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Chapter 13
Objectives, Strategy and Influences
Answer to End of Chapter Exercises

Q 13.1
Amongst other issues a further discussion of corporate social responsibility and ethics
and the individual
Corporate social responsibility
A minimum response would be to question whether all relevant costs have been
considered:
The potential impact of the decision :
1) Contingent cost of liability for pollution
2 ) Potential cost of adverse publicity for the pollution. Damage to the reputation of
the firm.

Potential strategic benefits of acting as a responsible organisation that takes

environmental issues into effect will not be realised.

Ethics and the individual

If the level of pollution is within legal limits then the individual can make his/her
views clear to the immediate superior and follow other internal channels to express an
opinion.
If the pollution is outside legal limits and no action is taken having pursued all
possible internal channels, then the individual is morally permitted to whistle blow
and it could be argued is morally required to whistle blow.

Q 13.2
This answer could raise a number of issues. A key point of the question is to highlight
that a range of alternative approaches can be justified. A planned approach may
become out of date within a short period of time because of a changing environment
and strong pressures against the proposed strategy. An emergent or incrementalist
approach to strategy formulation may be justified.
The danger of emergent or incrementalist approaches could be that the strong interest
groups will achieve their goals at the expense of the weak and that a political party
will make expedient short-term decisions at the expense of long-term goals.

Q 13.3
Managers of McLoed Holdings Ltd
Owners of McLoed Holdings
Employees of Dundee Bicycle Division
Customers
Suppliers
Local community

The extent to which different views should be taken into account was discussed in the
chapter.
i) Only shareholders
ii) Other stakeholders as it is through these stakeholders that shareholder
wealth will be achieved.

2008 John Wiley & Sons Ltd.

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iii) All stakeholders as the aims of all stakeholders should be taken into
account.

Q 13.4
See guidelines from chapter
To be a leading and profitable supplier of high quality bicycle frames.
Note that this statement does contain some idea of a vision i.e. to be a leading supplier
of quality bicycle frames. The scope of the Division is limited to supplying bicycle
frames. A number of stakeholders have not been considered. It does not fully cover all
the elements suggested in the guidelines provided and students should show that they
have gone through a few iterations and shown some thought before arriving at a final
version.

Q 13.5
i) Profits to be 225,000 in 20X8/9.
ii) To achieve a 99% on-time delivery rate in 20X8/9.
iii) To reduce the rework level to 4% by the end of 20X8/9.

Q 13.6
To safeguard his own position, the works manager may wish to receive his
instructions in writing from Jack Jones.
He may also wish to advise other internal channels, including senior executives in
McLoed Ltd of the state of repair of the wall and the decision that has been made.

The above would certainly be the case when the situation deteriorates. If no action has
been taken following advice to the internal managers, the works manager may feel
morally obliged to inform an external agency as there does seem to a danger to
employees.

Note the checklist of de George.

Q 13.7
The typology of Handy appears most appropriate given the information provided.
Previously the culture that had been developed was a task culture with emphasis on
problem solving. There now appears to be a power culture developing with the
organisation dominated from the centre.

The discussion with the works and commercial managers seem to suggest that
additional team exercises and training for staff could assist in reducing defensive
action from staff. A reconsideration of the reward/penalty system would also seem
appropriate.

SIEGMUND LTD
Q 13.8
Owners, managers, employees, customers, suppliers, local community of Siegmund
Ltd

See discussion under sections taking account of stakeholder objectives and

stakeholder management considering the power and interests of stakeholders.

2008 John Wiley & Sons Ltd.

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Q 13.9
I would expect students to show some imagination in answering this question! I
suppose a simple statement such as To be the leading supplier of electrical kitchen
appliances in Ruritania would comply with minimum requirements. See also
comments made in reference to 13.4.

Q 13.10
e.g.
Profits To achieve a profit of m 4.0 by 20Y0.
Sales To gain a 20% share of the ice cream maker market by 20Y0.
Production time To reduce the average manufacturing cycle time to 6 weeks by
20Y0.

ASSEMBLY DIVISION McLOED Ltd

Q 13.8)
Owners of McLoed Ltd
Managers
Employees
Customers
Suppliers
Local community

See discussion under sections taking account of stakeholder objectives and

stakeholder management considering the power and interests of stakeholders.

Q 13.9)
This might be quite difficult to judge as the assembly division of McLoed Ltd seems
to have a range of possible routes to follow.
It has traditionally been a supplier of high volume low price products and this market
is being rapidly penetrated by cheaper overseas products. It may choose to continue to
compete in all market segments or it might decide that it is necessary to change
direction and focus on the niche quality market segments. The decision will influence
the mission statement.
Again I would expect students to show some imagination in answering this question
and identify the issues that need to be considered.

Q 13.10
e.g.
Profits To achieve a profit of m 4.0 by 20Y0.
Sales To gain a 20% share of the folding bicycle range by 20Y0.

2008 John Wiley & Sons Ltd.

www.wileyeurope.com/college/bowhill