What Makes An Organizations Statement Unique

Published Date: 02 Nov 2017

Unit 3

Contents

Introduction

This project presents the use of strategic planning in a business and its constituents, further it discusses how strategic plans are implemented in a business. Firms use Strategic Analysis Model (SAM) to conduct strategic analysis of the organization, the results of the analysis could be further used for making strategic decisions (Abraham, 2012). SAM could also be used to set the direction and strategy of the organization by setting long term and short term goals.

Significance of an organizations Vision and Strategic Direction

Vision and Mission Statement of an organization is very important in outlining the strategic direction of the firm. The vision and mission of an organization outlines what exactly the organization is involved in and what do they plan to become in future. The vision and mission of the organization highlights what exactly the firm plans to do for its stakeholders. Summarizing we could say mission and vision are the communication modes through which the organization communicates with its stakeholders regarding the strategic direction of the firm. Vision and Mission is very significant for an organization because the management displays vision and mission in the organization/visiting cards of employees/key chains to positively impact the internal stakeholders of the organization and keeping everyone on the same page regarding the strategic direction of the firm.

Vision and Mission Statements

Organizations use mission statement as a mean of communication for the strategic direction of the firm (Harrison & St. John, 2010). Therefore mission statement is an important contributor in designing the strategic direction of the firm and communicating it to all the stake holders. The mission statement of an organization highlights the identity of the organization, its products, market and the specific methodology adopted by the organization to achieve its mission (Alkhafaji, 2003). Further the mission statement defines the following:

The size of the organization

The scope of the organization

The number of the organization’s businesses, markets and customers

The mission statement of SPAR is as follows:

"To be the best supplier of food, drink and associated products to existing and new customers in our retail business area" (SPAR, n.d.).

The mission statement of SPAR detailed the strategic direction of the business, which is to be the best supplier of food, drink and associated products in the retail industry of UK. It also highlights the size and the number of organizations businesses, customers and existing markets i.e. the size is limited to UK, the customers are new and existing customers looking for food, drink and associated products.

The vision of an organization represents the overall vision, defines the business of the organization and also outlines the values of the organization. The vision of TESCO is stated below:

"Vision for Tesco is to be most highly valued by the customers they serve, the communities in which they operate, their loyal and committed staff and their shareholders; to be a growth company; a modern and innovative company and winning locally, applying our skills globally" (TESCO, n.d.).

The vision of TESCO clearly states the values of the company, what they do and what they plan to do for their stakeholders in future. The vision clearly shows that TESCO plans to become a growth company and to provide services in order to be most highly valued by their customers. Therefore the strategic direction of the TESCO is to become a growth company which is valued most highly by its customers.

Purpose and Aim

The purpose and aim is to communicate the strategic direction of the firm as shown in above examples the purpose and aim of TESCO and SPAR is as follows:

SPAR: The purpose of mission statement is to communicate with the stakeholders that SPAR plans to become the best supplier of food, drink and associated products in the retail industry of UK.

Therefore the purpose and aim of the mission statement is to communicate the strategic direction of the organization with its stakeholders also highlighting the scope and size of the organization, along with the number of organization’s businesses, markets and customers.

What makes an organizations statement unique

The fact that every organization has different scope, size and number of businesses, markets and customers makes it targets, which makes the mission statement of each organization unique to its competitors or other organizations in the industry. The unique mission statement develops unique strategic direction for every organization in the industry. The strategic direction of the organization could only be determined with the help of the information on the image and character the firm wishes to develop in the future (Hitt et al., 2011). Therefore the fact that the mission and vision predict the strategic direction of the firm makes mission and vision unique.

Implications of Strategic Direction

The overall strategic direction of the firm has implications for the rest of the organization and all the activities the organization is involved, including products and services offered by the firm (Gould, 2012). Most of the organizations regard products and services offered by them as of the top priority, consequently designing the strategic direction of the firm becomes very important to achieve the organizations mission and satisfy the stake holders. The implications in development of organizational strategies could be explained with the help of the following figure, showing the development of Planned, Emergent, Deliberate, Unrealized and Realized Strategies for an organization (Hill & Jones, 2008).

Linkage between Mission, Vision with Strategic Direction

Mission and Vision of an organization have direct link with the strategic direction, because mission and vision outlines the values, scope, size, stakeholders, products and markets. Based on this information the strategic direction of the firm is designed which has its effects on all the aspects of an organization.

It could be easily stated that mission and vision provide organizational goals which set the direction of the organization, therefore the vision and mission of the organization actually direct the organization. As we see in above examples TESCO is directed to become an organization whose customers have the highest value for the organization, setting the direction of the organization in creating highest value for its stakeholders. In contrast SPAR has a different strategic direction which is to be the best supplier of food, drinks and related products and the organization is focusing to be the best supplier and not the high quality supplier as in the case of TESCO.

Incorporating Strategic Direction into Business Plan

The mission and vision of an organization provide the strategic direction of the business which could be incorporated in the business plan to achieve the mission of the organization. Strategic business planning enables an organization to achieve organization mission and vision with the help of strategic direction, pointing out the need for strategic planning to achieve long-term goals of the organization.

Stakeholders and the development of Strategic Business Plan

Stakeholders are the main focus of strategic business plan, ultimately the organization is working to increase the wealth of its shareholders, provide expected products/service to its customers and satisfy the demands of all the involved stakeholders.

Content of Strategic Business Plan

The first step in Strategic business planning is to develop the mission and vision of the organization highlighting the organizational size, scope, values, products, markets and stake holders. The mission and vision of the organization must highlight the long-term goal of the organization and what it intends to achieve for its stakeholders.

