How to approach this question:

- Define stakeholder mapping -- completing an analysis of the stakeholders of an organisation and dividing them into categories depending on certain characteristics. This is often represented visually on a graph or matrix.

- Describe a Stakeholder mapping tool -- the most common tool is Mendelow's Stakeholder Matrix so I would recommend using this one. It is explained in detail in the study guide. However, the question is open so you could choose to describe another tool such as Edgar's Stakeholder Position Analysis if you so wished. You wouldn't be wrong choosing this, but honestly, I'd just go for Mendelow. You can't go wrong with Mendelow. Because the Matrix has 4 sections you can imagine you'd get 5 points for the definition of stakeholder mapping, and 5 points for each of the quadrants of the matrix.

Essay Plan:

Introduction - The reason why stakeholder mapping is important is because interests and expectations of stakeholder groups will be different and possibly conflicting. Mapping this allows an organisation to see the variety and decide on an appropriate management style for each stakeholder group.

Paragraph 1 - Mendelow's Power / Interest Matrix maps stakeholders based on their influencing power and the strength of their motivation to use that power. It uses a 2x2 grid and defines power as high or low and interest and high or low. It then provides four strategies for managing the stakeholders based on which quadrant of the grid the stakeholder falls into. These 4 categories are:

Paragraph 2 - Keep satisfied -- high power but low interest. If the stakeholder becomes dissatisfied or concerned their interest may peak. Examples include regulatory bodies, shareholders, senior management. The best approach is to keep them up to date so they are informed of what is going on, but do not burden them with information they do not need.

Paragraph 3 - Manage Closely -- AKA Key players -- includes major customers, key suppliers, partners, senior management. These stakeholders need to know everything that is going on and approve of what is going on. The recommended strategy is early involvement and participation, and integrating their goals with yours. This group requires regular communication and meetings. You should take their opinions on board.

Paragraph 4- Monitor -- minimum effort required -- this is the low priority group as they have low power and low interest. Includes small volume suppliers and other organisational functions with no direct interest in your activities. This group does not need to receive regular communication.

Paragraph 5 - Keep informed - high interest, but low power. If they're not kept in the loop and understand the need for decisions, they may lobby together to protect their interest if they feel threatened. Employee groups, suppliers and community groups may be in this category. This group should receive regular communication.

Conclusion - Mendelow created the matrix in 1991 and it is still used today. It is a popular management tool due to its simplicity. It's important to notes that stakeholders can move through the matrix- it isn't stagnant. For example, at the beginning of a project a manager in another department may be classed as 'low priority' because they are seen to have no interest and no power in the project. However, as the project progresses the manager may become interested. They will then transfer into the keep informed category. Therefore, the matrix should be redone regularly throughout the lifetime of a project to capture any movements. The matrix should also be redone for each individual project -- it cannot be assumed that a stakeholder who had interest in one project would be interested in another.

Tutor Notes

- The above essay plan is basically the entire essay, I got carried away. The only thing you'd need to add into that is an example of a stakeholder for each of the sections! (e.g. the CEO is high power, but low interest stakeholder for the procurement department. He/ She doesn't care about the day to day operations but should be kept informed of any big news). For your examples you could use your own place of work.

- At level 4 you don't have to analyse the model, you just have to be able to memorise it and repeat it. Mendelow comes up again at Level 5 and 6 in a bit more detail. If you want to score super bonus points you could mention in your conclusion that the main disadvantage of Mendelow's Matrix is that it doesn't take into consideration the stakeholder's position on the project -- whether they're for it or against it. Therefore, it doesn't provide the full picture or provide much help on how to manage stakeholders. E.g. two stakeholders might both be in 'manage closely' section, but one is for the project and the other against -- they'd need to be handled very differently!

- Study guide p. 65

- there are a lot of components to this question so I would take a good 5 minutes to write out some bullet points on the characteristics of each one, and on some differences. Then from your notes make this into an essay. The mark scheme isn't 100% clear on how many characteristics and differences you need to name, so try and keep an equal split between the two areas. You would probably need 2-3 characteristics of each, and 3 differences for a good score.

