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The management of strategic issues

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Title:
The management of strategic issues an exploratory study of the concept and practice of issues management
Creator:
Callaghan, Christopher T
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Language:
English
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xix, 343 leaves : charts ; 29 cm

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Management ( lcsh )
Management ( fast )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

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Bibliography:
Includes bibliographical references (leaves 221-231).
General Note:
Submitted in partial fulfillment of the requirements for the degree, Doctor of Public Administration, Graduate School of Public Affairs.
General Note:
School of Public Affairs
Statement of Responsibility:
by Christopher T. Callaghan.

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|University of Colorado Denver
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Auraria Library
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All applicable rights reserved by the source institution and holding location.
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ocm14062882
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Full Text
THE MANAGEMENT OF STRATEGIC ISSUES:
AN EXPtORATORY STUDY OF THE CONCEPT
AND PRACTICE OF ISSUES MANAGEMENT
by
Christopher T. Callaghan
B.S., University of Detroit, 1973
M.B.A., University of Detroit, 1976
A thesis submitted to the
Faculty of the Graduate School of Public Affairs of th
University of Colorado in partial fulfillment
of the requirements for the degree of
Doctor of Public Administration
Graduate School of Public Affairs
1984


This thesis for the Doctor of Public Administration
degree by
Christopher T. Callaghan
has been approved for the
Graduate School
of Public Affairs
by


Copyright by
Christopher T.
Callaghan 1984
All Rights Reserved


Callaghan, Christopher T. (D.P.A., Management Policy
and Strategy)
The Management of Strategic Issues: An Exploratory
Study of the Concept and Practice of Issues
Management
Thesis directed by Professor John C. Buechner
In the past two decades organizational
management has become more complex. Operational
issues concerned with efficiency have been replaced
largely by strategic issues in the external environ-
ment, including social, political, economic and
technological change. Issues management has evolved
in the private sector as a modern management system to
more effectively anticipate, assess and respond to
strategic issues.
This study explored the phenomenon of issues
management. Existing knowledge about the concept and
practice was structured; empirical data from experi-
enced practitioners were obtained; and a general
theory was developed. Additionally, implications for
management theory, including public policy management,
and priorities for future research were identified.
Three distinct methods of data collection were
used. Pertinent academic and practitioner literature
was critiqued; interviews were conducted with issues
management practitioners from fourteen companies


covering eight industries; and examples from actual
practice were analyzed. The data were structured
conceptually by key variables, including the purpose,
scope, organizational location and general process of
each company's issues management program; the roles o
key managers; and the resources and methods used.
Case vignettes summarized these variables for each
issues management system.
The study's major findings include:
1. The programs were started to enable
organizations to anticipate changes in
their external environment, and to become
active participants in public policy
developments.
2. In most cases the programs
a. Provide information on external issues
to the board of directors and top
management.
b. Provide input on emerging issues in
strategic plans.
c. Assist top management and other senior
executives in external relations.
d. Develop programs to respond to public
policy issues.
3. The principal roles of the issue manager
are to support the planning, decision
making and external relations activities
of top-level executives; and to be "keeper
of the process," i.e., serve as the pivot
for attending to issues and marshalling
resources to deal with them.


VI
Issues management appears to have an important
role in the strategic management of organizations.
Theoretically, issues management is a system that
supports direction setting and strategic decision
making. Issue managers, as boundary spanners and
integrators, are central actors in the strategic
management process.
The form and content of this abstract are approved,
recommend its publication.
Signed
Faculty member in charge of thesis


DEDICATION
To Helen and Ray Eppert,
with love and admiration.


ACKNOWLEDGEMENTS
Throughout this study I have received support
and encouragement from many people. My sincere
appreciation goes to all of those who contributed,
particularly the following.
This research was supported, in part, by the
National Affairs Office of Deloitte Haskins & Sells.
A special thanks goes to Robert T. Atwood and Bill C.
Wilson for their patience and administrative
assistance throughout all phases of the project.
I'm grateful for the direction and input of my
entire dissertation committee, especially Dr. Philip
M. Burgess, Mr. James K. Paisley, Dr. John E. Young,
and Dr. Lawrence F. Keller. Special mention must go
to Mr. Paisley and Dr. Keller for their extraordinary
efforts in guiding me to completion.
I want to thank the many executives who gave
their time and whose experience, so generously shared,
is the source of the study's empirical findings.
Their cooperation has made a significant difference.


ix
A number of people helped prepare and type the
manuscript. A special thanks goes to Terry Monaghan,
who handled production of the dissertation as though
it were her own.
Finally, my wife, Patricia Shields, is to be
commended. During this period she managed to endure
two career changes, mine and hers; a relocation from
Colorado to Washington, DC; and the birth of our son,
Thomas. Her encouragement and assistance has been
invaluable.


CONTENTS
ABSTRACT............................................ iv
DEDICATION......................................... vii
ACKNOWLEDGEMENTS................................... viii
LIST OF TABLES................................. xvi
LIST OF FIGURES................................. ...xvii
CHAPTER I
INTRODUCTION....................................... 1
Background of the Problem....................... 1
A Period of Transformation and
Turbulence.................................... 1
Adaptation for Survival and Growth.............. 4
The Opportunity for Leadership.................. 5
The Research Problem.............................. 6
The Concept of Strategic Issues................. 6
Strategic Issues and Issues Management............ 7
The Need for Research.......................... 11
Purpose and Scope of the Study................... 12
Purpose of the Study........................... 12
Objectives of the Study........................ 13
Research Design and Methodology................ 14
Significance of the Study........................ 15


xi
The Need for Strategic Leadership.............. 15
Importance to Public Management............... 17
Organization of the Study....................... 19
Notes............................................ 23
CHAPTER II
STRUCTURE OF EXISTING KNOWLEDGE................... 27
Major Foci Found In The Literature............... 27
Background of the Phenomenon................... 28
Changing Business Environment............... 28
Lack of Preparation......................... 29
Organizational Responses................... 30
A New Perspective........................... 34
An Academic Perspective..................... 39
The Nature of Issues.......................... 41
Classifying the External Environment........ 41
Classifying Issues.......................... 45
Concept of Strategic Issue.................. 50
Issues Management Process...................... 54
A Model..................................... 54
Examples.................................... 56
Roles and Responsibilities.................. 58
Methods and Resources.......................... 60
Environmental Scanning and Monitoring..... 60
Methods..................................... 62


xii
Resources................................... 64
Summary.......................................... 66
Major Strengths of Existing Knowledge......... 67
Major Limitations of Existing Knowledge...... 68
Conclusions and Implications..................... 69
Need for Theory Research.................... 69
A Framework to Structure Insights............. 71
Key Variables. ............................... 73
Strategy.................................... 74
Structure................................... 74
Systems..................................... 76
Other Factors............................... 76
Summary..................................... 76
Field Study Plan.............................. 77
Notes.......................................... 79
CHAPTER III
RESULTS OF FIELD STUDY........................... 85
Background of Field Study........................ 86
Insights Into the Practice of Issues
Management.................................... 87
Strategy: Profile of Key Variables............ 87
Purpose..................................... 87
Scope....................................... 91
Examples.................................... 92
Structure: Profile of Key Variables.......... 103


xiii
Location................................... 103
Roles...................................... 104
Examples................................... 110
Systems: Profile of Key Variables.......... 119
Process.................................... 119
Resources.................................. 121
Methods.................................... 121
Examples................................. 124
Other Organizational Factors................. 126
Staf f/Skills.............................. 128
Style/Superordinate Goals................. 128
Other Findings............................... 132
Lessons Learned by Experienced
Practitioners........................... 132
Issues Management and Public Policy
Management.............................. 132
Summary of Findings............................ 133
Notes.......................................... 140
CHAPTER IV
DEVELOPMENT OF THEORY............................ 141
Conceptual Foundation.......................... 141
Open Systems Theory.......................... 141
Organization-Environment Alignment.......... 144
Strategic Management, Strategy and
Strategic Decisions........................ 146


xiv
The Strategic Decision Process................ 149
Bounded Rationality and Boundary
Spanning Roles............................ 152
Environmental Assessment and Scanning
Theory.................................... 155
Organization Design and Managerial Roles.... 157
Summary....................................... 160
Introduction of Theory......................... 160
Conceptual Framework.......................... 160
Issue Managers as Boundary Spanners........... 163
Issue Managers as Integrators................. 168
Issues Management as a Direction Setting
and Strategic Decision Support System...... 170
Summary..................................... 175
Notes........................................... 177
CHAPTER V
SUMMARY, DISCUSSION AND IMPLICATIONS.............. 183
Summary of Overall Findings..................... 183
Restatement of Objectives..................... 183
Structure of Existing Knowledge............... 184
Insights Into Practice of Issues
Management.................................. 186
Conceptual Foundation and General
Theory...................................... 188
Implications for Management Theory and
Research...................................... 190


XV
Key Implications for Management Theory....... 190
i
Management Policy and Strategy.............. 191
Strategic Decision Theory................... 194
Organizational Structure.................... 196
Business and Public Policy................. 200
Key Implications for Research Topics.......... 207
Key Methodological Implications............... 211
Summary....................................... 215
Notes........................................... 217
BIBLIOGRAPHY....................................... 221
APPENDIX
A. RESEARCH DESIGN AND METHODOLOGY.............. 233
B. CASE VIGNETTES.............................. 253
C. SAMPLE JOB DESCRIPTION OF ISSUE MANAGER...... 284
D. ISSUES MANAGEMENT TOOLS AND TECHNIQUES....... 289
E. LESSONS LEARNED BY EXPERIENCED
PRACTITIONERS.............................. 322
F. ISSUES MANAGEMENT AND PUBLIC POLICY
MANAGEMENT.................................... 332


TABLES
TABLE
1.1 Data on Decline in U.S. Competitiveness...... 3
3.1 Origin of Issues Management Programs.......... 88
3.2 Origin of Issues Management Programs......... 89
3.3 Purposes of Issues Management Programs....... 90
3.4 Scope of Issues Management Programs........... 91
3.5 Location and Reporting Channels of
Issues Management Programs................^105
3.6 Roles: Degree of Involvement................. 108
3.7 Roles: Manner of Involvement................. 109
3.8 Major External Resources Used In Issues
Management Process........................ 122
3.9 Methods: Use of Available Tools and
Technqiues................................ 123
3.10 Experience/Education of Issue Managers....... 129
A.l Field Study: Background on Companies and
Practitioners............................. 240
A.2 Field Study: Background on Consulting
Firms
240


FIGURES
FIGURE
1.1 Examples of Strategic Issues.................... 8
2.1 Evolution of Corporate Public Affairs.......... 32
2.2 Modern Management Systems..................... 40
2.3 Schematic Overview of External Environment.. 42
2.4 Classification Scheme of Sears' Macro
Environment................................. 47
2.5 Life Cycle of a Public Policy Issue............ 49
2.6 Issues Priority Matrix......................... 50
2.7 A Conceptual Relationship Among External
Trends and Issues........................... 53
2.8 Chase/Jones Model of Issues Management
Process.. ................................ 55
2.9 Use of Surveys and Content Analysis to
Identify Public Policy Issues............... 63
2.10 Sources of Scanning Information................ 65
2.11 A New View of Organizations:
The 7S Framework............................ 72
2.12 Key Issues Management Variables................ 75
3.1 Company N: Program's Scope and
Relationship to Strategy....................... 97
3.2 Company N: Model of Strategic
Planning Process............................ 99


