VISION, MISSION AND OBJECTIVES OF BUSINESS
*Shanmukha Rao. Padala **Dr. N. V.S. Suryanarayana
The leveraging of a firm’s internal resources, capabilities and core competencies to accomplish the firm’s vision, mission and objectives in a competitive environment is ‘Strategic Intent’. It is about winning competition battles and gaining leadership position by putting organizational resources to best use. When established effectively, a strategic intent can cause people to turn out excellent performance. Strategic intent is said to exist when all employees and levels of a firm are committed to the pursuit of a specific but significant performance target. The intent can take the form of a broad vision or mission statement or a more focused route covering specific objectives and goals. In a way, thus, strategic intent tries to establish the parameters that shape the values, motives and actions of people throughout their organization.
Based on the Strategic Intent is the organizations provide products and services for consumers, profits for investors, jobs for employees, taxes for governments, and economic stability for the communities. Strategic intent also identifies the commitment of the oraganisation to contribute to the welfare of society by setting standards on being economically productive and socially responsible. The goals identified through the strategic intent of the organization represent a synthesis and demands placed on the organization by its stakeholders these choices, collectively, set apart the organization from others.
The most important characteristics of successful organizations are their clarity of purpose, adherence to their core values, their distinct identity and their vision of the organization. In practice there will always be limits on the range of possible choices. Small enterprises tend to be limited by their resources, whereas large enterprises may find their range of choice limited because it is difficult to change quickly and therefore, they tend to be constrained by their past. In the public sector, strategic choices may be made at a political level and the role of the manager may be limited to devising best to implement strategies rather than on fundamental choices of future direction. Wherever may be the limitations on choices, organizations have to co-exist in competitive markets by contributing to economic progress by creating new value to society, each organization doing so in its own way.
Strategic analysis, strategic choice and strategy implementation are the three parts of the Strategic Management. Strategic choice is concerned with decisions about the organisation’s future and the way it needs to respond to the influences and impacts identified in strategic analysis. Choice becomes an idle exercise if the strategy is not properly implemented. These three divisions, therefore, form a closed loop in which the tail and the head are often indistinguishable.
We will generally follow the conventional framework based on these divisions. However, for pedagogical simplicity, in this chapter, we will begin our foray into hard-core strategic management by discussing strategic intent- through strategic intent is considered to be a past of strategic choice. We will start with the vision, mission and objectives as well as value statements. These concepts are at the core of the strategy of managements. If different organizations do not have differences in their vision and goals, there is going to be significant difference between organizations.
THE HIERARCHY OF STRATEGIC INTENT:
We will discuss these parameters as a hierarchy of strategic intent. The hierarchy of strategic intent includes the following elements.
- A broad vision of what the organization should be.
- The organization’s mission
- The strategic objectives and specific goals to be pursued relentlessly
- The plans that are developed to accomplish the intentions of management in a concrete way.
The elements of the hierarchy specify the pious intentions, lofty ideals and clear-cut ideas that serve to unify the energy and forces scattered throughout an organization. They are beginning points for any formal planning process, but they also provide the sense of direction necessary to assure that incremental behaviour culminates in overall progress. Strategic intent is said to have expressed effectively when people believe fervently in their products and industry and when they are focused totally on their firm’s ability to outperform its competitors.
Aspirations, expressed as strategic intent, should lead to an end; otherwise they would just be castles in the air. That end is the vision of an organization or an individual. It is what the firm or a person would ultimately like to become. For instance, some of you, say in 10 years, or may be even earlier, would like to become general managers managing an SBU in a large, diversified multinational corporation. Or some others among you would like to believe that you will be an entrepreneur in 10-15 years owning your own company dealing with IT services and employing cutting-edge technology to serve a global clientele. A firm thinks like that too.
Witness what Tata Steel sys about its vision: ‘Tata Steel enters the new millennium with the confidence of a learning, knowledge-based and happy organization. We will establish ourselves as a supplier of choice by delighting our customers with our service and our products. In the coming decade, we will become the most cost competitive steel plant and so serve the community and the nation’. A vision, therefore, articulates the position that a firm would like to attain in the distant future. Seen from this perspective, the vision encapsulates the basic strategic intent.
A vision is more dreamt of than it is articulated. This is the reason why it is difficult to say what vision an organization has. Sometimes it is not even evident to the entrepreneur who usually thinks of the vision. By its nature, it could be as hazy and vague as a dream that one experienced the previous night and is not recall perfectly in broad daylight. Yet it is a powerful motivator to action. And it is from the actions that a vision could often be derived. Henry Ford wished to democratize the automobile when the visualized that an affordable vehicle could be available for the masses. Walt Disney probably wanted to make people happy.
Vision is what keeps the organization moving forward. Vision is the motivator in an organization. It needs to be meaningful with a long term perspective so that it can motivate people even when the organization is facing discouraging odds.
