Unit II

Mission Statement
A company’s mission describes what the company does. It describes why an organization is
operating and thus provides a framework within which strategies are formulated. It describes what
the organization does (i.e., present capabilities), who all it serves (i.e., stakeholders) and what makes
an organization unique (i.e., reason for existence). A mission statement differentiates an organization
from others by explaining its broad scope of activities, its products, and technologies it uses to
achieve its goals and objectives. It talks about an organization‘s present (i.e., ―about where we are).
Ex: Microsoft‘s mission is to help people and businesses throughout the world to realize their
full potential.
Formulation of a Mission Statement:
Mission statement has three main components-a statement of mission or vision of the
company, a statement of the core values that shape the acts and behavior of the employees, and a
statement of the goals and objectives.
Mission statements always exist at top level of an organization, but may also be made for
various organizational levels. Chief executive plays a significant role in formulation of mission
statement. Once the mission statement is formulated, it serves the organization in long run, but it
may become ambiguous with organizational growth and innovations.
In today‘s dynamic and competitive environment, mission may need to be redefined.
However, care must be taken that the redefined mission statement should have original
fundamentals/components.

Needs/Features of a Mission
a. Mission must be feasible and attainable. It should be possible to achieve it.
b. Mission should be clear enough so that any action can be taken.
c. It should be inspiring for the management, staff and society at large.
d. It should be precise enough, i.e., it should be neither too broad nor too narrow.
e. It should be unique and distinctive to leave an impact in everyone‘s mind.
f. It should be analytical, i.e., it should analyze the key components of the strategy.
g. It should be credible, i.e., all stakeholders should be able to believe it.
Objectives
Objectives are defined as goals that organization wants to achieve over a period of
time.These are the foundation of planning. Policies are developed in an organization so as to
achieve these objectives. Formulation of objectives is the task of top level management.
Effective objectives have following features-
1. These are not single for an organization, but multiple.
2. Objectives should be both short-term as well as long-term.
3. Objectives must respond and react to changes in environment, i.e., they must be
flexible.
4. These must be feasible, realistic and operational.
In general an organization should have 3 types of Objectives:
1. Short Term Objectives : Targets to be achieved in 1 year or less.
2. Intermediate Term Objectives: Targets to be achieved in 1 to 5 years.
3. Long Term Objectives: Targets to be achieved in 5 to 7 years.
Areas where objectives are set:
 Growth
 Profitability
 Market share
 Productivity
 Technology
 R&D
 CSR
 Employee Satisfaction
GUIDELINES FOR ESTABLISHING OBJECTIVES:
1. Let the people responsible for attaining the objectives have a voice in setting them.
2. State Objective as specifically as possible.
3. Relate objectives to specific actions whenever necessary.
4. Pinpoint expected results.
5. Set goals high enough that employees have to strive to meet them, but not so high that
employees give up trying to meet them.
6. Specify when goals are expected to be achieved
7. Set objectives only in relation to other organizational objectives.
8. State Objectives clearly and simply.
Strategic planning is an organization's process of defining its strategy, or direction, and making
decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms
for guiding the implementation of the strategy. Strategic planning became prominent in corporations
during the 1960s and remains an important aspect of strategic management. It is executed by
strategic planners or strategists, who involve many parties and research sources in their analysis of
the organization and its relationship to the environment in which it competes.

Strategy has many definitions, but generally involves setting strategic goals, determining actions to
achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends
(goals) will be achieved by the means (resources). The senior leadership of an organization is
generally tasked with determining strategy. Strategy can be planned (intended) or can be observed as
a pattern of activity (emergent) as the organization adapts to its environment or competes.

Strategy includes processes of formulation and implementation; strategic planning helps coordinate
both. However, strategic planning is analytical in nature (i.e., it involves "finding the dots"); strategy
formation itself involves synthesis (i.e., "connecting the dots") via strategic thinking. As such,
strategic planning occurs around the strategy formation activity.

Strategic Planning Process:

Strategic planning is a process and thus has inputs, activities, outputs and outcomes. This process,
like all processes, has constraints. It may be formal or informal and is typically iterative, with
feedback loops throughout the process. Some elements of the process may be continuous and others
may be executed as discrete projects with a definitive start and end during a period. Strategic
planning provides inputs for strategic thinking, which guides the actual strategy formation. Typical
strategic planning efforts include the evaluation of the organization's mission and strategic issues to
strengthen current practices and determine the need for new programming.[2] The end result is the
organization's strategy, including a diagnosis of the environment and competitive situation, a guiding
policy on what the organization intends to accomplish, and key initiatives or action plans for
achieving the guiding policy.

Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of four
key elements:

1. Company strengths and weaknesses;

2. Personal values of the key implementers (i.e., management and the board);
3. Industry opportunities and threats; and
4. Broader societal expectations.

The complete strategic planning process

Strategic Planning Step 1: Gather inputs

 Successes and results from past strategic plans, environmental scans, and staff surveys
  PESTLE: Outside of your business, there are many factors that affect how you can do
business, competitors being one, but also the Political, Economic, Social, Technological,
Legal and Environmental climates that your organization or business operates in.
 SWOT: Throughout the strategic planning process, you'll also have to identify internal
processes and situations that may affect where you go in the future (strengths and
weaknesses). There are also external factors that might affect your business strategy
(opportunities and threats).
 These "inputs" are the ingredients to your successful strategic plan. The right information will
help you make the right decisions, so gather and assess carefully. Once you know where you
are at as an organization, and what's going on in the world outside of your organization, then
you can start to figure out where you're going.

