Term
Definition
Mission The Fundamental
objects of entity expressed in general
terms
(CIMA).
Overriding
purpose in line with the values and expectations
of
stakeholders. What business are we in?
Vision or strategic intent Desired future state:
the aspiration of the organization.
Goal General statement
of aim or purpose- may be qualitative in
Nature.
Term
Definition
Objective Quantification (if
possible) or more precise statement of the
Goal.
Strategies Long-term direction
expressed in broad statement about the
direction
the organization should be taking and the type of
actions
required to achieve objectives.
From the above
table we can see that a mission is a broad statement of the purposes of the
business. It will be open-ended and reflect the core values of the business. A
mission will often define the industry that the firm competes in and make
comments about its general way of doing business.
·
British
Airways seeks to be ‘the world’s favourite airline;
·
Nokia
speaks of ‘connecting people’;
·
DHL
‘delivers your promises’;
Roles of
mission statements:
1. Mission
2. Corporate
appraisal: Assessing the firm’s opportunities and threats, its
strengths and its weakness must be related to its ability to compete in its
chosen business domain. Factors are relevant only insofar as they affect its
ability to follow its mission.
3. Strategic
evaluation: When deciding between alternative strategic options,
management can use the mission as a touchstone or benchmark against which to
judge their suitability. The crucial question will be, ‘Does the strategy help
us along the road to being the kind of business we want to be?
4. Review
and control: The key targets of the divisions and functions should be
related to the mission, otherwise the mission will not be accomplished.
Research conducted among companies by Hooley et
al (1992) revealed the following purposes of mission statements:
1.
To provide a basis for consistent planning
decisions.
2.
To assist in translating purposes and
direction into objectives suitable for assessment and control.
3.
To provide a consistent purpose between
different interest groups connected to the organization.
4.
To establish organizational goals and ethics.
5.
To improve understanding and support from key
groups outside the organization.
The link
between mission, goals and objectives:
Whilst
the mission is an open-ended statement of the firm’s purposes and strategies,
strategic goals and objectives translate the mission into strategic milestones
for the business strategy to reach. In other words, the outcomes that the
organizations seeks to achieve.
A strategic objective will possess four characteristics
which set it apart from a mission statement:
1.
A precise formulation of the attribute
sought;
2.
An index or measure for progress towards the
attribute;
3.
A target to be achieved;
4.
A time-frame in which it is to be achieved.
Another
way of putting this is to say that objectives must be SMART, that is,
·
Specific- unambiguous in what is to be
achieved.
·
Measurable- specified as a quantity;
·
Attainable- within reach;
·
Relevant- appropriate to the group or
individual to whom it is applied;
·
Time-bound- with a completion date.
Lists some
examples of strategic objectives.
Examples
of strategic objectives
Mission
Attributes Measure
Growth Sales
volume 000s
of units
Share
of Market % of
total volume in the
Market.
Asset
base of firm Net
assets
Quality Customer
satisfaction Repeat
purchases
Defects
(6 d) No. per
Million
Consistency Adoption of
Standard
Procedures
Innovation Peer
group respect industry
awards received
Speed
to market Development
time
Successful
new product % of sales
from new
Products
Social
responsibility Non-discrimination Workforce composition
Environmental
pollution cubic meters of
waste
Safety Notified
incidents.
The goal
structure: The goal structure is the hierarchy of objectives in the
organization. It can be visualized as the diagram in below.
Objectives
perform five functions:
1. Planning:
Objectives provide the framework for planning. They are the targets which the
plan is supposed to reach.
2. Responsibility:
Objectives are given to the mangers of divisions, departments and operations.
This communicates to them:
a)
The activities, projects or areas they are
responsible for;
b)
The sorts of output required;
c)
The level of outputs required.
3. Integration: Objectives are how senior
management coordinate the firm. Provided that the objectives handed down are
internally consistent, this should ensure goal congruence between managers of
the various divisions of the business.
4. Motivation: Management will be motivated
to reach their objectives in order to impress their superiors, and perhaps
receive bonuses. This means that the objectives set must cover all areas of the
mission. For example, if the objectives emphasize purely financial outcomes,
then mangers will not pay much heed to issues such as social responsibility or
innovation.
5. Evaluation: Senior management control the
business by evaluating the performance of the managers responsible for each of
its divisions. For example, by setting the manager a target ROI and monitoring
it, senior management ensure that the business division makes a suitable return
on its assets.
You
may be familiar with these five functions (often recalled using the acronym
PRIME) from your studies in budgetary control. Budget target are a good example
of operational level objectives. In this chapter, however, we are working at a
higher level by considering the strategic objectives of the firm.
Having
established where the organization is in terms of its mission, goals and
objectives, it must then determine where it wants to go in the future. This
will be influenced by the nature of the external environment and the
organization’s internal capability.
For more on theory and case studies on: http://expertresearchers.blogspot.com
For Premium Academic and Professional Research: jumachris85@gmail.com
No comments:
Post a Comment