SESSION 4-5 Flashcards
What are the MUSTS for a Vision Statement?
- Should be developed first. It is the
foundation for developing a mission statement - A vision statement is a declaration
of an organization’s overarching objective or goal. - Your vision should be big, exciting
and compelling. - The vision statement should be
short, preferably one sentence, and
as many managers as possible
should have input into developing
the statement –SHARED VISION
Which perspective should the Vision Statement be written in?
Customer’s
Which should the Vision Statement do more and talk about?
Must do more than identify the
product/service a firm offers:
Should talk about the type of
business the company is engaged in.
What are the MUSTS for a Mission Statement?
- A declaration of an
organization’s “reason for being.” - Your mission covers the who, what
and how - Also known as a Creed statement, a
statement of purpose, philosophy,
beliefs, business principles, or a definition of the business - It is essential for effectively
establishing objectives and formulating strategies.
What are the characteristics for a Mission Statement?
- Broad in scope; does not include monetary amounts, numbers, percentages,
ratios, or objectives - Fewer than 150 words in length
- Inspiring
- Identifies the utility of a firm’s products
- Reveals that the firm is socially responsible
- Reveals that the firm is environmentally responsible
- Includes nine components: customers, products or services, markets, technology,
concern for survival/growth/profits, philosophy, self-concept, concern for public
image, concern for employees - Reconciliatory
- Enduring
What are the 9 components for a Mission Statement?
- Customers—Who are the firm’s customers?
- Products or services—What are the firm’s major products or services?
- Markets—Geographically, where does the firm compete?
- Technology—Is the firm technologically current?
- Survival, growth, and profitability—Is the firm committed to growth and financial soundness?
- Philosophy—What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
- Self-concept (distinctive competence)—What is the firm’s major competitive advantage?
- Public image—Is the firm responsive to social, community, and environmental concerns?
- Employees—Are employees a valuable asset of the firm?
What is Organizational Culture?
- Organizational culture has been described as the shared values,
principles, traditions, and ways of doing things that influence the way
organizational members act. - All organizations have cultures, but not all cultures influence employees’
behaviors and actions equally. - Culture is perception
- Culture is descriptive
- Culture is shared.
Which is better, a strong culture or a weak culture?
- Employees are more loyal in
organizations with strong cultures, - Organizations with strong cultures are
associated with high performance. - If values are clear and widely accepted, employees know what they’re
supposed to do and what’s expected of
them, - However, the drawback is that a strong
culture also might prevent employees
from trying new approaches especially
when conditions are changing
How do you build an organizational culture?
- Through Stories – founder, discoveries,
great events - Rituals – ceremonies, rites, events,
celebrations - Artifacts and symbols – uniforms, logos,
pins, awards - Language – jargon, own acronyms
What are the six components of a great company culture?
- Vision: A great culture starts with a vision or mission statement that articulates a company’s purpose. (Non-profit orgs, Apple, Tesla, Ateneo)
- Values: Values are the core of its culture. Values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision. (Japanese
companies) - Practices: Values are of little importance unless they are enshrined in a company’s practices. Walk the talk. (Google, Apple)
- People: No company can build a coherent culture without people who either share its core values or possess the willingness and ability to embrace those values. (stringent recruiting policies, Google)
- Narrative: Any organization has a unique history — a unique story. And the ability to unearth that history and craft it into a narrative is a core element of culture creation. (Coke, Apple, Ford)
- Place: Whether geography, architecture, or aesthetic design — impacts the values and behaviors of people in a workplace. (Silicon valley, Wall St.)
What is BHAGs?
Big Hairy Audacious Goals
- A clear and compelling unifying point of
effort and a catalyst for team spirit - Looks at a long-term goal for the company
- Has a clear finish line
- Not a “sure shot” more of a stretch target
- A powerful mechanism to create a sense of urgency and a goal to rally around
Four types of BHAGs
- Target-oriented BHAG
- Competitive BHAG
- Role-Model BHAG
- Internal Transformation BHAG
What is External Analysis?
