Professional Documents
Culture Documents
Strategic Direction
Identifying the Organisations purpose, aims, objectives and goals
Key Issues:
2)The Interested Parties 3)The Method of Communication 1)The Message
The Message:
Why does the firm exist? What is its aim and objectives? How will it achieve these?
What strategies?
Mission Statements
Mixed reception: Smoke and mirrors (Barkhus et al (2000) Building blocks, invisible hand (Strong 1997) Motherhood statements, the hippocratic or hypocritical oath, lantern, anchor, conscience, office manifesto, company slogan, motto, (Fletcher 2001)
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1. Mission
An overriding purpose in line with the values and expectations of stakeholders . Johnson & Scholes
3. Aim
A broadly-worded, general statement of goal or purpose. Personal example: To lose weight and gain muscle .
4. Strategic Objective
A quantification of that goal. Personal example: To lose 10 kg .
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Mission Statements
Often summarises the firms reason for existing The starting point for recognising the future direction of the firm and therefore the required strategic developments. Should be:
Simple, Easily Remembered, Impactful Positive, visionary & motivating
Should outline
Firms role What it wishes to achieve
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2)Strategy
How the firm will achieve its aspirations.
What is it offering? To whom? Why should people buy it? What are its competitive advantages?
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4)Behaviour standards
The routines, procedures and policies the firm adopt to fulfil its values
What is the firm willing to do/not do in order to succeed? How low will it go?
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TUI Nordic: Most satisfied customers and best profitabilty in the business
McDonald's Corporation: Quality food products; efficient, friendly service; and restaurants renowned for the cleanliness and value they provide (Sufi
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Some More
Otis: To provide any customers means of moving people and things up, down, and sideways over short distances with higher reliability than any similar enterprise in the world
Avis: Our mission is total customer satisfaction BA: Be the best and most successful company in the airline business
Easyjet:To provide our customers with safe, low-cost, good value, pointto-point air services. To offer a consistent and reliable product at fares appealing to leisure and business markets from our bases to a range of domestic and European destinations. To achieve this we will develop our people and establish lasting partnerships with our suppliers Kodak: To be the worlds best in chemical and electronic imaging
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Shangri la Hotels
Our Vision The first choice for customers, employees, shareholders and business partners Our Mission Delighting customers each and every time Our Guiding Principles (Core Values) We will ensure leadership drives for results. We will make customer loyalty a key driver of our business. We will enable decision making at customer contact point. We will be committed to the financial success of our own unit and of our company. We will create an environment where our colleagues may achieve their personal and career goals. We will demonstrate honesty, care and integrity in all our relationships. We will ensure our policies and processes are customer and employee friendly. We will be environmentally conscientious and provide safety and security for our customers and our colleagues.
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Some Visions
Tui Nordic = Making holiday dreams come true
Nike (1960s): Crush Adidas Giro Sport Design (1986): Become the Nike of the cycling industry
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Consistent with the Mission and Aim. One direction, avoid dissonance!!!
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Objectives - Examples
A larger market share Quicker design-to-market times than rivals Higher product quality than rivals Lower costs relative to key competitors Broader / more attractive product line than rivals A stronger reputation with customers than rivals Superior customer service Recognition as a leader in technology and/or product innovation Wider geographic coverage than rivals
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Objectives - Financial
Increased growth in revenues / earnings/ dividends per share Wider profit margins Attractive ROI Strong credit ratings Positive cash flows Recognition as a blue chip company Stable earnings during periods of recession A more diversified revenue base A rising stock price
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To become the most competitive enterprise in the world by being No.1 or No.2 in market share in every business the company is in
30% of the companys sales must come from products fewer than 4 years old
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Interest Groups
Shareholders / Board Senior Management Middle Managers / Operating Core
Interest Groups
Customers / Competitors
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Stakeholders
Definition:
Stakeholders are groups or individuals who have a stake in, or expectation of, the organisations performance .....
Johnson ,Scholes & Whittington Exploring Corporate Strategy
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Frames of Reference
Functional/ divisional
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Few Problems
Power
HIGH
Predictability
Minimal Effort
Keep Informed
Power
HIGH
Keep Satisfied
LOW
Key Players
HIGH
Levels of Interest
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Sub-group EMPLOYEES
Possible objectives Higher wages Job satisfaction Security of employment Better working conditions Dividends Capital growth Interest Prompt repayment of loan instalments No pollution Clean image No unsavoury relations Status Power Perks Challenging tasks Opportunities for development Safe, affordable product Quality Service
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SOCIETY
MANAGERS
CONSUMERS
Conclusion
Direction priorities will be influenced by key stakeholders May vary depending on size and complexity of organisations Small lifestyle businesses may not seek growth Large complex organisations must be accountable to external owners/shareholders Corporate social responsibility may be a factor in shaping direction Managerialism which focuses on return on capital employed/ investment dominates, it is a legal obligation to meet needs of shareholders
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References
Bartkus B, Glassman m,& McAfee (2000) Mission statements are they smoke and mirrors, Business horizons, Nov./Dec Fletcher W (2001) Hypocritical oath or mission impossible, The Times 19 January Raynor ME (1998), The vision thing, do we need it, Long Range Plasnning Vol 31, No.3 pp 368-376 Sufi T & Lyons H(2003) Mission statements exposed, International Journal of Contemporary Hospitality management, Emerald, 15/5 pp 255-262
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