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conscience of the
that is intrinsically
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plans to strive for in organisation.
the organisation as it is, but
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direct towards realisation of
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be both ambitious and questions
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Strategic intent articulates the CEO and represents the overriding attitude.
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envisions a desired top management’s purpose of the organisation structural fibre of an
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leadership position in strategic intent organisation
the future and consistency
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encourage the
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establishes the criterion help everybody in the
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and challenge To bridge the gap between top
consistently and
use to chart its established practices and
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execution by providing clarity about who according to a
progress. mindsets. we are, what we do, who our customers predetermined set of
are, and the way things are done
guidelines.
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Environmental scanning
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states the desired end result.
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Requirements for a good mission statement Preparing core value statements
• It must be inspirational, relevant and fair towards all the • Absolute commitment and buy-in from top
stakeholders. management.
• Simple language must be used, like in the case of • Distinguish between organisational and personal
Facebook: “...to give people values.
the power to share and make the world more open and • There are no right or wrong, good or bad values – a
connected”. core value can be right for
• It must reflect the competitive advantage of the one organisation, but might be wrong for the next,
organisation. even within the same industry.
• Flexibility is crucial. • Values must be translated into day-to-day guidelines
• The correct mix between breadth and focus is a primary for proper organisational behaviour.
prerequisite.
• It should be attainable and realistic.
Five-step process for preparing value statements.
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1. Each member of top management proposes five
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Integrate inputs into draft statement of five values.
2. Middle management discusses first draft,
0
considering practicalities and translating each value
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new values.
0
3. List is handed to lower-level management,
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opportunity to add new values.
4. Expanded list debated, integrated and prioritised by
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top management to form final statement of core
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EBUS2715
Unit 2
STRATEGIC DIRECTION
Learning Outcomes:
A • Explain the meaning of strategic intent
B• Describe why it is important for managers to have a clear strategic
vision of where the organisation is heading
C • Be able to formulate a strategic vision for an organisation
- • Explain what a mission is and why it is an important management tool
E • Be able to use the information from this chapter to develop a mission
statement for an organisation
F• Discuss core values and their importance to modern-day organisations
C• Be able to use the information from this chapter to develop values for
an organisation
⑰• Explain the importance of an integrated statement of vision, mission
1 and values
.
•
competitive
Strategic What we >
-
advantage
Intent strive for
in the future
Vision Where to
Strategic >
-
Why ?
Direction
Mission What to do
Core
How to
Values
Strategic Intent
⑰- Strategic intent is what the organisation plans to strive for in the future and it must
be both ambitious and compelling.
- Strategic intent incorporates stretch goals.
- Strategic intent envisions a desired leadership position in the future and
establishes the criterion that the organisation will use to chart its progress.
- Internal and external environments are complex – to be ambitious and
compelling, the strategic intent cannot be defined in a simplistic way.
- Strategic intent must encompass an active management process.
- Strategic intent is focused on the end, and not the nuts and bolts of the means.
- It must be communicated properly.
Example:
Canon – to beat Xerox
Komatsu – To encircle Caterpillar
Vision
- A vision is a dream or mental image of a desired future.
- A leader must never see the organisation as it is, but as what it can become.
- A strategic vision is future oriented, but it is not the result of a spectacular dream
or the power of an extreme imagination
- Changing circumstances necessitate leaders and managers to adapt their vision
statements
- Vision statements by politicians, CEOs and other leaders are meant to inspire
followers to commit themselves to a common cause – landing people on the
moon, sending spacecraft to Mars, technological and medical innovations are
typical examples
Examples of vision statements
Eskom Sustainable power for a better future.
National Treasury of SA The National Treasury is the custodian of the nation’s financial resources. We
hold ourselves accountable to the nation to discharge our responsibilities
professionally and with humility, with the aim of promoting growth and
prosperity for all. We aspire to excellence in the quality of our analysis, our
advice and the execution of our financial management responsibilities. We
aim to realise the full potential of South Africa’s economy and people and to
mobilise the resources of the state, business enterprises and the wider
community in a partnership of trust and mutual respect.
SA post office A leading provider of postal, logistics and financial services to the South
African market.
③ Why vision is a valuable tool
• The strategic vision articulates the CEO and top management’s strategic intent –
a description of the organisation’s future direction.
• Although a good strategic vision is relatively simple, it must encourage the
organisation to stretch, and challenge established practices and mindsets.
• Organisations are operating in an open and global environment, forcing leaders
to move beyond social, geographical and other existing boundaries.
Risks relating to strategic vision
• A strategic vision can lead to strategic stubbornness.
• Strategic opportunism and reactive management, as the direct opposite to
strategic vision.
• It happens when the future is extrapolated from a contemporary perspective
Why strategic vision?
A strategic vision
- serves as the single most important guiding star for future direction and
positioning,
- is the driving force for effective communication,
- provides the basis for dealing with complex challenges,
- assist managers on all levels not to fall into the trap of strategic opportunism,
and
- plays a congruence and solidarity role.
② Development of a strategic vision
• Strategic vision starts from the top. History is filled with examples of visionary
leaders like Napoleon, Nelson Mandela, Bill Gates and Alhaji Aliko Dangote.
