Unit 1 - Organisational strategy

Organizational Strategy

• An organizational strategy is the sum of the actions a company intends to take to achieve long-term goals. 
• Together, these actions make up a company's strategic plan. 
• Strategic plans take at least a year to complete, requiring involvement from all company levels.

Mission Statement

A mission statement is a brief description of a company's fundamental purpose. It answers the question, "Why do we exist?“.

It tells what the organization is, why it exists and the unique contribution it can make.

A mission statement can be defined as “the unique character and purpose of the organization which identifies the scope of its activities and which distinguish it from others of its type”.

In operational terms the mission statement identifies

1. the market and enterprise wishes to serve, 
2. the products and services it wishes to supply and 
3. the manner in which it wishes to compete. 

Example of Mission Statement

Courtyard by Marriott - "To provide economy and quality minded travelers with a premier, moderate priced lodging facility which is consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people” 

Key Market:     economy and quality minded travelers

Contribution:     moderate priced lodging

Distinction:        consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people

STEPS TO WRITING A GOOD MISSION STATEMENT

1.  Identify the claimant - Claimant set differs from business to business, innumber, size, influence and importance. In defining a mission a manager must identify all claimant groups.
2. Understanding of specific claims vis-à-vis the company - Strategic decision makers should understand the specific demands of each group.
3. Reconciliation of claims and assigning them priorities.
4. Coordination of claims with other elements of the mission.

ELEMENTS OF THE MISSION STATEMENT

1. It must be clearly articulated: – It should be easy to understand so that the values and purpose of the organization are clear to everybody in the organization and will be a guide to them.
2. It must be relevant: – should be appropriate to the organization in terms of its history, culture, and shared values.
3. It must be current: – A mission statement may become obsolete after some time because of change in the environmental factors and organizational factors. Some companies have changed there mission statements several times. The factors which call for change in the mission statement are changes in the market, growth, diversification into new areas.
4. It must be written in a positive tone: – It must be capable of inspiring and encouraging commitment towards fulfilling the mission.
5. It must be unique: – It should establish the individuality if not the uniqueness of the company and its products of services.
6. It must be enduring: – It should continually guide and inspire and be challenging in the pursuit of its mission.
7. Adapted to the target audience: – The mission statement must be directed towards the consumers, general public, share holders, employees

GOALS and OBJECTIVES 

GOALS: Goals are general guidelines that explain what you want to achieve.

Eg.  The Goal of an organization is to grow its revenue by 20 % in the coming Fiscal year.

OBJECTIVES: Objectives define the actions that must be taken within a year to reach the strategic goals.

Eg.  An objective to achieve the goal may be “introduce 2 new products  in the coming fiscal year.”

A goal is where you want to be and objectives are the steps taken to reach the goal.

Unlike goals, objectives are specific, measurable, and have a defined completion date. They are more specific and outline the “who, what, when, where, and how” of reaching the goals.

WHY SET OBJECTIVES

1. They help define the organization in its environment. By stating objectives they also attract people who identify with the organization to work for them. Objectives have public relation value , they might help in attracting support from various groups in the environment.
2. Objectives help in coordinating decisions and decision makers. There is a reduction in conflict if employees know what the objectives are i.e. objectives direct the attention of employees to desirable standards of behavior. 
3. Objectives provide standards for assessing organization performance.
4. Objectives are more tangible assets than mission statements. 
5. Objectives facilitate the translation of the broad purposes and missions into identifiable tasks and their assignment to responsible groups writhen the organization and to help in allocating organizational resources.

WHILE FIXING OBJECTIVES ASK

What will happen if objectives are not met? 

How will it be measured? 

Why are we making them? 

Can we achieve these objectives? 

When will the objectives be achieved? 

GOALS

Goals are general aims and targets to reach your forecasts.  

In other words they are open ended attributes that denote the future states of outcome 

If goals are not fulfilled the corporate does not become unsuccessful as a whole. 

OBJECTIVES

Objectives are specific aims of a firm. 

In other words they are closed ended attributes that are precise and expressed in specific terms 

If objectives are not fulfilled the corporate becomes unsuccessful as a whole 

Should be SMART(specific, measurable, action oriented, realistic and time bound) 

TYPES OF GOALS AND OBJECTIVES

The official goals  / objectives: They are the general aims of the organization as described in a memorandum of association or annual report. They may also be found in public statements by top executives.  

The operative goals / objectives: They indicate what the organization is really attempting to do. They may be inferred from the actual operating policies of the organization. They help organization managers to focus attention, reduce uncertainty and choose among the organizational design alternatives. These are used by supervisory personnel or managers in organizations to influence the behavior of subordinates and to measure their performance.  

 If a company's official goal is to increase customer satisfaction by offering multichannel customer support, such as social media, mobile, live chat and email

Its operative goal will be to craft a strategy for establishing, supporting and integrating customer support channels.

EXAMPLES

Operative goals are to provide employees QWL (quality work life) then the 

Operational objective would clarify   how much money is spent on improving actual working conditions. 

