The Benefits of Creating Win-Win Strategies as San Diego Goes Global

San Diego has decided that it is going to make a firm commitment to the global economy. An initiative of 30+ companies, San Diego Regional Economic Development Corporation, UC San Diego and the City of San Diego want to expand growth opportunities in the area by creating more export opportunities. Those export opportunities result in higher wages and more jobs but will rely heavily on win-win strategic outcomes.

Mayor Kevin Faulconer describes the Going Global initiative as "Opportunities and innovation abound in San Diego and it's time to tell the world (1)." The goal appears to be about getting products out of San Diego and into the global market while drawing investment into the region to capitalize on the core competencies of life sciences, blue technology and cyber knowledge.

According to the Go Global San Diego initiative San Diego is the 17th largest U.S. metro city, ranks 61st in terms of export intensity and 49th in terms of foreign-owned firms (2). San Diego has not fully capitalized on its inherent intellectual and human capital skills. The resources of many of the businesses that have global potential could be put toward exportation.

According to the Go Global San Diego site they will do this through a number of broad strategies:

-Catalyze growth of advanced industries.
-Drive Innovation through Talent: strengthen the workforce of today, deepen the workforce of the future.
-Realize CaliBaja’s potential through connections with priority and emerging markets.
-Mainstream global activity as a key component of regional business retention and expansion efforts.
-Maximize infrastructure assets.

The advantages of focusing on advanced industries is that they offer an opportunity to tap into a fast growing markets that spur additional investment. They also rely on a broad base of knowledge that supports medium and small businesses in the area. Wages are likewise higher in advanced industries raising the standard of living for local employees.

To truly do this well means the area will need to develop a brand that can sell the city as both a pro-business investment mecca and as a place where the quality of living is high. Local government should seek to draw in public and private stakeholders while ensuring decisions are based on bi-partisan strategic logic that creates the most winners. No need to create fights where no benefits are to be found.

There are advantages to getting everyone on the same page that isn't found in many cities across the country. When people can formulate a shared image of a city that helps them draw their self-interest the system becomes much more efficient through thousands of small actions aligned around that image. This will require not only business to succeed but also foster skill based income growth of motivated employees. Economic development that creates win-win outcomes will find support among investors while reducing inherent risks associated with uncertainty in regulations, labor allocation, governance, and socio-political turmoil.

You can read more at http://www.sandiegobusiness.org/goglobalsandiego

Leadership Through Stakeholder Collaboration

Leadership is a necessary component of moving groups from one performance level to another. Leaders provide a focal point for collective action, a voice to the will of the people and decision-making capacity when problems arise. Responsible leaders are able to bring stakeholders together to accomplish some important goal. This isn’t possible without considering the multiple stakeholders in any worthwhile activity.

According to Doh & Quigley (2014) leaders are able to use psychological and knowledge-based pathways to impact micro/individual, team, organizational, and societal outcomes. Such leaders have the personal capacity to see how daily activities can impact larger groups of stakeholders to create higher levels of impact. Responsible leaders can impact organizational processes and outcomes to achieve goals.

Consider the different types of stakeholders interested in an organization and the levels by which these can be categorized. The individual worker has a stake in terms of employment, the manager in terms of impact, suppliers who earn revenue, and the general community and society who are impacted by the economic opportunities. The same organization can have multiple people interested in its functionality due to far reaching implications.

Instead of shunning this interest it is possible for responsible leaders to capitalize on stakeholders to create a better functioning organization both on the human-to-human micro level as well as the community level. Individual workers who live and exist within the organization naturally have an impact on the success of the organization and its impact on the community.

It may not seem like it is possible for one person who can have this much influence but this depends on how the leader creates proper workplace environments and open inclusive interactions that can draw interested parties. Consider for a moment how organizations that are fully engaged in the community have a  positive impression that helps their overall impression and public image.

Leadership requires the ability to see the vantage point of multiple stakeholders and how their perceptions envision and interpret organizations. By drawing in such stakeholders across multiple levels it becomes even more possible to increase the amount of collective effort but also draw new ideas from interested parties.

A large part of leadership is about opening up communication lines and developing new ways to get people involved in solutions. Leadership requires not only the ability to think strategically but also how to draw people into that strategic image. Finding a vision that most stakeholders can accept is necessary for greater collaboration and higher achievement.

Doh, J. & Quigley, N. (2014). Responsible leadership and stakeholder management: influence pathways and organizational outcomes. Academy of Management Perspectives, 28 (3).

Stakeholder Orientation and Stakeholder Marketing

Stakeholder Orientation

Ferrell, Fraedrich and Ferrell (2013) stated that, “The degree to which a firm understands and addresses stakeholder demands can be referred to as stakeholder orientation” (p. 35).  According to Duesing (2009), one of the primary management theories is the Stakeholder Orientation (SO).  

  Ansoff (1965) initially discussed SO in terms of “balancing the conflicting claims of the various ‘stakeholders’ in the firm: managers, workers, stockholders, suppliers, vendors. The firm has a responsibility to all of these and must configure its objectives so as to give each a measure of satisfaction” as cited in Duesing.

Multiple authors have added to this definition to include the community and environment (Berman et al., 1999) to competitors and other industries (Greenley & Foxall, 1997) as cited in Duesing. Duesing (2009) posits that literature has previously stated that SO positively affects organizational performance.  The results of Duesing’s study showed that of all the stakeholders the ones with the strongest affect on organizational performance were employees and customers.