- Characteristics of goods: tangible, homogeneous, items tend not to perish quickly, can be stored

- Characteristics of services: intangible, heterogenous, inseparable (produced and consumed at the same time), no transfer of ownership, perish upon use (i.e. cannot be stored)

- Characteristics of construction work: project-based procurement, includes procuring both goods and services, complex procurement which has its own set of regulations (CDM2015).

- Differences between these

1) goods are not usually outsourced and services can be.

2) Complexity of the supply chain (goods and construction may have a complex supply chains, but service contracts usually only involve 2 parties).

3) Timescales -- construction work has a designated timescale but procurement of goods could be a one off or long-term contract, services is usually a long-term contract.

Example Essay

Introduction:

Procurement is a multifaceted field, and understanding the nuances between procuring goods, services, and construction works is pivotal for effective management. This essay explores the main characteristics that differentiate these categories.

Tangible / Intangible:

Goods are tangible items that can be physically seen and touched. For instance, raw materials like wheat and sugar in a manufacturing organization are tangible goods. On the other hand, services are intangible---though the results can be observed, the service itself cannot be touched. An example is a cleaning contract for a factory; while the effects of the cleaning are visible, the service itself remains intangible. Construction is usually a mixture of tangible and intangible procurement; the tangible is the construction materials such as bricks and windows, and the intangible aspect is the labour to complete the project.

Heterogeneous / Homogeneous:

Goods are generally homogeneous, meaning they are always the same. For example, steel purchased for manufacturing purposes will always be the same. In contrast, services are heterogeneous, varying each time they are rendered. Customer service, for instance, is inherently different each time due to the dynamic nature of customer interactions. Construction could be either heterogeneous or homogeneous depending on the project -- is it a one off unique building, or is it a large housing estate of same-build properties?

Transfer of Ownership:

When goods are procured, there is a transfer of ownership. The product becomes the property of the buyer upon delivery and payment. In contrast, services do not involve a transfer of ownership as there is no physical entity to transfer. In construction the transfer of ownership is extremely complex and varies depending on the project. Usually the buyer will retain ownership of the land throughout the project, but on some occasions the construction company may take ownership for insurance purposes.

Storable (Separable/ Inseparable):

Goods are storable, allowing for purchase on one day and use on another. For example a factory can buy in plastic to be used to manufacture toys and this is stored in inventory until the time comes to make the toys. However, services are consumed at the point of purchase, making them inseparable. The service is bought and utilized simultaneously. Services cannot be stored. This is the same for construction.

Ability to Outsource:

Goods are rarely outsourced, as they are typically purchased directly from suppliers. Services, on the other hand, can be easily outsourced---examples include outsourcing finance, cleaning, or security services. Construction works are commonly outsourced, with external companies hired to execute projects.

Complexity of the Supply Chain:

Service contracts often involve a simple two-party relationship between the buyer and the supplier. Goods and construction, however, may have complex supply chains. For example, procuring a pen involves a supply chain with various steps, including the raw material supplier, manufacturer, and possibly a wholesaler. Construction works often feature a tiered supply chain with subcontractors playing crucial roles.

Construction as a Hybrid:

Construction procurement represents a hybrid, incorporating elements of both goods and services. It involves hiring a service, such as a bricklayer for laying bricks, while also procuring the tangible goods---bricks. Separating goods from services in construction is challenging, as they are often intertwined, and both aspects are paid for simultaneously.

Conclusion:

In conclusion, distinguishing between the procurement of goods, services, and construction works is essential for effective supply chain management. The tangible or intangible nature, heterogeneity, transfer of ownership, storability, outsourcing potential, and supply chain complexities offer a comprehensive framework for understanding the unique characteristics of each category. Recognizing these distinctions empowers organizations to tailor their procurement strategies to the specific challenges and dynamics associated with goods, services, and construction works.

Tutor Notes

- What a characteristic is can also be a difference. So for example you can say tangible is a characteristic of goods but tangibility is also the main difference between goods and services. So don't worry too much about which order to write stuff in, or doing clear sections for this type of essay. It all comes out in the wash.

- Other differences in procuring these include:

- Costs: procuring goods such as stationary for an office will be low-cost so may not require approval, but a service contract may require management sign off. Procuring construction projects tend to be huge sums of money

- Where the budget comes from: goods and services may be operational expenditure and construction works capital expenditure.

