Strategic Purpose -Company Mission Vision Str Intent July 2014

8/11/2019 Strategic Purpose -Company Mission Vision Str Intent July 2014

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Strateg ic Pu rp o s e -vision,Mission,Core Ideology and Values;

Strategic IntentProf Ashish K Mitra


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VISIONMISSION

Founder / StakeholdersTop Management

OBJECTIVES (long term) Business Unit with Top Management

PlansUnit Manager with approval of

superiorPolicies

Goals

Strategies& Tactics

Each Organizational Level, in conformityWith other unit policy

Individual Managers, in conformityWith unit policies

Individual Managers, in conformityWith individual Goals

ORGANIZATIONAL DIRECTION


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Vision & Mission

Organizations Vision & Mission act as guideline /direction for strategy formulation (Establishing Vision / mission are therefore key top leveldi rec t ion se t t ing tasks in any organization )

Process of strategy formulation involves articulating avision , translating vision into a Mission that defines theorganizations purpose , converting mission intoperformance objectives, detailing each objective intospecific goals, and formulating strategies and tactics foraccomplishing the goals.

Vis ion v s Miss ion : What do w e wan t to becom e ?v s What is ou r bus iness ? (w ho w e are , w hat w e do,wh at i s ou r m anagem ent p h i losophy ?)


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Vision A well-conceived vision comprises of two main

components which are complimentary in nature . A Core ideology What we stand for and we exist,

the core values that never changes ordinarily evenwhen technology, competition , management style etcchange

An envisioned future what we aspire to become ,to achieve, to create that demands significantchange and progress . (BHAGs)

Eg: Vision of Tata Steel : we aspire to be the Global Steel Industrybenchmark for Value creation and Corporate Citizenship

Vision is a powerful motivator and keeps an organizationmoving in the forward direction, provides a directionalpath and guides the effort of employees. Theorganizations mission flows from the vision.


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Vision.

Vision is what insiders of organization create or perceive ,

however should also reflect concerns of other stakeholders like shareholders, customers, employees, thelocal community, and society in order to be effective.For example, support of shareholders is necessary to

bring about any major change in the organization. A well drafted vision should be realistic, credible,attractive, and future oriented.

Vision ought to co nv ey a la rger sense of

pu rpo se ( wo r th p u r su ing ) so that thepeople in the organization see themselves asbuilding a cathedral rather than laying stones.


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Vision

A well articulated strategic vision creates enthusiasm forthe course management has charted and engages allmembers of the organization, in which people live thebusiness instead of just coming to work.

They help in creating a sh ared sense of purpo se .Compel people to take risks, experiment with ideas,stretch their energies and take others along a relentlesspursuit to scale new heights.

A vision has far more m otiva t ion al va lue if it stressesthe payoff for customers and/or the general well being ofsociety , not the payoff for shareholders


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Vision Statementssome examples

Scotland Yard :To make London the safest major cityin the World

Charles Schwab : To provide customers with the mostuseful and ethical finance services in the World

General Electric :We will become number one ornumber two in every market we serve, andrevolutionize this company to have the speed andagility of a small enterprise

NIKE:To bring innovation and inspiration to everyathlete in the world

Microsoft : Empower people through great software any time, any place, and on any device


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INTEL:Getting to a billion connected computersworldwide, millions of servers, and trillions of dollarsof e- commerce.

Colgate-Palmolive : To be the company of first choicein oral and personal hygiene by continuously caring

for consumers and partners Tata Steel : we aspire to be the Global Steel Industry

benchmark for Value creation and CorporateCitizenship

Azim Premji Foundation : To significantly contributeto quality universal education as a foundation to a

just, humane and equitable society .


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Reliance Industries Limited :Through sustainablemeasures, create value for the nation, enhance quality oflife across the entire socio-economic spectrum and helpspearhead India as a global leader in the domains wherewe operate

BIOCON : To be an integrated biotechnology enterpriseof global distinction

INFOSYS : We will be a globally respected corporation Ford Motor Company : Our vision is to become the

worlds leading consumer company for automotiveproducts and services.


