Components of a Strategy Statement
The strategy statement of a firm
sets the firm’s long-term strategic direction and broad policy directions. It
gives the firm a clear sense of direction and a blueprint for the firm’s
activities for the upcoming years. The main constituents of a strategic
statement are as follows:
1.
Strategic
Intent
An
organization’s strategic intent is the purpose that it exists and why it will
continue to exist, providing it maintains a competitive advantage. Strategic
intent gives a picture about what an organization must get into immediately in
order to achieve the company’s vision. It motivates the people. It clarifies
the vision of the vision of the company.
Strategic
intent helps management to emphasize and concentrate on the priorities.
Strategic intent is, nothing but, the influencing of an organization’s resource
potential and core competencies to achieve what at first may seem to be
unachievable goals in the competitive environment. A well expressed strategic
intent should guide/steer the development of strategic intent or the setting of
goals and objectives that require that all of organization’s competencies be
controlled to maximum value.
Strategic
intent includes directing organization’s attention on the need of winning;
inspiring people by telling them that the targets are valuable; encouraging
individual and team participation as well as contribution; and utilizing intent
to direct allocation of resources.
Strategic
intent differs from strategic fit in a way that while strategic fit deals with
harmonizing available resources and potentials to the external environment,
strategic intent emphasizes on building new resources and potentials so as to
create and exploit future opportunities.
2.
Mission
Statement
Mission
statement is the statement of the role by which an organization intends to
serve it’s stakeholders. It describes why an organization is operating and thus
provides a framework within which strategies are formulated. It describes what
the organization does (i.e., present capabilities), who all it serves (i.e.,
stakeholders) and what makes an organization unique (i.e., reason for existence).
A mission
statement differentiates an organization from others by explaining its broad
scope of activities, its products, and technologies it uses to achieve its
goals and objectives. It talks about an organization’s present (i.e., “about
where we are”). For instance, Microsoft’s mission is to help people and
businesses throughout the world to realize their full potential. Wal-Mart’s
mission is “To give ordinary folk the chance to buy the same thing as rich
people.” Mission statements always exist at top level of an organization, but
may also be made for various organizational levels. Chief executive plays a
significant role in formulation of mission statement. Once the mission
statement is formulated, it serves the organization in long run, but it may become
ambiguous with organizational growth and innovations.
In today’s
dynamic and competitive environment, mission may need to be redefined. However,
care must be taken that the redefined mission statement should have original
fundamentals/components. Mission statement has three main components-a
statement of mission or vision of the company, a statement of the core values
that shape the acts and behaviour of the employees, and a statement of the
goals and objectives.
Features of a Mission
a.
Mission must be feasible and
attainable. It should be possible to achieve it.
b.
Mission should be clear
enough so that any action can be taken.
c.
It should be inspiring for
the management, staff and society at large.
d.
It should be precise enough,
i.e., it should be neither too broad nor too narrow.
e.
It should be unique and
distinctive to leave an impact in everyone’s mind.
f.
It should be analytical,i.e.,
it should analyze the key components of the strategy.
g.
It should be credible, i.e.,
all stakeholders should be able to believe it.
3.
Vision
A vision
statement identifies where the organization wants or intends to be in future or
where it should be to best meet the needs of the stakeholders. It describes
dreams and aspirations for future. For instance, Microsoft’s vision is
“to empower people through great software, any time, any place, or any device.”
Wal-Mart’s vision is to become worldwide leader in retailing.
A vision
is the potential to view things ahead of themselves. It answers the question
“where we want to be”. It gives us a reminder about what we attempt to develop.
A vision statement is for the organization and it’s members, unlike the mission
statement which is for the customers/clients. It contributes in effective decision
making as well as effective business planning. It incorporates a shared
understanding about the nature and aim of the organization and utilizes this
understanding to direct and guide the organization towards a better purpose. It
describes that on achieving the mission, how the organizational future would
appear to be.
An
effective vision statement must have following features-
a.
It must be unambiguous.
b.
It must be clear.
c.
It must harmonize with
organization’s culture and values.
d.
The dreams and aspirations must be rational/realistic.
e.
Vision statements should be shorter
so that they are easier to memorize.
In order
to realize the vision, it must be deeply instilled in the organization, being
owned and shared by everyone involved in the organization.
4.
Goals and
Objectives
A goal is
a desired future state or objective that an organization tries to achieve.
Goals specify in particular what must be done if an organization is to attain
mission or vision. Goals make mission more prominent and concrete. They co-ordinate
and integrate various functional and departmental areas in an organization.
Well made goals have following features-
a.
These are precise and measurable.
b.
These look after critical and
significant issues.
c.
These are realistic and
challenging.
d.
These must be achieved within a specific
time frame.
e.
These include both financial as
well as non-financial components.
Objectives
are defined as goals that organization wants to achieve over a period of time.
These are the foundation of planning. Policies are developed in an organization
so as to achieve these objectives. Formulation of objectives is the task of top
level management. Effective objectives have following features-
f.
These are not single for an
organization, but multiple.
g.
Objectives should be both short-term
as well as long-term.
h.
Objectives must respond and react to
changes in environment, i.e., they must be flexible.
i.
These must be feasible, realistic
and operational.
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