4-BUSINESS STRATEGY.

MISSION, VISION, PURPOSE,OBJECTIVES,GOAL, STRATEGIES,

TACTICS, POLICIES, PROCEDURES, RULES, PLANS, PROGRAMS,
CORPORATE PHILOSOPHY, CORPORATE GOVERNANCE,
CORPORATE CULTURE.FORECASTS, BUDGETS & PROBLEM OF
SEMANTICS IN TERMINOLOGY IN BUSINESS POLICY.

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Mission: The “As Is”.
• Mission Statements give a clear concise couple of sentences on what your
Company is as of today, and who the Customers you serve are, what are their
Needs and Wants, how you are satisfying their Needs and Wants better than
your Competitors.
• It should encompass the foundation of Vision Statement.
• Organizations develop Mission Statements to share with Managers, Employees,
and in many cases , Customers.
• A clear thoughtful Mission Statement provides Employees with a Shared Sense
of Purpose, Direction, and Opportunity and Guides Geographically Dispersed
Employees to work Independently and Collectively towards Realizing
Organization’s Goals.
• Good Mission Statements Focus on a Limited Number of Goals, Stress
Company’s Major Policies and Values and Define Firm’s Competitive Scopes,
which include:
1) Industry Scope.
2) Products and Application Scope.
3) Core Competence.
4) Market Segment Scope.
5) Vertical Scope and 6) Geographical Scope.
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Mission : “As Is” (Cont’d).
• Benefits of having a Mission Statement: A Formal Mission Statement has the following Benefits:
1) It provides the Boundary for Strategy Formulation.
2) It Formally acknowledges Responsibilities towards various Stakeholders and Society and sets Standards for
Organizational Performance along Related Dimensions.
3) It outlines Norms of Individual Behavior.
4) It acts as a Touch Stone for Decision Making.
5) It Defines the Business and Criteria for a Good Business Definition.
• Mission Statements of some of the Leading Indian and American Companies are given below:
• Otis Elevator: Our Mission is to provide any Customer a means of moving People and Things Up and Down,
and Sideways over short distances with higher Reliability than any similar Enterprise in the World.
• Avis Rent a Car: Our Business is renting Cars. Our Mission is Total Customer Satisfaction.
• Eastman Kodak: We are in the Picture Business.
• BHEL: A World-Class, Innovative, Competitive and Profitable Engineering Enterprise providing Total Business
Solutions.
• Glaxo Wellcome India: is Committed to fighting Disease with Safe and Effective Medicines and Exceeding
Customers’ Expectations in terms of Quality, Service, Value and Safety through Constant Innovation.

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Vision: “The To Be”.
 The Vision Statement is your “Want To Be”. “Where should the Company be headed, What
should its Future Technology-Product-Customer Focus be, What kind of Enterprise do we want to
become, What Industry Standing do we want to achieve in Five Years, Ten Years, or Fifteen Years?”
 These Questions are to be Answered to build a Vision Statement for a Company. Vision Statements
are not meant to be as Practical as Mission Statements. They are meant to be usefully Inspirational.
 A Great Vision Statement “ An Apple on Every Desk” by Steve Jobs, CEO of Apple Computers. Given
below are some Slogans representing Visions of some World Reputed Companies:
 Levi Strauss & Company: “We will Clothe the World by Marketing the Most Appealing and Widely
Worn Casual Clothing in the World.”
 Microsoft Corporation: “ Empower People through Great Software-Anytime, Anyplace, and on Any
Device”.
 Mayo Clinic: “The Best Care to Every Patient Everyday”
 Scotland Yard: “To make London the Safest Major City in the World”
 Greenpeace: “ To halt Environmental Abuse and Promote Environmental Solutions”.
 Charles Schwab: “To provide Customers with the most Useful and Ethical Financial Services in the
World”.
 Larsen & Toubro: “ L&T shall be a Professionally Managed Indian Multinational, Committed to Total
Customer Satisfaction and Enhancing Shareholder Value. L&T shall Foster a Culture of Caring, Trust
and Continuous Learning while meeting Expectations of Employees, Stakeholders & Society.”