- The level of risk involved in the procurement: goods tends to be quite low risk and construction high risk.

- Types of contract involved: procuring goods may be very simple and just require a PO, services is more complex so may require a formal contract or Deed of Appointment. Construction projects will require a contract due to the high value and high risk of the purchase

- Legislation -- Goods = Sale of Goods Act, Construction - CDM Regulations 2015. Construction is much more heavily regulated than services or goods. Note CDM regulations isn't part of CIPS. It's occasionally referenced in various modules but you don't have to really know what it is. Just know it's the main legislation governing the construction industry. Construction - Construction Design and Management Regulations 2015 (hse.gov.uk)

- Study guide LO 1.3.1 p. 40, but mainly p. 52 for services. NOTE the title of this learning outcome includes construction and it is hardly mentioned in the study guide. Most of the above information on construction comes from my own knowledge rather than the book.

How to approach this question.

- There's many aspects to this question -- make sure you're answering them all:

- Explain what added value is and explain what 'ensuring processes are compliant' means (this could be your introduction) Added Value = achieving more for the same money. May be in producing an item cheaper, or by procuring additional features at no additional cost. Requires innovation and creativity. The focus is on the outcome. Compliant Processes -- this is focusing on the process, rather than the outcome. Ensuring that purchases are made in line with internal and external rules/ procedures. This may be following Standard Operating Procedures, purchasing to strict budgets and the exclusive use of e-procurement tools.

- Explain the consequences of focusing on added value over compliance; can result in maverick spending, less visibility for management, may have additional risks if procuring items without following procedures -- this may have legal and financial repercussions, Time-consuming, May lead to added expenses

- Consequences of focusing on compliance over added value; May foster a silo-mentality, Misses out on flexibility and agility, misses out on collaborative whole life costs reductions, Procurement function becomes rigid, inflexible and inwardly focused

- How both can be achieved; 1) Seek to add value only for certain purchases such as capital-expenditure items and not for others such as stationary.2) Ensure time is well-spent i.e. focus on added value for purchases where this can be most achieved, and focus on compliance where there is high risks. 3) Review processes regularly to ensure both goals are being achieved 4) Complete 'lessons learned' activities after big procurement activities to advise on future procurement activities- were both Added Value and Compliance achieved? How could this be improved next time?

- these three should form the main body of your essay. Above are many ideas you could explore, you won't have time to talk about all of them so pick a couple that resonate with you

Conclusion -- the balance is important

Example Essay

Added value refers to the extra worth or enhancement a company provides to a product, service, or process that goes beyond the intrinsic value inherent in the initial input. It represents the additional benefits or features that make a product or service more desirable to customers, often justifying a higher price or distinguishing it from competitors. Procurement often look to achieve added value in procurement activities but achieving this whilst remaining compliant (adhering to established laws, regulations, standards, and internal policies) can be tricky. Achieving a delicate equilibrium between pursuing added value and ensuring stringent compliance in procurement activities is pivotal. This essay explores the consequences of emphasizing one area over the other and outlines strategies for organizations to successfully navigate the dual goals of attaining added value and maintaining compliance.

Consequences of Focusing Solely on Added Value:

Prioritizing added value without due consideration for compliance can expose an organization to a myriad of risks. One notable consequence is the potential compromise of regulatory requirements and legal standards. For instance, if a procurement team is solely driven by obtaining cost-effective solutions or innovative products, they may inadvertently overlook compliance with industry-specific regulations, leading to legal ramifications and reputational damage.

Moreover, an exclusive focus on added value may neglect crucial ethical considerations. An organization, in pursuit of cost savings or improved efficiency, might engage with suppliers that violate ethical standards or engage in unethical business practices such as modern day slavery. Such associations can tarnish the organization's reputation, eroding the trust of stakeholders and customers alike.

Consequences of Overemphasizing Compliance:

Conversely, a hyper-focus on compliance without adequate consideration for added value can result in missed opportunities and suboptimal outcomes. Strict adherence to procedural norms and regulations might lead to an overly bureaucratic procurement process, hindering innovation and stifling the organization's ability to adapt swiftly to market changes.

