HIERARCHY OF STRATEGIC

INTENT
Presented By
Akshit
Shivam
Alex
Satvik
 Introduction
• Hamal and Prahlad define strategic intent as:
•‘On the one hand, Strategic intent envisions a desired
leadership position and establishes the criterion the
organization will use to chart its progress…at the same
time, strategic intent is more than simply unfettered
ambition…the concept also encompasses an active
management process that includes: focussing the
organization’s attention on the essence of winning,
motivating people by communicating the value of the
target, leaving room for individual and team
contributions, sustaining enthusiasm by providing new
operational definitions as circumstances change and
using intent consistently to guide resource allocations.’

• Almost all multinational firms have evidently shown

that the view point of hamal and Prahlad is correct.

• Some examples are Reliance group of industries,

Tatas, etc. which started as a small firm but have
reached great heights using intent to grow.
Stretch , Leverage and Fit
• Stretch is a ‘Misfit between resources and aspirations’.

• Leverage refers to concentrating, accumulating, complementing, conserving, and recovering resources in such a
manner that the meagre resource base is stretched to meet the aspirations that an organization dares to have.

• Fit means positioning the firm by matching its organizational resources to its environment.

• First, techniques such as SWOT analysis are used to find the opportunities and capabilities of the organization.

• Then strategy becomes a compromise between the opportunities and abilities of the firm.

• The opportunities are seen as something which can be moulded and this is where the idea of fit comes in as it
provides a more realistic view of the situation whereas stretch and fit may provide an idealistic view.
 • These are the aspirations of the firm and individuals and
define what they want to become.

• Aspirations must be achieved otherwise they are just castles

in the air.

• Every individual as well as firm has some vision about what

they want to be in the distant future which helps in the
formulation of strategies to be able to achieve that goal.

• Visions may not be defined explicitly but are great motivators

for individuals in achieving a goal.

• El-Namaki defines vision as: ’ mental perception of the kind of

VISION
environment an individual, or an organization, aspires to
create within a broad time horizon and the underlying
conditions for the actualization of this perception.
BENEFITS OF HAVING A VISION

GOOD VISIONS ARE HELPS IN THE CREATION OF THEY FOSTER LONG-TERM THEY FOSTER RISK-TAKING THEY USE INTENSITY AND
INSPIRING AND A COMMON IDENTITY AND THINKING AND EXPERIMENTATION ARE TRULY GENUINE.
EXHILARATING A SHARED SENSE OF
PURPOSE

THEY PROVIDE A STEP AND

JUMP AHEAD AS THE FIRM
KNOWS WHAT IT WANTS TO
BECOME
PROCESS OF ENVISIONING
• A well-conceived vision consists of 2 major components:

• Core ideology- It defines the enduring character of an organization that remains unchangeable as it
passes through the vicissitudes of vectors such as technology. It rests on the core values of the firm.

• Envisioned future- It comprises a goal that is to be achieved and what it would be like to achieve it.
 It is the role that an organization plays in society.

Organizations strive to fulfill the needs of society through

various means.

Hunger and Wheelen state that mission is the ‘purpose or

MISSION
reason for the organization’s existence.’
It is formulated by various means in different organizations
and there are no predetermined sets for a mission
statement.
It is communicated to the people in order to build the
reputation of the firm.

It reflects the corporate philosophy, identity, character, and

image of the organization.
CHARACTERISTICS OF A MISSION
STATEMENT
• A mission statement must possess 7 characteristics in order to be effective:
• It should be Feasible- It should not aim too high and must be achievable, but the feasibility
depends on the resources available.

• It should be Precise- It should neither be too narrow as to restrict the organization’s activities nor
too broad which makes it meaningless.

• It should be Clear- It should be clear enough to lead to action and not just high sounding set of
platitudes for publicity purposes. Organizations must take this seriously as it may affect their
corporate image in the future.

• It should be Motivating- It should be motivating for the members as well as customers of the
organization and show that it is worthwhile being in association with the firm.
• It should be Distinctive- It should not be on the same lines as competitors as
it will not differentiate the firm.