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Mission Statements Mission is defined as the fundamental and enduring

purpose of an organization ( reason for being) that sets itapart from others of a similar nature Mission identifies the scope of its operation in terms of

produc t , market ( the customer it seeks to serve) , andtechnology thrust areas

Reflects the values, beliefs and priorities of the firmsstrategic decision makers business philosophy , imagecompany seeks to project and firms self -concept

Mission of a business looks to an endless future as if thefirm were immortal

Firms must ensure that their mission remains relevantover time. Mission should not become a trap. Thoughmission is not to be tinkered often, organizations shouldnot be building strategies around a mission that hasbeen robbed of its reality.


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Mission Statements The mission serves as a proclamation to insiders and outsiders onwhat corporation stands for . A mission , however, is not a PR

document; while it legitimizes the corporations existence and role inthe society, its main purpose is to give internal direction for thefuture of the corporation.

One school of thought says that the mission must be stated inprecise & concrete terms . Another school feels that a good measureof generality is desirable, after all, they are not designed to expressconcrete ends; they are intended rather to provide motivation andgeneral direction to everyone and an image , and a guiding

philosophy for the enterprise as a whole. A mission does notrepresent a specific target . At the same time it is not an euphoriaeither

Levitt, in his classic work The Market ing Myo pia forcefully broughtout tragic flaw in viewing ones business scope from a narrowproduct oriented perspective instead of broader need-orientedor fun c t ion or ien ted perspec t ive ( Failed American Railroad defined business as railroads rather than transportation )


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Mission Statements.

The mission is the reference point and guiding spirit forthe growth plan of a firm , its nature and pace. AT&Tsmission stated in initial years to give a telephone toevery American . Later AT&T refined its mission toconnecting people any time, any where . Changes inCorporate mission and business definition are part andparcel of growth process of a firm.

Drucker talks about ensuring mission objective competency fit or congruence for organizations, whichshould be retested based on changes in external and

internal environments. That business mission is so rarely given adequate thought isperhaps the mos t impo r tan t s ing le cause o f bus inessfrustration Peter Druck er


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Mission Statements..

A mission statement usually attempts to answer thefollowing questions: What is our reason for being? What is our basic purpose

( and long term objectives)?

What is unique or distinctive about our organization? Who are, or should be, our principle customers, clients? What are, or should be our principal economic

concerns? What is likely to be different ( from existing state) about

our business three to five years in future ( growth) ? What are our principal products at present and what will

they be in future? What are the basic beliefs, values, aspirations and

philosophical priorities of the firm?


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Formulating a mission statement

The process of formulating a mission for a specificbusiness is best understood by considering the businessat its inception.

A typical business organization begins with theaspirations and beliefs of a single entrepreneur . As the

business takes root and grows or is forced by competitive pressures to alter its product , market or technology , thecompany may redefine its mission statement with moreassertion viz ; who we are and what we do


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Basic products, primary market and principaltechnology used in production or delivery

The three indispensable components of amission statement are the basic product ,the primary market and the principaltechnology / special resources used inproduction or delivery . These threecomponents describe the business activity

of the company.


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Company Philosophy Statement of Companys philosophy ( often called the

company creed ) usually accompanies or appearswithin the mission statement. It reflects the Company philosophy and values give a framework /

boundary for individual actions aimed at achievingcorporate goals .

It reflects the basic beliefs, values, aspirations and philosophical priorities to which strategic decisionmakers are committed in managing the company

Example : Co philosophy of Sun Microsystems We

believe human development to be the worthiest of thegoals of civilization for nurturing growth in the capabilitiesof people


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Values By Values, we mean the beliefs, business principles,

and practices that are incorporated into the way thecompany operates and the behavior of companypersonnel. Value relate to such things as treatment ofemployees and sensitivity to customer wants,integrity, ethics, innovativeness, emphasis on qualityor service, social responsibility, and communitycitizenship . Value statements reinforce thecompanys vision, strategy and operating practices.

Home Depot ( a large chain in US) has embraced

values entrepreneurial spirit, excellent customerservice, giving back to the community, respect for allpeople, taking care of people, building strong relationships, and creating shareholder value.