Operative goal  is to contribute to social responsibility then the 

Operational objective will indicate the amount of money for pollution control equipment etc.

What is a strategic plan

In strategic planning it is critical to formally consider how your organization will accomplish its goals. The answer to this question is a strategy. There are a variety of formal definitions for strategies, but everyone fundamentally agrees that a strategy is the answer to the question, "How?"  

"Strategies are simply a set of actions that enable an organization to achieve results." 

"Strategy is a way of comparing your organization's strengths with the changing environment in order to get an idea of how best to complete or serve client needs." 

Types of strategies

Essentially, there are three different categories of strategies: organizational, programmatic, and functional. The difference among the categories is the focus of the strategy

1.  Corporate /Organizational Strategy—describe the company’s overall direction in terms of its general attitude towards growth and the management of its various businesses and product lines.  Organizational strategy outlines the planned avenue for organizational development (e.g., Stability, growth, retrenchment, collaborations, earned income, selection of businesses, mergers, etc.).

2. Business / Programmatic Strategy--- occur at business unit or product level. Emphasis on improvement of competitive position of organizations product/services. Programmatic strategy addresses how to develop, manage and deliver programs (e.g.  Competitive, co-operative  or market a prenatal care service to disadvantaged expectant mothers by providing information and intake services in welfare offices).

3. Functional strategy---strategy taken by functional area. Functional strategies articulate how to manage administration and support needs that impact the organization's efficiency and effectiveness (e.g. Maximize resource productivity, develop a financial system that provides accurate information using a cash accrual method).

How are strategies developed

Strategies may be based on an executive’s intuition, trial and error, philosophy and innovation. On the other hand they may be based on rigorous pragmatic analysis of the variables involved in a problem. Each approach or a combination of approaches is applicable to a given type of situation, depending upon the mix of factors. Many individuals are overwhelmed (weighed down) by the idea of developing strategies, but it can in fact be a fun and refreshing process. 

The process entails: examining the organization's critical issues determining how the organization's strengths and skills can be employed to address the critical issues analyzing opportunities and strengths and looking for ways to synthesize the two exploring and choosing the best approaches for the organization.  During this evaluation ask these key questions: Does the strategy meet/address critical issues? Is this aligned with our mission? Is this approach financially viable?  One effective method of strategy generation is to list critical issues and organizational strengths onto flipcharts and then have staff or board members brainstorm possible uses of those strengths or other skills to address the critical issues. 

Once the brainstorm session is completed, use a roundtable discussion to investigate and evaluate the possible strategies.  Remember to develop a list of alternative strategies to investigate and keep in the contingency planning file.  It is important not to discount the ideas that come to people during non-working hours. 

Strategic Approaches

ADAPTIVE APPROACH:

 It is an approach to strategy in which, by initially formulating a set of rules in a large overview, the approach moves towards closer and closer approximation of an appropriate solution, moving by successive steps to the solution, each step builds upon the previous step. For example, a first step could be a decision by a chief executive officer to utilize a program planning and budgeting system in a company. A second step might be the decision whether to implement the system on a trial basis in one particular division or throughout the company at the same time. A third step might be the approach taken to implement the system in a particular division. A fourth step might be the determination of the type of program planning and budgeting system to the company. This approach is also referred to as “muddling thru” i.e. find a reactive solution to existing problem and not search for new opportunities.

INTUTION APPROACH:

In this type of approach executives use little or no inference. They move by instinct. They move on the bases of prior experience in a similar setting. Of course, the more facts available, the better the intuitive decision will be.

DETERMINING STRATEGIC FACTORS:

 Another approach to strategy is to determine the strategic factors that will make an organization successful. In this type of strategy , the executive should look for the critical elements in the organization,  in divisions of the organization and in subunits of the organization; that is of the strengths and weaknesses that would determine the success or failure of the organization.

PICKING NICHES:

 One of the older strategies for organization is that of picking up niches in which to operate. In other words, by clearly defining consumers or client needs, an organization is able to make services or products available that uniquely fill those needs.

ASKING THE RIGHT QUESTIONS:  An approach frequently missed by executives is that of asking the right questions. Companies should examine their strengths and weaknesses, how they can better serve their customers and what operations can use its strengths. In fashioning a strategy through it, should examine the question of its greatest venerability.

ENTREPRENEUR APPROACH: The entrepreneur is defined as a creative thinker, an individual who combines in himself the role of innovator and risk-bearer. He is tough and pragmatic in disposition and is motivated by a powerful need for achievement and independence. I n this approach, the strategy is pushed ahead in the face of environmental odds. The vision and direction are typically provided by young executives and the heads of family-owned enterprises. This approach  has the following characteristics:

It is dominated by an active search for opportunities. The focus is on opportunities rather than problem solving.

The power rests with one man, the chief executive, who is capable of taking bold decisions on the basis of personal power charisma.

CONCLUSION

In conclusion strategic planning is very important for any organization to achieve its short and long term goals. Especially, with the boom and busts of the global economies in the last few decades, it has become even more important for companies to execute their strategies carefully.