Stakeholder Marketing

Stakeholder marketing takes into consideration that the market is more than a unique niche.  The customers are not standalone islands, but are vastly interconnected with government, other vendors, their community, and all of these affect the decisions that the consumers will make (Hosfeld, 2013).

Stakeholder marketing is an important part of embracing a systems perspective because it engages with the marketplace as such a dynamic system. It can also reflect the intention to create social good, depending on the degree of mutuality to which the company aspires (Hosfeld, 2013).

In this global and innovative marketplace, we must consider all ethical factors in place , when establishing a stakeholder marketing strategy.  Listed below in Table 1 are Forbe’s Top Ten Corporate Citizens that have the highest standards of ethical behavior when considering all of their stakeholders.

Table 1

Forbe’s Top Ten Corporate Citizens

Number	Organization
1	Bristol – Myers Squibb
2	IBM
3	Microsoft
4	Intel
5	Johnson Controls
6	Accenture
7	Spectra Energy
8	Campbell’s
9	Nike
10	Freeport-McMoran Copper & Gold

Author: Dr. Andree Swanson

References

Duesing, R. (2009). Stakeholder orientation and its impact on performance in small businesses. Doctoral dissertation. Retrieved from http://udini.proquest.com/view/stakeholder-orientation-and-its-pqid:1876290581/

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics & social responsibility. [OMM640 Custom edition] Mason, OH: Cengage Learning .

Hosfeld, K. (2013). Stakeholder marketing: Building trust and loyalty in cynical market. Hosfeld and Associates. Retrieved from http://blog.hosfeld.com/trust/stakeholder-marketingbuilding-trust-and-loyalty-in-a-cynical-market/

The Bounded Rationality of Stakeholder Theory

Stakeholder Theory is an organizational management perspective that attempts to defined the nature and purpose of firms/corporations within society. According to its founder Milton Friedman, the purpose of a firm is embedded almost exclusively in the production of wealth for shareholders (Friedman, 1970). Since this time, the concept of stakeholder has been expanded to include the idea that other entities have a particular stake, or interest, in the organization and can influence its success or failure.

The theory defines who are the stakeholders in an organization and their rights and obligations to the shareholders as well as society in general. The root of the theory is based off of the premise that its purpose is the, "identification of moral or philosophical guidelines for the operation and management of the corporation" (Donaldson & Preston, 1995). The theory helps to foster the understanding that the needs of the owners should be realized first before other considerations. However, other ethical aspects of managing an organization in society are important considerations of how companies should operate; the definition of stakeholder has been expanded to include them.

This management perspective helps bridge a gap with classical economic theorists who see the system as separate economic components competing against each other while ignoring the perspective of the management of the firm. The classical approach makes the assumption that all participants in the system are rational and independent (unbounded rationality) while management theorists believe that  the imperfect information and lack of participant's mental abilities would bind them together for decision making into firms and organizations (bounded rationality) (Simon, 1955).

Thus the firm became a resource entity where operational abilities and knowledgecan minimize costs and improve upon market influence (Amit and Schoemaker, 1993). It is believed that organizations have the capacity to create market efficiencies through tying together the skills of labor and management into a social function that furthers the interest of its members. In essence, a person joins the firm for resource attainment and hedges their skills which creates more productivity than working alone.

In order for the firm to be effective it must hedge the skills and development of employees to create efficiencies. When these efficiencies are difficult to obtain and employees/managers are capable of a "free ride" the collective benefits will be lessened (Hardin, 1982). The same risks apply when an organization's culture detracts from employee development, unions become obstructionists, or political corruption encourage "free rider" approaches. Adding enough free riders, and inefficient operators to an organization, will detract from the firms missions, purpose, and economic strength.

Coordinators of human capital are combined into what we consider the board of directors. This board should have the skill to develop and create synergy within the organization by hedging human capital to create innovative powers (Mohrman et al., 1995). Thus, the very purpose of the board of directors lies in their ability to increase the efficiency of transactions as well as the innovative potential of the organization.

When a group of skills and abilities come together into an in-group paradigm with productive core values, the stakeholders are able to capitalize on employee's abilities and reap higher market rewards. The firm becomes the psycho-social group with a bundle of rights and obligations (Donaldson and Dunfee, 1999). Each member of the organization must be fully integrated into these groups, rights and obligations if true success of the organization will be found.

Stakeholder theory helps put within perspective the nature and purpose of an organization. At present these two purposes are 1.) shareholder wealth and 2.) other interested parties that have influence over the firm. Even though the theory doesn't specifically state this concept, one could take a very large view that firms are also societal socialization tools and can collectively change the very nature of American values and beliefs. Thus a stakeholder can be any person, group or entity that has a vested interest in the development of the organization and the people that pass through it.

Amit, R. and Schoemaker, P. (1993)Strategic Assets and Organizational Rent. Strategic Management Journal 14, 33–46.

Donaldson, T. & Preston, L. (1995). The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications. Academy of Management Review 20 (1), 65–91.

Friedman, Milton. "The Social Responsibility of Business Is to Increase Its Profits." New York Times Magazine, 13 September 1970.

Hardin, R. (1995). Efficiency, in R. E. Goodin and P. Pettit (eds.), A Companion to Contemporary Political Philosophy (Blackwell, Oxford), pp. 462–470.

Mohrman, S., Cohen, S. and Mohrman Jr, A. (1995).  Designing Team-Based Organizations: New Forms for Knowledge Work. (Jossey-Bass, San Francisco).

Simon, H. (1955), A Behavioral Model of Rational Choice.  Quarterly Journal of Economics 69, 99–118.