STRATEGIC MANAGEMENT
CHAPTER 2- COMPANY DIRECTION
BBA VIII
HARI OM SHARMA
VISION, MISSION, VALUES AND
CULTURE
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WHY VISION, MISSION?
• Organizations that have clearly defined Vision
and Mission statements, that are aligned with a
strategic plan, outperform those who do not.
• Not having a clearly defined Vision and Mission
limits opportunities for the organization's
success.
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BENEFITS OF VISION, MISSION
AND VALUES
• Strengthen culture through a unified sense of
purpose
• Improve decision making with clarity about
"big picture"
• Enhance cross-functional relationships through
a shared understanding of priorities.
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WHAT IS VISION
• This is what company aspires to
be.
• It is different than what a
company is (mission statement)
• Provides guidance and
inspiration as to what an
organization is focused on
achieving in five, ten, or more
years.
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VISION EXAMPLES
• Ford: To become the world’s leading Consumer Company for
automotive products and services.
• Avon: To be the company that best understands and satisfies the
product, service and self-fulfilment needs of women—globally.
• Microsoft: Empower people through great software anytime, anyplace,
and on any device.
• Amazon: Our vision is to be earth’s most customer centric company; to
build a place where people can come to find and discover anything they
might want to buy online.
• Snapdeal: To create India's most impactful digital commerce
ecosystem that creates life-changing experiences for buyers and sellers.
• Tesla: To create the most compelling car company of the 21 st Century by
driving the World’s Transition to Electric Vehicles.
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WHAT IS MISSION
• This is what the company actually does.
• Defines the present state or purpose of an organization;
• Answers three questions about why an organization
exists -
• WHAT it does
• WHO it does it for
• HOW it does what it does.
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MISSION EXAMPLES
• Google: To organize the world’s information and make it
universally accessible and useful
• Target: Our mission is to make Target the preferred shopping
destination for our guests by delivering outstanding value,
continuous innovation and an exceptional guest experience by
consistently fulfilling our Expect More. Pay Less.® brand promise."
• Nissan: Nissan provides unique and innovative automotive
products and services that deliver superior, measurable values to
all stakeholders in alliance with Renault.
• Aditya Birla Group: To deliver superior value to our customers,
shareholders, employees and society at large.
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WHAT ARE VALUES
• Values are what support the vision, shape the culture,
and reflect what the company values.
• They are company’s principles, beliefs, or philosophy of
values.
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EXAMPLES
-
CHANGE
INNOVATION
- OWNERSHIP
•
OPENNESS
HONESTY
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GUESS WHO’S VALUES ARE
THESE?
• Honesty in work.
• Sincerity in relationships.
• Respect for self and others.
• Responsibility for one’s actions.
• Reflecting on and learning from our experience.
• Care for resources.
• Respect for laws and regulations.
WHAT IS CULTURE ?
• How people behave in organization.
• Culture creates the foundation for strategy
• Corporate values shape the culture and define
the character of the company.
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EXAMPLES OF CULTURE
1. Customer orientation
2. Global entrepreneurship
3. Success through excellence
4. Trust in our people
5. Authentic leadership
6. Sustainability
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Our Vision
To be a premium global conglomerate, with a clear focus on each of
the businesses.
Our Mission
To deliver superior value to our customers, shareholders, employees
and society at large.
Our Values:
Integrity, Commitment ,Passion ,Seamlessness and Speed
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"Good business leaders create a vision, articulate the vision,
passionately own the vision, and relentlessly drive it to
completion.“
Jack Welch
Ex-Chairman, GE
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Vision Mission Case Video by Dr. Vivek Bindra
[Link]
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CLASS ASSIGNMENT
• Imagine a company (of your own) and write
down its:
• Vision
• Mission
• Values
STRATEGIC INTENT
• What is an Intent?
STRATEGIC INTENT
• Strategic intent – clear sense of where the
leaders want to lead the company and what
results they expect to achieve through clear
vision and performance
• A strategic intent to achieve a successful
strategy with strategic vision has an obsession
to win
STRATEGIC INTENT-EXAMPLE
• Daraz's long-term vision is to become the destination for
product search in the country based on the online content
and trust such that a customer could get quality
information regarding any product.
• Make it easy to do business anywhere in the era of digital
economy- Mission Statement of Daraz
• Daraz Long Term Goal- To drive 100%+ annual growth of
the e-commerce market. Reach 20,000 active Daraz sellers (all
educated through Daraz University). Fully digitalize the logistics
ecosystem with real-time visibility for customers regardless of
location.
• What could be the short term goal of Daraz?
