) we to (8) VISION Vision and mission statements are powerful shapers of effective corporate cultures, for ‘organisations, These statements present the values, philosophies and aspirations, that guide organisa action. In fact, they motivate and inspire the current and future employees of the organisation | What is Organisational Vision? | An organisational vision is the answer to the question: “What do we want to create?” Shares visions in organisations, “create a sense of commonality that permeates the organisation and give ‘coherence to diverse activities.” The corporate vision has the potential power to focus the collective energy of insiders and to give outsiders a better idea of what an organisation really is. In fact vision is the first step of strategic management process in an organization (see Fig 3.1). Characteristics of Vision ! (i Vision is developed through sharing across an organisation: Famous stories of successfil visions involve visions that have been widely shared across entire organisations. Of course, a individual leader, often a founder has a powerful impact on the others. _ Vision and mission statements are supposed to encompass the ethical, financial and operationtl guiding lights of the company. Vision is referred to as ‘sky books for the soul.” The focus of vision is to reach out hungrily for the future and drag it into present. Vision is the soul searching activity, where the companies intend to answer the question like ‘why are we here, where are we and where would we like to proceed in the future, Reason for Being: The vision is compelling but not controlling force that protracts the fututé To quote Kwan Jzu (3rd century BC); “when planning for a year, sow com, when planning for! | decade, plant trees, when planning for a life, train and educate people.” Companies work for mission after the vision statement is conceptualised and direction of tht company is determined, Picture of Preferred Future | Most of the major achievements of a number of companies ae | dreams about the future, organisational values determine organisayeny re and ationts sorunne Credo puts it as, “We believe our primary responsibility 1 10 OM i Airways i puting nemple | and all others who use our products and services.” The values of BIS Ame sine people first,” of Jet Airways is “the joy of flying,” and the BPL is presei vision statements of certain selected companies.Mission: Organisation, comes into being andexists to accomplish something in the larger environment. Onur ck Vision Statement Ford Motors Konguke Matsoshita eee Quality covers first, customers are the focus of everything we do To serve society and profits are only a by product Wipro Close to the customer ire |New horizons. new hopes ‘Siemens Where technology touches lives Du Pont Better things for better living through chemistry Hyundai Building a better world through innovative technology Nokia Connecting people Xerox The document company Philips Let’s make things better TBM Solutions for a small planet Marati Suzuki Leader in the Indian automobile industry. Creating customer delight aaj shareholder's wealth British American Tobacco To lead tobacco industry through growth, productivity and responsibility (ii) Method of convincing the others about vision: The leaders, by working hard along with others, convince others in the organisations about vision statement and its details rather than simply by delivering speeches. (iii) Change Agendas: Leaders must recognise the complexity of changing an outmoded vision to reflect new realities. Organisations must redefine themselves through updated visions ofthe future through new objectives and strategies. (C) MISSION Organisation, whether it is a business or a social organisation, or a university or a government organisation, takes resources from the environment and converts the resources into goods andor services. It supplies these goods and/or services to the environment at an acceptable pri organisations which make a net contribution to the society are called “legitimate.” Organisations should protect this legitimacy over the long-run, Thus, every organisation, comes into being al exists to accomplish something in the larger environment, and that purpose or mission is clear # that start. As time passes, technology, consumer preferences and other environmental factors chang firms produce new products or renders new services and the interest of the management ani employees change. This results in significant change in the firm. The original mission or purpot may become irrelevant in the long run due to changes in internal environment of the organisatitt ‘and/or appropriate external environment. When these changes take place, management must sear@ for new purpose or state the new mission or restate the original mission. The conditions imposed by the various governments on smoking led to the modification of te mission statements of tobacco companies. Similarly the shift to open economies from patti regulated or communistic economies by most of the countries led to the modification of missiat statements of some companies. For example, changes in decline in demand for sea foods and di to other adverse external environmental factors, Vaisali Sea Foods Limited modified its mise statement from ‘leader in the sea food industry’ to ‘serve the customer the best’. The compel! Shifted its business emphasis to software industry by changing its mission statement.ae Establishing Corporate Direction ra what is Mission? Mission is defined as, “an enduring from other similar organisations.» Statement of purpose that distinguishes one organisation Most of the organisations defi statement. Organisations do exist Cue : th deficiency in the society, Organisation, th F's pata By playing that particular role, the organi; the organisation plays involves Producing products and/ society may have the need for