The second step (SWOT) is to determine the critical success factors of the organization necessary to achieve the mission and vision of the organization. An organization could conduct SWOT Analysis to determine the critical success factors also it predicts the competitive position of the organization. Critical success factors point out towards critical thinking, which is used by managers to think about the longer vision of the organization, assess its operations and create the success factors for the organization. Strategic thinking is a six step procedure which involves thinking over six critical success factors which are as follows (Kaufman et al., 2003):

Thinking out of the box, out of the comfort zone

Identifying what and how

Use all levels of planning including mega/outcomes, macro/outputs and micro products

Prepare organizational objectives (SMART objectives)

Using continuous development in planning

Thinking about improving results to increase performance

The third step (Strategic Plan) in the development of strategic business plan is to compile the business strategies which the organization will use to indulge in business practices. The strategies outline the actions required for the success of the organization and the concerned employee, including business strategies for marketing and advertisement.

The fourth step is to develop the timeline for the strategic business plan, the timeline in which the stakeholders of the firm expect required results.

The strategic business planning process could be narrowed down to:

Strategic Analysis using SWOT Analysis

Business Planning and developing Strategic Plans

Strategic Control with the help of Balance Scorecard

Link between objective and direction of the organization

The objectives derived from mission and vision of the organization set the strategic direction of the organization. Therefore the strategic direction of the organization could only be determined once the objectives of the organization are written down.

Identifying Business Risks

Identifying risks is also a major part of strategic business planning the products/services of an organization go through different product life cycle and experience low or high sales. Risk management is an important part of strategic planning process which could be understood with the help of following diagram, which explains the strategic planning process (Anderson & Schroder, 2010).

Risk Management Process

Monitor

Manage Hedge

Evaluate

Measure (VaR)

Identifying risks

Data Collection

Strategic Control (Balanced Scorecard)

Strategic Analysis (SWOT)

Business Planning (Strategic Plan)

Strategic Planning Process

Contingency – purpose and content

Contingency planning is an integral part of strategic business planning, which involves planning for unexpected events. Unexpected events are generally those events which are different than the assumptions in the strategic business plan. The purpose of contingency planning paradigm is to focus on most probable issues and most harmful issues in the organization and incorporate them in the planning process.

Importance of stakeholder support for Strategic Business Plan

Stakeholders of any organization may have very different objectives than the management of the organization. Finding out the objectives of the stakeholders and incorporating them in strategic business planning is very vital for the success of the organization and to achieve its mission. The objectives of the stakeholders must also be incorporated in the vision and mission of the organization. If an organization wished to achieve certain objectives it must incorporate the stake of all the stakeholders involved in fulfilment of those objectives specially the ones with level of power enabling them to exert pressure.

Key stakeholders

The key stakeholders of an organization include clients, investors and shareholders, contractors and suppliers, employee unions and society in general. An organization must incorporate objectives and safe guard stake of all of its stake holders in strategic business planning.

Communication Strategies

Both internal and external communication strategies must be used to remove conflict with any stakeholder in the organization. The conflict if any must be analysed and communication strategy must be developed to communicate with key stakeholders. The external communication strategy for external stake holders must include process definition and product identification.

Gaining Support

By implementing the right communication strategy an organization could gain support from all the key stakeholders while developing the strategic business plan. The benefits of implementing the business strategy must be identified and informed to the key stakeholders to gain support.

Implementing a Business Strategy

Following steps are important in implementing a business strategy:

To implement a business strategy the organization must come up with a change program with clear and defined mission and vision. The vision of the organization must be communicated to all the stakeholders, people must understand where they are going and what are they working to achieve in the future.

Communication plays an important role in the implementation of a business strategy, the objectives must be clearly communicated in order to achieve desired results.

Planning is an integral part of implementing a business strategy, which involves identifying all the steps in implementing the required change.

The objectives and goals of the organization must be realistic and not set too high, which become too hard to achieve in the given time.

Practicality is the centre ingredient for the implementation of a business strategy and to implement the required change.

All the stakeholders must be encouraged to participate in implementing the business strategy and change process.

Overcoming obstacles in the way of implementing strategies and motivating others to be confident and providing training and support for the employees to acquire new skills required to implement business strategy.

Resource Requirements

To implement a business strategy the resource requirement for the implementation must be identified with the help of Capacity Requirements Planning (CRP), Resource Requirements Planning (RRP) and Rough-Cut Capacity Planning (RCCP). CRP provides the resource requirements for the materials required for implementing the new strategy. The RRP helps an organization in assessing requirements for production operations, including required investment, raw materials, plant and equipment. RCCP assess the resource requirement for scheduling the production of goods/services of the organization.

Approaches

The following approaches could be used for implementing a business strategy:

Vision

Communication

Planning

Steady Progress

Realism and Practicality

Participation

Motivation

Overcoming Resistance

Systems and Processes

Training and support

The vision must be communicated clearly to all the stake holders for the success of any business strategy, and the management could adopt the approach of making the organizational objectives clear for everyone to understand and perform. Communication by using all means with all the key stake holders could be another approach for implementing a business strategy. Planning is an integral part of implementing change and the required business strategy hence managers could adopt planning approach to implement a business strategy.

All the resources and competencies which will be required by the organization for the implementation of the strategy are vital for the success of the strategy. Therefore it is necessary to acquire the resources and competencies required for the implementation of the strategy. Sub strategies are also a concern while implementing business strategy, sub strategies are within the functional areas of the firm designed to assist in fulfilling the overall strategy of the firm. Decision making also plays an important role in implementing a strategy and these decisions and actions help implementing the sub strategies eventually implementing the wide strategies.