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Unit 7.11 Developing Organizational Vision and Strategic Direction
Table of Contents
Table of Contents....................................................................................................... 1
2.3 Assess ways of communicating the vision to external stakeholders.................9
3.4 Outline the strategic planning process for an organization.............................12
References................................................................................................................16
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Unit 7.11 Developing Organizational Vision and Strategic Direction
Introduction
A business organization needs to follow a encouraging, ambitious and inspirational direction to
take itself to summit of success. A vision can play this role to develop organizational
effectiveness and may contribute and design the strategic direction as well. In these essay
different aspects of vision and strategic direction is discussed.
1. Understand how to develop a vision for an organization
A vision is an important statement, which guide and motivate an organization and its employees
to achieve its operational objectives. In this section, the role of key stakeholders and their
relationship to vision is discussed. Besides, factors which are impacting organization and its
vision is discussed with necessary clues on strategic direction. In this assignment, for the
convenience of referral, McDonald is chosen.
1.1. Assess the role of key stakeholders in relation to the vision
To assess the role of key stakeholders relating to vision statement of McDonalds, the nature of
vision need to be understood. A vision sets out what the organization wants to accomplish, and
should inspire members, staff and supporters. Vision statements may describe:
how things would be different as a result of the organizations activitieseg.
Canadian Cancer Society: Creating a world where no Canadian fears cancer
how the organization wants to be seen by otherseg. Canadian Institute of
Chartered Accountants: We are Canadas most valued, internationally recognized
profession of leaders in senior management, advisory, financial, tax and assurance roles
Good visions are aspirational. Some are hardtoreach ideals while others are more modest or
describe objectives that are achievable in the near future. In either case, the vision helps establish
the unique contribution that the organization makes to society. From a practical perspective a
vision can be a quick, memorable way to describe the organizations reason for being. This can
be valuable in times of crisis when it helps to remember what is really important. The vision and
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mission are often published in the organizations annual reports, brochures and fundraising
materials. now in the following figure, different types of stakeholders of mcdonalds is showed.
There three different catagories of stakeholders are found.
Figure 1: The Three Stakeholder Groups (Hitt et al 2007)
It is crucially important to stakeholders that organizations are well led and know what they want
to be famous for. At its core is having strong organizational vision and direction, and having the
confidence to make decisions to follow this through. We have found that those organizations that
rate best among their stakeholders are those with the greatest clarity of purpose stakeholders
want to know what an organization is doing to add value to them. Critics typically mention that
they are unclear about the role of an organization or the value that it provides:
There isnt a clear vision about what their role is, I dont think. They seem to be faced with
constant change about what their role should be.
Just as with customer satisfaction, stakeholder perceptions while influenced by
communications have to be built on a solid base. An organization that is clear about its
objectives and successfully meets them will be recognized as such by stakeholders. This means
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that good stakeholder management is about much more than PR or spin it gets to the heart
of the effectiveness of an organization.
1.2. Analyze factors that will impact on the organization and its vision
There are different factors which can have impact on the organization and its vision. For
different companies, PESTLE is analysed very common for the identification of the condition
and placement of an organization. in the following section . The meanings of various PESTLE
categories are discussed broadly in the next section. But initially brief contents or each category
are given below-
Political factors covers mostly about the government and its policy imposed on the economy
based on political interest. A vision can be affected by political factor, such as tax policy for
pricing, labor law for compensation management, environmental law for protection, trade
restrictions, tariffs on imports and exports, and political instability. Furthermore, some nations
put some restriction on different products based on their political interest, they have two different
priorities and restricts for goods they wanted and goods they do not wanted. In this case the
company need set its vision congruent with the political policies and intervention.
o The international operations of McDonalds are highly influenced by the
individual state policies enforced by each government.
Economic factors is very important for a business to start and to continue its profitability.
Economic factors which can affect vision negatively include decreasing rate of economic
growth, high interest rates, higher exchange rates and the higher inflation rate. Economic factors
have significant impact on business operation and decision making regarding investment and
costing.
o
For McDonald, it has created a favorable economic condition in differentcountries in the world. Though it has to experience hardship when economy falls
and change occurs in exchange rates.
o But the company has a position of Market leader in different countries
o Very high target market.
o Low cost and more incomes.
