Concept of Obj., Mission & Vision

8/22/2019 Concept of Obj., Mission & Vision

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CONCEPT OF OBJECTIVE, MISSION AND VISION

Strategy, in general, covers the following aspects:

1. Exploring and determining the vision of the company in the formof a vision statement.

2. Developing a mission statement of the company that should

include statement of methodology for achieving the objectives,

purposes, and the philosophy of the organization adequatelyreflected in the vision statement.

3. Defining the company profile that includes the internal culture,

strengths and capabilities of an organization.

4. Critical study of external environmental factors, threats,

opportunities etc.

5. Finding out ways by which a company profile can be matched

with its environment to be able to accomplish mission statement.


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6. Deciding on the most desirable courses of actions for

accomplishing the mission of an organization.

7. Selecting a set of long-term objectives and also the

corresponding strategies to be adopted in line with vision

statement.

8. Evolving short-term and annual objectives and defining the

corresponding strategies that would be compatible with themission and vision statements.

9. Implementing the chosen strategies in a planned way based on

budgets and allocation of resource, outlining the action programs

and tasks.

10.Installation of a continuous compatible review system to create

a controlling mechanism and also generate data for selecting

future course of action.


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Elements In Strategic Management Process

Each phase of strategic management process can be viewed to be

consisting of a number of elements, which can be clearly defined

with input and output relationships.

The steps have logical connectivity and hence these are sequential

which can be considered as comprehensive.

1. Defining the vision of the company

2. Defining the mission of the company

3. Determining the purposes or goals

4. Defining the objectives

5. Environment scanning

6. Carrying out corporate appraisal


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7. Developing strategic alternatives

8. Selecting a strategy

9. Formulating detailed strategy

10. Preparing a plan

11. Implementing a strategy

12. Evaluating a strategy


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Vision of The Company

Vision of a company is rather a permanent statement articulated

by the CEO of the company who may be Managing Director,

President, Chairman, etc. The purpose of a vision statement is to:

1. Communicate with the people of the organization and to those

who are in some way connected or concerned with the

organization about its very existence in terms of corporate

purpose, business scope, and the competitive leadership.

2. Cast a framework that would lead to development of

interrelationships between firm and stakeholders viz.employees,

shareholders, suppliers, customers, and various communities that

may be directly or indirectly involved with the firm.

3. Define broad objective regarding performance of the firm and its

growth in various fields vital to the firm.


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FEATURES OF STRATEGY:

1. Strategy relates the firm to its environment

Strategy relates particularly the external environment in allactions whether objective setting, or actions and resources

required for its achievement.

This definition emphasizes on the systems approach of

management and treats an organization as part of thesociety consequently affected by it.

2. Strategy is the right combination of factors

It is a combination of both external and internal factors.

In relating an organization to its environment, the

management must consider the internal factors like its

strengths and weaknesses, to take various courses of action.


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3. Strategy is relative combination of actions

The combination is to meet a particular condition, to solve

certain problems, or to attain a desirable objective.

It may take any form; for every situation it varies and,

therefore, requires a somewhat different approach.

4. Strategy involves contradictory action

Since strategic action depends on environmental variables, amanager may take an action today and revise or reverse his

steps tomorrow depending on the situations.

5. Strategy is forward looking

It has orientation towards the future. Strategic action isrequired in a new situation.

Nothing-new requiring solutions can exist in the past, and

so strategy is relevant only to the future.


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Strategy and Tactics

The major difference between strategy and tactics is that strategy

determines what major plans are to be undertaken and allocates

resources to them, while tactics, in contrast, is means by whichpreviously determined plans are executed.

Distinction between Strategy and Tactics

1. Level of Conduct Strategy is developed at the highest level of management either

at the headquarter or at major divisional offices and related

exclusively to decisions in the province of these levels.

Tactic is employed at and relates to lower levels of management.


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2. Periodicity

The formulation of strategy is both continuous and irregular. The

process is continuous but the timing of decision is irregular as it

depends on the appearance of opportunities, new ideas, crisis,management initiative, and other non-routine stimuli.

Tactics is determined on a periodic basis by various

organizations. A fixed timetable may be followed for this

purpose, for example, preparation of budgets at regular intervals.

3. Time Horizon

Strategy has a long-term perspective; especially the successful

strategies are followed for quite long periods. In occasional

cases, it may have short-term duration.

On the other hand, time horizon of tactics is short-run and

definite. The duration is uniform, for example budget

preparation.


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4. Uncertainty

Element of uncertainty is higher in the case of strategy

formulation and its implementation. In fact, strategic decisions

are taken under the conditions of partial ignorance.

Tactical decisions are more certain as these are taken within the

framework set by the strategy. Thus, evaluation of tactics is

easier as compared to evaluation of a strategy.

5. Information Needs

The total possible range of alternatives from which a manager

can choose his strategic action is greater than tactics. A manager

requires more information for arriving at strategic decision.

