Business Finance
COMPANY BACKGROUND "Building Capabilities at the Westward Hilton" Case

Question Description

"Building Capabilities at the Westward Hilton" Case


This section is an overview of the company, and you should rely on the concepts in Chapter 3.

This section includes the description of following aspects:

-The history of the company

-The current scope and domain of the company (e.g. size, core business, and business model)

-The vision and mission statement of the company

-Stakeholder analysis (Identify and prioritize at least 4 key stakeholders specific to the company)

-The current competitive position and financial performance of the company.

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1 2 Learning Objectives  Know the key questions managers must ask and answer to create a strategic direction.  Understand the challenge of structural inertia and how it limits organizations.  Explain the difference between a vision and mission statement, and why values are important to organizational decision-makers.  List the five different components of social responsibility  Define enterprise strategy and give examples of firms that link ethics and strategy.  Explain the five ethical frames of reference and how they shape values.  3 Influences on Strategic Direction 4 Multiple Uses of Mission Statements  Used for Decision Making and Resource Allocations  Managers and employees are targeted  Mission statements should use terms that are understandable to internal stakeholders  Communicate mission to internal stakeholders on a regular basis  Used to Inspire Higher Levels of Performance and Pride in Association  Also targets managers and employees  Should be inspiring  However, organization must act accordingly 5 Multiple Uses of Mission Statements  Communicates Organizational Purpose and Values  Targets primarily managers, employees, shareholders and potential investors  Helps managers and employees resolve dilemmas when faced with trade-offs  Helps external stakeholders know what to expect from the organization in particular situations  Enhances Organizational Reputation  Targets society and most external stakeholder groups, especially customers and potential venture partners  Carefully articulated to enhance reputation  Catchy slogans (but not cliché) are helpful  Should be short enough so that external stakeholders will attempt to read them  Widely dispersed to media sources and apparent in public settings  6 Organizational Vision  A sense of what the organization will be in the future  CEO has primary responsibility for defining vision  Microsoft Vision Statement  Empowering people through great software – any time, any place and on any device  Bill Gates wants Microsoft to dominate the software systems that link all digital Page 1 transactions and communications 7 Organizational Values  The underlying philosophies that guide decisions and behavior in a firm  Also called core values OR organizational ethics  CEO and other top managers have the most influence on organizational values  Also a reflection of societal values 8 9 Social Responsibility  Economic Responsibilities  Legal Responsibilities  Moral Obligations  Discretionary Responsibilities 10 Enterprise Strategy  Joins ethical and strategic thinking  Best possible reason for the actions it takes  Focused on which stakeholder needs are given priority  Mission statements often provide clues regarding the enterprise strategy of a firm  “We focus on satisfying customer needs”  “Our goal is to provide a satisfying work environment in which our employees can grow and develop”  “Our primary purpose is to maximize shareholder returns”  “We focus on giving back to the communities in which we operate” 11 Ethical Frames of Reference  Economic Theory  The purpose of business organizations is to maximize profits  Legal Theory  Compliance with laws ensures ethical behavior  Religious Theory  Everyone should act in accordance with religious teachings  Utilitarian Theory  Focus on outcomes from decisions. Everyone should act in a way that generates the greatest benefits for the largest number of people  Universalist Theory  Focus on the intent of the decision. “Would I be willing for everyone else in the world to make the same decision?” 12 Codes of Ethics  Communicate the values of the corporation to employees and other stakeholders  Ethics systems are sometimes established to ensure compliance  Formal systems may not be enough to ensure ethical behavior  Often people don’t personalize ethical behavior Page 2  Ethical issues are even more difficult for firms working in more than one country 13 Major Concepts in Chapter 3  Strategic managers provide long-term direction for their organizations, while at the same time balancing the competing interests of stakeholders  Mission statements communicate ideals and a sense of direction and purpose to internal and external stakeholders  A mission is what a company is and its reasons for existing, while a vision is a forwardlooking view of what the organization wants to become  Businesses are defined in terms of customers, needs satisfied, capabilities and technologies, and products and services 14 Major Concepts in Chapter 3  Organizational values guide organizational decisions and help determine the firm’s attitude towards social responsibility and the treatment of various stakeholder groups (enterprise strategy).  A code of ethics can communicate the values of the organization to employees and other stakeholders  Globalization makes dealing with values and ethics even more difficult Page 3 ...
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