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Strategic Purpose -vision,

Mission,Core Ideology and Values;


Strategic Intent
Prof Ashish K Mitra
STRATEGIC POSTURE
Whether a firm is developing a new business or
re-formulating direction for an ongoing
business, it must determine the basic purpose,
goals & philosophies that will shape its strategic
posture
Vision & Mission
Organizations Vision & Mission act as guideline /
direction for strategy formulation
(Establishing Vision / mission are therefore key top level
direction setting tasks in any organization)
Process of strategy formulation involves articulating a
vision , translating vision into a Mission that defines the
organizations purpose , converting mission into
performance objectives, detailing each objective into
specific goals, and formulating strategies and tactics for
accomplishing the goals.
Vision vs Mission : What do we want to become in
long run? vs What is our business? (who we are,
what we do, what is our management philosophy?)
Vision
A well-conceived vision comprises of two main
components which are complimentary in nature.
A Core ideology What we stand for and we exist,
the core values that never changes ordinarily even
when technology, competition , management style etc
change
An envisioned future what we aspire to become,
to achieve, to create that demands significant
change and progress. (BHAGs)
Eg: Vision of Tata Steel: we aspire to be the Global Steel Industry
benchmark for Value creation and Corporate Citizenship
Vision is a powerful motivator and keeps an organization
moving in the forward direction, provides a directional
path and guides the effort of employees. The
organizations mission flows from the vision.
Vision.
Vision is what insiders of organization create or
perceive, however should also reflect concerns of other
stake holders like shareholders, customers, employees,
the local community, and society in order to be effective.
For example, support of shareholders is necessary to
bring about any major change in the organization.
A well drafted vision should be realistic, credible,
attractive, and future oriented.
Vision ought to convey a larger sense of
purpose ( worth pursuing ) so that the
people in the organization see themselves as
building a cathedral rather than laying stones.
Vision

A well articulated strategic vision creates enthusiasm for


the course management has charted and engages all
members of the organization, in which people live the
business instead of just coming to work.
They help in creating a shared sense of purpose.
Compel people to take risks, experiment with ideas,
stretch their energies and take others along a relentless
pursuit to scale new heights.
A vision has far more motivational value if it stresses
the payoff for customers and/or the general well being of
society, not the payoff for shareholders
Vision Statementssome examples