The world over, backwards and forwards in history, just one thing has fired the imaginations of the people: a vision of future that promises to right today’s wrongs, a graphic image of a time when injustice, impoverishment will have disappeared. Moses used the vision of a land mark of milk and honey to motivate his people to set off for the promised land. Indian’s freedom fighters used the vision of a country free of its colonial rulers to wrest independence. In the corporate context, vision refers to an inspirational picture of a future that can be created, offering clarity amidst confusion, hope against despair, and unity of purpose amidst diversity of personal causes.
Vision has been defined in several different ways.
- Kotter defines it as a “description of somethings (an organization, corporate culture, a business, a technology, an activity) in the future”.
- El-Namaki considers it as a “mental perception of the kind of environment an individual, or an organization, aspires to create within a broad time horizon and the underlying conditions for the actualization of this perception”.
- Miller and Dess view it simply as the “category of intentions that are broad, all inclusive, and forward thinking”.
The common strand of thought evident in these definitions and several others available in strategic management literature relates to ‘vision’ being future aspirations that lead to an inspiration to be the best in one’s field of activity.
CHARACTERISTICS OF VISION:
- Vision is developed through sharing across an organization: Famous stories of successful vision involve visions that have been widely shared across entire organizations. Of course, an individual leader, often a founder has a powerful impact on the others.
- Methods of convincing the others about vision: The leaders by working hard along with others convince the others in the organizations rather than simply by delivering speeches.
- Change Agents: Leaders must recognize the complexity of changing an outmoded vision to reflect new realities. Organizations must redefine themselves through updated visions of the future through new objectives and strategies.
THE BENEFITS OF HAVING A VISION:
Parikh and Neubauer point out that several benefits accruing to an organization having a vision. Here is what they say:
- Good visions are inspiring and exhilarating.
- Visions represent a discontinuity, a step function and a jump ahead so that the company knows what it is to be.
- Good visions help in the creation of a common identity and a shared sense of purpose.
- Good visions are competitive, original and unique. They make sense in the marketplace as they are practical.
- Good visions foster risk-taking and experimentation.
- Good visions foster long-term thinking.
- Good visions represent integrity, they are truly genuine and can be used for the benefit of people.
When you begin the process of strategic planning, visioning comes first. Martin Luther King, Jr. said, “I have a dream,” and what followed was a vision that changed a nation. That famous speech is a dramatic example of the power that can be generated by a compelling vision of the future. A vision is a guide to implementing strategy. Visions are about feelings, beliefs, emotions and pictures.
A vision statement answers the question, “What will success look like?” The pursuit of this image of success is what motivates people to work together. It is an important requirement for building a strong foundation. When all the employees are committed to the firm’s visions and goals, optimum choices on business decisions are more likely.
When visioning the change, ask yourself, “what is our preferred future?” Your vision must be encompassed by your beliefs.
- Your beliefs must meet your organizational goals as well as community goals.
- Your beliefs are a statement of your values.
- Your beliefs are a public/visible declaration of your expected outcomes.
- Your beliefs must be precise and practical.
- Your beliefs will guide the actions of all involved.
- Your beliefs reflect the knowledge, philosophy, and actions of all.
- Your beliefs are a key component of strategic planning.
The process and outcomes of visioning is to develop an effectivce basis for business strategy. The foresight of the organization is to fit the strengths of the organization with the demands, to make the organization highly competitive with growth and profits as the rewards. The long-term benefits are substantial, because Visioning:
- Break you out of boundary thinking.
- Provides continuity and avoids the stutter effect of planning fit and starts.
- Identifies direction and purpose.
- Alerts stakeholders to needed change.
- Promotes interest and commitment.
- Promotes laser-like focus.
- Encourages openness to unique and creative solutions.
- Encourages and builds confidence.
- Builds loyalty through involvement (ownership).
- Results in efficiency and productivity.
BUILDING A VISION:
The vision statement should be build around certain core values. Thus, Sony’s vision rests on the values of encouraging individual creativity and its determination to be a pioneer. Such core values reflect how you want your future to look, the timeless principles to be followed while running the show- irrespective of what happens in and around the organization. Values, thus, are the essential glue of vision. Since a company’s different business may need to operate with different strategies, it’s their shared values that will prevent them from going in different directions. The vision statement should also spell out the core purpose of an organization very clearly. For example, we know that 3M’s purpose is to solve problems innovatively; Nike wants to provide the experience and emotion of competition – winning and crushing competitors; Blue Star wants to provide world class engineering products and services. Unstructured inputs could be taken from everyone developing the corporate vision. Companies like Larsen & Toubro, Crompton Greaves, Gujarat Heavy Chemicals typically follow certain steps in this regard:
- Elicit ideas from employees as to how their dream organization should be like in terms of characteristics;
- Combine these with the