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Strategic Management Mission Aim, Objectives & Stakeholders

The Strategic Management Process


Mission and objectives identification Analysis of business environment Internal business audit Review of Strategic Opportunities Comparison of Strategic Options Implementation of Strategy

The Lynch (2000) Polygon

The Business Idea

Strategic Direction
Identifying the Organisations purpose, aims, objectives and goals

Key Issues:
2)The Interested Parties 3)The Method of Communication 1)The Message

The Message:
Why does the firm exist? What is its aim and objectives? How will it achieve these?
What strategies?

How will its performance be measured?


Which benchmarks?

The Method of Communicating the purpose of the firm


Mission and Vision Statements
A visionary statement concerning the (long term) future direction of the firms, its products, markets and values. Essential purpose of the organisation

Mission Statements
Mixed reception: Smoke and mirrors (Barkhus et al (2000) Building blocks, invisible hand (Strong 1997) Motherhood statements, the hippocratic or hypocritical oath, lantern, anchor, conscience, office manifesto, company slogan, motto, (Fletcher 2001)
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1. Mission
An overriding purpose in line with the values and expectations of stakeholders . Johnson & Scholes

Personal example: Be healthy and fit.

2. Vision (or strategic intent)


A strong aspiration; Desired future state An aspiration around which to focus the attention and energies of members of the organization Helps thinks creatively about how to prepare a company for the future Personal example: To run the London marathon
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3. Aim
A broadly-worded, general statement of goal or purpose. Personal example: To lose weight and gain muscle .

4. Strategic Objective
A quantification of that goal. Personal example: To lose 10 kg .

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Mission Statements
Often summarises the firms reason for existing The starting point for recognising the future direction of the firm and therefore the required strategic developments. Should be:
Simple, Easily Remembered, Impactful Positive, visionary & motivating

Should outline
Firms role What it wishes to achieve
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Four Elements in the Mission Statement [1]


Adapted from the Ashridge School (1991) 1)Purpose
Why the firm exists and what it exists to do.
What would happen if the firm did not exist?

2)Strategy
How the firm will achieve its aspirations.
What is it offering? To whom? Why should people buy it? What are its competitive advantages?
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Four Elements in the Mission Statement [2]


3)Values
What the firm believes in
Why the world will better if the firm succeeds?

4)Behaviour standards
The routines, procedures and policies the firm adopt to fulfil its values
What is the firm willing to do/not do in order to succeed? How low will it go?

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Some Mission Statements


Disneyland Paris: To turn the dreams of the young and young at heart into reality

Hilton International: To always exceed customer expectations by delivering quality service through exceptional teamwork"

TUI Nordic: Most satisfied customers and best profitabilty in the business

McDonald's Corporation: Quality food products; efficient, friendly service; and restaurants renowned for the cleanliness and value they provide (Sufi

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Some More
Otis: To provide any customers means of moving people and things up, down, and sideways over short distances with higher reliability than any similar enterprise in the world
Avis: Our mission is total customer satisfaction BA: Be the best and most successful company in the airline business

Easyjet:To provide our customers with safe, low-cost, good value, pointto-point air services. To offer a consistent and reliable product at fares appealing to leisure and business markets from our bases to a range of domestic and European destinations. To achieve this we will develop our people and establish lasting partnerships with our suppliers Kodak: To be the worlds best in chemical and electronic imaging
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Shangri la Hotels
Our Vision The first choice for customers, employees, shareholders and business partners Our Mission Delighting customers each and every time Our Guiding Principles (Core Values) We will ensure leadership drives for results. We will make customer loyalty a key driver of our business. We will enable decision making at customer contact point. We will be committed to the financial success of our own unit and of our company. We will create an environment where our colleagues may achieve their personal and career goals. We will demonstrate honesty, care and integrity in all our relationships. We will ensure our policies and processes are customer and employee friendly. We will be environmentally conscientious and provide safety and security for our customers and our colleagues.