• It should indicate Major Components of Strategy- It should define some

idea of the strategies to be adopted by the firm which may enhance its
utility.

• It should indicate how Objectives are to be Accomplished- It should define

ways in which the organization’s objectives are to be achieved so as to make
the plan of action.
BUSINESS DEFINITION
• Business can be defined differently for each industry but all of them have three dimensions in which it is defined. These are:
• Customer functions- It defines the ‘what’ aspect of the product as it defines the needs that are being fulfilled
by the products or services offered. The needs can be basic needs or high-order needs depending on the
industry. This is the most important dimension as every business wants to fulfill the needs for long-term
growth.

• Customer Groups- It deals with the ‘who’ aspect as it defines the target market and the people whose needs
are to be fulfilled. This is also an important dimension as it helps the organization to focus on the target market
and earn a reputation. There are various ways for identifying the market such as demographic, geographic, etc.

• Alternative Technologies- It deals with the ‘how’ aspect and the ways in which the products and services are to
be provided to the customers. It identifies various means which can be used for providing products to
consumers.

• These dimensions have been identified by D.F. Abell and can be used to find the dimension for each and every business.
• Businesses can be defined at various levels based on the size of the whole organization. A single business
firm has an easy definition.

• A large conglomerate may be defined at the top and then each business may have a different definition.

• Each of the large conglomerates has companies in various industries so a single definition cannot be
provided due to diversifying businesses.

• The products offered also have far-reaching implications for the firm as they may be perceived differently by
various individuals.

• The firm needs to identify its products in order to build an image in the minds of people. For eg. Motorola
wanted to make mobile phones to help customers in paying bills, buy tickets and do many more functions
rather than just make calls which built its reputation as a premium phone company in the market.
 BUSINESS MODEL

This concept has changed over the previous years

The business model helps in differentiating the Online firms have vastly different business models
due to the internet boom and changes in the
business as well as formulating strategies. compared to old firms.
technological environment.

Example: Bharti Airtel wants to become a major

player in the communications market and uses a
highly cost-effective business model. It has
Google earns through the ads that are shown and entered into a strategic alliance with Nortel India
A business model also helps in identifying
sponsorships rather than providing information to to handle the customer contact services that help
opportunities that could help in growth.
the people. it to focus on the core business. This also helps in
reducing costs due to lower employee and infra
needs and also provides better service to the
consumer.
GOALS AND OBJECTIVES

GOALS ARE WHAT AN ORGANIZATION STRIVES TO OBJECTIVES ARE CLEARLY DEFINED AND SPECIFIC OBJECTIVES ARE MORE IMPORTANT AS THEY
ACHIEVE AND MAY BE GENERALIZED IN NATURE. IN CONTRAST TO GOALS. THEY MAY BE LONG- HELP IN FORMULATING STRATEGIES AND ARE
THESE ARE USUALLY LONG-TERM AND GROWTH- TERM OR SHORT-TERM DEPENDING ON THE SPECIFIC IN NATURE WHICH PROVIDES
RELATED. IMPLICATION. DIRECTION TO THE ACTIONS OF THE FIRM.
ROLE OF OBJECTIVES

Define Define the organization’s relationship with its environment- A firm commits to what it wants to achieve
for society at large and the employees.

Help Help an organization pursue its vision and mission- They define the short-term and long-term targets
which are in line with the vision and mission of the firm.

Provide Provide the basis for strategic decision-making- They provide a direction for the plan of action and help
in achieving desirable results.

Provide Provide the standards for performance appraisal- They set benchmarks along which the performance can
be evaluated and judged in order to be consistent or better in the future.
CHARACTERISTICS OF OBJECTIVES

Objectives should be Understandable- They must be clear to the people who have to achieve them as the managers
will take the wrong action if they don’t understand clearly.

Objectives should be Concrete and Specific- They should be specific and not generalized as they may cause confusion
in the minds of the people and may not be achieved.

Objectives should be related to a Time Frame- The duration of objective must be set in order to define the terms for
the employees and targets are achieved on time.