• Strategic vision is focused. For example, Kennedy’s vision of landing a man on
the moon.
• It is the result of a continuous development process.
• Environmental scanning is a fundamental prerequisite.
• It always states the desired end result.
• It must be separate and independent from current strategies.
z• It must be communicated.
Mission
⑭ What is mission:
• A mission is a direction-setting guideline and serves as the conscience of the
organisation.
• It must direct towards realisation of the vision by answering questions such as:
- What business are we in and what purpose do we serve?
- What business should we be in?
- What are we doing –our products and services?
- What customers are we targeting and what are their needs?
- Why does this organisation exist?
• Mission statements are more concrete than vision statements and must reflect
the belief system of the organisation.
• The mission represents the overriding purpose of the organisation
Examples:
FNB To help our customers achieve economic success and financial
security by building enduring, mutually beneficial relationships
based on trust and integrity. To build a diverse workforce where
employees can learn, grow and prosper as contributing members
of a winning team. To create a sustainable, long-term value for
our shareholders. To improve the quality of life in the
communities we serve
Shoprite The guiding mission of the Shoprite Group of Companies is to be
the consumers’ preferred shopping destination, by retailing food
and non-food products at the lowest prices from conveniently
located outlets in an environment that is conducive to shopping.
National Treasury of SA The mission of the Department of the National Treasury is to
promote economic development, good governance, social
progress and rising living standards through accountable,
economic, efficient, equitable and sustainable management of
South Africa’s public finances.
⑭ Why a mission statement
• To bridge the gap between top management’s dreams and lower level’s
execution by providing clarity about who we are, what we do, who our customers
④
are, and the way things are done.
• A mission is about required behaviour, as well as attitude and general orientation.
• Necessary to align managerial decision making.
• A well-phrased mission statement can provide the glue that will symbolically hold
everything together in one unified entity.
Requirements for a good mission statement
Read
• It must be inspirational, relevant and fair towards all the stakeholders.
• Simple language must be used, like in the case of Facebook: “…to give people
the power to share and make the world more open and connected”.
• It must reflect the competitive advantage of the organisation.
• Flexibility is crucial.
• The correct mix between breadth and focus is a primary prerequisite.
• It should be attainable and realistic.
②
Development of a mission statement
Who Customers and customer groups
What Important needs of customers and customer groups. Customers therefore
do not pay for the goods or services, but for what those goods or services
are doing for them.
Do not offer me things …
Do not offer me clothes. Offer me attractive looks.
Do not offer me shoes. Offer me comfort for my feet and the pleasure of
walking.
Do not offer me books. Offer me hours of pleasure and the benefit of
reading.
Do not offer me CDs and DVDs. Offer me leisure and the sound of music.
Do not offer me things. Offer me ideas, emotions, feelings, and benefits
How How will the customer’s needs be satisfied?
• Minds of strategists must be stretched beyond current day-to-day challenges.
• Current nature and position and future nature and position.
Key questions towards a comprehensive mission statement
Development of a mission statement – components
- Three indispensable components are the who (market), what (product or service)
and how (technology).
- Other components of survival, growth and profitability can also be part of a
mission statement – be aware of sending out a wrong message.
- Another component may be philosophy. This is about its values and beliefs-
rather in separate value statement.
- Self-concept (the organisation’s own understanding of its strengths and
weaknesses) and public image (whether customers accept the products and
services of the organisation) are two more components that may be part of a
mission statement – seldomly seen as explicit components of a mission
statement.
⑰ Core Values
- A core value is a principle or standard of behaviour, or a quality that is intrinsically
valuable or desirable.
- Core values can be described as stretching from a belief or ideal or as behavioral
norms and traits that members of staff are expected to portray at the other.
- Values define what is right or fundamentally important to a person and provide
guidelines for a person’s choices and actions.
·
Example
- -
Importance of core values
• Significant influence on behaviour and attitude.
• Core values are essential to the structural fibre of an organisation.
• Prioritising the core values is important.
• A valuable lesson from various winning organisations is that of consistency.
• Shared core values help everybody in the organisation to act consistently and
according to a predetermined set of guidelines.
• It is obvious that the core value statement forms the basis of every activity in
an organisation.
i
Preparing core value statements
• Absolute commitment and buy-in from top management.
• Distinguish between organisational and personal values.
• There are no right or wrong, good or bad values – a core value can be right for
one organisation, but might be wrong for the next, even within the same industry.
• Values must be translated into day-to-day guidelines for proper organisational
behaviour.
Five-step process for preparing value statements.
1. Each member of top management proposes five values crucial for structural fiber
of organisation. Integrate inputs into draft statement of five values.
2. Middle management discusses first draft, considering practicalities and
translating each value into day-to-day guidelines. Have opportunity to add new
values.
3. List is handed to lower-level management, considering real meaning and
practicalities on their specific level, as well as for their subordinates. Have
opportunity to add new values.
4. Expanded list debated, integrated and prioritised by top management to form final
statement of core values
5. Cascading value statement down into entire organisation
Linking vision, mission and values
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