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SME Notes

SME Notes

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Published by NabinSundar Nayak
6th trimester MBA notes
6th trimester MBA notes

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Published by: NabinSundar Nayak on Jul 16, 2010
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12/29/2012

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STRATEGIC MANAGEMENT & ENTREPRENEURSHIPSTUDY MATERIALMODULE: 1-4
 
Module ±IConcept
Vision and Mission
Understanding Vision
A vision is more dreamt of than it is articulated. This is the reason why it is difficult to say whatvision an organization has. Sometimes it is not even evident to the entrepreneur who usually thinks of the vision.
Defining Vision
³description of something (an organization, corporate culture, a business, a technology, an activity) inthe future´.- Kotter(1990).³mental perception of the kind of environment an individual, or an organization, aspires to createwithin a broad time horizon and the underlying conditions for the actualization of this perception´.-El-Namaki(1992)³category of intentions that are broad, all-inclusive, and forward thinking´.- Miller and Dess(1996).
The benefits of having a vision
1.
 
G
ood visions are inspiring and exhilarating.2.
 
Visions represent a discontinuity.3.
 
G
ood visions help in the creation of a common identity and a shared sense of purpose4.
 
G
ood visions are competitive, original and unique.5.
 
G
ood visions foster risk-taking and experimentation6.
 
G
ood visions foster long-term thinking7.
 
G
ood visions represent integrity, they are truly genuine and can be used for the benefit of people.
The process of envisioning
 
According to Collins and Porras, a well-conceived vision consists of two major components: Coreideology and Envisioned future.Core ideology: Core ideology defines the enduring character of an organization that remainsunchangeable as it passes through the vicissitudes of vectors, such as, technology, competition, or management fads. The core ideology rests on the core values and core purposes.Envisioned future: The envisioned future too consists of two components: a 10-30 years audaciousgoal, and a vivid description of what it will be like to achieve that goal.
Understanding Mission
Mission is a statement which defines the role that an organization plays in a society. It refers to the particular needs of that society, for instance, its information needs.
Defining Mission
³essential purpose of the organization, concerning particularly why it is in existence, the nature of the business(es) it is in, and the customers it seeks to serve and satisfy´-Thompson(1997)³ purpose or reason for the organistion¶s existence´- Hunger & Wheelen(1999)
How are Mission Statements formulated
Mission Statements could be formulated either formally or informally. Mission Statements could beformulated on the basis of the vision that an entrepreneur decides on in the initial stages of anorganisation¶s growth.
Characteristics of a Mission Statement
1.
 
It should be feasible.2.
 
It should be precise.3.
 
It should be clear.4.
 
It should be motivating.5.
 
It should be distinctive.6.
 
It should indicate major components of strategy.7.
 
It should indicate how objectives are to be accomplished.
 
Obj
ectives and Goals
Goals and Objectives
G
oals denote what an organization hopes to accomplish in a future period of time. They represent afuture state or an outcome of the effort put in now. A broad category of financial and non-financialissues are addressed by the goals that a firm sets for itself.Objectives are the ends that state specifically how the goals shall be achieved. They are concrete andspecific in contrast to goals which are generalized.
Role of Objectives
Objectives define the organisation¶s relationship with its environment.1.
 
Objectives help an organization to pursue its vision and mission.2.
 
Objectives provide the basis for strategic decision-making.3.
 
Objectives provide the standards for performance appraisal.
Characteristics of Objectives
Objectives should be understandable.1.
 
Objectives should be concrete and specific.2.
 
Objectives should be related to a time frame.3.
 
Objectives should be measurable and controllable.4.
 
Objectives should be challenging5.
 
Different objectives should correlate with each other.6.
 
Objectives should be set within constraints
Issues in Objective setting
1.
 
Specificity2.
 
Multiplicity3.
 
Periodicity4.
 
Verifiability5.
 
Reality6.
 
Quality
W
hat Objectives are set
According to Drucker, objectives need to be set in the 8 vital areas of market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development,worker performance and attitude, and public responsibility.According to B R Singh, objectives were set in areas like:
y
 
Profit

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