having quick, rel yn : , Teliabl ic i i information would be the mission of that reliable and cheap communication. Providing quick for providing fast, reliable and cheap mobi ‘on for their existence in terms of mission ‘ed of the society or to fulfill a particular Similarly society has many needs like, ch i : A i » cheap and fuel economy cars, acquiring knowledge, quick food, fast and comfortable travel, health care, entertainment, child care, and the like. Organisations do exist to produce the products and/or render Services to satisfy these needs of the society. That particular role of the firm would be its mission, ‘ined, it provides a statement to insiders and Corporation stands for — its Purposes, image and character. The mission ‘ong-term purpose of what the organisation is trying to become — the unique aim that differentiates it from similar organisations. The basic questions that must be answered are: What is our business? And what should it be? Mission statement provides direction and significance to all members of the organisation, regardless of their level. statement should be a | The mission statement is where a company starts to show how this dream is going to become 4 reality. Companies identify major goals that must be accomplished. They indicate how they are going to operate to achieve the major goals. Mission statement is based on the organizational activities and background. Exhibit 3.3 presents mission description of activities, motto/slogan and mission statements of some selected companies, Mission: An enduring statement of purpose that distinguishes one organisation from other similar organizations,ee Characteristics of a Mission Statement anisations spend a year or two in developing an effective and useful mission. When completed, it spe cifies the basic It focuses on ld also be clear, (See Exhibit Developing an effective and useful mission statement is extremely difficult. Orgs reason for the organisational existence, philosophy, identity, character and the im: markets rather than products, it is also achievable, motivating and specific. It sho ate major components of strategy and how the policies are achie (i) Market Rather Than Product Focus: The customers are the key factors in determining am organisation’s mission. Traditionally, many organisations defined their business by what they d and in many cases named the organisation after their products (For example Andhra + Mills Limited). Such organisations found that its mission is no longer relevant and its ies become obsolete A key feature of produce: Pradesh Paps name may no longer describe what it does when their products and/or technolog Therefore, 2 more enduring way of defining the mission has become necessary mission statements has been an external rather than internal focus in recent years. Hence, it is viewed thet, the mission statement should focus on the broad class of needs that the organisation is intending 10 satisfy (external focus) not on the physical product or service that the organisation is serving at Present (internal focus). According to Peter F. Drucker, me Le © Precisely stated outcomes, given in measurable terms and with a specified completion data © Consistency with the environment in which the firm is operating or expects to operate. © A description of how organisational activities will lead to the desired outcomes. © Congruence with policies, procedures and plans as they apply to the organisation or business unit © An integration of major components of the organisation (scope of operations, resource allocation, Competitive advantages and disadvantages), © Attainability (cealistic but challenging with existing or attainable resources) ‘ao “A business is not defined by the company’s name, statutes or articles of incorporation, It is - by the want of the customer to be satisfied when he buys a product or service. To satisfy lomer is the mission and purpose of every business, The question “What is our business?” can ‘ ; of therefore, be answered only by looking at the business from the outside, from the point of view and marketspecific, clear, and distincti' = mew Business Policy and Strategic Management Him The view of Drucker is also applicable to non-profit and government organisations. Therefore, the organisations have to state the mission in terms of meeting the requirements of a particular grou of customers and/or meeting a particular class of need. (ii) Achievable: Though the mission statements indicate that the organisations should achieve high performance, it should at the same time be realistic or feasible and practically achievable. In other words, it should not drive the company towards the practically impossible projects and far beyond its capacities, but rather, it should open a vision of new opportunities. For example, manufacturing gold in laboratory environment without the ore is commercially non-yiable under the current circumstances and as such it can not form a basis for writing a mission statement. Therefore, the organisation should consider its resources while writing the mission statement. (iii) Motivational: The mission statement is a guide to its employees, managers and customers spread geographically. A well defined mission provides a shared sense of purpose. Thus, a mission should motivate the employees and managers to work for the organisation, customers and the society. It should also motivate the customer to feel pride for associating himself with that organisation. (See Box 3.1).