Ch3: Strategic Direction

Question 1

What is a strategic intent?

Answer 1

• A long-term (10-20 year) quest or ambition to attain dominance/leadership within a specific industry by focusing on the essence of winning and stimulating the motivation to win within all employees
• It is diffused across all levels of the organisation

Question 2

What is a vision statement?

Answer 2

• Similar to strategic intent (Longterm focus and inspires employees to action and good performance)
• More specifically a top-level leadership tool often ascribed to a single visionary leader
• A picture of what the company wants to be and ultimately achieve
• Shapes company’s longterm future
• Should be understandable and straightforward, so as to capture the hearts and minds of employees

Question 3

What is a mission statement?

Answer 3

• A more concrete and practical statement that can change more frequently based on market developments
• Should still inspire and motivate employees and satisfy other stakeholders
• Vision and Mission statements together form the foundation upon which an organisation can develop further practical strategies
• As many stakeholders as possible should be considered in the formulating of a mission statement
• Addresses the following questions:
• What do we do? (What product do we sell, to who and how do we acquire it?)
• What are our economic goals?(Survival, growth & profitability)
• What are our core competencies and competitive advantages? (What value do we create?)
• How we view our responsibilities towards stakeholders?

Question 4

What is a value statement?

Answer 4

• A list of the company’s core values, beliefs and philosophies
• Usually included in the mission statement

Question 5

How do you translate strategic direction into operational terms?

Answer 5

Vision, mission and value statements should be expressed as a set of goals/objectives to be achieved. THey should be SMART goals, indicating resources required, people responsible and timelines to be stuck to
Balanced scorecard is a useful tool to make this translation.

Question 6

What is a balanced scorecard and what perspectives does it focus on?

Answer 6

• It is a tool to translate vision and mission statements into pragmatic tangible goals and objectives that all employees can work towards in their everyday activities.
• 4 balanced perspectives:
• Financial perspective- basic financial performance (Is it delivering value to stakeholders)
• Customer perspective- how do our customers perceive us (Look at customer loyalty, retention and growth)
• Business processes perspective- what key processes must we excel at to stimulate financial and customer satisfaction?
• Learning and growth perspective- how can we continue to grow and improve by combining social, technological and environmental factors?

Question 7

What are the functions of a balanced scorecard?

Answer 7

• Clarify and translate vision into strategy- BS forces managers to define unclear elements of vision and mission by developing key measures for the 4 BS perspectives
• Link strategy to specfic departmental objectives and measures, and communicate strategy throughout the organisation
• Forces business to integrate its different functions/departments when planning and setting goals
• Improves organisational learning- early results of BS measures can indicate whether a plan is working well and what might need to be changed/learned