Scotland Yard:To make London the safest major city


in the World
Charles Schwab: To provide customers with the most
useful and ethical finance services in the World
General Electric:We will become number one or
number two in every market we serve, and
revolutionize this company to have the speed and
agility of a small enterprise
NIKE:To bring innovation and inspiration to every
athlete in the world
Microsoft: Empower people through great software
any time, any place, and on any device
INTEL:Getting to a billion connected computers
worldwide, millions of servers, and trillions of dollars
of e-commerce.
Colgate-Palmolive: To be the company of first choice
in oral and personal hygiene by continuously caring
for consumers and partners
Tata Steel: we aspire to be the Global Steel Industry
benchmark for Value creation and Corporate
Citizenship
Azim Premji Foundation : To significantly contribute
to quality universal education as a foundation to a
just, humane and equitable society.
Reliance Industries Limited :Through sustainable
measures, create value for the nation, enhance quality of
life across the entire socio-economic spectrum and help
spearhead India as a global leader in the domains where
we operate
BIOCON : To be an integrated biotechnology enterprise
of global distinction
INFOSYS: We will be a globally respected corporation
Naryans Hrudayala ( Dr Devi Shetty) : To provide
affordable heart care to the masses.
Ford Motor Company: Our vision is to become the
worlds leading consumer company for automotive
products and services.
Mission Statements
Mission is defined as the fundamental and enduring
purpose of an organization ( reason for being) that sets it
apart from others of a similar nature
Mission identifies the scope of its operation in terms of
product, market ( the customer it seeks to serve) , and
technology thrust areas
Reflects the values, beliefs and priorities of the firms
strategic decision makers business philosophy, image
company seeks to project and firms self-concept
Mission of a business looks to an endless future as if the
firm were immortal
Firms must ensure that their mission remains relevant
over time. Mission should not become a trap. Though
mission is not to be tinkered often, organizations should
not be building strategies around a mission that has
been robbed of its reality.
Mission Statements
The mission serves as a proclamation to insiders and
outsiders on what corporation stands for. A mission ,
however, is not a PR document; while it legitimizes the corporations
existence and role in the society, its main purpose is to give
internal direction for the future of the corporation.
One school of thought says that the mission must be stated in
precise & concrete terms. Another school feels that a good measure
of generality is desirable, after all, they are not designed to express
concrete ends; they are intended rather to provide motivation and
general direction to everyone and an image , and a guiding
philosophy for the enterprise as a whole. A mission does not
represent a specific target. At the same time it is not an euphoria
either
Levitt, in his classic work The Marketing Myopia forcefully brought
out tragic flaw in viewing ones business scope from a narrow
product oriented perspective instead of broader need-oriented
or function oriented perspective ( Failed American Railroad
defined business as railroads rather than transportation)
Mission Statements.
The mission is the reference point and guiding spirit for
the growth plan of a firm, its nature and pace. AT&Ts
mission stated in initial years to give a telephone to
every American. Later AT&T refined its mission to
connecting people any time, any where. Changes in
Corporate mission and business definition are part and
parcel of growth process of a firm.
Drucker talks about ensuring mission objective
competency fit or congruence for organizations, which
should be retested based on changes in external and
internal environments.
That business mission is so rarely given adequate thought is
perhaps the most important single cause of business
frustration Peter Drucker
Mission Statements..
A mission statement usually attempts to answer few of the
following questions:
Why it is in business? What is our basic purpose ( and
long term objectives)?
What is unique or distinctive about our organization?
Core competencies & competitive advantages?
Who are, or should be, our principle customers, clients?
What are our enduring economic goals?, or should be
our principal economic concerns?
What are our principal products at present and what will
they be in future?
What are the basic beliefs, values, aspirations and
philosophical ( company image, self-concept) priorities of
the firm?
How do we view our responsibilities to shareholders,
employees, communities, social issues, environment?(profit)
Formulating a mission statement
The process of formulating a mission for a specific
business is best understood by considering the business
at its inception.
A typical business organization begins with the
aspirations and beliefs of a single entrepreneur.
As the business takes root and grows or is forced by
competitive pressures to alter its product , market or
technology , the company may redefine its mission
statement with more assertion viz; who we are and what
we do
Basic products, primary market and principal
technology used in production or delivery
The three indispensable components of a
mission statement are the
basic product,
the primary market and
the principal technology / special resources
used in production or delivery.
The above three components describe the
business activity of the company.
Company Philosophy
Statement of Companys philosophy ( often called the
company creed) usually accompanies or appears
within the mission statement.
It reflects the Company philosophy and values give a
framework / boundary for individual actions aimed at
achieving corporate goals.
It reflects the basic beliefs, values, aspirations and
philosophical priorities to which strategic decision
makers are committed in managing the company

Example : Co philosophy of Sun Microsystems We


believe human development to be the worthiest of the
goals of civilization for nurturing growth in the capabilities
of people
Values
By Values, we mean the beliefs, business principles,
and practices that are incorporated into the way the
company operates and the behavior of company
personnel.
Value relate to such things as treatment of
employees and sensitivity to customer wants,
integrity, ethics, innovativeness, emphasis on quality
or service, social responsibility, and community
citizenship. Value statements reinforce the
companys vision, strategy and operating practices.
Home Depot ( a large chain in US) has embraced values
entrepreneurial spirit, excellent customer service, giving back to
the community, respect for all people, taking care of people,
building strong relationships, and creating shareholder value.
Sonys vision rests on the values of
encouraging individual creativity and its
determination to be a pioneer
Intels corporate values consist of discipline,
risk taking, quality, customer orientation, a
result oriented atmosphere, and being a great
place to work
DuPont, which calls itself a science
company and makes a wide array of
products, stresses four values safety,
ethics, respect for people, and environmental
stewardship.
Public Image

