Open-Ended Question. I Don't Know About Organizational Essay

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open-ended question. I don't know about organizational thinking -- individuals think; an organization has no brain. I do know, however, that strategy is set within organizations on the basis of all manner of internal and external variables. Several frameworks have been developed to help understand how this process works, and if there are any differences between long-term and short-term approaches to strategy and environmental analysis. A dichotomous time-frame might be an oversimplification, since everything has a unique time-frame, but it works in a generic sense.

Environmental scanning is a critical element of strategic thinking at all levels of the organization. Porter (2008) devise the five forces that shape competitive strategy. These focus on competitive factors in the external environment, and competitive factors often reflect economic and social factors in particular. Intensity of rivalry, for example, derives largely from the competitive structure of the industry -- basic microeconomics. Social factors determine price elasticity of demand, which affects the bargaining power of suppliers and buyers. But there are better models for understanding these external factors. The PEST framework covers economic, social, political and technological factors that affect a business (MindTools, 2013). Cultural factors are either folded into social factors or are considered separately, especially in an international business context but also sometimes in a marketing context.

In any case, the frameworks are usually used to get a basic sense of the business. Organizations will often eschew formalized models because there is a high level of knowledge locked within the organization already -- a CEO probably has a good sense of what economic factors affect his or her company. But a formalized process helps reduces gaps in the thinking by alerting people within an organization to a broader range of factors and how those factors will affect the business. Strategy is usually formulated in long-run terms, which are then translated to a series of short-run actions and objectives.

Phase 2, Part II.

This is a thesis topic, not a topic for a 2-page discussion board posting. But ok. The long-term viability of companies is determined by their financial success, nothing more. Companies that fail do so because they aren't making enough money. That is what "viability' means. Now success is another question altogether -- do companies that focus strictly on profits succeed to a higher level than companies that do not. Obviously there are no direct comparables because of the unique nature of every business and every market, but maybe there are broad trends. Milton Friedman (1970) certainly took the view that the pursuit of profit was mutually exclusive to the pursuit of social responsibility. Given the impossibility of direct comparison, it is no surprise that there is not much formal research on the subject. We know that there are areas were social responsibility aligns with increased profit -- Wal-Mart seeks to improve its performance in both by reducing waste, for example. The triple bottom line concept was developed to help firms understand how to achieve success in economic, social and environmental responsibility (Slaper & Hall, 2011). Schacter (2000) reviewed the research and noted that there is ambiguity with respect to the effect the CSR has on the bottom line, but also that it was essentially impossible to determine its effects.

Thus, no honest researcher would say that there is a definitely difference in long-term viability between firms that are focused almost entirely on economic factors that those that seek some balance. Success measures are different for each firm, as are definitions of other factors that are important. There are no direct comparables, only rough ones. Furthermore, most companies seek to make a business case for CSR (Schacter, 2000) and that means that they are not seeking pure-form altruism, but rather some definition of balance that is constrained by the need to earn profit.

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This makes coming to conclusions nearly impossible. There is no doubt, however, that there are many companies that have been financially successful while utilizing strategies that emphasize objectives beyond the financial, and that the pursuit of such non-financial objectives is probably not mutually exclusive to the pursuit of profit in the way that Friedman argued.

Phase 2, Part III.

In a broad sense, the entire climate change debate is a debate about economic vs. environmental objectives. The entire hydrocarbon industry enjoys profits based on negative externalities that are not priced into its activities. This includes all of the economic progress facilitated by the use of electricity, roads and vehicles, and the structures of society that have grown up around fossil fuel consumption. The debate is often very specifically framed in terms of economic costs of reduced energy consumption vs. The costs of continued abuse of hydrocarbon resources. Hill (2006) notes that economic viability is a constraint in the switch from fossil fuels to fuel sources that are better for the environment, on the basic assumption that fossil fuels are economically superior. Pimentel (2003) also juxtaposes environmental and economic benefits of different fuel types -- the climate change argument almost always uses this framing.

If we need a second example, try atmospheric pollution, though when the relationship is examined closely, Grossman and Kruger (1995) find that there is usually a turning point at which economic growth no longer contributes to environmental degradation -- or at least the measures that they used, which did not include climate change, ocean acidification and other such macro-level variables. But their point is that some pollution can be addressed simply because wealthier societies no longer rely on highly-polluting industries, or are in a better position to implement pollution controls. Typically, regulation is a preferred solution, to impose specific costs on negative externalities -- a fee imposed by government on behalf of the society that pays the costs for the pollution. Such an approach brings the environmental and economic spheres together, allowing for a solution to arise based on that common ground.

Phase 2 Part IV.

In the Pralahad and Hammond article, the tension appears to be that between corporate profits and living standards around the world. This tension is a bit of a straw man -- the authors invent this idea that firms are opposed to entering poor countries only to then say that many firms enter poor countries. So maybe the tension is elsewhere, like in government approaches to alleviating poverty. Anyway, rapid growth of population combined with a lack of corresponding growth in infrastructure, agricultural production and job production is the problem in the world's poorest countries -- people forget that the West only started to get richer when birth rates started to slow.

Anyway, the approach advocated by the authors is to allow or encourage more multinational participation in third world economies. This approach is rooted in neoliberalism and basic economic theory. There's nothing particularly wrong with the approach except that is an oversimplified view of both the problem and the solution. Because there are so many factors that contribute to poverty around the world, there are many different solutions that have been put forth as well, not just this one. Berger (1989) argues for social change -- in particular bringing more women into these economies to unlock an essentially untapped resource. Some advocate stronger social programs as a means of alleviating poverty -- Tiehen, Jolliffe and Gundersen (2012) talk about this at the U.S. national level but at the international level this is more aid from Western governments......

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