Furthermore, an excessive emphasis on compliance might limit engagement with suppliers, stifling creativity and potential breakthroughs. For instance, a procurement team rigidly adhering to compliance protocols might miss out on collaborating with smaller, innovative suppliers that could offer unique and value-added solutions.

Strategies for Achieving Both Added Value and Compliance:

To navigate the delicate balance between added value and compliance, organizations can adopt several strategic approaches. First and foremost, an organization should establish clear procurement policies and procedures that incorporate both compliance requirements and avenues for seeking added value. This ensures that all procurement activities align with regulatory standards while leaving room for innovation.

Effective supplier management plays a pivotal role in achieving this balance. By thoroughly vetting and categorizing suppliers based on their ability to deliver value and comply with regulations, organizations can strategically align their procurement activities. For example, suppliers that have a proven track record of compliance can be trusted with critical components, while those offering innovative solutions may be engaged for projects that prioritize added value.

Leveraging technology is another essential strategy. Implementing advanced procurement software that integrates compliance checks and offers analytics for value assessment can significantly enhance the efficiency of procurement processes. Automated systems can streamline due diligence, ensuring that suppliers meet compliance standards while providing insights into their potential to deliver added value.

Additionally, fostering a culture of collaboration within the procurement team and across organizational departments is crucial. Encouraging open communication enables different stakeholders to contribute insights on compliance and added value. Cross-functional collaboration ensures that procurement decisions align with broader organizational goals and values.

In conclusion, the strategic balancing act between achieving added value and ensuring compliance in procurement is indispensable for organizational success. By recognizing the consequences of favouring one area over the other and adopting a holistic approach, this safeguards against risks but also positions the organization for sustained growth and competitiveness in the ever-evolving business landscape.

Tutor Notes:

- Examples highlight that you understand the material you have studied and can apply it to real life scenarios. You could take a certain industry or organisation and explain the consequences for them of focusing on one over the other. E.g. In the construction industry it is very important that organisations achieve compliance in their procurement activities. This includes ensuring there are robust contracts in place and that legislation such as CDM and Health and Safety is followed. When procuring a construction contract the danger of focusing on Added Value over compliance is that this may result in key legislation being forgotten which leads to legal proceedings against the buyer. For example, if the buyer procures a construction contract without fulfilling the responsibilities outlined in the CDM and H&S regulations, this can result in huge fines for the company and potential jail time for senior management.

- The risk of focusing on compliance over added value may be in missing out on alternative proposals. For example, if a buyer is procuring a construction project of a new hospital and they focus too much on compliance, they may not engage in Early Supplier Involvement or cross-functional working which may bring up alternative ideas such as different ways the hospital could be built. The alternative ideas may result in higher quality or cost savings which are missed by the buyer. This results in a more costly, or lower-quality hospital being built.

- Overall, what CIPS are testing you on here is that you understand that the procurement department should aim to achieve both -- it's a balancing act between compliance and added value and this could be viewed as a pendulum- it's important not to swing too heavily in one direction. That's actually a really good metaphor -- feel free to use that in your conclusion!

- study guide p. 114

How to approach this question

- Description of the 'third sector' - the part of an economy comprising non-governmental and non-profit-making organisations including charities, voluntary and community groups, and cooperatives. These organisations reinvest surplus profits back into the enterprise to further their objectives. This is worth 10 points so should be a good 2-3 paragraphs, with examples.

- Main objectives -- these could include engaging with stakeholders, social or environmental aims, education, providing a service to the community, stewardship role. There's more points for this question so you should have more content here.

Example Essay

The 'Third Sector' refers to a segment of the economy distinct from the public (government) sector and the private (for-profit) sector. It encompasses a diverse range of non-governmental organizations (NGOs), charities, foundations, social enterprises, cooperatives, and other non-profit entities. These organizations are primarily driven by social, environmental, cultural, or community objectives rather than the pursuit of profit. They often operate based on values such as democracy, equality, and social justice. The Third Sector plays a crucial role in providing services, advocating for social causes, and filling gaps left by the public and private sectors.

The third sector is often called the 'not-for profit' sector. It's distinguished from the private sector in that the main aim isn't to make money for money's sake. The main aim is to generate money to reinvest back into the organisation so that the organisation can achieve the purpose it was set up for. Whereas the private sector may exist solely to make money, the third sector has a 'higher aim'.