(iv) Specific: The mission statement should be precise and specific and provide direction and guidelines for management’s choices between alternative courses of action. Therefore, the mission statement, at the same time, should not be too narrow as it restricts the management’s activities. If the mission is ‘transporting the tourists,’ it would be too narrow and if it is ‘tourist business,” it would be too broad. (v) Clear: The mission statement should provide direction and guidance to the management and employees. Therefore, it should be stated in clear terms. Otherwise, it will result in confusion to all concerned. The mission of Nike Inc., is clear as it states “to Bring Inspiration and Innovation to every athlete in the world.” (vi) Distinctive: As stated earlier, the mission statement of one organisation should be different from those of the similar organisations. In fact, different organisations serve the different markets or different groups of customers and use different technologies and produce different qualities of products (See Box 3.2).(BE) OBJECTIVES MEER of purpose or mission of an organisation requires the formulation of @ ‘num njectives. Achievement of the organisational objectives, in turn, requires the formulation Ifllment of ; Se vicrecty. departmental and unit goals. As presented in Figure 3.4, objectives can be structured 1 OVERALL ORGANISATIONAL OBJECTIVES LONG RANGE AND ‘SHORT RANGE 2 DEPARTMENTAL OBJECTIVES 3 UNIT LEVEL OBJECTIVES Fig. 3.4: Hierarchy of Objectives Long-range objectives specify the results that are desired in pursuing the organisation’s mission and normally extend beyond the current financial year of the organisation. Long-range objectives are notably speculative for distant years. Short-range objectives are performance targets, normally of less than one-year’s duration, that are used by management to achieve the organisation’s long-range objectives, The selection of short-range objectives is from an evaluation of priorities relating to long- range objectives. Departmental objectives, both long-range and short-range are formulated based on the respective long-range and short-range objectives of the organisation. Unit objectives are generally specific and are drawn from the departmental objectives. Objectives Vs. Goals: The terms objectives and goals are differentiated by some managers based on generality and specificity of what an organisation seeks to achieve. For example, objective of an organisation is to improve its profitability whereas one of the goals of the organisation is to increase the net sales by 20% during 2010 over 2009. Thus, objectives are open-ended attributes ‘and goals are close-ended attributes which are precise and expressed in specific terms. However, some managers use these two terms synonymously. Formulating Objectives: The mission and directional course are converted into designated performance outcomes in the process of formulating objectives. Objectives represent a managerial ‘commitment to achieve specified results in a specified period of time. They clearly spell out the quantity and quality of performance to be achieved, the time period, the process and the person who is responsible for the achievement of the objective. ‘An organisation’s mission statement will be just a window-dressing, unless, it is translated. into measurable and specific performance targets and managers are pressured to achieve these targets. Thus, objective formulation is a critical step in the strategic management process. It is viewed that, companies, whose managers formulate objectives for each key result area and then actively pursue ‘actions to achieve their performance targets will out-perform the companies whose managers operate with hopes and mere good intentions. Objectives are based on mission statement and open- ended statements whereas goals are closed ended statementsCharacteristics of Effective Objectives All organisations formulate objectives in one form or the other. The utility of objectives is determined by their level of effectiveness. The important guidelines for the formulation of effective objectives include: Specific Objectives: It becomes clear exactly what is to be achieved, when, how and by whom, when the objectives are formulated specifically. All organisational members know and understand what is expected of them, if the Objectives are specific. Further they eliminate confusion. More specific objectives make it easier for mana: gement to develop realistic strategies. Thus, effective and specific objectives provide a foundation on which managers can construct appropriate organisational strategies. Level of Effort: Objectives should be set tealistically. Ground realities should be taken into consideration while d leciding the efforts needed. Objectives should be set to that level, at which id themselves somewhat to achieve the! d est igeable but reachable organisational objectives, and all employees should share this view. és Changing Objectives: Both internal environment and relevant external environment change continuously. These changes sometimes make the established objectives irrelevant. Therefore, the management should continuously assess and monitor the environmental changes and reformulate the objectives accordingly. In fact, managers must encourage all employees to identify changes and suggest required changes in the objectives, 8 Measurable Objectives: The objectives should be measurable in quantitative terms like 12% increase in profit per share over the last year’s profit, A measurable objective is an objective stated in such a way that an attempt to attain it can be compared to th it actually has been attained. © Objective itself to determine whethergam Establishing Corporate Direction Sow S Consistent Long-run and Short-run Objectives: Organisational objectives that reflect a desirable mix of timeframes and that support one another should be established. Long-term objectives must be consistent with the organisational vision and mission, while short-run objectives must be consistent with long-run objectives. In short, short-run objectives should be derived from and lead to the attainment of long-run objectives. Figure 3.6 presents consistency of organisational objectives with mission.