Public Relations PURE311

1. Public Relations PURE311 Learning Unit 3.3 Levels of Strategic Management 5 May 2011

2. DPR3 LU3.3 Strategic Management Levels Outcomes Levels of strategic management Corporate environments in strategy development Mission statements Case Study Shell South Africa

3. DPR3 LU3.3 Strategic Management Levels Strategic management levels According to Steyn & Puth (2000) • Hierarchical levels of organisations result in the need for different strategies at different levels of the organisation • Vision and mission guide strategic intent, which informs overall goals and objectives • Strategic intent translated into strategies for different business units to guide their activities • Business unit strategies translated into strategies for different functions within business units, such as Human Resources, Public Relations, Finance, to assist the organisation achieve its goals • Five levels of strategy: Enterprise  Corporate  Business  Functional  Operational

4. DPR3 LU3.3 Strategic Management Levels Enterprise strategy • Broadest scope with a societal-role strategy that may not be implicitly or formally stated • Concerned with mission, purpose and role in society • Addresses • Why it exists and attempts to provide to society • Sectors it forms part of • How it functions in society • Stakeholder orientation • Development path • Strategic thinking; vision, mission, role; relationship with environment; stakeholder orientation

5. DPR3 LU3.3 Strategic Management Levels Corporate strategy • Financially orientated • Addresses the questions of: • Which business portfolios organisation should compete in • How portfolio should be integrated • This level of strategy often combined with enterprise level • Development path • Defines and unifies business portfolios • Complementary, reinforcement attributes of business units • Resource allocation to different business levels • Enterprise strategy level support • Financial orientation puts focus on bottom line

6. DPR3 LU3.3 Strategic Management Levels Business unit strategy • Covers a single product or group of related products • Focus is on how to compete in specific product or market segment • Strategies are often market-orientated • Development path • How to compete in product, market or industry segments • Identifies niche • Integrates functional levels for competitive advantage • Supports enterprise or corporate strategy • Strategy is marketing-orientated to ensure that products/ services are accepted and acquired to help organisation achieve its goals

7. DPR3 LU3.3 Strategic Management Levels Functional strategy • Concerned with implementation of organisation’s strategies • Developed for each functional area of organisation • Marketing, public relations, human resources, finance • Focus on • Maximising productivity of resources • Capitalising on synergies and distinctive competencies within organisations • Development path • Relates function to the enterprise, corporate, business levels to support those strategies • Coordination with other functions • Focus of strategy on capitalising and synergising

8. DPR3 LU3.3 Strategic Management Levels Operational strategy • Organisational strategies translated to action at operational levels in organisations • Operational strategies have short-term objectives that contribute to business and corporate goals • These strategies are necessary to manage operating units in a cost-effective manner • Development path • Translates organisational strategy into action • Develops functional tactics • Maximises resources and productivity • Orientated towards cost-effective performance and outputs

9. DPR3 LU3.3 Strategic Management Levels Levels of strategy • Public Relations helps with strategy implementation at all levels • Corporate and environmental levels impact on strategies • Different units/divisions operate under the umbrella of the holding company and all strategies flow from one level to the next • Example: BIDVEST • Group has enterprise strategy that guides overall business and directs 10 divisions world-wide • One division, Bidfreight, develops a corporate strategy which flows from enterprise strategy • A Bidfreight company, SafcorPanalpina, develops a business strategy • Each of the functions of SafcorPanalpine develops a functional strategy to help achieve goals and objectives of business strategy • Each functional strategy translated into operational strategy for implementation

10. DPR3 LU3.3 Strategic Management Levels Class exercise Individually, read the case study on Shell South Africa (pp 109-110 in your student manual), discuss it in your group and answer the question: Identify the different levels of strategy, either explicitly or implicitly stated in the case study. Use quotations from the case study to motivate your point.

11. DPR3 LU3.3 Strategic Management Levels Corporate environment: internal Public Relations practitioners must be familiar with organisation’s internal an external environments to develop communication strategy and policy • Internal environment • Profile – financial stats, reputation, products and services, overall competitive environment • Vision – realistic, attractive, credible future state of affairs, associated with goals • Mission – purpose, definition of role in society and economy, flows from values of stakeholders, explains organisation’s identity and ambition, associated with the way of behaving

12. DPR3 LU3.3 Strategic Management Levels Corporate environment: internal • Internal environment • Corporate values – sets of real beliefs that determine standards of practice, commitment and energy of staff are fuelled by values that drive organisation • Corporate philosophy – orientation behind mission, derived from values, acts as guiding principles that drive behaviour including employee involvement, empowerment, customer service, quality control, continuous change, community involvement • Corporate culture – shared values conveyed symbolically, not written down, basic assumptions about what is acceptable and not • Corporate policy – expression of strategy and plans as guiding principles for behaviour and actions, provides direction

13. DPR3 LU3.3 Strategic Management Levels Corporate environment: external • Total of all conditions and forces that • affect strategic options • influence competitive situation • cannot be controlled • Four categories • Remote environment (macro/societal) – sectors that affect indirectly by influencing long-term decisions • Factors: social, economic, political, ecological • Industry environment (competition) – five forces that shape competition, collection of global, local organisations that offer similar products, services

14. DPR3 LU3.3 Strategic Management Levels Corporate environment: external • Four categories [cont] • Operating environment (task environment) – sectors that have direct transactions with organisation, influences day-to-day operations and goal attainment, including customers, suppliers, competitors, creditors • Functional environment (specialisation) – specialisation functions including finance, human resources, operations, administration, marketing, public relations, research & development Example using the PESTEL analysis: local, national and global factors or the LONGPESTEL analysis: political, economic, social, technological and legal factors within the local, national and global contexts

15. DPR3 LU3.3 Strategic Management Levels Homework for 6 May 2010 Read the case study in your student manual on pp 110-114 and respond to the question Write out your response for feedback to and discussion in class