The issue of public Image is increasingly


becoming important, more so for a
growing firm that is redefining markets,
products, and its markets. Companys
mission statement should take into
account public image that company wants
to create. For example Johnson &
Johnson products are regarded as safe
and Sonys as quality products.
Examples of mission statements
Cadbury India : To attain leadership position in the
confectionary market and achieve a strong national
presence in the food drinks sector
Reliance Industries: To become a major player in the
global chemicals business and simultaneously grow in
other growth industries like infrastructure
Mckinsey & Co: To help business corporations and
governments to be more successful
Merck: : To provide society with superior products and
services innovations and solutions that satisfy
customer needs and improve quality of life.
Eastman Kodak we are in the picture business
ONGC To stimulate, continue and accelerate efforts
to develop & maximize the contribution of the energy
sector to the economy of the country
Pfizer Inc: Pfizer is a research-based , global
pharmaceutical company. We discover and develop
help them enjoy longer, innovative, value added
products that improve quality of life of people around the
world and help them enjoy, healthier, and more
productive lives.
The company has three business segments: health
care, animal health and consumer health care. Our
products are available in more than 150 countries
Ritz-Carlton Hotels : The Rtz-Carlton Hotel is a place
where genuine care and comfort of our guests is our
highest mission.
We pledge to provide the finest personal service and facilities for
our guests, who will always enjoy a warm, relaxed yet refined
ambience.
The Ritz-Carlton experience enlivens the senses, instills well-
being, and fulfills even the unexpressed wishes and needs of our
guests.
The Gillette Company: Our mission is to
achieve or enhance clear leadership, worldwide,
in the existing or new core consumer product
categories in which we choose to compete.
Current categories are:
Male grooming products, including blades and
razors, electric shavers, shaving preparations .
Female grooming products, including .
Alkaline and special batteries and cells.
..
Values: In pursuing our mission, we will live by
following values
- People
- Customer Focus
- Good Citizenship
Microsoft For years mission that drove Microsoft
was a computer on every desk & every home using
great software as empowering tool. Its new mission for
2013 and beyond is "to create a family of devices and
services for individuals and businesses that empower
people around the globe at home, at work and on the go,
for the activities they value most." In 1999 broadened its
vision- Empower people through great software any
time, any place, and on any device
OTIS Our mission is to provide any customer a means
of moving people and things up, down, sideways over
short distances with higher reliability than any similar
enterprise in the world
Bristol-Meyers Sqib our mission is to extend and
enhance human life by providing the highest quality
health and personal care products. We intend to be
preeminent global diversified health and personal care
Mission Statement of Azim Premji Foundation..
Catalyze a national movement for Universalization of
Elementary Education in India.
Achieve significant improvement in the quality of
education as a sustained method for attracting and
retaining children in the school
Work with existing government initiatives and create new
ones to improve access, content and delivery of
education.
Build active, sustainable partnerships with individuals,
community at large, government and other organizations
committed to the field of education to leverage the effort
for optimum results.
Enable schools to guarantee learning
Develop world class human resources in the field of
education
Mission statement of TCS is : To help customers achieve
their business objectives by providing innovative, best-in-
class consulting, IT solutions and services. Make it a joy
for all stakeholders to work with us.
The values guiding the organization are specified as :
Integrity, Leading Change, Excellence, Respect for the
individual, and Learning and sharing.
David Nine components of a mission statement
Customers
Products or services
Markets
Technology
Concern for survival, growth and profitability
Philosophy
Self-concept
Concern for Public Image
Concern for employees
Process of developing a mission statement
Process of development of mission statement should
create an emotional bond & sense of mission between
organization & employees. Emotional bond comes when
an individual identifies with the underlying values &
behavior of a firm.
Involve as many managers & employees in process ,
brings commitment.
An approach often used is to select several articles about
mission statement, ask people to read as background
information.