XV111
3.3 Schematic Overview of the Roles of Board,
Top Management, Line and Staff in
Issues Management.......................... 106
3.A Company F: Issues, Phases and Structures
in the Issues Management Process........... Ill
3.5 Company F: Issues Management Program -
Specific Roles and Responsibilities......... 112
3.6 Company M: Structure of Issues Management
Program.................................. 114
3.7 Company L: Structure of Issues Management
Program. .............................. 117
3.8 Schematic of Issues Management Process
and Key Elements......................... 120
3.9 Company N: Two-Track Issues Management
Process................................. 125
3.10 Company F: Major External Sources of
Information on Issues...................... 127
4.1 A General Model of the Strategic Decision
Process.................................. 151
4.2 A Model of the Environmental Assessment
Process................................... 156
4.3 The Conceptual Framework: Issues
Management as a Direction Setting
and Strategic Decision Support System..... 161
4.4 Comparison of Issues Management and
Strategic Decision Processes............... 172
4.5 Schematic Overview of Issues Management
as a Direction Setting and Strategic
Decision Support System.................... 174
5.1 Strategic Management: Four-Factor
Analysis................................... 192
5.2 Schematic of Traditional and Network
Structures................................. 198
A.l Consecutive Levels of Research Design........... 235


xix
A.2 Letter to Corporate Practitioners
Requesting Interview...................... 245
A.3 Topical Outline Provided in Advance of
Interview With Corporate Practitioners.... 246
D.l Firms Offering Survey Services............... 292
D.2 The Consensor: An Illustration............... 294
D.3 Content Analysis An Illustrative Process.. 297
D.4 Illustrative List of Publications Scanned... 298
D.5 Trend Impact Analysis: An Illustration....... 300
0.6 Cross Imact Analysis: An Illustration...... 302
0.7 Company F: Use of Cross Impact Analysis.... 303
D.8 Scenarios: An Illustration................... 305
D.9 Issues Priority Matrix: An Illustration.... 306
D.10 Portfolio Analysis: Growth Share Matrix.... 309
D.ll Strategic Issues Model...................... 312
D.12 Implications Wheel........................... 313
D.13 Issues Scorecard............................. 314
D.14 Stakeholder View of the Firm................. 315
0.15 Company N: Options Evaluation Table.......... 317
D.16 Summary of Management Tools/Techniques....... 318
F.l Overview of Foresight Studies by U.S.
House Committee on Energy and Commerce.... 337
F.2 Transmittal Letter Accompanying Private
Sector Task Force Report on Foresight..... 338
F.3 Comparison of Foresight Legislation
in 98th Congress.......................... 340


CHAPTER I
INTRODUCTION
Background of the Problem
A Period of Transformation and Turbulence
Our nation and its private, public, and
independent sector organizations face a period of
rapid change and transformation. The causes of the
turbulence are well documented, e.g., a decade of
global inflation and unprecedented interest rates; a
national decline in economic competitiveness and
productivity; a high level of unemployment and
bankruptcy, highest since the Depression; a shift from
an industrial economy to an information economy; and
rapidly changing levels and revolutionary alterations
in government spending. As the French philosopher and
poet, Paul Valery, stated, "the trouble with our times
is that the future is not what it used to be."^
Many believe that the turbulence and
discontinuities confronting our society and its
organizations will not abate. In fact, a number of
authors, including Alvin Toffler in The Third Wave;
Peter Drucker in Toward The Next Economics, and


2
Managing In Turbulent Times; and Marilyn Ferguson in
The Aguarian Conspiracy, suggest that the rapid rate
at which technological, social, political and economic
changes occur will not only continue but even
2
increase.
These and other authors have noted that a
central challenge to organizations is the search for
creative and effective responses to change. Drucker
calls these "strategies for tomorrow," as these
strategies must anticipate where the greatest changes
are likely to occur and what they are likely to be.
For example, in Megatrends: Ten New
Directions Transforming Our Lives, John Naisbitt
identifies ten overarching trends already reshaping
3
our society. The most important of these for this
type of study are the following.
1. Our economy is evolving from an industrial
base to an information base.
2. Our society is becoming part of a global
economy, moving away from isolation and
national self-sufficiency. As a result,
America will no longer be the world's
dominant industrial force.
3. Citizens, workers, and consumers are
demanding, and getting, a greater voice in
government, business and the marketplace.


3
4. Structures of social activity are moving
from hierarchies to networks.
5. Centralized structures are crumbling.
Social systems are decentralizing, growing
stronger from the bottom up.
An example of the second trend, the shift to,
and loss of dominance in a global marketplace, was
outlined by Walker Lewis, President of Strategic
Planning Associates, at a 1982 conference of the
4
International Planning Executives Institute. Table
1.1 presents data that substantiate this important
development.
Table 1.1
Data on Decline in U.S. Competitiveness
United States United States
1960 Worldwide 1980 Worldwide
Industry Market Share Market Share
Steel
Automotive
Consumer Electronics
Semi conductors
Wide-bodied jets
26% 17%
50 33
44 25
90 60
85 50
Source: From presentations by W. Lewis at the
International Conference of Planning Executives
Institute, Cincinnati, May 17-19, 1982.
Furthermore, the Organization for Economic Cooperation
and Development (OECD) has projected that throughout
the next twenty years the U.S. share of the Gross


4
World Product (GWP) will continue to decline, while
other nations will enjoy larger shares.5 This
information dramatizes the rapidity of change
confronting not only organizations, but nations as
well.
Adaptation for Survival and Growth
Organizations in the U.S. have grown more
concerned about their external environment. Murray
Weidenbaum, former Chairman of the Council of Economic
Advisors under President Reagan, points out:^
It is no exageration to say that for most
managers the main problems the main
obstacles to achieving their business
objectives are external . .
In 1981, senior executives from major U.S.
corporations met at Business Week's International
Roundtable, to discuss changes in the external
environment that could have a significant impact on
their organizations' growth during the next decade.
Forty emerging issues were identified at their
meeting. These issues included political, social,
economic and technological developments.7 The
specific issues identified covered a broad range of
concerns, from the role of government in business,
e.g., as an owner, banker, risk insurer, promoter, and
sponsor of R&D; to the impact of revolutionary changes
in information and communications technologies.


5
The concern executives have about changes in
the external environment is very real. According to
James Skidmore, Chairman and Chief Executive Officer
D
of a major U.S. corporation:
Many executives today have grave doubts
about whether they can position their
companies to respond to the rapidly and almost
overwhelming forces of today's business
environment. At the root of the problem is
the chief executive's ability to control his
company. The top decision-maker had been
accustomed to an environment where, perhaps,
90 percent of the basic factors influencing
the bottom line were internal; only 10 percent
represented external forces. Today the
percentages have been reversed . .
This level of concern is not restricted to the private
9
sector. Congressman John D. Dingell has stated:
Unless the federal government makes a more
successful effort to anticipate future events
as part of a concerted strategy to give us
more time to consider how to meet the
challenges of tomorrow, the rate of change may
be more than our social institutions can
handle and our democratic form of government
could be threatened.
It is clear that organizations in all sectors of our
economy need to address the challenges of a rapidly
changing external environment.
The Opportunity for Leadership
In the past two decades (1960-1980)
organizational management has become more complex.
Organizations have grown in size and, as noted, the
external environment in which they operate has become
more complex and subject to change. These new


6
conditions require organizational leaders to
anticipate, assess and respond effectively to change.
According to Peter Drucker:^0
A time of turbulence is also one of great
opportunity for those who can understand,
accept and exploit the new realities. It is
above all a time of opportunity for leadership.
Drucker suggests creative approaches are needed for
adapting to the external environment if organizations
are to grow and prosper.
The Research Problem
The Concept of Strategic Issue
As Skidmore has noted, there has been a
significant shift in the basic factors influencing
organizational effectiveness. As a result, the nature
of issues confronting an organization's leadership has
changed. The concept of "strategic issue" has been
developed to underscore the need for organizations to
anticipate and respond effectively to their changing
environments.
Only in the last three years has a sufficient
operational definition of strategic issue emerged.^
12
Ian Wilson defines a strategic issue as
... a major opportunity or threat which
could critically affect the long-term future
of the institution. An issue may be immediate
or emerging; internal or external in origin;
concerned with any facet of the institution -
competitive, marketing, technological, human
resources, financial, etc.


7
Although this definition encompasses internal as well
as external issues, this study is concerned with
external strategic issues that arise from an
organization's external environment. As explained
below, it is the rapid changes in the external
environment that gave impetus to the concept and
practice of issues management.
Wilson's definition underscores the
significance of strategic issues; that is, those
issues to which an organization must adapt. Prior to
the 1960s most strategic issues were internal issues.
The management of these issues has become more routine
as the practice of management has matured. However,
as the external environment of organizations has
changed, the very nature of management has necessarily
13
changed. Operational issues concerned with
efficiency have been replaced largely by strategic
issues concerned with the external environment.
To illustrate the distinct nature of strategic
issues, examples can be drawn from the senior
management roundtable referred to earlier. Figure 1.1
presents a number of the strategic issues identified
at this meeting.
Strategic Issues and Issues Management
To adapt to their external environment,
organizations have searched for ways to more


Social
. The rise of political
and economic power in
the elderly.
Population shifts
towards the sunbelt
in the U.S.fl.
Necessity for and
changes attributed
to multiple income
families.
. Corporate social
responsibility; e.g.,
the changing
expectations of a
corporation within
the societies it
elects to participate
Source: Business Week's
Political
Economic
. National direction
(leadership or lack
thereof) with respect
to economic, energy,
materials, product-
ivity, and technological
policy.
. Reductions in the
size and power of
U.S.A.'s government.
Less adversarial
and more cooperative
relations between
business and government
in the U.S.A.
Increase in U.S.
government debt and
deficits.
. The emergence of
world products;
replacing regional
and local products.
. Post-industrial
society; a shift
from the manufacturing
to the service and
knowledge sectors in
developed nations.
. Fluctuating exchange
rates, and the effects
of devaluation,
revaluation and
speculation.
. Materials shortages
and the rapid
depeltion of natural
resources.
"Corporate Planning 100" International Roundtable, Brussels,
Technological_______
Challenges to U.S.
leadership position in
advancing technologies.
Level, range and focus
of R&D expenditures by
competing nations.
. Revolutionary advances
in electronics and
associated industries.
Accelerating technology
transfer to less
developed nations.
Belgium, December 1-2, 1981
Figure 1.1
Examples of Strategic Issues
CO


9
effectively anticipate, assess and respond to change.
In the private sector, the concept and practice of
issues management has evolved as one way to meet this
need. Issues management has been termed "the most
significant management technique developed in the last
14
two decades."
An article in The Wall Street Journal'*'5
points out that few of the major issues of the 1970s
were anticipated as late as the mid-1960s, including
the environmental movement, the consumer movement, the
oil price shocks, the wave of new government
regulations, the new marketing conditions, and the
rate of technological innovation.^ In response to
these and other changes, many companies have
established issues management programs.^-7 The
general purpose of these programs is to help the
organization identify, assess and respond to important
18
changes in the external environment. It can be
expected that public agencies will need to establish a
similar capability, and therefore, have much to learn
from these programs in the private sector. In fact,
this study creates a framework that will permit this
learning to take place.
In describing the evolution of issues
19
management, one leading practitioner notes that


10
. . the needs of . institutions to
perceive, understand and respond to
environmental change provoked alternatives in
ways companies thought about managing their
enterprise, beginning in the early 1970's.
One such alternative was issues management.
At present there is no uniform definition of
issues management. This phenomenon is of such recent
development that the body of literature describing it
is still highly fragmented and without organization.
A statement appearing in a U.S. Department of
Commerce report emphasizes that the practice of issues
management is still developing and that there are some
20
problems associated with it.
It is only in the past few years that most
companies have realized how important public
policy and social issues are to their own
survival and profitability. The effective
integration of social performance issues into
strategic planning has yet to occur in most
major corporations. Most firms still conduct
strategic planning exclusively as an economic
exercise. In some cases, planning still deals
only with investment allocation and projected
returns on investment.
In even the most sophisticated companies,
there are few effective socio-political inputs
or outputs in the strategic planning process.
One sign of change is the increasing
sophistication of issues analysis and issue
management in many firms. This approach is,
however, handicapped by its separation in most
cases from the organized strategic planning
process, its focus on public policy issues to
the exclusion of many demographic or
technological developments, its concentration
on legislative and judicial developments, and
the lack of a coherent method of selecting the
most critical issues.


