MGT 4090 Management Policy & Strategy Week 5

Definition of Economic Value:
Economic value is the difference between the perceived benefits received by a customer from using a good or service and the costs incurred to obtain it.

Implement the Integrative Approach:
- Assessing firm performance using a holistic and integrative framework.
Deciding on Business Models:
- Determining suitable business models for individual firms based on their strategic objectives and market conditions.

Purpose:
- Assists managers in achieving strategic objectives by providing a comprehensive framework for performance measurement.
Features:
- Uses a mix of internal and external performance metrics.
- Balances financial objectives with strategic goals to ensure comprehensive performance tracking.

Customer Metrics:
- Revenue, profit, customer satisfaction.
Value Creation Metrics:
- Competitiveness, innovation, organizational learning.
Core Competencies Metrics:
- Key business processes vital for organizational success.
Shareholders Metrics:
- Cash flow, operating income, Return on Invested Capital (ROIC), Return on Equity (ROE), and total returns to shareholders.

Advantages:
- Links strategic vision to responsible parties within the organization.
- Translates high-level vision into measurable goals for various departments.
- Aids in the design and planning of business processes effectively.
- Implements feedback mechanisms and promotes organizational learning.
- Provides early alerts on the need for adaptation of strategic goals.
Disadvantages:
- Primarily focuses on implementation rather than the formulation of strategy.
- Challenges in realigning to strategy if deviations occur.
- Lack of clear guidance on which metrics to prioritize.
- Difficulties in addressing setbacks effectively.

Task: Create a balanced scorecard for the Dhillon School of Business
Considerations:
- Customer perceptions: How do customers view us?
- Value creation: How do we create value?
- Core competencies: What competencies do we require?
- Shareholder perceptions: How do shareholders view us?

Focus Areas:
- Economic (Profits)
- Social (People)
- Ecological (Planet)
Dimensions of Performance:
- Profits: Represents the economic dimension, focusing on financial performance.
- People: Represents the social dimension, focusing on stakeholder relations and community impact.
- Planet: Represents the ecological dimension, focusing on environmental sustainability.

Concept:
- The simultaneous pursuit of performance across economic, social, and ecological dimensions forms the foundation of a sustainable strategy.

Consumer Motivation:
- Discuss why consumers may prefer Toms over competing brands.
One-for-One Model:
- The success of Toms' business model is attributed to the visualization of tangible impacts on consumer purchases.
- Explore additional products/services that may benefit from a one-for-one model and provide rationale.
Sustaining Competitive Advantage:
- Analyze Toms' struggles to maintain a competitive advantage and whether the one-for-one model can sustain itself long-term.
Shift to CSR:
- Evaluate the decision for Toms' leadership to pivot from creating shared value (CSV) to corporate social responsibility (CSR).
- Discuss the wisdom behind this choice.
CSR vs. CSV:
- Compare and contrast the two approaches, outlining situations in which one might be preferable over the other.