{"id":56,"date":"2018-06-19T17:47:17","date_gmt":"2018-06-19T17:47:17","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/suny-opmanagement\/?post_type=chapter&p=56"},"modified":"2018-07-05T14:46:31","modified_gmt":"2018-07-05T14:46:31","slug":"2-1-role-of-strategy-in-operations-management","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-opmanagement\/chapter\/2-1-role-of-strategy-in-operations-management\/","title":{"raw":"2.1: Role of Strategy in Operations Management","rendered":"2.1: Role of Strategy in Operations Management"},"content":{"raw":"
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\"Wikibooks: \"Business Strategy\/Approaches to Strategic Management\"<\/span><\/a><\/div>\r\n
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\r\n\r\nRead this article, making sure to pay particular attention to the section on the strategy hierarchy.\u00a0<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n
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\"Exploring Business<\/em>, v. 2.0: \"Chapter 2, Section 5: Corporate Social Responsibility\"<\/span><\/a><\/div>\r\n
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\r\n\r\nRead section 2.5. This provides insight into the nature of Corporate Social Responsibility (CSR) and the necessity of stakeholders to the success of the organization. CSR crucial to the establishment of goodwill amongst the employees and within the local and\/or greater business community. Integrating a CSR plan when developing the strategy requires that managers consider all of the stakeholders\u2019 (internal and external) needs. Complete Exercise 1 located at the end of the reading. This is a self-graded activity.\u00a0\u00a0<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n
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\"Boundless:\u00a0Management<\/em>: \"Chapter 12, Section 4, Part 1: Strategic Management\"<\/span><\/a><\/div>\r\n
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\r\n\r\nRead this section. The strategy pursued by an organization has a distinct impact on the way that the organization chooses to operate. The five steps of strategy are crucial in the design of the operations.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n
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\"Corporate Governance<\/em>, v.1.0: \"Chapter 7, Section 1\"<\/span><\/a><\/div>\r\n
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\r\n\r\nRead section 7.1. There are many discussions surrounding the importance of the Board of Directors taking a guiding role in the development of strategy. Consider the challenges that boards face in carving out a significant role in the strategy process.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n
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\"Building Strategy and Performance<\/em>, v. 1.0: \"Chapter 5: Building and Managing the Strategic Architecture\"<\/span><\/span><\/a><\/div>\r\n
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Read chapter 5. This chapter explains the connection between operations and strategy. \u00a0There is a direct connection (or should be) between this functional area and organizational plan. The strategy provides the foundation for the operational decisions made on a daily basis. In other words as an operations manager, you choose tactics based on the developed organizations corporate, business, and functional level strategy. Take time to complete the Action Checklist activity at the end of the chapter. This is a self-graded activity.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n

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\"Developing New Products and Services<\/em>, v. 1.0: \"Chapter 8: Strategic Planning and Ten\u2013Ten Planning\"<\/span><\/a><\/div>\r\n
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\r\n\r\nRead chapter 8. This chapter explains the nature of planning and the importance of analysis to the creation of differentiated product or services or higher levels of efficiency. Understanding the nature of strategic planning and the types of analysis used during the strategic planning process are important for operation managers\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n

\u00a0<\/a>2.5<\/span> Corporate Social Responsibility<\/h1>\r\n<\/div>\r\n
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Learning Objective<\/h3>\r\n
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  1. Define corporate social responsibility<\/em> and explain how organizations are responsible to their stakeholders.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n

    Corporate social responsibility<\/a><\/span> refers to the approach that an organization takes in balancing its responsibilities toward different stakeholders when making legal, economic, ethical, and social decisions. What motivates companies to be \u201csocially responsible\u201d to their various stakeholders? We hope it\u2019s because they want to do the right thing, and for many companies, \u201cdoing the right thing\u201d is a key motivator. The fact is, it\u2019s often hard to figure out what the \u201cright thing\u201d is: What\u2019s \u201cright\u201d for one group of stakeholders isn\u2019t necessarily just as \u201cright\u201d for another. One thing, however, is certain: Companies today are held to higher standards than ever before. Consumers and other groups consider not only the quality and price of a company\u2019s products but also its character. If too many groups see a company as a poor corporate citizen, it will have a harder time attracting qualified employees, finding investors, and selling its products. Good corporate citizens, by contrast, are more successful in all these areas.<\/p>\r\n

    Figure 2.6 \"The Corporate Citizen\"<\/a> presents a model of corporate responsibility based on a company\u2019s relationships with its stakeholders<\/em>. In this model, the focus is on managers\u2014not owners\u2014as the principals involved in all these relationships. Here, owners are the stakeholders who invest risk capital in the firm in expectation of a financial return. Other stakeholders include employees, suppliers, and the communities in which the firm does business. Proponents of this model hold that customers, who provide the firm with revenue, have a special claim on managers\u2019 attention. The arrows indicate the two-way nature of corporation-stakeholder relationships: All stakeholders have some claim on the firm\u2019s resources and returns, and it\u2019s management\u2019s job to make decisions that balance these claims.See David P. Baron, Business and Its Environment<\/em>, 4th ed. (Upper Saddle River, NJ: Prentice Hall, 2003), 650\u201352.<\/span><\/p>\r\n\r\n\r\n[caption id=\"\" align=\"alignnone\" width=\"1390\"]\"image\" Figure 2.6 The Corporate Citizen Let\u2019s look at some of the ways in which companies can be \u201csocially responsible\u201d in considering the claims of various stakeholders. <\/em>[\/caption]\r\n\r\n

