Professional Documents
Culture Documents
Business Vision and Mission
Business Vision and Mission
Vision Statement –
What do we want to become?
Mission Statement –
What is our business?
Ch 1 -1
Many organizations today develop a vision
statement that answers the question “What
do we want to become?”
Developing a vision statement is often
considered the first step in strategic planning
Many vision statements are a single sentence
Ch 1 -2
Mission statements are “enduring statements
of purpose that distinguish one business from
other similar firms.
A mission statement identifies the scope of a
firm’s operations in product and market
terms.” It addresses the basic question that
faces all strategists: “What is our business?”
Ch 1 -3
A clear mission statement describes the
values and priorities of an organization.
Developing a mission statement compels
strategists to think about the nature and
scope of present operations and to assess
the potential attractiveness of future markets
and activities.
Ch 1 -4
A mission statement broadly charts the future
direction of an organization.
A mission statement is a constant reminder to
its employees of why the organization exists
and what the founders envisioned when they
put their fame and fortune at risk to breathe
life into their dreams.
Ch 1 -5
4. External Opportunities and Threats
Analysis of Trends
Economic
Social
Cultural
Demographic/Environmental
Political, Legal, Governmental
Technological
Competitors
Ch 1 -6
Opportunities and Threats
Ch 1 -9
Other opportunities and threats may include:
the passage of a law,
competitor,
a national disaster, or
Ch 1 -10
External Opportunities and Threats
Take advantage of
External Opportunities
Strategy Formulation
Avoid/minimize impact of
External Threats
Ch 1 -11
For this reason, identifying, monitoring, and
evaluating external opportunities and threats
are essential for success.
This process of conducting research and
gathering and assimilating external information is
sometimes called environmental scanning or
industry analysis.
Lobbying is one activity that some
organizations utilize to influence external
opportunities and threats.
Ch 1 -12
5. Internal Strengths and
Weaknesses
Ch 1 -13
Internal strengths and internal
weaknesses are an organization’s
controllable activities that are
performed especially well or poorly.
Ch 1 -14
Internal Strengths and Weaknesses
Financial Ratios
Performance Measures
Internal Factors
Industry Averages
Survey Data
Ch 1 -15
Internal Strengths and Weaknesses
Marketing
Finance/Accounting
Production/Operations
Ch 1 -16
Identifying and evaluating organizational
strengths and weaknesses in the functional
areas of a business is an essential strategic
management activity.
Ch 1 -17
Strengths and weaknesses are determined
relative to competitors.
Ch 1 -18
6. Long-Term Objectives
Aid in evaluation
Create synergy
Reveal priorities
Focus coordination
Diversification
Acquisition
Product development
Market penetration
Retrenchment
Divestiture
Liquidation
Joint venture
Strategies are potential actions that
require top management decisions and large
amounts of the firm’s resources.
In addition, strategies affect an
organization’s long-term prosperity, typically
for at least five years, and thus are future-
oriented.
Strategies have multifunctional or
multidivisional consequences and require
consideration of both the external and
internal factors facing the firm.
8. Annual Objectives
StrategicManagement Process
Dynamic & continuous
Communication is a key to
successful strategic management
A major aim of the process is to achieve
the understanding of and commitment from all
managers and employees. Understanding may
be the most important benefit of strategic
management, followed by commitment.
When managers and employees
understand what the organization is doing and
why, they often feel they are a part of the firm
and become committed to assisting it.
Managers and employees become
creative and innovative when they
understand and support the firm’s mission,
objectives, and strategies.
A great benefit of strategic
management, then, is the opportunity that
the process provides to empower
individuals.
Empowerment is the act of
strengthening employees’ sense of
effectiveness by encouraging them to
participate in decision making and to
exercise initiative and imagination, and
rewarding them for doing so.
More and more organizations are
decentralizing the strategic-management
process, recognizing that planning must involve
lower-level managers and employees.
Laziness
Content with success - Particularly if a firm
is successful, individuals may feel there is no
need to plan because things are fine as they
stand.
Fear of failure - By not taking action, there is
little risk of failure unless a problem is urgent
and pressing.
Reasons (con’t)
Overconfidence - As managers amass
experience, they may rely less on formalized
planning. Rarely, however, this is appropriate.
Being overconfident or overestimating
experience can bring demise. Forethought
is rarely wasted and is often the mark of
professionalism.
Prior bad experience – in cases in which plans
have been long, ungainly, impractical, or
inflexible. Planning, like anything else, can be
done badly.
Reasons (con’t)
Self-interest—When someone has achieved
status, privilege, or self-esteem through
effectively using an old system, he or she
often sees a new plan as a threat.
Fear of the unknown—People may be
uncertain of their abilities to learn new skills,
of their aptitude with new systems, or of their
ability to take on new roles.
Suspicion—Employees may not trust
management.
Reasons (con’t)
Honest difference of opinion—People may
sincerely believe the plan is wrong. They may
view the situation from a different viewpoint,
or they may have aspirations for themselves
or the organization that are different from the
plan. Different people in different jobs have
different perceptions of a situation.
HRM 1B
CBMEC 2 - TTH 12:30-2:00
P.E. 2 – M – 10:00-12:00
1. Define strategic
management.
2. What is the difference
between strategic
management and strategic
planning?
3. What are the three
stages of strategic
management process?
Justify each.