11
Although there are some problems in practice, the
literature suggests issues management is an important
means of anticipating, assessing and responding to
external issues. Accordingly, this managerial
phenomenon requires careful study, both to determine
what is happening in the private sector, and to frame
what is learned in relevant organizational terms for
the practice of public management.
The Need for Research
Since the practice of issues management has
evolved so rapidly, only since 1979 has there been an
attempt to take a closer look at it. A number of
21
leading journals and newspapers, and a number of
22
national and international conferences, suggest
its role and importance will grow.
Various articles, reports and speeches have
been published on the subject. Accordingly, a body of
literature is emerging. This body of knowledge
provides insights into how the practice of issues
management evolved, and descriptions of the different
activities involved in the issues management process.
Although this data is useful, the literature as a
whole is fragmented, lacking structure, direction and
conceptual organization.
The phenomenon is badly in need of research.
Existing studies have not kept up with developments in


12
practice, nor have they been tied to the
organizational theory literature. Therefore, there is
little guidance on how to deal with the emerging
problems in practice, such as those noted in the
report of the Department of Commerce. Additional
guidance requires integration of the concept and
practice into effective private sector management
practices. This outcome will not occur without an
adequate base of theory and research for the
phenomenon. Accordingly, advances in the practice of
issues management and its importation to the public
sector could be deferred, perhaps at a time when it is
most needed.
Purpose and Scope of the Study
Purpose of the Study
The lack of a conceptual framework already has
stalled progress in the practice of issues
23
management. Progress also has been inhibited by
the lack of a research agenda. In essence, there is
insufficient theory to guide both the research and the
practice of issues management.
The purpose of this study is to research the
phenomenon and to introduce a theory of issues
management based on this research. This requires
obtaining additional insights into the practice of


13
issues management. Because the phenomenon is at a
relatively early stage of development, and the study
has not kept up with the practice, it is imperative to
link theory-research and practice. Therefore, this
research taps a sample of the more experienced
practitioners (issue managers) in order to obtain data
about the practice. Insights from these data permit
the development of a general theory.
Objectives of the Study
The study's purpose requires the following
objectives.
1. Structure existing knowledge about the
concept and practice of issues management.
2. Obtain additional insights into the
phenomenon based on the experience of
skilled practitioners.
3. Build a conceptual foundation and introduce
a general theory to explain the phenomenon.
4. Review the study's implications to
management theory, and suggest priorities
for additional research.
These four objectives establish a base from which
students, researchers, and practitioners can draw
additional knowledge and guidance.


14
Research Design and Methodology
An important tenet in scientific research is
that the choice of a specific research design should
be dictated by the level of knowledge about a
phenomenon. This study is an exploratory study
because of the recent emergence of the phenomenon. As
exploratory research, the study is concerned with
discovering important variables that describe the
practice of issues management and the relationships
among these variables. This provides an opportunity
to better understand issues management and to lay the
groundwork for additional research.
Appendix A details the research design and
methodology. In summary, the study relies on three
distinct methods of data collection.
1. An analysis of pertinent literature.
2. Interviews with experienced practitioners
in the field of issues management.
3. An analysis of "insight-stimulating"
examples.
Most exploratory studies use only one of these
methods. This study employs all three methods in
order to accomplish the research objectives.
Practitioners were selected based on their reputation
for knowledge and experience with the subject.
Examples of issues management practices were analyzed


15
because scientists have found this to be a
particularly fruitful method for obtaining insights
into a phenomenon.
Significance of the Study
The Need for Strategic Leadership
In a world of rapid change, our society
depends on its organizations. Kenneth Boulding .
emphasized long ago that the health, safety and
general well-being of individuals and groups depends
24
on the effective performance of organizations.
Indeed, sociologist W. Fred Cottrell stated that the
failure of organizations to survive and grow may have
serious ramifications for the "careers" of
25
communities. In a world of turbulence, the very
survival of a nation depends on the ability of its
organizations to adapt to change. This unique
responsibility requires leaders of business, public
and independent sector organizations to direct and
guide their organizations effectively.
In recent years a number of scholars and
practitioners have claimed that our nation has a
crisis in leadership."^6 A recent article in Fortune
points out that the need for more effective leadership
continues, especially as our society demands more
27
responsive and responsible organizations.


16
This study is concerned with the ability of
organizations to adapt to their external environment;
specifically, to process external strategic issues
through the practice of issues management. This
ability requires a new concept of leadership,
strategic leadership; the kind of executive leadership
28
articulated by Peter Drucker.
... in turbulent times the first task of
[leadership] is to ensure its' institution's
capacity for survival, its structural strength
and soundness, its capacity to survive a blow,
to adapt to sudden change, and to avail itself
of new opportunities.
To ensure organizational capacity for survival and
growth, executive leadership must be able to
anticipate where the greatest changes are likely to
occur, what they are likely to be, and respond in a
way that enables the organization to adapt to its
external environment. Hence, the signficance of the
concept and practice of issues management, and its
link to strategic leadership.
W.R. Haselton, Chairman of St. Regis,
emphasizes the importance of strategic leadership in
29
one of the company's publications.
Trends change sometimes at an almost
imperceptible pace, sometimes overnight. For
businesses to succeed and flourish, they must
understand the basic socio-economic forces
that govern the markets they serve. And they
must be prepared to take appropriate and
timely action.


17
St. Regis studies basic trends and
identifies emerging issues, using its
knowledge in the stategic planning and
decision-making process. As shareholders,
each of us should be aware of the changing
trends and new directions.
Steps must be taken, then, to fill the large gap in
research needed to better understand the phenomenon of
issues management, and thus contribute to strategic
leadership. This challenge is timely.^
Issues management is rapidly being
institutionalized in American business. That
it is doing so reflects the ability of
business executives to sense change, to
organize for change, and to incorporate change
in their decision-making. As American society
transforms itself during the remaining decades
of the twentieth century, issues management
will be the catalyst of corresponding change
in the American corporation.
By investigating issues management in the real world,
and building theory that will enhance our
understanding of it, the research gap can begin to be
filled. Without filling this gap, organizations
cannot effectively conceptualize and implement
strategic leadership. Without strategic leadership,
our society's organizations will not be able to adapt
to a rapidly changing environment.
Importance To Public Management
Although it is a relatively recent addition to
the field of management, issues management is rapidly
becoming a major interest in both business and public
policy. Among the many factors in a company's


18
environment, including new technologies, competitive
forces and changes in the market place, the
socio-political sector is a powerfully influential
force. As noted earlier, this part of the external
environment spawned the practice of issues management.
Government is increasingly a significant actor
in the external environment of private enterprise.
Since our nation is a mixed economy, there is the need
for increased communication and cooperation between
private and public sector leaders. Issues management
appears to hold some potential as a means for
enhancing this communication. To that end, this study
considers how issues management might bridge business
and public policy.
The study addresses another potentially
important connection to public management. As public
sector legislators and managers enter an era of
reduced resources and increased demands, they will
have to manage external strategic issues more
effectively. For example, the Congressional
Clearinghouse on the Future provides members of
Congress with information about trends which may shape
the future. It does this through a trend evaluation
and monitoring (TEAM) program in which participating
congressional staffers and some members of Congress
monitor over 70 different periodicals. Their aim is


19
to spot and report on articles suggesting or
describing trends that will have implications for
Congress. Other public agencies concerned with
emerging issues include the Congressional Research
Service and the Office of Technology Assessment.31
In addition, the national government has
studied the concept and practice of issues management,
and legislation has been introduced in Congress to
apply these to the government's policy-making
process. These initiatives are examined in Appendix F.
Organization of the Study
This chapter has provided background
information on the management of strategic issues and
the phenomenon of issues management. In addition to
reviewing the organizational setting that created this
phenomenon, the concept of external strategic issues
was discussed. The relation between issues management
and organizational leadership was sketched,
underscoring the need for research and the utility of
an exploratory study. A brief summary of the study's
research design and methodology was outlined.
Finally, the study's significance to the public sector
was noted.
Chapter 2 addresses the study's first
objective, i.e., the structure of existing knowledge.


20
First, the major foci on the subject found in books,
periodicals, and other written material are
identified. This information is critiqued and its
lack of conceptual organization is discussed. The
need for exploratory research, including field
research, is set forth. Finally, the chapter
introduces a set of key variables to begin organizing
existing knowledge, and to guide the required field
research.
Chapter 3 covers the study's second objective,
i.e., additional insights obtained from experienced
practitioners. Data from the field research are
presented in profiles of each key variable introduced
in Chapter 2. Examples are provided to illustrate
each of the key variables and their interrelationship.
Major findings from the field research are summarized
at the end of the chapter.
Chapter 4 addresses the study's third
objective, i.e., the conceptual foundation and general
theory. Concepts from the management literature are
selected to explain the findings from the study. The
theory proposes that issues management is a system
that supports direction setting and strategic decision
making, and that issue managers, as boundary spanners
and integrators, are central actors in this system.
From this perspective, issues management plays an


21
important role in the strategic management of
contemporary organizations.
Chapter 5 summarizes the study's major
findings and reviews their implications to management
policy and strategy, strategic decision theory,
organizational structure, and business and public
policy. In addition, the chapter suggests priorities
for future research.
To enhance the utility of the research to both
scholars and practitioners, details of the study are
contained in a series of appendices. Appendix A
explains the study's research design and the
methodology of exploratory research. Appendix B
contains the case vignettes for all companies whose
issue managers were interviewed. In essence, the case
vignettes profile each company's issues management
program.
Appendix C presents a sample job description
of an issue manager. Appendix D summarizes and
illustrates the more significant issues management
tools and techniques used by experienced
practitioners. Appendix E summarizes the major
challenges and opportunities encountered by these
practitioners.
Finally, Appendix F briefly reviews public
sector studies and related legislation pertaining to


22
our national government's concern about its own
foresight capability. As noted in these studies,
foresight is analogous to issues management;
therefore, the public sector can learn from the
concept and practice of issues management in the
private sector, and perhaps strengthen its own
foresight capability.