STRATEGIC INTENT-EXAMPLE
STRATEGIC INTENT
VISION, MISSION, AND PURPOSE
Most Fewest in
Integrative Number
VISION
MISSION
OBJECTIVES
GOALS
Most Specific PLANS Greatest in
Number
STRATEGIC OBJECTIVE VS
FINANCIAL OBJECTIVE
Strategic Objectives
Financial Objectives
• They are goals deemed most
important to the current and • The target state is measured
future health of a business
in monetary terms – profit%
• They are developed on the
basis of mission and focused on • Examples
the long term goals of the
organization. • Revenue growth through sales
• Examples and marketing
• Increased market share • Profit margins by revenue and
• Increasing productivity
cost controls
• Innovation
• Action planning through SMART • Sustainability by de-
goals
leveraging by paying off
• Increased CSR activities
• PR objectives
debts, and keeping income
• Employee retention level consistent
• Customer satisfaction
• Return on investments
STRATEGIC OBJECTIVES
• Current Customers: Expand sales to existing customers.
• Current Customers: Increase customer retention.
• Current Customers: Achieve and maintain outstanding customer
service.
• Current Customers: Develop and use a customer database.
• New Customers: Introduce existing products into a new market.
• New Customers: Introduce new products to new and existing
markets.
• New Customers: To expand sales to the global marketplace.
• Customer Services: Improve our service approach for new and
existing customers.
FINANCIAL OBJECTIVES
• Financial Growth: To exceed $10 million in the next 10
years.
• Financial Growth: To increase revenue by 10% annually.
• Financial Efficiency: To decrease expenses by 5%.
• Financial Efficiency: To increase net profit by 10%
annually.
POLICIES
• Policies refers to specific guidelines, methods, procedures, rules,
forms and administrative practices established to support and
encourage work towards stated goals
• Policies are instruments for strategy implementation and help
solving recurring problems
• Policies are the procedure for operation, and they are standard in
nature and form
• Policies set boundaries, constraints and limitations on
administrative actions that can be taken to reward and sanction
behavior that they clarify what can and cannot be done to pursuit
of an organization
• Areas of policy
• Recruitment and selection policy
• Supplier selection policy
• Promotion and pricing policy
EXAMPLES OF POLICY
• Use of social media Internal and
• Company Code of conduct external hiring preferences
• Attendance and absence • Equal opportunity and anti-
discrimination
• Employee behavior • Job description and advertisement
templates
• Company values • Selection process and timeframe
• Internet access rules
• Break and mealtime
• Appropriate online usage
policies
• Controls on misuse of the internet
• Confidentiality • Procedure for submitting a formal
grievance
• Use of company property • Company policy regarding response
LONG-TERM AND SHORT-TERM
OBJECTIVES
LONG-TERM OBJECTIVES
• Long-term objectives cover long term horizon of a firm’s desires and
vision
• It is related to achieving long term prosperity and sustainability
• The objectives clarify the long-range purpose of a grand strategy -
growth, innovation, integration, diversification
• They guide the operating strategy
• Long-term objectives are measured in terms of market share, ROI,
ROE, stock price, new market penetration
• Long-term objectives dimensions
• Time-frame – 5 years and more
• Focus – future positioning as per competitive environment
• Specificity – broadly stated in compare to specific functional annual objectives
• Measurement – measured in broad and relative terms in compare to specific
quantitative annual objectives
LONG-TERM OBJECTIVE AREAS
• Profitability
• Productivity
• Competitive position
• Employee development
• Employee relations
• Technological leadership
• Public responsibility
SHORT -TERM OBJECTIVES
• Short term objectives are the measurable outcomes achievable or
intended to achieve in one year or less
• Short-term objectives are – annual objectives
• They are specific, quantities and set by operational managers
• They provide much more specific guidance for what is to be done
• They translate vision into action
Short-Term and Long-Term Objectives
Short-Term Basis of Difference Long-Term
Decentralize activity Activity Centralize activity
Outcomes that management set to Definition Outcomes management seeks to
achieve in each functional unit achieve through its overall activities
Measured in absolute terms Measurement Measured in relative terms
Use of lagging indicators- INDICATOR Use of leading indicators-consumer
unemployment rate, corporate confidence or customer satisfaction.
profits, and labor cost per unit of
output.
Implement generic strategy (low Method Implement grand strategy (growth,
cost, differentiation, focus) innovation, integration,
diversification)
Develop core competencies-A Competence Develop distinctive competencies-
manufacturing company with a innovation, a skill, design,
low defect rate technology, name
recognition, marketing,
workforce, customer
satisfaction, or even being
first to market.
10% increase in annual revenues Example 10% Increase in market share in
Let’s look at a case study video-The Ordinary Heroes of the Taj
Hotel:
[Link]
Vision of Taj Hotel:
By 2025, 25% of the world’s population will experience the Tata
commitment to improving the quality of life of customers and
communities. As a result, Tata will be amongst the 25 most admired
corporate and employer brands globally, with a market capitalisation
comparable to the 25 most valuable companies in the world.
The TATA Mission: To improve the quality of life of the communities
we serve globally through long-term stakeholder value creation based
on Leadership with Trust.
What strategies would you enlist from the case video of The Taj Hotel?