Strategic Planning Step 2: Vision

 Where are you going? What does winning look like?

 There's one thing to have a vision statement, and it's another to have a very clear vision of the
future, like a blueprint to a house. This is the foundation of your strategic plan.
 As an organization (for-profit, non-profit, government, growing startup, etc.), what are you
building, and what is that rallying point for your people?
 Spending the time to get agreement and alignment on this future is key, because otherwise
each individual will be following their own destination of success.
 Another way to think of your vision is: "If success was a place, how would we know if we
got there"

Strategic Planning Step 3: Mission

 What is your purpose? Why do you exist? What do you do, and who do you do it for?
 This is an opportunity to focus your energy on a specific set of stakeholders (staff,
shareholders, board, customers, etc). If you had to dedicate the majority of your resources to
a group, who would it be? This is a tough question because the tendency is to say:
"everyone".
 Your mission is the key driver in accomplishing your vision. It's your: HOW

Strategic Planning Step 4: Values

 If you want to find the number one contributor to a successful organization, it's having values
that are understood and agreed on.
 Values create a set of behaviours that everyone on the organization can count on and expect.
 It's like having everyone playing by the same rules that clearly identify how you can be
successful. You want your people to feel successful and fulfilled in their jobs? Live, eat and
breathe your values so they know how they can contribute to making the organization a
success.
Strategic Planning Step 5: Competition, Risks and Road blocks

 You didn't think it was going to be that easy did you? There will always be things that will
get in your way of success. If you take the time to identify scenarios, what the impact of
specific roadblocks happening will be, and what you're going to do to mitigate these risks,
you are less likely to be caught off guard.
 You can look at incorporating a risk register or scenario planning as frameworks to help you
manage these risks and uncertainties.

Strategic Planning Step 5: Strategic Priorities, Goal, Strategies and Tactics

 This is where you can tie into the big picture thinking into action items as part of your
strategic planning process.
 Strategic priorities are a handful of areas that will make the most amount of progress towards
accomplishing your vision.
 Want to increase the focus of your strategic planning? Focus on the right strategic
priorities.
 Once you have your strategic priorities, find a way to measure its success. Think of it as
moving it from its current state: X, to its future state: Y by a certain date. From X to Y by
DATE
 Then you make the individual action steps that are going to contribute to the accomplishment
of that goal. Check out this article if you want some ideas on what strategic priorities to pick
as part of your strategic plan.

Strategic Planning Step 6: Communication Plan

 This is where you'll make your plan as a team to communicate your strategic plan, and the
things that you're going to get people bought in to your plan.
 Remember how we mentioned that a shelf plan is not very useful, and that making sure you
keep your strategic plan and strategic priorities at the top of mind is key; this is where you do
that.
  Audio, video, meetings, whatever you need to do: Let people know where the organization is
going, and how they can contribute to making that plan a success.
 Communication goes both ways. You'll have better buy-in if you listen as well as speak.
That's the difference between pushing a plan on people, versus pulling them towards you and
inspiring them to want to contribute.

Strategic Planning Step 7: Action plan

 Implementation is where most organizations falter, so a strong action plan is needed.

 Now that you know where you're going, and how you're going to measure your success, do
the things that are going to move the needle on the success of your strategic plan.

The strategic planning process might seem pretty simple at first, but the intricacies of people and the
moving parts of most businesses make planning a crucial but also challenging art form. Combining
effective long range planning, with short term implementation is a skill of great managers and great
leaders.

Strategic Decisions - Definition and Characteristics

Strategic decisions are the decisions that are concerned with whole environment in which the firm
operates, the entire resources and the people who form the company and the interface between the
two.

Characteristics/Features of Strategic Decisions

a. Strategic decisions have major resource propositions for an organization. These decisions
may be concerned with possessing new resources, organizing others or reallocating others.
b. Strategic decisions deal with harmonizing organizational resource capabilities with the threats
and opportunities.
c. Strategic decisions deal with the range of organizational activities. It is all about what they
want the organization to be like and to be about.
d. Strategic decisions involve a change of major kind since an organization operates in ever-
changing environment.
e. Strategic decisions are complex in nature.
f. Strategic decisions are at the top most level, are uncertain as they deal with the future, and
involve a lot of risk.
g. Strategic decisions are different from administrative and operational decisions.
Administrative decisions are routine decisions which help or rather facilitate strategic
decisions or operational decisions. Operational decisions are technical decisions which help
execution of strategic decisions. To reduce cost is a strategic decision which is achieved
through operational decision of reducing the number of employees and how we carry out
these reductions will be administrative decision.
The differences between Strategic, Administrative and Operational decisions can be summarized as
follows-

Strategic Decisions Administrative Decisions Operational Decisions

Strategic decisions are long-term Administrative decisions are Operational decisions are not
decisions. taken daily. frequently taken.

These are considered where The These are short-term based These are medium-period
future planning is concerned. Decisions. based decisions.

Strategic decisions are taken in These are taken according to These are taken in accordance
Accordance with organizational strategic and operational with strategic and
mission and vision. Decisions. administrative decision.

These are related to overall These are related to working These are related to
Counter planning of all of employees in an production.
Organization. Organization.

These deal with organizational These are in welfare of These are related to
Growth. employees working in an production and factory
organization. growth.