Components of a Strategy Statement
The strategy statement of a firm sets the
firm’s long-term strategic direction and broad policy directions. It gives the
firm a clear sense of direction and a blueprint for the firm’s activities for
the upcoming years. The main constituents of a strategic statement are as
follows:
Strategic
Intent
- An
organization’s strategic intent is the purpose that it exists and why it
will continue to exist, providing it maintains a competitive advantage.
Strategic intent gives a picture about what an organization must get into
immediately in order to achieve the company’s vision. It motivates the
people. It clarifies the vision of the vision of the company.
- Strategic
intent helps management to emphasize and concentrate on the priorities.
Strategic intent is, nothing but, the influencing of an organization’s
resource potential and core competencies to achieve what at first may seem
to be unachievable goals in the competitive environment. A well expressed
strategic intent should guide/steer the development of strategic intent or
the setting of goals and objectives that require that all of
organization’s competencies be controlled to maximum value.
- Strategic
intent includes directing organization’s attention on the need of winning;
inspiring people by telling them that the targets are valuable;
encouraging individual and team participation as well as contribution; and
utilizing intent to direct allocation of resources.
- Strategic
intent differs from strategic fit in a way that while strategic fit deals
with harmonizing available resources and potentials to the external
environment, strategic intent emphasizes on building new resources and
potentials so as to create and exploit future opportunities.
Mission
Statement
- Mission
statement is the statement of the role by which an organization intends to
serve it’s stakeholders. It describes why an organization is operating and
thus provides a framework within which strategies are formulated. It
describes what the organization does (i.e., present capabilities), who all
it serves (i.e., stakeholders) and what makes an organization unique
(i.e., reason for existence).
- A mission
statement differentiates an organization from others by explaining its
broad scope of activities, its products, and technologies it uses to
achieve its goals and objectives. It talks about an organization’s present
(i.e., “about where we are”). For instance, Microsoft’s mission is to help
people and businesses throughout the world to realize their full
potential. Wal-Mart’s mission is “To give ordinary folk the chance to buy
the same thing as rich people.” Mission statements always exist at top
level of an organization, but may also be made for various organizational
levels. Chief executive plays a significant role in formulation of mission
statement. Once the mission statement is formulated, it serves the
organization in long run, but it may become ambiguous with organizational
growth and innovations.
- In
today’s dynamic and competitive environment, mission may need to be
redefined. However, care must be taken that the redefined mission
statement should have original fundamentals/components. Mission statement
has three main components-a statement of mission or vision of the company,
a statement of the core values that shape the acts and behaviour of the
employees, and a statement of the goals and objectives.
Features
of a Mission
- Mission
must be feasible and attainable. It should be possible to achieve it.
- Mission
should be clear enough so that any action can be taken.
- It
should be inspiring for the management, staff and society at large.
- It
should be precise enough, i.e., it should be neither too broad nor too
narrow.
- It
should be unique and distinctive to leave an impact in everyone’s mind.
- It
should be analytical,i.e., it should analyze the key components of the
strategy.
- It
should be credible, i.e., all stakeholders should be able to believe it.
Vision
- A vision
statement identifies where the organization wants or intends to be in
future or where it should be to best meet the needs of the stakeholders.
It describes dreams and aspirations for future. For instance, Microsoft’s
vision is “to empower people through great software, any time, any place,
or any device.” Wal-Mart’s vision is to become worldwide leader in
retailing.
- A vision
is the potential to view things ahead of themselves. It answers the
question “where we want to be”. It gives us a reminder about what we
attempt to develop. A vision statement is for the organization and it’s
members, unlike the mission statement which is for the customers/clients.
It contributes in effective decision making as well as effective business
planning. It incorporates a shared understanding about the nature and aim
of the organization and utilizes this understanding to direct and guide
the organization towards a better purpose. It describes that on achieving
the mission, how the organizational future would appear to be.
- An
effective vision statement must have following features-
- It must
be unambiguous.
- It must
be clear.
- It must
harmonize with organization’s culture and values.
- The
dreams and aspirations must be rational/realistic.
- Vision
statements should be shorter so that they are easier to memorize.
- In order
to realize the vision, it must be deeply instilled in the organization,
being owned and shared by everyone involved in the organization.
Goals and Objectives
- A goal is
a desired future state or objective that an organization tries to achieve.
Goals specify in particular what must be done if an organization is to
attain mission or vision. Goals make mission more prominent and concrete.
They co-ordinate and integrate various functional and departmental areas
in an organization. Well made goals have following features-
- These
are precise and measurable.
- These
look after critical and significant issues.
- These
are realistic and challenging.
- These
must be achieved within a specific time frame.
- These
include both financial as well as non-financial components.
- Objectives
are defined as goals that organization wants to achieve over a period of
time. These are the foundation of planning. Policies are developed in an
organization so as to achieve these objectives. Formulation of objectives
is the task of top level management. Effective objectives have following
features-
- These
are not single for an organization, but multiple.
- Objectives
should be both short-term as well as long-term.
- Objectives
must respond and react to changes in environment, i.e., they must be
flexible.
- These must be feasible, realistic and operational.