Set up discussion groups, hire consultants / facilitators to
manage process / draft language, get unbiased view
Decide how best to communicate to all stakeholders
Strategic Intent
C K Prahalad & Gary Hamel highlighted the concepts of
Strategic intent based on deep study of success of smaller
Japanese rivals over giant established American
corporations in 1980s in their book Competing for
Future.
Strategic Intent is defined as the ability of the firm to think
beyond its resources at a given point of time and define its
purpose in terms- such as achieving something very
laudable over a long horizon, challenging the market leader
or industry leader. Since Strategic intent envisages the
companys position in the long term - it conveys a sense of
direction.
Strategic Intent is described as a way of creating an
obsession with winning, amongst all levels of employees
and across all functions of the organisation. It is a shared
competitive agenda for . Employees will be inspired / excited
about the feeling of exploring something new i.e, discovery
Strategic intent also generates an emotional connection.
Employees feel passionate that the pursuit of the companys goals is a
worthwhile experience. In this way it gives rise to a shared destiny.
Examples : Success stories of Komatsu vis--vis Caterpiller
Komatsu set out to encircle Caterpillar. Cannon sought to Beat
Xerox .. And Honda strove to become a second Ford am
automotive pioneer .. John F Kennedy in 1960 USA will put the first
man o the moon by end of the decade
Strategic Intent : is the dream that energizes a company. The
strategic intent that provides the emotional and intellectual energy
necessary for the long journey. It gives employees at all levels of a
corporation:
A sense of direction
A sense of discovery every individual enjoys exploring some thing
new
A sense of Destiny
Conventionally , strategy attempts to ensure a fit between
existing resources and emerging opportunities. In contrast, the
concept of strategic intent involves the deliberate creation of a
situation of misfit between resources and aspirations
Competitive Strategy as Leverage
Leverage comes into picture when a resource- scare firm
is facing a resource rich rival like one who may have
high financial resources and / or high market share and
revenue. Leverage is to do more with less
North Vietnam in its conflict with US a good example of
resource leverage. Resource scarcity gave rise to
creativity.
GM was rich, had invested billions in automating
manufacture. But did not adequately rejuvenated
management processes and work flows, supplier
relationships . It lacked the skill & will to leverage
resources.
Smaller Japanese challengers changed the rules of the
game. Looked for gaps in bigger firms defenses. Focused
its investments on relatively fewer competencies where
the firm saw chances of becoming a leader.
Created Lean manufacturing methods to do
more with less. As they had fewer designers,
they were constrained to reduce product
development times and subsequently the cost of
introducing new product lines
The need for shorter product development period
encouraged cross-functional communication.
Resource limitation made them develop capable
supplier base, which shared a substantial burden
of innovation.
Japanese firms could not think of corporate
overheads or excess management layers. It
would choose only a few goals , which will have
full top management support.
Japanese managerial ingenuity is credited
for perceiving competition as
encirclement rather than confrontation,
an inclination to reduce the time taken for
product development, tightly knit cross
functional teams, a focus on core
competencies, close links with suppliers,
and a program for employee involvement.
Some of the premises on Which Leveraging Operates
A firm is a portfolio of resources (as well it is a
portfolio of products or businesses)
Resource constraints not necessarily prevent a
firm to achieve global leadership
Leverage-based efficiency gains come primarily
from raising the numerator in productivity
ratios rather than from reducing the
denominator.
The resource allocation task of management
has received too much attention as compared to
the task of resource leverage.
The capacity for resource leverage often
separates winners in prolonged battles for
industry leadership
Strategic intent involves significant stretch for the
organization.. Existing skills, capabilities , and resources
are not considered sufficient for the task.
ORGANIZATIONAL DIRECTION

VISION Founder / Stakeholders


MISSION Top Management
OBJECTIVES (long term) Business Unit with Top Management
Unit Manager with approval of
Plans
superior
Each Organizational Level, in conformity
Policies With other unit policy
Individual Managers, in conformity
Goals
With unit policies
Strategies Individual Managers, in conformity
& Tactics With individual Goals

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