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o The rate at which the economy of that particular state grows determines the
purchasing power of the consumers in that country.
Among the other elements of PESTLE, Social factors are having less impact and it is
manageable in some cases very easily compare to other elements. Social factor include different
cultural aspects, health consciousness of the citizen, population growth rate, inhabitants age
distribution, career attitudes and aspirations, priority and emphasis on safety. Social factors can
impact on preparation of vision, by the demand manipulation of a company product and
acceptability of product feature with company nature as well.
Working within many social groups.
Increase employments.
Technological factors are involve with different technological improvement and up gradation in
different function of a business and the factors which may negatively affect the vision statement
of a company, low chance to research and development activity for product development, no
opportunity to automation, unavailability of technology incentives and the rate of technological
change is very frequent.
o Advanced technology development.
o Quality standards.
There are different types of legal factors which may intervene on the nature and operation of a
business and as it may affect a business, to vision can also be affected. The legal factors which
can affect a vision of a company include discrimination law, consumer law for safe practice of
foods, antitrust law for intellectual rights, employment law controlling labor practice, and health
and safety law etc.
o Quality packing.
o Local manufacture using foreign supplies.
Lastly, Environmental factors may also affect the nature and contents of a vision statement. As
the environment become important for the survival of human kind, businesses should not do
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anything which may harm environment. For this reason, in almost every country in the world,
people want to protect environment from business and its by products. The environmental factors
include ecological and environmental aspects such as weather types and its trend, climate change
and its frequency etc, these environmental factors can affect the vision statement tourism,
farming, and insurance based businesses. For McDonalds, the impact of environmental factors
can be on
o Legislation for product based on environment
o Sustained logo.
Apart from the PESTLE factors, other factor which may have impact include Government policy
and legal requirements in a market, regulatory and accountability factors for control and guidethe , best practice and industry trends, global factors, gathering data on factors
1.3. Create a vision for an organization
As written in the earlier sections, that vision is a guidance to set up a mission and establish the
values to achieve and fulfill it. In the following section, the vision, mission and value statements
of Mcdonalds are written below.
McDonald's vision is emphasis on two elements, firstly, be a best quick service restaurant and
secondly, maintain quality, service, cleanliness for ensuring value of the product and the
customer as well. But the vision may be strengthened if the statement added with employee
engagement and empowerment. The organization is not only for consumer satisfaction but it is
for employee satisfaction as well.
Mission & Values
McDonald's brand mission is to be our customers' favorite place and way to eat. Our worldwide
operations are aligned around a global strategy called the Plan to Win, which center on an
exceptional customer experience People, Products, Place, Price and Promotion. We are
committed to continuously improving our operations and enhancing our customers' experience.
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McDonalds Values
We place the customer experience at the core of all we do.
We are committed to our people.
We believe in the McDonalds System.
We operate our business ethically.
We give back to our communities..
We grow our business profitably.
We strive continually to improve. (about McDonalds 2011)
1.4. Determine the strategic direction for the organization
To determine the strategic direction for the organization, there are different tools and techniques
available for the analysis. In the following figure, the BCG matrix is used to determine the
strategic direction of the organization. The product portfolio suggests the following strategies for
products or business units falling into certain categories:
cash cow milk and redeploy the cash flow
dog liquidate or divest and redeploy the freed resources or proceeds
star strengthen competitive position in growth industry
Question invest as appropriate to secure and improve competitive position.
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Here the evaluating factor and criteria for analysis is the growth rate and relative market share.
Based the recent financial and operational performance, Mcdonalds
2. Understand how to communicate the vision to stakeholders
After setting up a vision statement, the success and implementation of the vision statement is
depend on the effective promotion and communication of the vision to the different stakeholders.
For that reason, In this section different perspective of communicating vision to stakeholders is
discussed.