Organisations operate in a very narrow marketplace. They may be the only provider in that marketplace. For example the RNLI is the only operator of lifeboats and the only organisation that sets out to save lives at sea- there is no 'competitor'.

3rd Sector Organisations have multiple sources of income; e.g. subscriptions or donations, or from donated goods that they then sell on (such as Oxfam shops), fundraising activities or selling merchandise. The sector also has a wide range of stakeholders.

The third sector is subject to same regulations as private and public companies but also has its own regulations imposed by the Charities Commission. This is a statutory regulation body which checks charities are run for public benefit and not private advantage, ensures charities are independent, and sets out to remedy serious mismanagement. They can audit, offer advice and investigate complaints. Therefore the sector is highly regulated.

Organisations in this sector have a huge range of objectives depending on why they were set up. These can be very specific, for example: charities such as Cancer Research (objective- find a cure for cancer), Museums (objective- educate the public), CIPS (objective - provide professional services to a particular industry), trade unions (objective- defend the rights of workers), pressure groups (objective- change laws and practices they morally disagree with).

However organisations in this sector do have overarching objectives in common.

1. Survival -- Generating Enough Money to Continue Operations: Survival is a fundamental objective for Third Sector organizations. Unlike for-profit entities, these organizations do not aim to generate profits for shareholders but need sufficient funding to sustain their operations. This funding often comes from donations, grants, fundraising activities, and sometimes income from services provided. The challenge lies in balancing the mission with the need for financial stability, ensuring that the organization can continue to serve its community and pursue its goals over the long term. Financial sustainability is crucial, particularly in a sector where funding sources can be uncertain and competition for donations is high.

2. Creating Awareness of Their Cause: Raising awareness is vital for Third Sector organizations, as it helps to educate the public, garner support, attract volunteers, and drive fundraising efforts. Awareness campaigns are essential in highlighting the issues these organizations address, whether it's health, environmental conservation, social justice, or cultural preservation. Effective communication strategies, including the use of social media, public events, and collaborations, are employed to reach a wider audience. The more people know about a cause, the more likely they are to support it, either through donations, volunteering, or advocacy.

3. Compliance with Regulations and the Charities Commission: Compliance with legal and regulatory requirements is a critical objective. In many countries, including the UK, Third Sector organizations are regulated by bodies like the Charities Commission. These organizations must adhere to specific legal standards, including financial transparency, governance practices, and ethical guidelines. Compliance ensures credibility and trustworthiness, which are essential for maintaining public confidence and the continued support of donors and volunteers. It also ensures that the organization operates within the law, avoiding legal issues that could jeopardize its mission.

4. Providing a Service to the Community: The core of a Third Sector organization's mission is to provide services or benefits to the community. These organizations often address needs that are unmet by the private or public sectors, focusing on improving the quality of life for certain populations or addressing specific societal issues. This objective can take many forms, from offering direct services like healthcare and education to advocating for policy changes that benefit underserved communities. The impact of these services on the community can be profound, often bringing about significant social change.

5. Fulfilling a 'Gap in the Market': Many Third Sector organizations exist to fill gaps in services not provided by the public or private sectors. A classic example is the provision of air ambulance services in the UK. While the government provides comprehensive healthcare services, there's a gap in the rapid transportation of critically ill patients, which is filled by charities operating air ambulances. These organizations identify specific needs that are not adequately addressed and work to meet them, often innovating in the process. By fulfilling these gaps, they play a crucial role in complementing existing services and enhancing the overall welfare of society.

In conclusion, Third Sector organizations operate with a unique set of objectives that distinguish them from other sectors. Their focus on survival, awareness-raising, compliance, community service, and filling market gaps is essential not only for their existence but also for the significant societal impact they make. These objectives align with the overarching mission of the Third Sector to contribute positively to society, addressing needs and issues often overlooked by other sectors.

Tutor Notes:

- A strong essay will use real life examples of organisations in the third sector and their objectives. I've mentioned a couple above such as Cancer Research UK: Our strategy to beat cancer | Cancer Research UK and North West Air Ambulance Charity: Home | North West Air Ambulance Charity (nwairambulance.org.uk) but pick charities you know well.