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Purpose, Objectives & Goals.
• Purpose: The Senior Management in an Organization Determines a Purpose or
Several Purposes which the Company should be able to Achieve in the Long Run.
• The Purpose can include Anything that an Organization Strives for. In the various Activities and
Functions which the Managers Perform they are Guided by the Purpose.
• When a Company identifies its Purpose as “To be known as a Company that Cares for its
Customers”, then if the Purpose is taken seriously by its Managers, it will have a far reaching
Impact on the Objectives, Goals Policies and Plans of the Company.
• Goals: These are Open Ended Attributes denoting Future State or Outcome that an
Organization Strives for. The Goals are sought to be achieved in order to take the Organization
towards its Purpose and to Fulfill its Mission.
• A Mission and a Purpose may lead to several Goals which are stated in General Terms. A
Company may state its Goals in terms of Increase in the Market Share. When Goals are stated
in Specific Terms, they become Objectives to be Attained.
• Objectives: An Objective is a Close Ended Attribute which is Precise and Expressed in Specific
Terms. The Goal of Increase in Market Share may be stated thus: To Raise the Existing Market
Share of 25% to 35% of the Total over a period of Two Years.
• In order to Attain Objectives, Policies Need to be set on the basis of which Action is then
initiated. Short Term Objectives, Expressed in very Precise Terms and used for Time Bound
Programs are Known as Targets.
• Mission, Purpose, Goals and Objectives are Vital for the Determination of Strategy.
We will discuss these details later.

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Policies, Procedures, and Rules, Plans & Programs.

 Policies, Procedures and Rules: A Policy is considered to be a Guideline for Action. It

Channelizes Organizational Efforts in a Predetermined Direction and Leads to the
Achievement of Goals, Objectives, Purpose and Mission of the Company.
 Policies are subdivided and stated in terms of Procedures (a series of related steps
or Tasks expressed in a chronological order) and Rules (prescribed courses of Action
that explicitly states what is to be done under a given set of circumstances.
 A Company may state one of its many Policies as: Products which are going to
become obsolete will be offered for Sale with a certain percentage of Discount. The
Procedure may explain how to decide which Product is obsolete and what
percentage of Discount is to be offered. A Rule may specify the way in which a
Discount Plan is going to operate.
 Plans and Programs: A Program is a Broad term which includes Goals, Policies,
Procedures, Rules and Steps to be taken in putting a Plan into Action. Programs are
usually supported by Funds Allocated for Plan Implementation. They are also
known as Action Plans and when expressed in highly concrete and specific terms
become Projects.
 A Plan may be Implemented through a series of Programs, each consisting of
several Projects. An example of a Plan could be the Growth Plan of a
Pharmaceutical Company consisting of Expansion, Modernization and
Diversification Programs requiring an investment of say Rs 40 Crore over next Five
years.
 Each of the different Programs under Growth Plan constitutes a Major Program.
Thus there could be Major as well as Minor Programs. An Example of a Minor
Program could be a one-week Training Program. 6
Corporate Philosophy.
• Corporate Philosophy Statement of a Business Organization indicates
the Value System and Business Ethics followed by the Organization to
achieve its set Goals & Objectives.
• It can be understood clearly by studying the Corporate Philosophy
Statement of Google:
• Our Philosophy-Ten Things we Know to be True.
• The Core Principles that Guide our Actions are:
1) Focus on the User and all else will follow.
2) It is Best to do One Thing Really, Really Well.
3) Fast is better than Slow.
4) Democracy on the Web Works.
5) You do not need to be at your desk to need an Answer.
6) You can make money without doing Evil.
7) There is always more information out there.
8) The need for information crosses all Borders.
9) You can be serious without a Suit.
10) Great just is not Good Enough.
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Corporate Governance (Cont’d).