23
NOTES-CHAPTER I
1 T. H. Thompson, "Revolutions Per Minute,"
Vital Speeches, 1 April 1984, p. 367.
2 Alvin Toffler, The Third Wave (New York:
William Morrow & Co. Inc."j 1980); Peter F. Drucker,
Toward The Next Economics (New York: Harper and Row,
1981) and Managing In Turbulent Times (New York,
Harper and Row, 1980); and Marilyn Ferguson, The
Acquarian Conspiracy (Los Anqeles: J.P. Tarcher, Inc.,
1980).
3 John Naisbitt, Megatrends (New York:
Warner Books, Inc., 1982).
4 Remarks by Walker Lewis, presented at the
International Conference of the Planning Executives
Institute, Cincinnati, May 17-19, 1982.
5 This point is developed further in James
K. Paisley's presentation to corporate CEOs, planners
and public policy makers as part of Business Week's
Corporate Planning 100 Annual International
Roundtable, Brussels, December 1-2, 1981.
6 Murray Weidenbaum, "Public Policy: No
Longer a Spectator Sport for Business!" Journal of
Business Strategy, (Summer 1980), p. 51.
7 Business Week's Corporate Planning 100
Annual International Roundtable, Brussels, December
1-2, 1981.
8 James A. Skidmore, Jr., "The Storm of the
80's," Leaders, (January 1981), pp. 46-48. 9
9 From letter of transmittal accompanying
report to Members, Committee on Energy and Commerce,
entitled Strategic Issues: Historical Experience,
Institutional Structures and Conceptual Framework,
U.S. Government Printing Office, Committee Print
97-KK, July 1982, p. V.


24
Drucker, Turbulent Times, p. 5.
11 Charles Hermann's study of crises in
foreign policy provides a typology that helps
conceptualize this kind of strategic issue. Hermann
classifies the dimensions of crises along three lines
- threat, decision time and awareness. See C.
Hermann, Crises in Foreign Policy (New York: The
Bobbs-Merrill Co., Inc., 1969), p. 36.
12 Ian H. Wilson, "Environmental Scanning
and Strategic Planning", Reading 7 in George A.
Steiner, et. al., Management Policy and Strategy (New
York: MacMillan Publishing Co., 1982), pp"! 299-303.
Reprinted from Business Environment Public Policy:
1979 Conference Papers, (St. Louis: American Assembly
of Collegiate Schools of Business, 1980), pp. 159-160.
11 3 * The increasing rate of environmental
change and the increasing concern about the central
responsibilities of an organization's top level
management has spawned a new concept and field of
study in the private sector called management policy
and strategy, or strategic management. The concept
and its relevance to this study is outlined in
Chapters 4 and 5.
14 J. Perham, "New Company Watchdogs," Dun's
Business Month, 118, No. 6 (December 1982), p. 88.
15 Earl C. Gottschalk, Jr., "Firms Hiring
New Type of Manager to Study Issues, Emerging
Troubles," The Wall Street Journal, 10 June 1982, p.
21. It should be noted that one experienced
practitioner suggests that many of these issues were
perceived by subordinates of senior management, but
the latter ignored the "early warnings" or rejected
the former's forecasts.
16 It should be noted many of these issues
also triggered changes in the public sector
environment. Indeed, many of the actions of
government create changes for business; conversely,
actions of business create strategic issues for
government. This fact illustrates the interdependent
nature of business and public policy.
17 A 1982 article on the subject estimated
over 200 Corporations have formally established senior
positions in issues management. See William L.
Renfro, "Managing the Issues of the 1980's, The
Futurist, (August 1982).


25
18 See for example, Perham, "Watchdogs;"
Gottschalk, Jr., "Emerging Troubles;" and Paul Cathey,
"Industry Has a New Advance Guard-Issue Managers,"
Iron Age, 23 April 1982.
Rene D. Zentner, "Issues and Their
Management," Manuscript submitted for publication,
1982.
20 Report of the Task Force on Corporate
Social Performance, Business and Society: Strategies
for the 1980's, U.S. Department of Commerce, December
1980.
21 This includes Gottschalk, Jr., "Emerging
Troubles;" Perham, "Watchdogs;" and Roger Rickless,
"Firms Helping Bosses Focus on the Future," The Wall
Street Journal, 5 October 1981, p. 31.
22 These include Business Week's Corporate
Planning 100 Annual International Roundtable,
Brussels, December 1-2, 1981; The World Future
Society's Fourth General Assembly and Exposition,
Washington, D.C., July 1982; and The Issues Management
Association's Fall Conference, New York City, November
18, 1982.
25 As reported by two founders of the Issues
Management Association, whose board of directors has
recently established a research committee.
24 Kenneth E. Boulding, The Organizational
Revolution (New York: Harper and Row, Publishers,
Inc., 1953).
25 w. Fred Cottrell, "Death By
Dieselization: A Case Study in the Reaction to
Technological Change," American Sociological Review,
16 (June 1951), pp. 358-365.
26 Benjamin Barber, "Our Leaders are Mostly
Dead, and Leadership is in Bad Repute," Harper's,
April, 1975. 27 28 29
27 Walter Kiechel, "What Makes A Corporate
Leader?," Fortune, 30 May 1982, pp. 135-140.
28 Drucker, Turbulent Times, p. 1.
29 W.R. Haselton, Chairman and CEO, St..
Regis Paper Company, remarks appearing in Breaking
Trends, Communications to the Public, September 1982.


26
30 Zentner, "Issues", p. 10.
31 James K. Brown, This Business of Issues
Coping with the Company's Environments (New York:
Conference Board, 1979), pp. 7-8.
The


CHAPTER II
STRUCTURE OF EXISTING KNOWLEDGE
This chapter structures knowledge on the
subject of issues management as it appears in the
literature. First, the chapter reviews the major
areas of focus found in previous studies, books,
articles and other written material, e.g., speeches.
Next, this information is critiqued, indicating the
literature's strengths and limitations, and the need
for theory and research. Finally, a set of key
variables is introduced to structure data obtained
from the literature. These variables are important to
understanding the phenomenon and, as explained in the
chapter, are the starting point for conducting the
required field research.
Major Foci Found In The Literature
The literature on issues management has four
major areas of focus.
1. Background of the phenomenon and its
evolution.
2. The nature of issues.


3. The issues management process.
4. Issues management methods and resources.
Unfortunately, this information does not reflect
empirical data or conceptual studies; nonetheless, i
does provide valuable insights.
Background of Phenomenon
Changing business environment. The concept
and practice of issues management evolved in the
1970s. Peter Drucker has noted that it was during
this time that our society moved from a period of
relative continuity and predictability to one of
turbulence. ^
The literature discusses many of the changes
2
that have occurred.
. . the 1970's were a time when Americans
experienced vanishing resources, perplexing
and changing ecological concerns, growing
international tensions, and expanding
government involvement in the private sector.
As the 70's came to a close, business was
faced with a numbing array of domestic and
international dilemmas.
Although many of these forces arose from
outside the traditional business focus, they
were inexorably relevant to the bottom line.
Public pressures ranging from government
programs and regulations to international
turmoil were affecting capital investment
decisions, as well as the cost of producing
goods and services.
As we entered the 1980's concerns over
environmental protection, worker health and
safety, pressures for expanded health and
pension coverage, and product safety and


29
liability were all resulting in higher costs
for raw materials, labor, production, and
marketing. Internationally, American business
was faced with political instability, threats
of expropriation, currency convertability
problems, kidnappings, and other forms of
terrorism.
The reference to "traditional business focus" is
noteworthy. Raymond P. Ewing, Director of Issues
Management at the Allstate Insurance Cos., recalls:"5
Until the late 1960s, the business
community had been accountable only for its
economic activities. Businesses were supposed
to make products, provide jobs and provide a
profit. In the late 1960s and early 1970s,
however, the business community found itself
bombarded by demands from minority groups,
environmental organizations, consumer
activities and other advocacy groups.
All of a sudden, they were asking,
expecting, the business community to be
accountable for social and political
problems. The business community was pulled
into the political forum.
4
Adds Graham Molitor:
A spate of new legislation was passed.
About 20 new government agencies were created
and they fomented a tremendous amount of
public policy change. Economic decision-
making was, in a very big way, supplanted by
political decision-making. .
Lack of preparation. The literature
indicates that it was largely the proliferation of
political and social concerns that spawned the concept
and practice of issues management. As suggested
above, many private sector organizations were
ill-prepared to deal with change. In a speech bn the


30
subject, the president of a major business trade group
laments:^
I wish I could tell you that the American
business community generally so creative and
alert had the clairvoyance to prepare for
these activities . that they did indeed
anticipate such [changes], and were prepared
to respond quickly and intelligently . But
that simply would not be true. The fact is
that they were not only ill-prepared but often
refused to listen, let alone change, until
forced to do so.
A Conference Board study on issues management
gives some insight into why the business community was
inadequately prepared.^
. . managements felt comfortable with the
so-called 'hard data' of economics, technology
and demography; whereas, they are uncomfortable
with the soft that is to say, qualitative -
data that often characterize social and
political forecasts.
In fact, during this period very few companies even
attempted to develop forecasts of political and social
7 8
change. Rene Zentner suggests that
. . the social and political forces business
decision makers were to encounter were those
for which they had no training, no experience,
and no way of responding. Accordingly,
attention in business organization became
directed in the 1970's to methods for dealing
with the new environment.
Organizational responses. In the late 1960s
and throughout the following decade, the business
community rallied in response to environmental
change. Organizationally, there was a surge in.
"external affairs" units, including public affairs,


31
public relations, corporate communications, corporate
o
planning, marketing, and employee relations. Two
of these functions, public affairs and corporate
planning, stand out in the issues management
literature. A brief discussion of each is important
to an understanding of the concept and practice of
issues management.
i
The first public affairs department appeared
I
i
on a corporate organization chart in the early
1950s.^ A Conference Board survey of 1,033
companies revealed that by 1970, 75 percent had some
identifiable putjlic affairs function. Although many
j
were in their in'fancy and few had formalized policy
i
statements, companies of all sizes were implementing
.. i ii
or expanding programs.
The miss
programs has var
ion and responsibilities of these
ied with changes in the business
i
i
climate over thej past three decades and into the
1980s. A brief summary of these changes is presented
in Figure 2.1, which highlights the evolution of
I
I
issues management programs/activities within corporate
public affairs. ;
noted that
As to corporate planning, two researchers have
12
. . the rapidly increasing rate of environ-
mental change since the 1950s, and especially
over the past decade, has led to many of the