- LO 4.4. P.230

How to approach this question

- There are three questions within this question. The purpose could be your introduction, and then take two big sections in the main body of your essay for the elements and how to evaluate it.

Example Essay

A Corporate Social Responsibility (CSR) policy serves as a formal commitment by a company to conduct its business in a socially responsible and sustainable manner. The purpose of a CSR policy is to outline the organization's dedication to ethical practices, environmental stewardship, and social contributions. It reflects a company's commitment to going beyond mere profit generation and actively engaging in initiatives that benefit society and the environment.

Elements of a CSR Policy:

1. Ethical Business Practices:

* Clearly articulated principles on fair business dealings, anti-corruption measures, and adherence to ethical standards in all operations.

2. Environmental Sustainability:

* Commitments to minimize environmental impact through sustainable practices, energy efficiency, waste reduction, and responsible sourcing of materials.

3. Social Responsibility:

* Efforts to contribute positively to the community, which may include support for education, healthcare, poverty alleviation, or other social initiatives.

4. Labor Practices:

* Fair and ethical treatment of employees, including non-discrimination, fair wages, safe working conditions, and respect for workers' rights.

5. Supply Chain Responsibility:

* A commitment to ensuring that suppliers and partners adhere to similar ethical and CSR standards, promoting responsible practices throughout the entire supply chain.

6. Transparency and Accountability:

* Open disclosure of CSR initiatives, performance, and impacts, demonstrating a commitment to transparency and being accountable for CSR goals.

7. Stakeholder Engagement:

* A pledge to engage with and consider the interests of various stakeholders, including employees, customers, communities, and shareholders, in decision-making processes.

Evaluating a Supplier's CSR Policy:

Assessing a potential supplier's CSR policy involves a comprehensive examination of key factors to ensure alignment with ethical and responsible business practices:

1. Policy Content:

* Review the content of the CSR policy to ensure it covers a broad spectrum of social, environmental, and ethical aspects. A comprehensive policy reflects a commitment to holistic CSR practices.

2. Alignment with Industry Standards:

* Check if the CSR policy aligns with industry-specific standards and best practices. Adherence to recognized standards, such as the Global Reporting Initiative (GRI) or ISO 26000, indicates a commitment to global CSR norms.

3. Performance Metrics:

* Evaluate whether the supplier includes measurable performance metrics in their CSR policy. Clear objectives and key performance indicators (KPIs) demonstrate a commitment to continual improvement and accountability.

4. Stakeholder Engagement:

* Assess how the supplier engages with stakeholders. A robust CSR policy should involve stakeholders in decision-making processes and demonstrate an understanding of their concerns.

5. Supply Chain Responsibility:

* Check if the supplier extends CSR principles to its supply chain. This involves ensuring that suppliers and partners adhere to ethical, environmental, and social standards, contributing to a responsible and sustainable supply chain.

6. Transparency and Reporting:

* Look for transparency in reporting. A supplier that openly communicates about its CSR initiatives, achievements, and challenges indicates a commitment to accountability and transparency.

7. Continuous Improvement:

* Evaluate if the supplier emphasizes a commitment to continuous improvement in its CSR policy. This indicates a dynamic approach to addressing emerging challenges and staying ahead of evolving CSR expectations.

By thoroughly examining these aspects, a buyer can gain insights into a potential supplier's commitment to corporate social responsibility and make informed decisions that align with their own CSR objectives and values.

Tutor Notes

- Students often ask if they can use bullet points in their essays. Many tutors say no, but the answer is actually more nuanced than that. I've purposefully written the above in bullet points to show you how it can be done effectively. Bullet points are fine, providing you're using full sentences and it makes sense as a stylistic choice. It's not a good option if you're just going to list things without context. Then it can be hard to follow. I've personally used bullet points in essays and done really well. There's no rule against it. You've just got to make sure you're doing it 'right'.

- CSR policies are only briefly mentioned in LO 2.4 but it does come up as quite a big topic in other parts of the syllabus so is worth knowing. You could mention some examples of big companies and what their stance on CSR is. A good one to look at is The Body Shop.

- The study guide references Carroll's Pyramid -- this would be great to include in your essay Carroll's CSR Pyramid explained: Theory, Examples and Criticism (toolshero.com) p.112