2.1. Analyze methods to communicate the vision to engage and inspire others
within the organization
In the organization there are both external and internal group of stakeholders. And it is very
important that the stakeholders and their interest should be in line with the vision statement of
the company. In McDonalds, the vision identified earlier, should be communicated properly to
get the best performance from the business operation. There are different methods to
communicate the vision to inspire others in the organization. These include the following-
Presentation using multimedia
Question
Marks
Cash Cows Dogs
Relative Market Share
Position
IndustrySalesGrowthRate
StarsMCD
Figure 2: Strategic direction for McDonalds
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Stressing importance about implementation of the vision
Gaining agreement with the stakeholders about the nature and the outcome of the vision
Establish different corporate style for communicating vision to stakeholders
Develop different communication tools and techniques and promotion to let the distance
stakeholder
For the stakeholders who are reachable in very short time, can be communicated easily, but for
the distant stakeholders like government, pressure groups, regulators etc need to be considered
specially to communicate the vision to them.
2.2 Assess how to build support for the vision within the organization
In a big organization like McDonalds, building support for the vision within the organization is
crucial for the future growth and survival of the company. To build support for the vision,
McDonalds, should do the following -
Communicating clearly and effectively,
Maintain equality in every parts of the business
Face and justify the challenging behaviours based on effective communication
Deters attitudes that do not support vision,
Improve and strengthen the negotiation skills,
Change the system if it favors the new vision or support the operation in the new vision
guided operation.
2.3 Assess ways of communicating the vision to external stakeholders
There are different ways to communicate the vision of McDonalds to its external stakeholders. In
the earlier section, the communication method described and analyzed were for both external and
internal stakeholders. External stakeholders are not easy to reach and convenient. For this reason,
there should be some different and effective ways to communicate with external stakeholders.
The ways to communicate with external stakeholders include the following
Arrange adequate promotion of the vision statement
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Analysis of the benefits of the new vision and promote the benefits as well
Include a feedback mechanism in the communication system, so that it can help to
strengthen the communication process by repairing it continuously based on the
feedbacks
McDonalds may add cost benefit analysis to show importance and necessity of the vision
and its incremental benefits overlapping the cost.
3. Understand how to implement the vision and strategic direction within the
organization
Now we have understood the vision of McDonalds and its strategic direction. The next step is to
implement the division and strategic direction in the organization.
3.1 Analyze leadership behavior to promote the vision within the organization
McDonalds is a very large fast food chain in world. And it has operation in different countries,
culture, regions, community; ethnicity etc. to keep the vision encouraging for all its employees
and make it a directive for the company, McDonalds needs to have congruent leadership
behavior. For promoting the vision of McDonalds, the managers and staffs need to have some
important leadership behavior, which may include-
Being a Role Model for Integrity & Ethics
Establishing a Vision & Mission for set priorities and preferences
Setting Strategy & Priorities for upcoming objectives and targets
Building High Performance Teams and encourage team work
Motivating & Inspiring Others for goal attainment
Delegating new and potential clients & Empowering employees for skill
development
Listening and Communicating to employees and staffs
Managing & Evaluating Performance in bias free mode
Coaching & Developing Talent with integrity and honesty
Managing Complexity & Ambiguity (Arneson 2009)
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In the top leadership behaviors, it can be noticed that these behavior related to consultative and
participative leadership and management style. Apart from that, this leadership behavior, specially
listening, communicating, setting strategy and priorities etc are very supportive to promote the vision and
mission of a company. Besides, managing change resulting from new vision statement or modification in
vision statement is very important to promote vision in a company. As McDonalds is a large company
and it has lots of workers around the world, so it need be more careful in change management and there
one should play the role of initior for the change adaption and then spread it in the whole organization. In
this case personal credibility and belief is very important and necessary for effective promotion of vision.
3.2 Assess how the vision can be embedded within the organization
To embed the vision, McDonalds can have a number of options or set of activities to do.
Adaption and understanding is important in the embedding process for vision. In the vision ofMcDonalds, they have given emphasis on quick service and quality customer service as well. But
the employees should be priorities in this vision as well, because the vision guide the staffs and
employees. There are different tools to use to embed the vision in McDonalds; the tools include
the following-
top down, , in this process, embedding is started from the top level management of an
organization and continue to bottom level.
bottom up, this embedding process is opposite to top down approach
consultative styles, taking opinion and suggestion from all levels and then make an
effective embedding process of vision after change adoption
to used these tools , an employee or manager needs to identify procedures, activities, values
related to the vision statement and work on it as guided by the above tools. In this case it may
demand change in language which is not consistent with vision and replacing them; or updating
the organizational culture to promote vision and go for it .