32
Business Climate
. Generally stable.
. Trust/respect of
business community.
. Social and cultural
changes.
. Civil rights, health
and welfare issues.
. Greater government
involvement in
social issues.
. Rising expectations
or private sector.
. Public opinion of
business begins
rapid decline.
. Mounting social
and economic prob-
lems e.g., energy
shortages, chronic
inflation.
. Businesses face con-
tinued pressure for
assistance.
. Consumer and environ-
mental activism
heightens.
. Public opinion of
business plummets.
. Dependence on foreign
energy and erosion
of America's position
as world leader.
. Prolonged double-
digit inflation,
rising unemployment
and escalating crime
rates.
. Increased skepticism
of federal "solu-
tions."
. Less citizen pressure
for federal regula-
tion.
Source: Adapted from Robert
AffairB Handbook (New York:
Extent/
Focus of Public Affairs
1950s
. Only "handful" of
programs.
. Focus on government
relations.
1960s
. Expansion of programs.
. Focus on community
affairs and govern-
ment relations.
. Emergence of "corpor-
ate citizenship" and
"corporate social
responsibility" phil-
osophies.
1970s
. "Social responsibility"
remains a dominant
theme.
. Government relations
efforts escalate.
. Expansion in Washing-
ton offices and trade
associations.
. Senior management more
concerned with public
policy.
Enter 1980s . .
. Function more coordin-
ated and integrated.
. Function headed by
senior executive with
close reporting re-
lation to top manage-
ment.
. Issues management
programs emerge.
. Movement toward inter-
national public
affairs.
Illustrative
Programs/Activities
. Promote employee under-
standing of political and
economic systems.
. Encourage employee
participation in
governmental process
(e.g., as voters).
Encourage employee
participation in
community organiza-
tions.
Corporate giving to
cultural, educational
and charitable acti-
vities.
Legislative relations
at national, state
and local levels.
Minority, environmen-
tal, urban and con-
sumer programs.
. "Fire-fighting" of
citizen complaints
and consumer initia-
tives.
. Active corporate
involvement in legis-
lative process -
lobbying, PACs, etc.
. Activation of coali-
tions for political
support.
. Practice of "Issues
management" evolves.
. Intensification of
"emerging Issues"
activities.
. Expansion of state
government relations
programs.
. Proliferation of
business PACs.
. Institution of vig-
orous grass roots
programs.
H. Moore, "The Evolution of Public Affairs," The Public
AMACOM, 1982) pp. 9-16.
Figure 2.1
Evolution of Corporate Public Affairs


33
important changes in the technology and
process of strategic planning. .
Also, W. W. Simmons notes:!^
This trend toward externalities indicates
that businesses are shifting their planning
emphasis to take the external . environment
under more serious consideration.
The external environment was not always sufficiently
considered, even though for some time now scholars and
practitioners of strategic planning have thought a
corporation's external environment should be closely
monitored. In fact, in the early 1970s, planning fell
into disrepute as planners were blamed for not
forseeing many of the strategic issues, e.g., the
consumer and environmental movements, that impacted
their organization. Up until then, the traditional
role of the corporate planner was to project trends,
primarily on the basis of historical data. This
historical orientation did not meet the needs of top
14
management.
Recent studies indicate strategic planning
15
systems continue to fall short. For example, Ball
and Lorange have found that in practice, a common
underlying problem is uncertainty about how to couple
planning efforts with critical factors and trends in
the external environment.^6 Moreover, almost every
company in their research felt an increased need to


34
have their planning systems become more useful in
adapting to environmental opportunities and threats.
A number of practitioners view issues
management as one approach to making planning systems
more useful. Ian Wilson, a pioneer of General
Electric Company's strategic planning system, writes
that environmental analysis* must be "issue-oriented"
if it is to contribute to planning and decision
making.'*'7 Similarly, Simmons considers issues
management one of the most significant challenges and
opportunities for planning executives in the
18
1980s. Other practitioners view issues management
as a critical component of strategic planning systems;
in fact, many see it as distinguishing "strategic"
19
from all other forms of planning.
A new perspective. In sum, the tumultuous
period of the 1960s and 1970s sent a powerful message
to corporate managers. One practitioner considers
20
that thezu
. . profitable survival of any company is
becoming as dependent on its ability to
understand, respond to and influence the
external environment as it is on its more
traditional functions, such as research and
development, production, marketing management,
financial control, etc.
*This term, and the term environmental
scanning, is used in the strategic planning literature
to describe an organization's process of identifying
external trends.


35
Out of this new perspective on dealing with the
external environment came the concept and practice of
issues management. W. Howard Chase gave the issues
management field its name in 1975.
By 1979 issues management became "the most
21
popular topic of discussion in executive suites"
as senior corporate managers started to focus more
attention on developments occuring outside their
organization. A 1981 survey of Fortune 1000 companies
found that business leaders spent an average of 55
percent of their working hours "on external relations
over and above profit center management," up sharply
from the average of 18 percent reported in a similar
22
survey in 1975.
The literature offers different perspectives
on the phenomenon of issues management, rather than a
critque. Most of the literature addresses how the
phenomenon arose, including glimpses of various
features of corporate programs. The coverage is
broad, and includes articles in The Wall Street
Journal, Advertising Age, Duns Business Month,
Chemical Week, USA Today, Iron Age and Industry Week.
This literature refers to the phenomenon as a "new key
to corporate survival," "new company watch dog" and
"new advance guard."


36
The major views and information found in this
literature include the following.
1. Over 200 of the Fortune 500 corporations
have formally established senior positions in issues
management, inclluding Atlantic Richfield, Union
Carbide, Prudential Insurance, Bank of America,
23
Bethlehem Steel, R. J. Reynolds and Sears.
2. A profession of "issue managers" is
emerging. An Issues Management Association was formed
in 1982 by "more than 100 corporate and government
24
leaders." Its membership in May 1983 exceeded 400
25
professional managers from business and government.
3. Issues management work is distinct from
that of "futurists." The latter tries to forecast
what will happen, for example 10 or 20 years from
now. The former considers the immediate future, the
next one to five years; and deals not only with
identifying issues, but also with setting forth
26
specific ways an organization might deal with them.
4. The initial aim of issues management
programs was to defend the organization from the
immediate threat of pending legislation and
regulation. The thrust now appears to have shifted to
anticipation or "early warning" of issues;* i.e., to
*Figure 2.1 outlines the background on when
this shift occurred in the practice of public affairs.


37
allow organizations to spot issues in early stages of
development; thereby, enhancing their ability to
capitalize on potential opportunities and avert
potential threats. In the case of public policy
issues, this might include enabling an organization to
become involved in the policy-making process before an
issue becomes politically polarized.
5. No uniform definition of issues management
exists in the literature. One leading practitioner
27
defines issues management as
... an amalgam of forecasting, futures
research, environmental scanning, planning,
public relations, government relations, and
public affairs. More specifically, issues
management is the use of these elements in a
program that manages an organization's
resources to forecast, assess and respond to
emerging issues potentially important to the
organization.
A more narrow definition was formulated by the
President of the Public Affairs Council. He defines
, 28
issues management as
. . the process by which [an organization]
can identify and evaluate those governmental
and societal issues that may impact signifi-
cantly on it. The issues can then be assigned
priorities for appropriate . response.
Most definitions describe the phenomenon as a
management process involving identification, analysis
and response to external change, and generally differ
only in the kinds of external issues considered by the


38
process, e.g., political, social, economic,
technological, and competitive. Both the content of
issues and the process of issues management are
reviewed later in this chapter.
6. Three distinct functional perspectives
appear in the literature. These are communications,
public affairs and planning. It appears these
perspectives depend on where an issues management
function is located within an organization's
structure. Communications is concerned largely with
an organization's public image and relies on public
opinion in identifying issues and in determining
response programs. Public affairs focuses on
regulatory and legislative matters, and whether (and
how) the organization should respond. The planning
perspective is concerned with a broad based
environmental scan as part of "classic strategic
29
planning." The literature does not suggest these
three perspectives are mutually exclusive.
These six points emerge from the writings and
speeches of practitioners, which comprise the largest
portion of the issues management literature. As noted
below and in the remainder of this chapter, a number
of scholars have begun to address the concept and
practice of issues management.


3 9
An academic perspective. In terms of the
academic literature there is only one conceptual piece
that addresses issues management per se. H. Igor
Ansoff views issues management as the most recent
newcomer of modern management systems that have
developed in response to changes in environmental
conditions. The other systems, in chronological
order, are: control, long range planning, strategic
planning, and strategic management. He considers
"surprise management" a likely candidate for the
future.
A summary of Ansoff's view is presented in
Figure 2.2, which outlines the distinct purpose served
by each system, and the basic and limiting assumptions
that are assumed to exist. Ansoff defines issues
management as "a systematic approach for early
identification and fast response to important trends
and events which impact on the firm."3^ This
definition and his typology of management systems
introduces two ideas that do not appear elsewhere in
the literature.
1. Although each system in Figure 2.2 appears
to be independent of the preceding one, the systems
are complementary approaches to solving different
managerial problems.


Control Long range planning Strategic planning Strategic management Strategic issue management Surprise management
Purpose Control deviations and manage complexity Anticipate growth and manage complexity Change strategic thrusts Change strategic thrusts and change strategic capability Prevent strategic surprises and respond to threats/ opportunities Minimize. surprise damage
Basic assumption The past repeats Past trends continue into future New trends and discontinuities Expect resistance. New thrusts demand new capabilities Discontinuities faster than response Strategic surprises will occur
Limiting assumption Change is slower than response The future will be 'like' the past Past strengths apply to future thrusts. Strategic change Is welcome Future is predictable Future trends are OK Future trends are OK
Real time
Source: H. Igor Ansoff, "Strategic Issue Management," Strategic Management Journal, Vol. 1, No. 2. p. 132.
Figure 2.2
Modern Management Systems


41
2. An issues management system is "real time;"
that is, it continually provides information and
response to important external developments.
Therefore, issues management might serve as an
important bridge between periodic, e.g., annual,
planning cycles. For purposes of this study, the
concept of issues management as a "system" is an
important one and is considered further at the end of
this chapter.
This part of the chapter has briefly reviewed
background information on the phenomenon found in the
literature. The next part reviews information the
literature provides about the nature of issues.
The Nature of Issues
Classifying the external environment. As can
be seen from background information about the
phenomenon, issues management is concerned largely
with an organization's external environment.
Therefore, a conceptual map of the external
environment is needed before addressing the specific
nature of issues. For this purpose the environmental
scanning literature provides significant
guidance.3"*' Figure 2.3 presents a model of an
organization's external environment.


POLITICAL/LEGAL
TECHNOLOGICAL
ECONOMIC SOCIAL/DEMOGRAPHIC
Figure 2.3
Schematic Overviev; of External Environment


43
The external environment can be viewed at two
levels. The "macro level surrounds an organization
and its markets, and consists of "the large scale
32
forces and factors influencing [its] future."
These are normally divided into the following parts.
1. Economic, e.g., indicators of economic
activity, such as GNP, inflation, interest
and unemployment rates, savings and
investment, and trade.
2. Political/Leqal, e.g., policy making and
legislative behavior, as well as public
opinion and responses, e.g., federal,
state, local government initiatives, court
rulings, and pressure groups.
3. Technological, e.g., scientific and
technological developments influencing the
way people and organizations live, work and
interact among themselves and with their
environment, e.g., research and
development, processes, information and
knowledge.
4. Social/Demographic, e.g., values, life
styles and demographic changes of people,
e.g., attitudes and cultural norms.
The other level, where an organization intimately
operates, is referred to variously in the management


44
literature as the "institutional," "micro,"
"stakeholder" or "task" environment.'5'5 This level
mainly consists of what the business literature calls
market influences, functionally defined as customers,
competitors, suppliers and regulators.
Two points about the model in Figure 2.3.
First, the dotted line emphasizes the external
determinants are fluid; i.e., no component of the
external environment is mutually exclusive. Second,
the arrows suggest the relative direction of influence
between the organization and the factors in its
environment.
Conceptually, the main purpose of the model is
to acknowledge all major aspects of the external
environment, the source of issues, rather than to
suggest the need to pigeon-hole different external
issues correctly,. Much of the more recent issues
management literature emphasizes the need for such an
34 35
outlook. One practitioner emphasizes that
... we must focus on the . environment
in its entirety, i.e., the interaction among
economic, social, demographic, and political
forces, and also the interaction between these
and technological, competitive, and market
forces. .
As noted earlier, the fact that organizations did not
sufficiently perceive their "macro" environment led to
the concept and practice of issues management.