Objectives should be Measurable and Controllable- This helps to clearly identify all the terms of the contract and
makes it easy for the lower level employees to identify its implications.

Objectives should be Challenging- They must not be too low or too high which makes them unrealistic to achieve.
They are great motivators as the employees may increase productivity to achieve them if they are achievable.
Different objectives should Correlate with each other- The objectives set must be
correlating as it may lead to conflict among the departments if the employees
are not in favor of them.

Objectives should be set within Constraints- There are various constraints both
internal and external which need to be considered while setting objectives.
Resource availability is an internal constraint and legal rule is an external
constraint. Both these need to be looked at before setting objectives so that
there is no problem for the firm.
 Specificity- Objectives may be too broad or too narrow which
makes it a problem in achieving them. The objectives may be
set at different levels in order to curb this issue. They can be set
at corporate, general, and particular so that each area of
operations is taken care of and judged.

Multiplicity- Objectives need to be more in number for a large

firm due to the presence of hierarchy and diversification.

ISSUES IN Objectives must be set with respect to organizational level,

function, ends, and nature to cover all aspects Too many or too
few objectives may turn out to be unrealistic.

OBJECTIVE
SETTING Periodicity- Objectives are set for long-term and short-term
usually but they need to be correlated in order to achieve all of
them. Many short-term objectives may be needed to achieve a
long-term objective. Short-term objectives are specific in nature
while long-term ones are general.

Verifiability- A manager will not be able to clearly identify if an

objective has been met if it is not verifiable. Quantitative
objectives are much easier to be judged as they are measurable
whereas qualitative objectives need to be carefully judged in
order to identify the extent to which they have been met.
Reality- Organizations need to define the operative and
official objectives. Operative are the ones towards
which the firm actually works while official ones are
usually for publicity.

Quality- The quality of an objective is judged on the

basis of its measurability and if it provides direction to
the firm. An objective to be a market leader in the
industry is a bad objective as it is not measurable. An
objective such as ‘ to increase our sales by 20% in the
next two years ‘ is much better as it provides direction
and can be measured.

Objectives are usually set for growth and profitability as

these are what organizations strive to achieve in the
long-term.
FACTORS DETERMINING
OBJECTIVES
• Glueck identifies 4 factors that help in determining the objectives to
be set. These are:
• Forces in the environment- It takes into account
the opinion of each person related to the firm.

• Realities of firm’s resources and internal power

relationships- This is the resource availability with
the firm as well as the allocation of these
resources among various departments.

• Value system of the top executive-The values of

the organization as well as individuals define the
areas in which the objectives are to be set.

• Awareness by the Management- Objectives set in

the past are usually carried on or changes are
implemented marginally as the objectives are
correlated.
 • According to Robert Kaplan and David Norton,
performance should be measured from 4
perspectives:
• Financial- It considers the financial
aspect such as the revenue.

• Customer’s – This includes customer

satisfaction and overall quality of
BALANCED service provided to the customers.
SCORECARD
APPROACH • Internal business – These are the
internal goals to be achieved and
provide information on the financial
success of the firm.

• Learning and growth- It shows if the

organization is open to change and can
face challenges that come its way in
the future.
 These are as the name suggests critical for the measurement of
the firm’s performance.

CRITICAL
They may be different for various organizations and need to be
clearly defined in order to be evaluated.

SUCCESS
FACTORS Example: A shoe-manufacturing company may set high quality
and cost-effectiveness as its CSFs while a courier company sets
speedy delivery and price as its CSFs so they are different for
each organization.

There is no standard procedure for setting CSFs but a general

idea of the major factors that the firm looks into helps in
identifying them.
 These are the measures used to identify the extent
to which the CSFs have been achieved.

KEY
PERFORMA
They are clearly defined and are in quantifiable
terms that can be easily measured.

NCE
INDICATOR The CSFs set are correlated to KPIs.

S
Example: A firm with a CSF of profitability needs to
have pre-tax profit or shareholder equity as its KPIs
in order to measure the extent to which objectives
have been achieved.
NCE
INDICATO
THANK YOU
RS