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Sonys vision rests on the values ofencouraging individual creativity and itsdetermination to be a pioneer

Intels corporate values consist of discipline,risk taking, quality, customer orientation, aresult oriented atmosphere, and being a greatplace to work

DuPont , which calls itself a sciencecompany and makes a wide array ofproducts, stresses four values safety,ethics, respect for people, and environmentalstewardship.


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Public Image

The issue of public Image is increasinglybecoming important, m ore so for agro w ing f i rm that i s redef in ing m arkets ,p ro du c ts , and i t s m arkets . Companysmission statement should take intoaccount public image that company wants

to create . For example Johnson &Johnson products are regarded as safeand Sonys as quality products .


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Examples of mission statements Cadbury India : To attain leadership position in the

confectionary market and achieve a strong nationalpresence in the food drinks sector

Reliance Industries : To become a major player in theglobal chemicals business and simultaneously grow inother growth industries like infrastructure

Mckinsey & Co : To help business corporations andgovernments to be more successful

Merck : : To provide society with superior products andservices innovations and solutions that satisfycustomer needs and improve quality of life.

Eastman Kodak we are in the picture business ONGC To stimulate, continue and accelerate efforts

to develop & maximize the contribution of the energysector to the economy of the country


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Pfizer Inc : Pfizer is a research-based , globalpharmaceutical company. We discover and develophelp them enjoy longer, innovative, value addedproducts that improve quality of life of people around theworld and help them enjoy, healthier, and moreproductive lives. The company has three business segments: health

care, animal health and consumer health care. Our

products are available in more than 150 countries Ritz-Carlton Hotels : The Rtz-Carlton Hotel is a place

where genuine care and comfort of our guests is ourhighest mission. We pledge to provide the finest personal service and facilities for

our guests, who will always enjoy a warm, relaxed yet refinedambience. The Ritz-Carlton experience enlivens the senses, instills well-

being, and fulfills even the unexpressed wishes and needs of ourguests.


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The Gillette Company : Our mission is toachieve or enhance clear leadership, worldwide,

in the existing or new core consumer productcategories in which we choose to compete.Current categories are: Male grooming products, including blades and

razors, electric shavers, shaving preparations . Female grooming products, including . Alkaline and special batteries and cells. .. Values: In pursuing our mission, we will live by

following values- People- Customer Focus- Good Citizenship


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Microsoft For years mission that drove Microsoft

was a computer on every desk & every home usinggreat software as empowering tool . Its new mission for2013 and beyond is "to create a family of devices andservices for individuals and businesses that empowerpeople around the globe at home, at work and on the go,

for the activities they value most." In 1999 broadened itsvision- Empower people through great software anytime, any place, and on any device

OTIS Our mission is to provide any customer a meansof moving people and things up, down, sideways overshort distances with higher reliability than any similarenterprise in the world

Bristol-Meyers Sqib our mission is to extend andenhance human life by providing the highest qualityhealth and personal care products. We intend to bepreeminent global diversified health and personal care


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Mission Statement of Azim Premji Foundation ..

Catalyze a national movement for Universalization ofElementary Education in India.

Achieve significant improvement in the quality ofeducation as a sustained method for attracting andretaining children in the school

Work with existing government initiatives and create newones to improve access, content and delivery ofeducation.

Build active, sustainable partnerships with individuals,community at large, government and other organizationscommitted to the field of education to leverage the effort

for optimum results. Enable schools to guarantee learning Develop world class human resources in the field of

education


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Mission statement of TCS is : To help customers achieve

their business objectives by providing innovative, best-in-class consulting, IT solutions and services. Make it a joyfor all stakeholders to work with us.

The values guiding the organization are specified as :

Integrity, Leading Change, Excellence, Respect for theindividual, and Learning and sharing .


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David Nine components of a mission statement

Customers Products or services Markets Technology Concern for survival, growth and profitability Philosophy Self-concept

Concern for Public Image Concern for employees


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Process of developing a mission statement Process of development of mission statement should

create an emotional bond & sense of mission betweenorganization & employees . Emotional bond comes whenan individual identifies with the underlying values &behavior of a firm .