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    Owners<\/h2>\r\n

    Owners invest money in companies. In return, the people who run a company have a responsibility to increase the value of owners\u2019 investments through profitable operations. Managers also have a responsibility to provide owners (as well as other stakeholders having financial interests, such as creditors and suppliers) with accurate, reliable information about the performance of the business. Clearly, this is one of the areas in which WorldCom managers fell down on the job. Upper-level management purposely deceived shareholders by presenting them with fraudulent financial statements.<\/p>\r\n\r\n

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    Fiduciary Responsibilities<\/h2>\r\n

    Finally, managers have a fiduciary responsibility<\/a><\/span> to owners: They\u2019re responsible for safeguarding the company\u2019s assets and handling its funds in a trustworthy manner. This is a responsibility that was ignored by top executives at both Adelphia and Tyco, whose associates and families virtually looted company assets. To enforce managers\u2019 fiduciary responsibilities for a firm\u2019s financial statements and accounting records, the Sarbanes-Oxley Act of 2002 requires CEOs and CFOs to attest to their accuracy. The law also imposes penalties on corporate officers, auditors, board members, and any others who commit fraud.<\/p>\r\n\r\n<\/div>\r\n

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    Employees<\/h2>\r\n

    Companies are responsible for providing employees with safe, healthy places to work\u2014as well as environments that are free from sexual harassment and all types of discrimination. They should also offer appropriate wages and benefits. In the following sections, we\u2019ll take a closer look at each of these areas of responsibility.<\/p>\r\n\r\n<\/div>\r\n

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    Safety and Health<\/h2>\r\n
    \r\n\r\n[caption id=\"\" align=\"alignnone\" width=\"1342\"]\"image\" Figure 2.7 Workplace Deaths by Event or Exposure, 2010 <\/em>[\/caption]\r\n\r\n<\/div>\r\n

    Though it seems obvious that companies should guard workers\u2019 safety and health, a lot of them simply don\u2019t. For over four decades, for example, executives at Johns Manville suppressed evidence that one of its products, asbestos, was responsible for the deadly lung disease developed by many of its workers.Saul W. Gellerman, \u201cWhy \u2018Good\u2019 Managers Make Bad Ethical Choices,\u201d Harvard Business Review on Corporate Ethics<\/em> (Boston: Harvard Business School Press, 2003), 49\u201366.<\/span> The company concealed chest X-rays from stricken workers, and executives decided that it was simply cheaper to pay workers\u2019 compensation claims (or let workers die) than to create a safer work environment. A New Jersey court was quite blunt in its judgment: Johns Manville, it held, had made a deliberate, cold-blooded decision to do nothing to protect at-risk workers, in blatant disregard of their rights.Saul W. Gellerman, \u201cWhy \u2018Good\u2019 Managers Make Bad Ethical Choices,\u201d Harvard Business Review on Corporate Ethics<\/em> (Boston: Harvard Business School Press, 2003), 53.<\/span><\/p>\r\n

    About four in one hundred thousand U.S. workers die in workplace \u201cincidents\u201d each year. The Department of Labor categorizes deaths caused by conditions like those at Johns Manville as \u201cexposure to harmful substances or environments.\u201d How prevalent is this condition as a cause of workplace deaths? See Figure 2.7 \"Workplace Deaths by Event or Exposure, 2010\"<\/a>, which breaks down workplace fatalities by cause. Some jobs are more dangerous than others. For a comparative overview based on workplace deaths by occupation, see Figure 2.8 \"Workplace Deaths by Industry, 2010\"<\/a>.<\/p>\r\n\r\n

    \r\n\r\n[caption id=\"\" align=\"alignnone\" width=\"1392\"]\"image\" Figure 2.8 Workplace Deaths by Industry, 2010 <\/em>[\/caption]\r\n\r\n<\/div>\r\n

    For most people, fortunately, things are better than they were at Johns Manville. Procter & Gamble (P&G), for example, considers the safety and health of its employees paramount and promotes the attitude that \u201cNothing we do is worth getting hurt for.\u201d With nearly one hundred thousand employees worldwide, P&G uses a measure of worker safety called \u201ctotal incident rate per employee,\u201d which records injuries resulting in loss of consciousness, time lost from work, medical transfer to another job, motion restriction, or medical treatment beyond first aid. The company attributes the low rate of such incidents\u2014less than one incident per hundred employees\u2014to a variety of programs to promote workplace safety.Procter & Gamble, 2003 Sustainability Report<\/em>, http:\/\/www.pg.com\/content\/pdf\/01_about_pg\/corporate_citizenship\/sustainability\/reports\/sustainability_report_2003.pdf<\/a> (accessed April 24, 2006).<\/span><\/p>\r\n\r\n<\/div>\r\n

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    Freedom from Sexual Harassment<\/h2>\r\n

    What is sexual harassment<\/em>? The law is quite precise:<\/p>\r\n\r\n