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Some Visions
Tui Nordic = Making holiday dreams come true
Nike (1960s): Crush Adidas Giro Sport Design (1986): Become the Nike of the cycling industry

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Organisational Objectives [1]


Is an organisation a single period profit maximiser?

Johnson & Scholes


An organisation's objectives tend to emerge as the wishes of the most dominant coalition. based on R M Cyert & J G March's 'Behavioral Theory of the Firm' (1996)
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Organisational Objectives [2]


Generally SMART:
Specific Measurable Achievable Realistic Timely

Consistent with the Mission and Aim. One direction, avoid dissonance!!!

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Objectives - Examples
A larger market share Quicker design-to-market times than rivals Higher product quality than rivals Lower costs relative to key competitors Broader / more attractive product line than rivals A stronger reputation with customers than rivals Superior customer service Recognition as a leader in technology and/or product innovation Wider geographic coverage than rivals
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Objectives - Financial
Increased growth in revenues / earnings/ dividends per share Wider profit margins Attractive ROI Strong credit ratings Positive cash flows Recognition as a blue chip company Stable earnings during periods of recession A more diversified revenue base A rising stock price
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Some Statements of Objectives


McDonalds: To achieve 100% total customer satisfaction everyday in every restaurant, for every customer
To provide our shareholders with superior returns by achieving double-digit annual earnings per share growth, increasing dividends consistent with earnings growth, repurchasing shares when the opportunity is right, pursuing profitable international beer expansions, and generating quality earnings and cash flow returns

To become the most competitive enterprise in the world by being No.1 or No.2 in market share in every business the company is in
30% of the companys sales must come from products fewer than 4 years old
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Interest Groups
Shareholders / Board Senior Management Middle Managers / Operating Core

Government / Professional associations

Interest Groups

Technostructure / Support staff

Suppliers Contract Staff / Special Interest Groups

Customers / Competitors

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Stakeholders
Definition:
Stakeholders are groups or individuals who have a stake in, or expectation of, the organisations performance .....
Johnson ,Scholes & Whittington Exploring Corporate Strategy
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Frames of Reference
Functional/ divisional

Professional (or institutional)

Organisational The individual

National (or regional)

Industrial/ sector (recipe)

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Stakeholder Mapping: Power/ Predictability


LOW

Few Problems

Power
HIGH

Unpredictable but Manageable

Powerful but Predictable


HIGH

Greatest Danger or Opportunities


LOW
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Predictability

JUDGEMENTS on Stakeholder Power/Predictability Matrix


Likelihood of each stakeholder group impressing their expectations Whether they have the means to impress: Power of Stakeholder

Effect of stakeholder expectations on future strategies....


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Stakeholder Mapping: Power/ Interest


LOW

Minimal Effort

Keep Informed

Power
HIGH

Keep Satisfied
LOW

Key Players
HIGH

Levels of Interest
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Sub-group EMPLOYEES

Possible objectives Higher wages Job satisfaction Security of employment Better working conditions Dividends Capital growth Interest Prompt repayment of loan instalments No pollution Clean image No unsavoury relations Status Power Perks Challenging tasks Opportunities for development Safe, affordable product Quality Service
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SHAREHOLDERS LOAN FINANCIERS

SOCIETY

MANAGERS

CONSUMERS

Conclusion
Direction priorities will be influenced by key stakeholders May vary depending on size and complexity of organisations Small lifestyle businesses may not seek growth Large complex organisations must be accountable to external owners/shareholders Corporate social responsibility may be a factor in shaping direction Managerialism which focuses on return on capital employed/ investment dominates, it is a legal obligation to meet needs of shareholders
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References
Bartkus B, Glassman m,& McAfee (2000) Mission statements are they smoke and mirrors, Business horizons, Nov./Dec Fletcher W (2001) Hypocritical oath or mission impossible, The Times 19 January Raynor ME (1998), The vision thing, do we need it, Long Range Plasnning Vol 31, No.3 pp 368-376 Sufi T & Lyons H(2003) Mission statements exposed, International Journal of Contemporary Hospitality management, Emerald, 15/5 pp 255-262

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