45
This broader view of the dimensions of an
organization's external environment provides a context
for understanding the nature of issues. Even then, a
closer look at what comprises an issue is needed.
Classifying issues. Alternate definitions
of issue abound in the literature. Most are quite
elusive. For example, some view an issue as"56
... a trend or condition . that if
continued, would have a significant effect on
how [an organization] is operated over the
period of its business plan.
Others define an issue as37
... a matter of some unresolved or
controversial question of public policy whose
resolution may affect [an organization's]
operations.
Accordingly, the meaning of "issue" requires
clarification.
To provide clarification, a taxonomy can be
developed from major views expressed in the
literature."5 Key variables include:
1. Type or inherent character, e.g., economic,
social, political, technological, etc.
2. Timing or stage, e.g., current versus
emerging; near-term, mid-term or long-term;
probability of occurence.
3. Impact, e.g., who or what will be affected,
e.g., a particular industry or sector of


46
the economy; organization as a whole; a
subsidiary; a product line; or program.
4. Salience, e.g., immediacy or prominence of
issues.
5. Geography, e.g., international, national,
regional, state, local.
6. Span.of control, e.g., uncontrollable,
semicontrollable, controllable.
The first four variables require elaboration.
Figure 2.3 was a first step towards
understanding the content or inherent character of an
issue, as it helps make sense of the rather amorphous
external environment. A second step is to develop
more homogeneous and manageable subcategories. An
example is the classification used by Sears to monitor
its macro environment (Figure 2.4).
An issue's timing or stage of development is
important. A report on foresight prepared for the
U.S. House of Representatives noted the critical
39
importance of this variable.
A notion behind issues management is that
issues, like products, industries and even
whole societies, are subject to lifecycle
principles moving through emerging,
developing, maturing and declining stages.
The importance of stage of development also applies to
40
public policy issues. As one practitioner noted:
The societal concerns of yesterday become
the political issues of today, the legislative


47
Major Category
Demographic
Values/Lifestyle
Resources
Technology
Public Attitudes
Government
International
Economics
Selected Sub-categories
Population, employment,
income, housing
Work and leisure,
marriage/family
structure,
aging/retirement
Energy supply/demand and
mineral and chemical
supply
Alternative energy
sources, electric
communications,
transportation, product
development
Consumer confidence,
public attitudes,
consumerism
Expenditures,
regulation, legislation,
privacy, products,
safety, taxes
World population,
resources, trade,
developing nations,
technology transfer
GNP, interest rate,
inflation rate, wage
levels, capital
formation/needs,
productivity
Figure 2.4
Classification Scheme of
Sears' Macro Environment


48
requirements of tomorrow, and the litigated
penalties of the day after.
Within a public policy issue's life cycle, four
41
critical developments typically occur.
1. Societal expectations stage signals
structural changes, and gives rise to
recognition, and often the
politicalization of an issue.
2. Political development stage gives rise to
the creation of ad hoc and/or formal
organizations to deal with the issue.
3. Legislative action stage signals a peak in
public attention wherein the issue is
defined in operational or legal terms and
solutions, frequently in the form of laws
and regulations.
4. Requlation/Litiqation stage represents a
plateau in public attention when
enforcement procedures become routine and
penalties apply to those who ignore or
violate the spirit, letter and/or intent
of the law.
Figure 2.5 illustrates the lifecycle of a specific
public policy issue, i.e., equal opportunity, in terms
of the timing of its impact on a corporation.
Both the degree and focus of an issue's impact
42
are important considerations. Brown distinguishes
. . between issues that have a direct impact
. . (e.g., prospective changes in tax laws)
and those that have an indirect impact (a
force which will influence the economy, which,
in turn, will influence any [organization]
whose performance is closely tied to the
health of the economy).
The focus of impact relates to who or what will be
affected. An issue might affect an organization's
supply of resources, its range of products and


qual
opportunity
Brown vs Johnson's Civil Rights AT&Ts Sattlamsnt
Board of Political Act S38MM
Education Platform Equal GE's Sattlamsnt
(1954) (1964) Opportunity S30MM
Friadan Act (1978)
Feminine (1972)
Mystique
(1963)
imo
narrowing of corporate options/expansion of corporate liability
Figure 2.5
Life Cycle of a Public Policy Issue
Source: Integrating Emerging Issues Into the
Corporate Planning Process. Course material From
World Future Society Conference, Washington, D.C.,
August, 1982. ^


50
services, its image, its competitive position, or its
financial liquidity.
Finally, an issue's salience can be determined
by combining its probable timing and impact. This can
be most graphically illustrated in an issues priority
matrix, such as the one presented in Figure 2.6. The
most salient issues would be those designated "high
priority;" that is, issues with high probability of
occurence and high degree of impact on the
organization.
Ngh
>%
S ^
mtdurn
A
e
a
low
high imdhan low
impact
Figure 2.6
Issues Priority Matrix
Source: "Integrating Issues Into Corporate
Planning Process," World Future Society Conference,
Washington, DC, August 1982.
/ S' i
\ \ s
<
Concept of strategic issue. While all
issues can be classified in terms of the afore-
mentioned variables, what constitutes an issue in the


51
first place requires clarification. Two distinctions
are necessary. First, a trend is distinct from an
issue in that the former is "an environmental force
43
that may or may not germinate into an issue."
An example is the growing percentage of
the U.S. population in the 65-and over age
category, which promises to produce a
political and economic force which some
commentators are already terming 'gray power',
which has led to the formation of an interest
group called 'Gray Panthers.' Though this .
trend has not yielded a significant issue for
U.S. business, it may well do so in the
future. Already there are signs: for
example, requests by senior citizens for price
discounts for consumer goods and services.
The second distinction is between a "public policy
issue" and a "strategic" issue. As to the former:44
They are normally those questions or
problems in the public domain on which . .
management believes it should take a stand -
even though the issues do not appear to be
vital to the [organization's] survival or
success.
45
A strategic issue can be defined as
... an external condition or pressure that
is likely to importantly affect the degree to
which [a] firm can accomplish its objectives.
Ian Wilson provides a more comprehensive definition.
46
He defines a strategic issue as
... a major opportunity or threat which
could critically affect the long-term future
of the institution. An issue may be immediate
or emerging; internal or external in origin;
concerned with any facet of the institution -
competitive, marketing, technological, human
resources, financial, etc.
As noted earlier, this study is concerned with those
strategic issues that are external in origin.


52
Some of these issues have both strategic and
public policy implications. Also, a public policy
issue for one organization may be a strategic issue
for another (just as an emerging issue for one can be
47
a current issue for another).
For instance, the rates and quality of the
Postal Service are clearly of strategic
importance to the publishing industry and mail
order houses, but they are hardly strategic
issues for most manufacturing firms. The
national energy policy is probably a strategic
issue for manufacturing firms, but only a
public policy issue for the publishing
industry.
It is important to clarify the relationship among
external trends generally, and public policy and
strategic issues specifically. This is illustrated in
Figure 2.7.
From the perspective of a single organization,
the external environment provides change in the form
of trends and events. These developments become
issues to the extent that they can be defined in terms
of their interests to an organization. The relative
importance of these issues is a function of whether
they germinate into public policy or strategic
issues. Within this set of issues are public policy
and strategic issues. As noted earlier, for any
single organization a public policy issue may also be
a strategic issue.


Figure 2.7
A Conceptual Relationship Among
External Trends and Issues


54
How organizations identify, and then act on,
strategic issues is central to understanding the
concept and practice of issues management. The
literature addresses this aspect of the phenomenon
through discussions of the issues management process.
Issues Management Process
A Model. Although the literature frequently
refers to the process of issues management, it only
offers one comprehensive model. Figure 2.8 illustrates
the model, which was developed by W. Howard Chase and
Barrie L. Jones.
There are five major activities or components
,, 48
of the process.
1. Issuesidentificatioh, [a search for
issues] through environmental and
organizational analyses.
2. Issues analyses, a series of qualitative,
sometimes quantitative, analyses
evaluating the issues probability of
development, impact and timing. Also,
development of advocacies that marshall
relevant expertise throughout the
organization, including senior management.
3. Policy options, determining alternative
policies and strategies of response to the
issue, and selecting optimum course(s) of
action.
4. Program design, designing a program to
implement the chosen course(s) of action.
5. Results, implementing the program and
evaluating performance.


55
Figure 2.8
Chase/Jones Model of Issues Management Process
Source: Copyright W. Howard Chase and Barrie L.
Jones, 1977, revised. See Guide To The Chase/Jones
Issue Management Process Model (New York: Geyer-
McAllister Publishers, Inc., T977) p. 4.


56
Essentially, the process involves two distinct
stages. The first stage is awareness, and includes
issues identification and analyses. The second stage
is action-taking, and includes the remaining
activities.
In general, the process is aimed at answering
50
the following key questions.
1. What is the probability that a given
trend, event or development will become a
major (i.e., strategic) issue?
2. How great will be the eventual impact on
the organization?
3. How likely is the impact to be focused on
the organization rather than diffused over
the entire industry, market, community,
etc?
4. When is the issue likely to peak?
. Near-term (1-2 years)?
. Mid-term (3-5 years)?
. Long-term (6- years)?
5. Who are the major players and what
position(s) are they likely to adopt?
6. What can the organization do to deal with
the issue?
The literature provides examples of some of the
model's components and answers to these key questions.
Examples. One insightful example
illustrates how a corporation responded to a social
and economic issue.^
In early 1981, Monsanto Corporation
decided there was a chance its operations
might be affected by the confluence of two
trends; a social trend the growing militancy


57
of various population groups (e.g., women,
handicapped and elderly people and racial
minorities), and an economic trend the
increasingly somber economic outlook. The
company recognized an emerging issue -
intensified competition for a limited number
of jobs and promotions.
Monsanto surveyed its plant managers and
personnel managers around the nation to see if
there was any evidence of such competition and
if it had yet blossomed into conflict. While
the survey revealed no serious immediate
problems, it did indicate management should
watch the situation closely and develop
solutions in advance to avoid getting caught
between competing groups' conflicting demands.
It should be noted it was the confluence of these
trends that formed a strategic issue for this
particular organization. Another example looks at how
an energy company minimizes what it calls "unpleasant
..52
surprises."
Fed up with unpleasant surprises, in the
late 1970's, Atlantic Richfield Co. set up
special trend-spotting departments, assigning
them a task previously done somewhat hapazardly
by top executives, government-relations
people, planners and public relations staffs.
At ARCO, the issues manager's job is to alert
management to emerging political, social and
economic trends and controversies, and to
mobilize the company's resources to deal with
them.
In February 1981, ARCO's issues managers
saw trouble ahead. They predicted President
Reagan's budget cuts would prompt states to
compensate for lost federal money by taxing
business. As a profitable oil and natural
resources company, operating in 28 states,
ARCO would be greatly affected.
An internal company task force reported on
the likely state tax proposals, and by summer
ARCO lobbyists and top executives were ready.
The following spring (1982) saw a deluge of