• In “A Board Culture of Corporate Governance”, Business

Author Gabrielle O’Donovan defines Corporate Governance
as “an internal System encompassing Policies, Processes, and
People, which serves the needs of Shareholders and other
Stakeholders, by Directing and Controlling Management
Activities with good Business Savvy, Objectivity, and
Integrity.
• Sound Corporate Governance is reliant on External
Marketplace Commitment and Legislation, plus a Healthy
Board Culture which safeguards Policies and Processes”

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Corporate Culture.
• Corporate Cultures are built upon Behavioral Norms, which are defined as a
set of expectations of how people will behave in a given situation, such as
when the Boss finds your ideas highly objectionable.
• These Cultural Norms grow and evolve over a period of time. They are
generally not written down in any formal Policy and they are not discussed
by people within the Culture.
• For Example, in some Organizations Competition is encouraged and even
Rivalries are encouraged. Let us call this as “A” type Culture.
• In another type of Corporate Culture, Team Work is encouraged. Let us call
this as “B” type Culture.
• The first thing the young people should do when they enter an Organization
is to determine what type of Environment they have become a part of.
• If they are type “A” in a type “B” Environment or vice-versa, they are bound
to get stuck badly and they better find a new job or adapt themselves to the
existing Culture.
• A Corporate Culture is a powerful force, impervious to individual pressure,
or even group pressure to change.
• Corporate Norms affect an Individuals attitude and performance from a
number of different perspectives. 10
Corporate Culture (Cont’d).
 They occur in such areas as Information Sharing (Either it is a Norm or it
is not), Innovation (It is encouraged or it is not), Self Expression and
Socialization wit One’s Work Group.
 Industrial Psychologists have identified Two Basic types of Cultures:
1) Closed Corporate Culture and
2) Adaptive Corporate Culture.
 Closed Corporate Culture: In this type of Culture, Work Units guard their
Fiefdoms carefully and share little Information.
 They protect themselves at all times, minimizing Risk Taking and
generally exhibiting extreme caution.
 Adaptive Culture: An Adaptive Culture requires both Risk and Trust.
Employees actively support each other’s Efforts to identify problems
and reach Solutions.
 Individuals who do not tune in quickly to many Nuances of their
Corporation’s Culture, usually find themselves in deep trouble. Those
who are patient and clever enough to go through the motions can
survive until they can find a position with another company in which
the Culture is more in tune with their own Work Habits, Attitudes and
Style.
 Mavericks who think they can Buck or Change the System, find that
their Days are numbered.
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Corporate Culture (Cont’d).
• Culture Shock Starts Here: It will not be wise to accept a
Job, in an Organization, without first doing some serious
Anthropological Investigation. But before you probe a
particular Culture, you have got to probe within yourself to
discover your own particular Work Place Needs.
• Give below are three potential trouble spots:
1) Levels of Autonomy: An important thing to consider how
well your Personal Style matches with the Organization’s
way of Delegation of Work.
2) Preciseness of Job Responsibility:
3) Attitude towards Disagreement:

