Chapter 2: Charting a Company's Direction: Vision and Mission, Objectives, and Strategy Flashcards
What are the stages of the Strategy-Making, Strategy-Executing Process?
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
Developing a Strategic Vision. What is a strategic vision?
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
What are the Dos and Don’ts of wording a vision statement?
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
Crafting a mission statement. The mission statement should:
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
Ideally, a mission statement is sufficiently descriptive to:
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
Linking Vision and Mission with Core Values. Core values are?
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
Stage 2: Setting Objectives. The purposes of setting objectives?
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
Examples of Strategic Objectives
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
Examples of strategic objectives in public sector
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
Examples of financial objectives
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
Stage 3: Crafting a Strategy. Strategy making:
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
Why is strategy-making often a collaborative process?
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!
Employing a balanced scorecard. What is BSC?
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
What are initiatives/action plans?
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
What is key performance indicators (KPIs)?
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