3.3 Translate the vision into organizational objectives to set the strategic direction
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McDonald's vision is to be the world's best quick service restaurant experience. Being the best
means providing outstanding quality, service, cleanliness, and value, so that we make every
customer in every restaurant smile and the synergies is created from the congruent mission
statement and value statement as described in the previous section. If the strategic objective of
McDonalds is to be the top and the number one fast food chain in the world, the vision statement
is effectively in line with the strategic objective. And the link between the vision and operational
objectives, devise a very efficient way to their goal fulfillment.
In this way, McDonalds, become the top performers among the worlds leading fast food chains
include subway, KFC, Burger King etc. and it can be found that the key competitive advantage is
the quick but quality service to correct segment of a fast food market. In the translation of vision
into the organizational objective, the role of stakeholders is the crucial one and without the role
fulfillment, it may not be possible to attain those strategic objectives in a correct direction.
3.4 Outline the strategic planning process for an organization
To prepare a outline of a strategic planning process, the key components of the process needs to
be known. There are four major part of the strategic planning process, which is showed in the
following figure.
Vision and mission statements are discussed in the previous sections. Values are beliefs that are
shared among the stakeholders of an organization. In setting an organizations future, a value
plays an important role, because a value of an organization set priorities and culture within which
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the operations of the business are surrounded. To make decisions, another important thing is
need with vision, mission, values; which is strategy. It sometimes referred as the art of general.
Strategic planning process
There are different types of strategic planning process and the processes are sometime looks very
simple and sometimes very complex. In the following section, two different strategic planning
process is illustrated.
Situation-Target-Proposal
Situation - evaluate the current situation of a business and analyze the source of the
problem as well.
Target define and determine the goals and/or objectives to be targeted
Path / Proposal - map a possible route to completely achieve the goals/objectives
Another approach of strategic planning is the Draw-See-Think-Plan approach, there based on the
flow of information and system drawn by the process, a plan is prepared for the strategy
development. In the following figure , the step by step process of anther approach of strategic
planning is shown-
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Figure 3: Draw-See-Think-Plan approach
Draw
SeeThin
k
Plan
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The strategic planning process can be customized according to the need of an organization and to
congruent with the operational design. But the major steps will be the same as written in the
above section.
Conclusion
Strategic planning is a foundation of set an effective strategy for organizational effectiveness and
business success. In this matter, vision is an important element which guides strategic direction
to the right way. So taking insights from experts and stakeholders with the direction of vision an
organizational can achieve its mission and business objectives.
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References
About McDonalds (2011) vision, mission and values of McDonalds, retrieved from
http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html
Arneson, S. (2009) The 25 most important leadership behaviors. retrieved
from http://www.examiner.com/leadership-in-national/the-25-most-important-
leadership-behaviors
Dobson, P.;Ken Starkey,K. annd John Richards (2004) Strategic management : issues and cases
2nd ed. Baskerville: Blackwell publishers
Hitt,M. A. ; Ireland, R. D. and Hoskisson, R. E. (2007) Strategic Management:
Competitiveness and Globalization (Concepts and Cases), Seventh Edition. London:south western cengage learning
Kaplan, R. S.; Norton, D.P. and Burrows Jr., E.A. 2008 Developing the strategy:
Vision, value gaps and analysis. Balance Score card Report, January-February
issue
Maker, A. (2011) Three leadership behaviors of successful project managers.
Retrieved from http://www.techrepublic.com/blog/tech-manager/three-
leadership-behaviors-of-successful-project-managers/5643
Morden, T. 2007 Principles of strategic management, 3rd ed. Hampshire:
Ashgate Publishing Limited
Pearce II, J. A. & Robinson, R. B. 2005 Strategic Management, Formulation,
Implementation, and Control. 9th ed. New York-McGraw-Hill
Thompson, J. & Martin, F. 2007 Strategic management, 5th ed. New York-
McGraw-Hill
http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.htmlhttp://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html