1.3 Organizational objectives Flashcards
Vision statement?
- Forward looking statement about long-term aims and aspirations of a business;
- Less specific and serves as a guiding principles.
- Answers the question: What do we want?
- Should never change.
- Inspirational.
- Often a summary of aims, may be put in other words than those aims
A vision statement describes what a company aspires to be, as opposed to what it is now.
Mission statement?
- Focuses on the immediate steps to achieve the mission
- Action-oriented
- Answers the question: what are we doing and why?
- Can serve as performance indicator, to measure success.
- It often includes a general description of the organization, its function, and its objectives.
- May be changed/modified to meet new circumstances.
Amission statement describes what is now as opposed to what a company aspires to be,
Aim?
Long-term goal
Objective?
Medium or short-term goals
``To make this home project the best-seller in the City” what is it: a mission, vision, aim or objective?
Aim
3 types of objectives
Strategic (medium to long-term)
Tactical (medium to short-term)
Operational (day-to-day)
``To sell this home project for twice as much then in last year.” what is it: a mission, vision, aim or objective?
Objective
SMART objective?
Specific
Measurable
Achievable
Relevant
Time-specific
4 Stages of strategy development
- Assessment of where the business is
- Development of a plan (the strategy itself) where the business wants to arrive.
- Consideration of implementation of planned steps and their viability
- Periodic evaluation
What can trigger the change in a company’s objectives internally?
- Change of leadership
- HR philosophy, structure or staff change for other reasons
- Organizational structure or location changes
- Product or whole product line changes
- Access to finance changes
- Operation/procedures optimization
7 external triggers of change in company’s objectives?
The STEEPLE
1. Social factors change (education levels, philosophy etc)
2. Technological changes
3. Economic
4. Ethics (particularly, the values which are not regulated by legal tools)
5. Political
6. Legal
7. Ecological (sustainability)
Reasons for ethical objectives?
Creating positive image in general (which will cover different perspectives: customers, investors, government etc). In particular:
1. Building up customer loyalty
2. Developing positive /motivating work environment
3. Reducing legal risks
4. Meeting customers growing expectations
5. Meeting partners (suppliers, alliance etc) growing expectations
5. Increasing profits
Adverse effects of high focus on ethical objectives?
- Costly, at least in the short term
- Competitors may respond, to maintain their position, which may mean additional cost or lost benefit
- As company becomes selective with regard to suppliers (your product may be ethical, if all its components are ethical) , some of them, who may not meet company’s new ethical objectives, may respond to protect their orders.
CRS?
-Concept that a business has an obligation to operate in a way that will have a positive impact on society.
-The CRS policy is based on the companies intention to be a good ‘corporate citizen’, setting standard for others
- More likely to be a sustainable business model
What are internal factors of SWOT analysis?
Strengths and Weaknesses
What are external and more future oriented factors of SWOT analysis?
Opportunities and Threats
Growth strategy based on SWOT
Combining strengths with opportunities - most positive short-term strategy, if there are no other big issues
Defensive strategy based on SWOT
When weaknesses and threats relate, quick defensive action needed to survive. The most negative short-term strategy
Re-orientation strategy based on SWOT
Long-term strategy, which aims to address weaknesses (implement changes) to benefit from existing/foreseeable opportunities
Defusing strategy based on SWOT
Neutral, medium, short term strategy, not meeting opportunities but minimizing existing/foreseeable threats is viewed as a most beneficial step.
What are the 4 growth strategies according to Ansoff?
- Market penetration
- Product development
- Market development
- Diversification
In which case is a Market Penetration strategy suggested?
When there is an existing/established product on the already existing market and the aim is to gain more share
What are the limitations of a Market penetration strategy by Ansoff?
- Limited growth potential of the existing market
- Strength of customer loyalty towards the competitors
- Power of competitors to respond
What is the aim of Market development?
To look for new markets of existing/established products or for a new segment in the existing market
Which strategy from Ansoff’s matrix is the safest?
Market penetration
Limitations of Market development strategy
- Lack of understanding local specifics of new markets
- Lack of effective distribution channel
- Lack of good quality market research
What is Product development strategy?
Development of a product on the existing market.
What are the risks and limitations of Product development strategy?
- Low quality research
- Low quality of R&D system
- Loosing first mover advantage to competitors due to prolonged R&D time,
- Loosing first mover advantage to competitors, because not patented (kept as a company secret) items/processes become common knowledge or known to the competitor
Which is the riskiest Ansoff strategy?
Diversification
What are the limitations of Diversification strategy?
All related to product or market development strategies:
1. Low quality research
2. Low quality of R&D system
3. Loosing first mover advantage to competitors due to prolonged R&D time,
4. Loosing first mover advantage to competitors, because not patented (kept as a company secret) items/processes become common knowledge or known to the competitor
5. Lack of understanding local specifics of new markets
6. Lack of effective distribution channel
Is this statement of Teslas “To accelerate the world’s transition to sustainable energy” a mission statement or a vision statement?
A mission statement
Is this statement of Ted “Spread ideas“ a mission statement or a vision statement?“.”
A mission statement
Is this statement of LinkedIn “To connect the world’s professionals to make them more productive and successful” a mission statement or a vision statement?“.”
a mission statement
Is this statement of IKEA “to create a better everyday life for many people” a mission statement or a vision statement
A vision statement
Limitations of SWOT?
- may be biased
- may be just a snapshot of current situation
- environment changes may not be reflected (obsolete assumptions)