Involve as many managers & employees in process ,brings commitment.

An approach often used is to select several articles aboutmission statement, ask people to read as backgroundinformation.

Set up discussion groups, hire consultants / facilitators tomanage process / draft language, get unbiased view

Decide how best to communicate to all stakeholders


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Strategic Intent C K Prahalad & Gary Hamel highlighted the concepts of

Strategic intent based on deep study of success of smallerJapanese rivals over giant established Americancorporations in 1980s in their book Competing forFuture.

Strategic Intent is defined as the ability of the firm to thinkbeyond its resources at a given point of time and define its

purpose in terms- such as challenging the market leader orindustry leader, achieving something very laudable over along horizon. Since Strategic intent envisages thecompanys position in the long term - it conveys a sense of

direction. Strategic Intent is described as a way of creating anobsession with winning, amongst all levels of employeesand across all functions of the organisation . It is a sharedcompetitive agenda for . Employees will be inspired / excited

about the feeling of exploring something new i.e, discovery


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Strategic intent also generates an emotional connection . Employeesfeel passionate that the pursuit of the companys goals is a worthwhile

experience . In this way it gives rise to a shared destiny. Examples : Success stories of Komatsu vis--vis Caterpiller

Komatsu set out to encircle Caterpillar. Cannon sought to BeatXerox .. And Honda strove to become a second Ford amautomotive pioneer .. John F Kennedy in 1960 USA will put the firstman o the moon by end of the decade

Strategic Intent : is the dream that energizes a company. Thestrategic intent that provides the emotional and intellectual energynecessary for the long journey. It gives employees at all levels of acorporation: A sense of direction A sense of discovery every individual enjoys exploring some thing

new A sense of Destiny

Conventionally , strategy attempts to ensure a fit betweenexisting resources and emerging opportunities. In contrast, theconcept of strategic intent involves the deliberate creation of a

situation of misfit between resources and aspirations


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Competitive Strategy as Leverage Leverage comes into picture when a resource- scare firm

is facing a resource rich rival like one who may havehigh financial resources and / or high market share andrevenue. Leverage is to do more with less

North Vietnam in its conflict with US a good example ofresource leverage. Resource scarcity gave rise tocreativity.

GM was rich, had invested billions in automatingmanufacture. But did not adequately rejuvenatedmanagement processes and work flows, supplierrelationships . It lacked the skill & will to leverageresources.

Smaller Japanese challengers changed the rules of thegame. Looked for gaps in bigger firms defenses . Focusedits investments on relatively fewer competencies wherethe firm saw chances of becoming a leader.


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Created Lean m anu fac tur in g methods to domore with less . As they had fewer designers,they were constrained to reduce productdevelopment times and subsequently the cost ofintroducing new product lines

The need for shorter product development period

encouraged cross-functional communication . Resource limitation made them develop capablesupplier base, which shared a substantial burdenof innovation.

Japanese firms could not think of corporateoverheads or excess management layers. Itwould choose only a few goals , which will havefull top management support.


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Japanese managerial ingenuity is credited

for perceiving competition asenc i rc lem ent ra ther than co nfro nta t ion ,an inclination to reduce the time taken for

product development , tightly knit crossfunctional teams , a focus on corecompetencies , close links with suppliers ,and a program for employee involvement .


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Som e of the prem ises on Which Leveraging Operates

A firm is a portfolio of resources (as well it is aportfolio of products or businesses)

Resource constraints not necessarily prevent afirm to achieve global leadership

Leverage-based efficiency gains come primarilyfrom ra is ing th e nu m erator in productivityratios rather than from reducing thedenominator.

The resour ce a lloca t ion task of managementhas received too much attention as compared to

the task o f resou rce leverage. The capacity for resource leverage oftenseparates winners in prolonged battles forindustry leadership


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Strategic intent involves significant stretch for theorganization.. Existing skills, capabilities , and resourcesare not considered sufficient for the task.

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Strategic Purpose -Company Mission Vision Str Intent July 2014