Strategic Management

Part 2

Vision, Mission and Objectives of the

Company

Reference:
John E. Gamble, Margaret A. Peteraf, & Arthur A. Thompson. Jr.,. Essensials
of Strategic Management: The quest for competitive advantage, 4th Edition.
New York: McGraw-Hill Education, 2015.
 
Stages of Creating and Implementing
strategies
Stage 1: develop a strategic vision, mission
statement, and a set of core values
 Things to do and don't do in setting vision

The Dos The Don’ts

Be graphic. Describe clearly where the Don’t be vague or incomplete. Don't be poor
company is going and the market position the explanation of where the direction and future of
company wants to fight for. the company

Be forward-looking and directional. Describe Don’t dwell on the present. Vision is not about
strategies that will help companies prepare for what the company used to do or do now
the future.

Keep it focused. Focus on making decisions Don’t use overly broad language. Don't use
and allocating resources language too broadly

Have some wiggle room. Language flexibility Don’t state the vision in bland or uninspiring
is customized market, customer, state of terms. Don't express vision in bland or
technology. uninspiring terms.
 Things to do and don't do in vision meetapkan

The Dos The Don’ts

Be sure the journey is feasible. Must be Don’t be generic. Don't use common
within the realm that the company can reach; (unspecified) languages
Over time, companies must be able to
demonstrate measurable progress in achieving
their vision of

Indicate why the directional path makes Don’t rely on superlatives. Don't overdo it
good business sense. The direction of the
company should be in the long-term interests
of stakeholders, especially shareholders,
employees, and suppliers.

Make it memorable. Must be a slogan / Don’t run on and on. Don't be too long (not
memorable short obviously solid)
 Why should the mission be delivered?

Growing employee commitment to the strategic direction chosen by the

1 company

2 Ensuring the importance of understanding

Motivate, inform and inspire internal and external stakeholders

3

4
Demonstrate top management support for the company's future
strategic direction and competitive efforts
 Why should the Company's Vision be conveyed properly?

1 Crystallize senior executive's views on the long-term direction of the

company

2 Reduce the risk of aimless decision-making

3 Gaining support from organization members to bring the vision to life

4 Guidance for lower-level managers in drafting and setting departmental

objectives

5 Helping organizations to get around the future

 Developing the Company's Mission statement

Use a specific language to provide the Company's unique identity

1

Explaining the company's current business and goals— "who we

2 are, what we do, and why we're here"

Should focus on describing the company's business, not on "making a

3 profit" —profit is not a mission statement
 Connecting Vision, Mission with Core Corporate Values

The company's core values are the beliefs, traits, and norms of behavior that are expected to
be displayed by the company's personnel in conducting the company's business and pursuing its
strategic vision and mission.

• Are the beliefs, traits, and norms of behavior that employees expect to
be demonstrated in running the company's business and in pursuing its
strategic vision and mission?
• Become an integral part of corporate culture
• Match the company's vision, mission, and strategy, contributing to the
Core Values company's business success
 Stage 2:
Objective settings
 Specific

Measurable Karakteristik tujuan Menantang/

yang baik memotivasi

Targets for
achievement
 What Kinds Of Objectives To Set

• Communicate top management’s goals for financial performance

• Are focused internally on the firm’s operations and activities.
Financial
Objectives

• Are the firm's goals related to marketing standing and competitive position.
• Are focused externally on competition vis-à-vis the firm’s rivals

Strategic
Objectives
 Setting Financial Objectives

Increase in annual revenue

Increase in profit after tax
Increase in share income
Increased dividends
Profit margin
Return on employed capital (ROCE) or return on shareholder equity
investment (ROE)
Increased shareholder value in the form of a share price that tends to rise
upwards
Bond and credit ratings
1. Internal cash flow to fund new investments
 Setting Strategis Objectives

Win market share

Achieve lower overall costs than competitors
Outperform major competitors on product performance or quality or customer service
Earn revenue from the sale of new products introduced in the last five years
Have broader or deeper technological capabilities than competitors
Has a wider product line than competitors
Have a better known or stronger brand name than rivals
Have stronger national or global sales and distribution capabilities than competitors
1. Consistently get new or better products to market in front of competitors
 Stage 3:
Create a strategy
 Strategy making

Overcoming a series of strategic ways

1

Requires selection among strategic alternatives

2

Promote actions to do something different from competitors

3

4
Is a collaboration involving managers in various positions at all levels of
the organization
 Stage 4:
Executing The Strategi
 Converting strategic plans into actions requires

Direct organizational actions

1

Motivate organization members

2

Building and strengthening the company's competence and

3 competitive capabilities

Creating and maintaining a working climate that supports strategies

4
Meet performance targets
 Managing the strategi execution process

Creating a strategy support structure

Staff at the company with the skills and skills needed
Develop and strengthen resources and capabilities that support
strategies
Allocate sufficient resources for activities critical to strategic
success
Ensure that policies and procedures facilitate the effective
implementation of strategies
1. Organize work efforts to achieve best practices
 Managing the strategi execution process

Install information and operating systems that enable company

personnel to perform important activities
Motivate and provide rewards / incentives directly for the
achievement of performance goals
Creating a corporate culture conducive to successful
implementation of strategies
7. Provide the internal leadership needed to drive future
implementation
 Stage 5:
Evaluating Performance and Initiating
Corrective Adjusment
 • Decide whether the company will pass 'the three tests of a
winning strategy'; compatibility, competitive advantage,
Evaluating strong performance
performance

Decide whether to continue or change the company's vision

and mission, objectives, strategies, and methods of
implementing the strategy
Initiating • Apply lessons based on organizational experience
corrective
adjustment
 Achieving Effective Corporate Governance

Strong and independent board of directors:

Well informed about the company's performance
Guide and assess CEOs and other executives
Can limit management actions that the board thinks are inappropriate or too
risky
Can state to shareholders that the CEO is doing what the board expects
Provide insights and advice to top management
1. Deeply involved in debating the pros and cons of the company's key
strategic decisions and actions