Tactical information is generated within the organization

particularly from accounting procedures and statistical sources.


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6. Subjective Values

The formulation of strategy is affected considerably by the

personal values of the person involved in the process. For

example, what should be the goals of an organization is affectedconsiderably by the personal values of the persons concerned.

On the other hand, tactics is normally free from such values

because this is to .be taken within the context of strategic

decisions.

7. Importance

Strategies are most important factors of organization because

they decide the future course of action for the organization as a

whole.

On the other hand, tactics are of less importance because they

are concerned with specific part of the organization. This

difference, though seems to be simple, becomes important from

managerial action point of view.


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8. Type of Personnel Involved in Formulation

Generally separate group of managerial personnel are involved

in strategy and tactics formulation and their implementation.

As discussed earlier, strategic decisions are never delegatedbelow a certain level in the managerial hierarchy.

Tactical decisions can be taken by personnel at lower levels

because these involve minute implementation of strategic

decisions.

Though these differences between strategy and tactics are there, often

the lines of demarcation between these two are blurred both

conceptually and operationally.

At the one extreme end, the differences are crystal clear, as discussedabove. But these differences may not always hold true because tactics

is generated by strategy and may rightly be called sub-strategy.

What is one managers strategy is anothermanagers tactics and vice-

versa.


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Policy

The term policy has more precise definition as compared to

strategy.

It has been derived from the Greek word politeia meaning

citizen and Latin word politis meaningpolished, i.e., clear.

According to New Webster Dictionary, policy means the art of

manner of governing a nation, the line of conduct which rulers of

a nation adopt on a particular question specially with regard to

foreign countries, the principle on which any measure or course

of action isbased.

While these descriptions of policy relate to any field, policy in

management context is defined by Weihrich and Koontz as

follows:

Policies are general statements or understandings which guide

or channel thinking in decision making.


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Kotler has defined policy more elaborately as follows:

Policies define how the company will deal with stakeholders,

employees, customers, suppliers, distributors, and other

important groups. Policies narrow the range of individual

discretion so that employees act consistently on important

issues.

We may define the policy as follows:

A policy is the statement or general understanding, which

provides guidance in decision making to members of an

organization in respect to any course of action.


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FEATURES OF A POLICY

1. A policy provides guidelines to the members of the organization

for deciding a course of action and, thus, restricts their freedom

of action. Policy provides and explains what a member should dorather than what he is doing. Policies, when enforced, permit

prediction of roles with certainty. Since a policy provides

guidelines to thinking in decision- making, it follows that it must

allow some discretion; otherwise it will become a rule.

2. Policy limits an area within which a decision is to be made and

assures that the decision will be consistent with and contributive

to objectives. A policy tends to pre-decide issues, avoid repeated

analysis, and give a unified structure to other types of plans, thus

permitting managers to delegate authority and still retaining

control of action. For example, if the organization has framed a

policy that higher positions in the organization will be filled by

internal promotion, the managers concerned can deal with the

situation in this light whenever a vacancy at higher level arises.


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3. Policies are generally expressed in qualitative, conditional, or general

way. The verbs most often used in stating policies are to maintain, to

continue, to follow, to adhere, to provide, to assist, to assure, to

employ, to make, to produce, or to be.

Such prescriptions may be either explicit or these may be interpreted

from the behavior of organization members, particularly at the top

level. When such a behavior is interpreted as policy guideline, it is

normally known as precedent that is what has happened in the past on a

particular issue if there is no clearly specified declaration.Policy formulation is a function of all managers in the organization

because some form of guidelines for future course of action is required

at every level. However, higher is the level of a manager, more

important is his role in policy making. Similarly, policies may exist in

all areas of the organization from major organizational policies tominor policies applicable to the smallest segment of the organization.


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Policy and Strategy: A Comparison

Strategy is now the more common term for what used to be called

policy, though there is no consensus on this also. For example, some

writers make distinction between the two referring as the general or

grand strategy as policy and competitive; strategy as the strategy used

in military sense. The situation is, therefore, still confusing. Steiner has

observed that for some years and after much travail, the term policy

was fairly understood.

Then the game theorists began to use the term strategy with re resultthat management literature now is thoroughly confused about its

meaning and relationship to policy. However, in this text, two terms

have been used with fairly different meaning and based on that, the

difference between the two can be identified.


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A distinction between policy and strategy is made on the basis that former

is a guideline to the thinking and action of those who make decisions

while the latter is concerned with the direction in which human and

physical resources are deployed in order to maximize the chances of

achieving organizational objectives in the face of environmental

variables.

Ansoff makes difference between policy and strategy by putting that

policy is a contingent decision whereas strategy is a rule for making

decision. A contingent event is recognized because it is repetitive butthe specific occurrence cannot be specified. For such repetitive events,

it is not worthwhile to decide every time what to do when such a

contingency arises. It is better to decide in advance what ill be done in

such a case.

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Concept of Obj., Mission & Vision