR is inherently multidimenstional and has a more external focus, or considering a wide range of stakeholders. On addition to its shareholders, an organization also interacts with employees, customers, public authorities, non-governmental organizations, all of which entertain differing, but have a stake in well-being of the organization. Academic thinking about corporate citizenship has made significant progress over the past 35 years or so. So has corporate responsibility – from a company perspective. However, there are different views. Milton Friedman argues against the concept of corporate responsibility. Cutting product prices to prevent inflation, or making expenditures to reduce pollution, or hiring hardcore unemployed, all for social good, according to him, makes the business organization inefficient. Either prices go up to pay for these social costs or new investments and R&D are affected. According to Friedman, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”.

            According to Archie Carroll, business organizations have four responsibilities, legal, ethical and discretionary, in order of priority. Carroll defines CSR to include both the ethical and discretionary responsibilities. His position is that to the extent business organizations fail to acknowledge discretionary or ethical responsibilities, society, through Government will act making them legal responsibilities. The risk involved is that it may do so, without regard to the organisation’s economic responsibilities. Therefore, it is important that business organizations self regulate their responsibilities to avoid such a situation and ensure survival.

            Ethical behaviour, he argues, is based on what society values and is yet to be put into law. Discretionary behaviour of today may become ethical requirements of tomorrow. This depends on the changing values of society. For example, traditionally companies have followed a stringent reporting system of its financial position, whereas environmental and social obligations have pushed onto the backburner. But today the triple bottom line way has become a norm with corporate houses worldwide. The term ‘triple bottom line’ is used as a framework for measuring and reporting corporate performance against economic, social and environmental parameters.

            Both Friedman and Carroll argue their positions based on the impact of CSR on the organisation’s profits. While Friedman argue that social responsibilities hurt the business organisation’s efficiency. Carroll proposes that lack of social responsibility reduces the business organisation’s efficiency, by inviting increased government regulations. Friedman’s theory is based on a limited view of who the stakeholder is. He seems to accept that stakeholders are those who have put their capital into the organization, while Carroll ambiguous on this point. It is, therefore, not surprising that research has failed to consistently support either position. There seems to be no clear relationship established between financial performance and social responsibility in the many studies that have been made on this subject.

            However, what is important to understand is that as CSR is not a legal requirement, therefore, it is the strategy of the organization. Organizations adopt CSR because they perceive that it enhances the long term value of its assets and adds to stakeholder confidence.

            There is a realization that increasing industrialization of modern society has led to the emergence of a risk society. In contrast to early industrial society where the hazards were generally limited to their places of origin, the risks generated by advanced industrial society are rarely delimited by space or time. The risks include both global environmental threats such as nuclear radiation, chemical waste, the toxic contamination of air, water, and food, and more generally, the destructive side-effects of industrial processes and products. In addition, other risks to the stakeholders include quality and reasonable prices of products; and more of all the transparency in operations and accountability.

            Economic progress without social development is not sustainable, while social development without economic progress is not feasible. Economic progress brings in a society in a risk society in its wake. The question is whether organizations responsible for these risks should bear the burden or should the Government and civil society bear this burden? It is recognized now that the world’s key challenges cannot be met by Governments, business or civil society alone. There is a need for organizations to recognize that there has to be concerted attempt by all; together, they can find solutions. This implies that business has some corporate responsibility for social development.

            Critics Scoff at the notion that a corporation, driven by profit, might also be interested in helping develop society in which it does business. In the words of one Mongolian analyst, “Robert Friedland is a businessman, not a philanthropist”. But in order to be a businessman today, you must be a philanthropist as well. It is considered a part of corporate responsibility as it can result in greater economic efficiency. There is a growing value people place on corporate social and environmental action. The manifestation of this trend is increasingly found in the choices consumers make. Some benefits that accrue can provide business organizations a competitive advantage:

  • Environmental concerns amy enable business organizations to charge premium prices and gain brand loyalty. Manufacturers of recycled paper products were able to sell their produce at higher prices.
  • Trustworthiness can improve the quality and reliability of external linkages in the value chain. Suppliers and distributor’s loyalties to an organization are likely to be based on this criterion.
  • They can attract outstanding employees at less than market rat. It is generally seen that the company’s reputation is an important factor in job selection.
  • They are more likely to be welcomed as multinationals in foreign countries.
  • In difficult times, they can expect support from the Government and public officials. This goodwill is always of great competitive advantage to the organization.
  • Investors and the public view reputable business organizations as their first option to put their money into.

SOCIAL RESPONSIBILITY THEORIES:

            The corporate responsibility theories and related approaches are classified into four groups.

  1. The Instrumentation Theories, in which the corporation is seen as only an instrument for wealth creation and its social activities are a means to achieve economic results.
  2. Political theories, which concern themselves with the power of corporations in society and a responsible use of this power in the political arena.
  3. Integrative Theories, in which the corporation is focused on the satisfaction of social demands and
  4. Ethical Theories, based on ethical responsibilities of corporations to society.

               A number of studies have been conducted to determine the correlation between corporate social responsibility and corporate financial performance.

SUMMARY:

               Strategy is a determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. The strategy should have the following four important elements: goals, scope, competitive advantage and logic. Strategy implementation consists of four steps namely: Designing appropriate organizational structure, Designing control systems, Matching strategy, structure and control and Managing conflicts, politics and change. There are three approaches viz., Rational-analytical, Intuitive emotional and Behavioural-political to strategic decision-making process.

               Ethics is a discipline dealing with good and bad with moral duty and obligations. Business ethics is concerned with trust, justice and a variety of aspects such as the expectations of society for compensation, advertising, public relations, social responsibilities, consumer autonomy and corporate behaviour at home country and abroad. Social responsibility is the capture the whole set of values, issues and processes that companies must address in order to minimize any harmful resulting from their activities, and to create economic, social and environmental values.

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