- Also called Environmental Scanning or
Industry Analysis Focuses on identifying,
analyzing and evaluating trends and
events beyond the control of a single firm - The external analysis is aimed at
identifying key variables that offer
actionable responses - Reveals key opportunities and threats
confronting an organization so that
managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats
What are the five key external factors?
- Economic factors
- Social, Cultural, Demographic, Natural
Environment factors - Political, Governmental, and Legal
factors - Technological factors
- Competitive factors
What are economic factors?
How economic conditions shift supply and demand to directly affect a
company. This includes economic growth or decline and changes in
inflation and interest rates
Impact of a healthy stock market…
- Stock prices of listed companies are increasing
- Investors and consumers have more wealth
- There is general bullishness and optimism about the future
- Confidence leads to increased spending and investments
- Increased consumer purchases
- Increases earning for businesses
- Over-all GDP growth
Impact of increasing disposable income and consumer spending….
- Households have more money to save or spend
- Growth in consumption
- Increase demand for products
- Good for companies
- More employment
Impact of a strong dollar to the Philippine economy…
- Makes imported goods more expensive
- Purchase of raw materials from other countries now more expensive
- Higher production cost leading to higher prices
- Good for OFWs
- Discourages Filipinos from travelling abroad and spending money
- Leads to higher oil prices because oil globally is priced in U.S. dollars
- But may boost local tourism industry
Impact of the pandemic on the economy…
- Shortened operating hours
- Limited mobility
- Lower demand
- Additional operating costs
- Limited capacity in establishments
- Supply chain disruptions
- Need for delivery and take-out options
- Unemployment and business closures
What are Social, Cultural, Demographic, Natural Environment factors?
*Emerging trends and patterns in population analytics, demographics, and customer behavior that may indicate changes in customer needs and wants
What are Political, Governmental, and
Legal factors?
- The increasing global
interdependence among economies, markets, governments, and organizations
makes it imperative that firms
consider the possible impact of
political variables on the
formulation and implementation
of competitive strategies.
What are technological factors?
New technologies are fueling innovation in many industries, and impacting strategic-planning decisions
Technology is fueling innovation and
digitalization in the following key
sectors:
*Online Media - advertising, gaming, video and music streaming
*E-commerce - buying and selling of goods, online marketplace
*Ride-Hailing and Logistics - parcel and food delivery, and transport services
*Online Travel - flights, vacation, hotel
rentals
*Digital Financial Services - payments,
remittances, lending, investments,
insurance
What is the External Factor Evaluation (EFE) Matrix?
Summarizes and evaluates the external factors: STEP-C
How does the External Factor Evaluation (EFE) Matrix work?
- List 20 key external factors
identified in the external audit
process. - Assign a weight from 0.0 to 1.0 for
each factor. Sum of all weights
must be equal to 1. - Rate the effectiveness of firm’s
current strategies from 1-4 vs. each
factor. (1 is poor, 4 is superior.) - For each factor, multiply weight by
rating. - Sum weighted scores.
- The higher the total score the
better the strategies
What is the Competitive Profile Matrix (CPM)?
- Identifies firm’s major competitors and their strengths & weaknesses
- CPM uses critical success factors to be successful in the industry which
include both internal and external factors. - A weight is assigned from 0.0 to 1.0 for each factor. Sum of all weights
must be equal to 1. - Compares a company to its competitors, revealing relative strengths
and weaknesses - Each firm is ranked vs. competitors (from 1 to 4) based on Critical
success factors and reveals areas for improvement
What is the summary of Session 5: External analysis?
- Increasing turbulence in industries means that external analysis has become a vital part of the strategic management process.
- Firms that do not do external analysis may fail to anticipate emerging opportunities and threats and may pursue ineffective strategies and miss opportunities.
- Quantified, organized, prioritized, and
actionable external information is a key
ingredient for making decisions that result in winning strategic plans and sustained competitive advantages.
