Chapter 2: Charting a Company's Direction: Vision and Mission, Objectives, and Strategy Flashcards

1
Q

What are the stages of the Strategy-Making, Strategy-Executing Process?

A

Stage 1: Developing a strategic vision, mission, and values

Stage 2: Setting Objectives

Stage 3: Crafting a strategy to achieve the objectives and move the company along the intended path

Stage 4: Executing the strategy

Stage 5: Monitoring developments, evaluating performance, and initiating corrective adjustments

Note: Revise as needed in light of the company’s actual performance, changing conditions, new opportunities, and new ideas

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2
Q

Developing a Strategic Vision. What is a strategic vision?

A

It describes management’s aspirations for the future and delineates (describes) the company’s strategic course and long-term direction.

It provides a sense of direction

Reduces random ad-hoc decision makings

Aligns departmental strategies with the vision and aspiration of the company

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3
Q

What are the Dos and Don’ts of wording a vision statement?

A

Dos:
1) Be Graphic

2) Be forward-looking and directional
3) Keep it focused
4) Have some wiggle room
5) Be sure the journey is feasible with time frame
6) Indicate why the directional path makes good business sense
7) Make it memorable

Don’ts:
1) Don’t be vague or incomplete

2) Don’t dwell on the present
3) Don’t use overly broad language
4) Don’t state the vision in bland or uninspiring terms
5) Don’t be generic
6) Don’t rely on superlatives only
7) Don’t run on and on

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4
Q

Crafting a mission statement. The mission statement should:

A

1) Use specific language to give the firm its own unique identity
2) Describes the firm’s current business and purpose - “who we are, what we do, and why we are here.”
3) Should focus on describing the company’s business, not on “making a profit” - earning a profit is an objective not a mission

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5
Q

Ideally, a mission statement is sufficiently descriptive to:

A

1) Identify the firm’s product or services
2) Specify the buyer needs it seeks to satisfy
3) Identifies the customer groups or markets it is endeavoring to serve
4) Specifies its approach to pleasing customers
5) Sets the firm apart from its rivals
6) Clarifies the firm’s business to stakeholders

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6
Q

Linking Vision and Mission with Core Values. Core values are?

A

They are the beliefs, traits, and behavioral norms that employees are expected to display in conducting the firm’s business and in pursuing its strategic vision and mission.

Examples are teamwork, innovative, fair treatment, socially responsible, ethical behaviours, honesty, reliability.

Can be used to guide decisions during time of crisis, recruitment and firing, and customer service

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7
Q

Stage 2: Setting Objectives. The purposes of setting objectives?

A

1) To convert the vision and mission into specific, measurable, timely performance targets
2) To focus efforts and align actions throughout the organisation
3) To serve as yardstcks for tracking a firm’s performance and progress
4) To provide motivation and inspire employees to greater levels of effort

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8
Q

Examples of Strategic Objectives

A

1) Winning an x percent market share
2) Improve sales by x percent
3) Achieving lower overall costs than rivals
4) Consistently getting new or improved products and services to market ahead of rivals
5) Deriving x percent of revenues from the sale of new products introduced within the next five years
6) Having broader or deeper technological capabilities than rivals
7) Having a wider product line than rivals
8) Having a better-known or more powerful brand name than rivals

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9
Q

Examples of strategic objectives in public sector

A

1) To acquire alternative sources of funds
2) To enhance the quality of professional development
3) To develop knowledge management system
4) To reduce the waiting time
5) To reduce the process time
6) To increase public awareness
7) To increase public satisfaction on service delivery

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10
Q

Examples of financial objectives

A

1) An x percent increase in annual revenues
2) Annual increases in after-tax profits of x percent
3) Annual increases in earnings per share of x percent
4) Annual dividend increases of x percent
5) Profit margins of x percent

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11
Q

Stage 3: Crafting a Strategy. Strategy making:

A

1) Addresses a series of strategic “how’s”
2) Situational analysis
3) Requires choosing among strategic alternatives
4) Is a collaborative team effort that involves managers in various positions at all organisational levels

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12
Q

Why is strategy-making often a collaborative process?

A

1) The many complex strategic issues involved and multiple areas of expertise required can make the strategy-making task too large for one person or a small executive group
2) When operations involve different products, industries and geographic areas, strategy-making authority must be delegated to functional and operating unit managers such that all managers have a strategy-making role—ranging from major to minor—for the area they head!

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13
Q

Employing a balanced scorecard. What is BSC?

A

It is a comprehensive strategic management system that is able to help managers to facilitate the conversion of the business objectives into small and manageable measures, that are easily understood and adopted by members of the organisation.

It sees business from four perspectives: the financial, the customer, the internal business process, and the learning and growth perspectives

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14
Q

What are initiatives/action plans?

A

1) Action oriented projects taken to attain the objectives
2) Need spending and budget
3) They describe who does what, how it is done and when it will be completed
4) Monitor progress against measurements
5) Correct and revise action plans per comparison of actual results against original action plans

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15
Q

What is key performance indicators (KPIs)?

A

1) KPI is a specific measure of an organisation’s performance
2) The purpose is to give meaningful measurements to objective set
3) Performance measurement is a comparison of actual level of performance to pre-established target levels of performance

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16
Q

Input, Output and Outcome in BSC model

A

Employee Learning (Input) -> Internal Process (Output) -> Stakeholders (Outcome) -> Financial (Outcome) -> Mission (Outcome)

17
Q

What is “outcome measure”?

A

Qualitative/quantitative consequences associated with the programme/services

Eg: % increase in revenue, profit

18
Q

What is “output measure”?

A

Quantity or no. of items produced. How accurately or timely a service is produced.

Eg: No. of application produced; Reduce waiting/processing times; Complain rate; On-time delivery

19
Q

What is “input measure”?

A

Value of resources to produce an output.

Eg: Dollar budgeted/spent; Staff hours used. % or no. of staff completed the training, employee retention rate; level of employee satisfaction

20
Q

How to develop good measures?

A

1) Be clear and simple
2) Have clearly defined units. Eg: No. of clients, days, percentage, level
3) Be measurable

21
Q

What are targets?

A

1) The figure or index of measures. For each measure, there should have at least one target.
2) Target should stretch their organisation to higher level of performance valued by the stakeholders
3) It should be clear, realistic, timed yet challenging
4) When you reach your targets, you have successfully executed your strategy and meet your objectives

22
Q

Some of the data gathering and evaluation methods are:

A

1) Surveys
2) Observations
3) Focus groups
4) Secondary data (to benchmark)
5) Analytical software like SPSS

23
Q

Best practices

A

1) Measure performance of all “critical” strategic objectives
2) One measure per objective may be enough
3) Have milestones
4) Hold people responsible for results (champion)
5) Develop a deadline
6) Use performance information to manage
7) Match resources to objectives

24
Q

Managing the Strategy Execution Process (Critical Success Factors to execute strategy)

A

1) Staffing the firm with the needed skills and expertise
2) Building and strengthening strategy-supporting resources and competitive capabilities
3) Organising work effort along the lines of best practice
4) Allocating ample resources to the activities critical to strategic success
5) Ensuring that policies and procedures facilitate rather than impede effective strategy execution
6) Installing information and operating systems that enable effective and efficient performance
7) Motivating people and tying rewards and incentives directly to the achievement of performance objectives
8) Creating a company culture and work climate conducive to successful strategy execution
9) Exerting the internal leadership needed to propel implementation forward and drive continuous improvement of the strategy execution processes