CORPORATE STRATEGY

Corporate Strategy

Corporate Strategy

Introduction

The concept of organizational culture is a relatively new one. Organizational cultures, like other human cultures, include particular types of artefacts, special values, and common beliefs and assumptions. In some respects, it is the culture that makes the organization a true organization rather than just a collection or randomly engaged people. It provides the defining characteristics that make organizations differ from each other and the foundation for both success and failure organizationally. While organizational culture is, to some extent, organic, it is somewhat malleable and management needs to focus on those aspects of the culture which can be influenced and shaped.

The focus of this paper is to explore the gaining significance of corporate culture and analyse its influences on the organisation with respect to strategic management of the company. The first section will describe organisational culture as a whole and in parts, outlining its nature, purpose and origin. The second section analyses the relationships of corporate culture with various aspects of the organisational design and corporate strategy. The last section deals with the various issues raised by organisational culture, including ethics, implementation of cultural practices, leaders' role in corporate culture and the future of corporate culture (Brousseau et.al. 2006 110-121).

Part 1

The purpose of this paper is to investigate the relationship between corporate environmental strategy and firm value. Understanding what motivates firms to be environmentally responsible and how these decisions ultimately impact firm value is of great significance to corporate management. It is hypothesized that, in addition to traditional economic factors, the relationship between firm value and environmental responsibility involves stakeholder considerations.

Environmental policies seem to be formulated, not only with respect to shareholders and debt holders, but additionally, with regard to their potential impact upon customers, suppliers, employees, management, the community, regulators, and other stakeholders. Although environmental issues can profoundly affect the financial health and, indeed in some cases, the very viability of a firm, empirical research has been meagre (Martin et al 2008 64-88). This is the first study to apply stakeholder considerations to environmental policy.

The major finding of this study is that corporate performance with regard to environmental responsibility is related to overall firm value. Adopting an environmentally responsible strategy appears to significantly enhance corporate financial performance for all firms except those serving industrial customers. Firms that supply industrial customers seem to benefit financially from a strategy of environmental indifference or irresponsibility. 

A popular theoretical view of the firm is that of an efficient nexus of contracts between and among diverse parties (Sriussadaporn-Charoenngam & Jablin 1999 382-418). Gardner (2006 36-37) expands upon this view, emphasizing that non-investor stakeholders provide an often overlooked connection between corporate strategy and corporate well-being. Cornell and Shapiro distinguish between explicit and implicit claims.

The former are contractual in nature while the latter include promises that a firm makes to various stakeholders but are often too vague to put into writing. Stakeholders” explicit claims (e.g. warranties) are risk-free unless financial distress occurs. Stakeholders' implicit claims (e.g. continued service and manufacture of parts for a prior purchase) are risky even if financial distress is not a ...