58
state tax bills, as many as ten a week.
Well-prepared ARCO executives responded
quickly, and, although four states did raise
corporate taxes and four raised severance
taxes, bills aimed specifically at oil
companies in several states were defeated.
Similar glimpses of the issues management process
53
appear throughout the literature. These examples
are highly useful in an exploratory study such as this
study. More of these "insight-stimulating" examples
were obtained in the field research portion of this
study and are presented in Chapter 3.
Roles and responsibilities. The literature
offers only cursory insights into how individual
companies organize to carry out their process. There
appears to be considerable diversity among industries,
even among firms within the same industry, e.g., the
54
chemicals industry.
Some companies including Celanese, Dow
Chemical, DuPont and Rohm & Haas have
committees, often made up of Board members,
that identify the relevant issues and then
assign task forces to investigate them. Other
companies, such as Monsanto, have set up
special issues-management departments. And
still others, like Ciba Gigy's U.S.
subsidiary . have delegated the function
to their strategic-planning staffs.
Rene Zentner found three general organizational
forms in the literature. These are distinguished in
terms of who has primary responsibility for the issues
55
management function.


59
1. Senior Management -- responsible for
identifying, analyzing and dealing with
issues, with support of individual staff.
A committee at the Board of Directors
and/or officer level often exists in these
cases.
2. Staff a staff organization holds issues
management responsibility, reporting on
its activities to corporate officers or
organizations as appropriate. Typically,
such staff are positioned in the Planning,
Public Affairs or Communications
Departments.
3. Joint Management/Staff responsibility
is divided between staff and senior
management, and each level plays an
appropriate role in the several stages of
the issues management process.
The literature also indicates task forces and inter-
disciplinary teams, some ongoing, others ad hoc, are
commonly used in carrying out the issues management
process. In addition, in some instances the process
is organized primarily around clusters of issues,
e.g., energy and resources; legislation and
regulation; international trade; and in other cases by
function, e.g., planning, human resources, public
affairs.
Finally, in discussing organizational forms,
the literature frequently mentions corporate style and
the background and skills of issues managers.
56
Regarding style, one practitioner states that
. . the nature of each issues management
process appears to depend greatly on
individual corporate style the personality
of the chief executive officer, the internal


60
decision-making dynamics of the company, and
the field or fields in which it operates.
Such diversities appear to account for the
range of organizational forms in which issues
management is currently practiced.
As to the background and skills of personnel,
virtually every feature article on the subject of
issues management notes that issues managers are a
diverse lot, with experience and training that
includes law, economics, education, journalism,
futures research, policy analysis and public
... 57
relations.
Methods and Resources
The literature frequently identifies methods
(analytic tools and techniques) and resources
(primarily people and information) used in the issues
management process. Generally, the methods and
resources are discussed in relation to Stage One
activities, i.e., issues identification and issues
analyses. The concept of environmental scanning is
key to understanding this stage, and the methods and
, 58
resources used.
Environmental scanning and monitoring.
Scanning and monitoring are distinct, but related,
concepts. Scanning is a process of identifying as
early as possible changes in the external environment
that could affect the organization. Monitoring is the


61
process of taking these changes to the point where
further analysis of the trend, event or issue is
59
required. In the literature, scanning is likened
to a 360 degree radar sweep, where registered signals
are analyzed for possible pattern formations.
Monitoring is analogous to an electrocardiogram, where
the behavior of known variables is tracked for actual
versus anticipated performance.
According to the literature, the scanning and
monitoring of trends, events and specific issues
include, but are not limited to60
. Changes in attitudes and/or behavior of
general public and opinion leaders.
. Changes in demographics, values,
lifestyles and other social indicators.
. Shifts in activities of stakeholder groups
such as stockholders, lenders, employees,
customers, competitors, suppliers, special
interest groups.
. Changes in fiscal and monetary policy,
price indices, currency fluctuations and
other economic indicators.
. Shifts in programs, decisions, enforcement
procedures of regulatory agencies.
. Legislative initiatives at international,
federal, regional, state and local levels.
. Outcome of significant litigation and
court rulings.
. New theories and proposals from academic
and research groups.
. Scientific and technological innovations
and inventions.


These and other developments are scanned, monitored
and analyzed through the use of a number of methods
and resources.
62
Methods. The tools and techniques mentioned
most frequently in the literature are:^
1. Surveys, including public opinion polling,
delphi panels and attitudinal surveys.
2. Content analysis of newspapers,
periodicals, newsletters, books, reports
and other written material.
3. Trend analysis, including trend
extrapolation, trend impact analysis, and
cross impact analysis.
4. Scenario writing of alternative futures
based on specific assumptions about
relevant social, economic, political and
technological forces and their
interactions.
5. Modeling and simulation, including
computer aided projections and analyses of
an organization and its competitive
environment, technological environment,
etc.
6. Decision aids, including the issues
priority matrix, described earlier in the
chapter, and illustrated in Figure 2.6.
Each of these methods is further described and
illustrated in Appendix D.
Figure 2.9 shows the applicability of the
first two methods in the context of public affairs.
Surveys in this illustration involve regular opinion
sampling of the general public, pressure group
leaders, government officials, and state and federal


63
Source: R.P. Ewing, "Modeling The Process," in
J.S. Nagel-Schmidt, ed. Public Affairs Handbook
(New York: AMACOM, 1982) p. 51.
Figure 2.9
Use of Surveys and Content Analysis
to Identify Public Policy Issues


64
legislative officials. Content analysis of
newsletters, books and reports of public interest
organizations, foundations and government agencies
also is considered necessary. Additionally, an
analysis of newspapers is made to identify emerging
issues and to evaluate the progress of issues
previously identified.
The concept of a lifecycle is important in
environmental scanning and monitoring. In reference
to public policy issues, the practitioner who
62
developed Figure 2.9
. . found no issues emerging at the general
public level . that reached final
enactment into law at the federal level in
less than six years.
Thus scanning for emerging issues and the continuous
monitoring of these provides an opportunity for
organizations to develop policy and support programs
in time to participate meaningfully in the public
policy process.
Resources. The major resources used in
practice appear to be largely those used in
environmental scanning and monitoring, i.e., in
identifying and analyzing issues. These are
summarized in Figure 2.10.


65
I. External
A. Personal
1. Consultants, research firms and trade
associations.
2. Conferences (professional and scientific
meetings, etc.).
3. Business organizations (Business
Roundtable, CED, etc.).
4. Executives and managers in other companies.
5. Government officials (Congressmen and
regulators).
6. Representatives of public interest
organizations.
B. Impersonal
1. Reports from trade associations.
2. Government publications (Congressional
Record, Federal Register).
3. Newspapers and magazines.
4. Trade and technical journals (Food and
Chemical News) and books.
5. Special consulting and reporting services.
6. Publications of public interest
organizations.
II. Internal
A. Personal
1. Chief executive officer.
2. Board of directors.
3. Washington Office personnel.
4. Other executives and managers.
5. Staff specialists.
B. Impersonal
1. Management reports and memoranda.
2. Accounting reports.
3. Planning reports and budgets.
Figure 2.10
Sources of Scanning Information
Adapted from Rogene Buchholz, Business
Environment and Public Policy (New York: Prentice-
Hall, 1980) p. 469.


66
A Conference Board study has noted different
ways issues are identified through internal resources,
including the following.63
1. Chief Executive Officer designates the
issues.
2. Management workshops, retreats, informal
discussions among senior executives.
3. Structured polling of senior executives,
using a list of issues prepared by a staff
unit, such as Corporate Planning or Public
Affairs.
4. The issue is developed initially by
division or profit-center heads.
5. Internal monitoring of particular
publications, development of abstracts and
meetings to surface issues.
The use of resources appears to depend on a number of
factors, including the style of management and the
role and responsibilities of managers in the issues
management process. More data about the use of
internal resources were obtained in the field research
and are persented in Chapter 3.
Summary
The literature's major areas of focus
presented above provide a starting point for
structuring knowledge about the concept and practice
of issues management. However, an overall assessment
of the strengths and limitations of this body of
knowledge is required.


67
Major Strengths of Existing Knowledge
The literature has a number of strengths. As
a body of knowledge, it:
1. Provides background information on how the
concept and practice of issues management
evolved.
2. Gives insight into why the phenomenon is
significant, and how it is growing in
importance.
3. Offers a range of perspectives on the
phenomenon, as found in the different
concepts and definitions of "issue1' and
"issues management."
4. Provides a model of the issues management
process.
5. Gives some insight into what is occurring
in practice, citing different organiza-
tional forms through which the process is
carried out, as well as the use of analytic
tools and techniques, and different
resources.
6. Offers a taxonomy that clarifies the nature
of issues.
7. Offers insight into problems emerging in
practice.


68
Major Limitations of Existing Knowledge
The literature has five major limitations. As
a body of knowledge, it:
1. Lacks structure, especially any kind of
conceptual organization.
2. Does not contain a complete framework or
theory that can be used to understand,
explain or predict the phenomenon, although
it does introduce selected concepts. As a
result, the literature offers little
guidance in the form of propositions or
hypotheses.
3. Lacks empirical evidence. Prior studies
are largely a reconnaissance, designed to
"get a handle" on initial developments
occurring in practice. These were not
designed to obtain or analyze data in terms
of any conceptual framework, nor did these
offer such a framework.
4. Has not kept up with developments in
practice. The practice of issues
management is developing rapidly, and, as
noted earlier, a number of major problems
have emerged.


69
5. Has not formulated a research agenda;
although practitioners are interested in
. 64
research.
Conclusions and Implications
Need For Theory-Research
The preceding assessment of issues management
indicates the phenomenon lacks a conceptual framework
and theory, thereby requiring additional research.
The critique also indicates any advances to be made in
theory-research must be linked to practice. These two
factors shape this study's purpose, objectives and
research design.
This study's purpose is to advance the body of
knowledge of issues management so that it can be
better understood, researched and practiced. The
study's major objectives are:
1. Structure existing knowledge about the
concept and practice of issues management.
2. Obtain additional insights into the
phenomenon based on the experience of
skilled practitioners.
3. Build a conceptual foundation and introduce
a general theory to explain the phenomenon.


70
4. Review the studys implications to
management theory, and suggest priorities
for additional research.
The research strategy most appropriate for
this study is exploratory or formulative research.
Exploratory research is concerned with acquiring
insights into a phenomenon; specifically, insights as
expressed in terms of key variables and their
relationships. This kind of research is particularly
well suited for the initial formulation of theory
where knowledge about a phenomenon is relatively
limited and lacks a base of research. Accordingly,
exploratory research is a suitable approach for
researching issues management. The full details about
this study's research design are contained in Appendix
A.
Although the literature of issues management
is fragmented and without conceptual organization, it
does provide significant information and is amenable
to further structure. This chapter's summary and
assessment of major foci take the first step towards
structure. The next step is to take data obtained
from this body of knowledge and structure these by a
set of key organizational variables.