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Corporate Culture (Cont’d).
Closed Culture.
•Do not rock the Boat.
•Do not enjoy your work.
•Do not disagree with your Boss
in Public.
•Do not be the first to come up
with new ideas.
•Do not come to meetings on
time.
•Look Busy, when you are not.
•Do not share Information with
other groups.
•Do not be Bearer of Bad News.
•Do not associate with any
failure.
•Do complain for small things
quite often.
Adaptive Culture.
•Treat everybody with respect.
•Encourage People in Innovating.
•Enjoy your Wok.
•Speak with people about your
Firm.
•Be willing to take
Responsibilities.
•Initiate Changes.
•Bring Un-Comfortable Issues out
in the open.
•Feel free to Disagree with your
Boss or Others in the Group.
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Forecasts and Budgets.
• Forecasts: are Estimates of Future based on an Extrapolation of the Past and
Present Trends. They are usually concerned with the Quantification of different
variables and use the figures generated as a basis for Extrapolating the Future
Trends.
• Such Information is vital for Long Range Planning exercise. In the context of Business
Policy, Forecasting is usually employed as a Quantification Technique for
Environmental Forecasting.
• For instance, Economic, Technological, Social, and Political Forecasting can be done
for an Assessment of Future Environment a company is likely to face.
• Budgets: A Budget is Plan Statement for a given period of time in Future, expressed
in Financial or Physical Units. Based on Goals and Programs, Budgets are used as
Tools in Planning and Controlling Functions.
• When used in Conjunction with Forecasts, Budgets perform the Essential Task of
Resource Allocation. Most companies usually, formulate One Year & Five Year
Budgets for Planning Purposes.
• The Government also prepares Annual Budgets of different kinds. Most Common
and Popular , are the Railway Budget and General Budget presented in the
Parliament in February-March every year.
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Problem of Semantics in Terminology: Business
Policy Terms.
• Tactics: Tactics is a Term often confused with Strategy and rightly so, since, the
difference lies only in the degree of importance associated with Tactics.
• Strategy gives rise to Tactics and thus, Tactics may be thought of as a Sub-Strategy.
But what is Tactics for one may be Strategy for another and the vice-versa is also
true.
• A Company may plan a Strategy of Market Expansion and the Regional Office in
Implementing the Strategy may add or devise the Tactics of Creating Product
Awareness through Aggressive Selling to a Broader Segment of the Market. The
Regional Office may consider such a Plan as its Strategy.
• Steiner, Miner and Gray say that “There are serious Semantics Problems in the area
of Business Policy, because words are sometimes used as Nouns and sometimes as
Verbs. They are often used to signify Concepts and at other times to denote specific
Actions. They are used interchangeably.”
• In a way, what are referred to as ‘serious Semantics Problems’ natural to a Discipline
which is still in the process of evolution. Business Policy, like other emerging
Disciplines, faces these Problems too. Various Experts and Authorities in the field
tend to assign different meanings to terms used.
• A Few Illustrations are given in the next slides where Terms are either confused with
each other or are used interchangeably.

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Problem of Semantics in Terminology : Business
Policy Terms (Cont’d).
 Mission-Purpose: Mission Statements help an Organization to link its Activities to
the Needs of the Society. In this sense, Mission Exhibits an obvious External
Orientation.
 Purpose too has an External Orientation, but is based on what the Organization
desires to achieve Internally. In other words, by achieving a set of Purposes for
itself, an Organization fulfills its Mission for the Society.
 Some Authors (Thompson & Strickland) use these words Jointly. Some Authors
employ words, ‘Purpose’ and ‘Values’: Value representing the Beliefs and
Convictions that underline the Personal and Organizational Choice for Achievement
of Purpose (Rowe, Mason & Dickel and Stanford).
 Goals & Objectives.: Goals are open ended Attributes denoting a future state or
outcome and are stated in general terms. Objectives are close ended Attributes
expressed in specific terms.
 For example the CEO may say that the Goal of the Organization should be to
increase the Market share, without Quantifying the increase and also without fixing
a time frame for achieving the Objective.
 This Goal is converted into a specific Objective by the Marketing Manager by
setting the Objective as “We should increase our Market Share from the Current
10% to 15% within the next 2 years.” Thus Objectives are Quantified and a Time
Frame is Fixed to achieve the Goal.

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 Problem of Semantics in Terminology: Business
Policy Terms (Cont’d).
 Strategy-Policy: Strategies are Means to an end. Policy is a Guideline to Action.
While Strategies necessarily lead to Action, Polices are contingent Decisions: they
operate only when a Decision Maker, faced with a problem refers to a Guideline for
Action.
 Despite these distinctions, there are times when it is difficult, if not impossible to
separate the Two Terms. To avoid Confusion and possibly a Controversy, some
Authors tend to use both Terms Synonymously as well as Jointly (e.g. Steiner, Miner
and Gray 1982).
 Strategy-Tactics: Though Tactics are considered as Action Plans through which
Strategies are Implemented, they are often confused with Strategies. Theoretically
it is possible to draw a distinction between the Two Terms but Operationally,
differences are blurred.
 Since Strategy gives rise to Tactics, it is possible to demarcate the Two only at the
Extremes. In between, Strategy shades into Tactics and several Tactics converge to
form a Strategy.
 For the sake of understanding, it is useful to consider the analogy of a Strategy as a
War and Tactics as the Battles in a War. Overall a Strategy is considered Successful if
it consists of a Large number of Winning Tactics; a few of the Tactics may, however
fail.
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