71
A Framework To Structure Insights
The literature review shows that issues
management is a multifaceted, relatively complex
phenomenon. To structure existing knowledge about the
phenomenon requires a framework that will help
identify key variables and their relationships. This
can be accomplished through the "7S Framework" (Figure
2.11), which is the conceptual foundation for two
national best selling books: The Art of Japanese
Management, and In Search of Excellence. The
framework has been used in practice to help executives
develop a more effective way of understanding the
complexity of their organizations.
The framework resulted from significant
applied research into the practice of management; in
particular, "the excellent company," and its
development involved the collaboration of researchers
65
and practitioners from around the world.
Researchers found seven organizational factors that
best explained organizational performance, "what
enables organizations to perform in a superior way and
endure over time."^ These factors are:^
Strategy Plan or course of action leading
to the allocation of a firm's
scarce resources, over time, to
reach identified goals.
Structure Characterization of the
organization chart, e.g.,
functional or decentralized.


72
Figure 2.11
A New View of Organization:
Source: T. Peters and R,
Search of Excellence, New York:
p. 10.
The 7S Framework
Waterman, Jr. In_
Harper and Row, 1982,
?!
i


!
73
Strategy
Structure
Systems
Staff
Skills
Style
Plan or course of action leading
to the allocation of a firm's
scarce resources, over time, to
reach identified goals.
Characterization of the
organization chart, e.g.,
functional or decentralized.
Procedures, reports, routinized
processes . patterns of
communication (including their
means) inside the organization and
to the outside.
"Demographic" description of
important personnel categories
within the firm, i.e., engineers,
entrepreneurs, M.B.A.s, etc.
"Staff" is not meant in line-staff
terms.
Distinctive capabilities of key
personnel or the firm as a whole.
Characterization of how key
managers behave in achieving the
organization's goals; also the
cultural style of the organization
Superordinate The significant meanings or
Goals guiding concepts that an
organization imbues in its members
This general framework can be used to identify key
variables in the issues management literature.
Key Variables
The 7S framework was used in analyzing the
data obtained on each of the major foci outlined in
the first section of the chapter. The framework
helped filter these data conceptually, which resulted
in a set of key variables. The variables identified


74
tended to cluster around the so-called "Hard Ss,"
Strategy, Structure and Systems (Figure 2.12).
Strategy. Contemporary management
literature stresses that an organization's strategy,
i.e., its plan or course of action, provides the
essential linkage between the organization and its
68
external environment. Two variables in the issues
management literature that correspond to this concept
of strategy are: (1) the purpose of the function or
activity; and (2) its scope, i.e., the aspects of the
external environment with which the function is
concerned.
The literature does not provide significant
evidence of the connection between issues management
and strategy. However, its discussion of how the
phenomenon evolved, and the definitions and examples
it provides, strongly imply that the purpose of issues
management is to contribute to the aforementioned
"linkage" between an organization and its external
environment.
Structure. The literature provides some,
albeit cursory, insight into structure. In terms of
location and roles, the literature indicated three
general organizational forms, i.e., senior management,
staff, joint management/staff; different functional


75
STRATEGY
STRUCTURE
SYSTEMS
VARIABLES
Purpose why the issues management
program exists; i.e., its mission or
charter and its outputs/contributions.
Scope the parts of the external
environment and type of issues covered by
the program.
Location the internal focal point of
responsibility for the program.
Roles the manner and degree to which
management personnel are involved in the
program.
Process the major activities of the
program.
Resources the major external resources
(particularly people and information)
used in carrying out the process.
Methods management tools and techniques
used in the process.
Figure 2.12
Key Issues Management Variables


76
approaches, i.e., planning, public affairs, and
communications; and the use of different internal
mechanisms, e.g., task forces and interdisciplinary
teams.
Systems. A major, although singular, view
expressed in the literature is that issues management
is a modern management system. Two key variables
found in the literature, process and resources,
suggest the usefulness of.thinking of issues
management as a system. In fact, both variables are
major considerations in thinking about the meaning of
69
any system. Figures 2.8 and 2.10 illustrated
these two variables. Methods, a third variable found
in the literature, can be viewed as another kind of
resource (in addition to people and information).
Other factors. Strategy, structure and
systems provide the most guidance in structuring
current knowledge about issues management. However,
as noted earlier in this chapter (pages 59-66) the
literature suggests three of the so-called "Soft Ss,"
Staff, Skills and Style, can be factors in
understanding the concept and practice of issues
management.
Summary. In sum, the 7S Framework has
enabled the identification of key variables which can


77
be found in the literature. This framework and set of
variables also will be used to guide the field study
of issues management practices.
Field Study Plan
The following three research methods have
proved to be most effective in exploratory studies.
1. Review and critique of pertinent literature.
2. Interviews with experienced practitioners.
3. Analysis of "insight-stimulating" examples.
As noted earlier, advancing knowledge about issues
management requires linking theory-research and
practice. In order to accomplish this link, the
current body of knowledge must be examined, the
experience of practitioners must be gathered and then
synthesized, and examples from practice that provide
additional insights into key variables and their
relationships must be obtained. Therefore, all three
methods are integral to this study.
The results of the first method were presented
in this chapter. The review and critique of the
issues management literature, with the aid of the 7S
Framework, has helped structure existing knowledge
about the phenomenon.
The second and third research methods pertain
to the study's second objective, obtaining additional


78
insights into the phenomenon based on the experience
of practitioners. These two methods were implemented
through field research.
The results of the field study are presented
in Chapter 3.


79
NOTES-CHAPTER II
1 Peter F. Drucker, Managing in Turbulent
Times (New York: Harper & Row, 1980), p. Tl
2 Robert H. Moore, "The Corporate
Perspective: The A & A Experience," in Edwin M.
Epstein and Lee E. Preston, eds., Business
Environment/ Public Policy: The Field and Its Future,
1981 Conference Papers, (St. Louis: American
Association of Collegiate Schools of Business, 1982),
pp. 67-68.
3 B. G. Yovovich, "Tracking the Trends in
Public Opinion," Advertising Age, 23 May 1983, p. 30.
4 Yovovich, "Tracking," p. 30.
5 Richard A. Armstrong, "The Concept and
Practice of Issues Management in the United States,"
Vital Speeches, 17, No. 24, p. 763.
6 James K. Brown, This Business of Issues:
Coping With the Company's Environments (New York: The
Conference Board, Report No. 758, 1979), p. 8.
7 Ian H. Wilson, "Socio-Political
Forecasting: A New Dimension to Strategic
Forecasting," Michigan Business Review, (July 1974),
pp. 15-20.
8 Rene D. Zentner, "Issues and Their
Management," manuscript submitted for publication,
1982, p. 4.
9 Zentner, "Issues," p. 4.
"Fundamentals of Issues Management,"
monograph published by the Public Affairs Council,
Washington, DC, 1978.
11 Robert H. Moore, "The Evolution of Public
Affairs," The Public Affairs Handbook, Joseph S.
NagelschmidlTJ ecL (New York: AMACOM, 1982), p. 9.


80
12 John B. Olsen and Douglas C. Eadie, The
Game Plan: Governance With Foresight (Washington,
DC: Council of State Planning Agencies, 1982), p. 12.
W. W. Simmons, "Issues Management -
Challenge for Planning Executives," Planning Review,
7, No. 6 (November 1979), p. 15.
Simmons, "Challenge," p. 16.
15 See Ben C. Ball, Jr. and Peter Lorange,
"Managing Your Strategic Responsiveness to the
Environment," Managerial Planning, 28, No. 3, pp.
39+; and Liam Fahey, et al, "Environmental Scanning
and Forecasting in Strategic Planning The State of
the Art," Long Range Planning, 14, No. 1, pp. 32-39.
16 Ball, "Responsiveness," p. 3.
17 Ian H. Wilson, "Environmental Scanning
and Strategic Planning," Business Environment/Public
Policy, 1979, Conference Papers (St. Louis: American
Assembly of Collegiate Schools of Business, 1980),
p. 301.
1 Simmons, "Challenge," pp. 15-18.
19 See "Integrating Emerging Issues Into The
Corporate Planning Process," course materials, World
Future Society Conference, August 1982.
20 Jan Dauman, "Introductory Note,"
Framework for a Program to Develop an International
Issue Management System (London: Matrix Corporate
Affairs Consultants, Ltd., May 1978), p. 1.
21 From Gallagher's President'sReport, as
noted in Simmons, "Challenges," p. 15.
22 Yovovich, "Tracking," p. 31.
23 See William L. Renfro, "Managing the
Issues of the 1980's," The Futurist, 16, No. 4,
pp. 61-66; Goral C. Gottschalk, Jr., "Firms Hiring New
Type of Manager to Study Issues, Emerging Troubles,"
The Wall Street Journal, 10 June 1982, p. 25 (W),
p. 33 (E); and Paul Cathey, "Industry Has a New
Advance Guard," Iron Age, 23 April 1982.
24 Renfro, "Issues of the 1980's," p. 61.


81
23 Mike McNamee, "Scouting the Future for
Danger," USA Today, 23 May 1983, p. 2B.
26 Gottschalk, Jr., "Emerging Troubles," p.
25 (W), p. 33 (E).
27 Renfro, "Issues of the 1980's," p. 54.
28 Armstrong, "Concept and Practice," p. 763.
29 Cathey, "New Advance Guard," p. 61.
30 H. Igor Ansoff, "Strategic Issue
Management," Strategic Management Journal, 1 (1980),
p. 131.
31 P. T. Terry, "Mechanisms for
Environmental Scanning," Long Range Planning, 10 (June
1977), pp. 1-9; A. G. Kefalas, "Environmental
Management Information Systems: A Reconceptuali-
zation," Journal of Business Research, 3, No. 3, pp.
253-266; and F. Fredrich Neubauer and Norman B.
Solomon, "A Managerial Approach to Environmental
Assessment," Long Range Planning, 10, No. 2, pp. 13-20.
32 P. Kotler, et al, "The Marketing Audit
Comes of Age," Sloan Management Review, (Winter 1977),
p. 51.
33 Kotler, "Marketing Audit;" Brown, "This
Business of Issues." J. D. Thompson, Organizations In
Action (New York: McGraw Hill, 1967). Though these
concepts were not necessarily created by these
authors, they provide a useful definition of each.
34 See e.g., P. Vanderwicken, "From 'Issues
Management' To 'Environmental Analysis'," remarks to
the Public Affairs Council, Conference on Issues
Management, Chicago, March 25, 1981; and B.
Montgomery, et al, "Toward Strategic Intelligence
Systems," The McKinsey Quarterly, (Spring, 1981),
pp. 82-102.
35 Daniel A. Sharp, "Business Environment
Assessment Its Link to Corporate Strategy,"
Corporate Public Issues, 8, No. 7, p. 1.
36 R. Moore, "Planning for Emerging Issues,"
in S. Sethi, et al, Private Enterprise and Public
Purpose, (New York: Wiley, 1981), p. 373.