2. Strategic Management
• Strategy Management is defined as a dynamic process of
formulation, implementation, evaluation, and control
of strategies to realise the organization’s strategic
intent
3. Strategic Intent
• It refers to purpose for what organization
strives for. Organization must define “what
they want to do” , “why they want to do”.
• This “why they want to do” underlines the end
result and in management terms it is known
as strategic intent
• Strategic Intent has a hierarchy: Vision,
Mission, Goals and Objectives
5. VISION• Burt Nanus a well known expert of organizational vision has
defined vision as “ a realistic, credible and attractive future
for an organization”.
• Realistic: Vision must be based on reality to be meaningful
for an organization; It should not be a merely day dreaming
but a dream to be converted into reality
• Credible: Vision must be believable to be relevant to the
members of organization. One of the purpose of vision is to
aspire those in org. to achieve a level of excellence
• Attractive: Vision must be attractive as to inspire and
motivate the org. members. People must want to be a part
of future of org.
• Future: Vision is always for future
Kotter (1990) defines it as a "description of something(an
organization, a corporate culture, a business, a technology, an
activity) in the future"
6. Features of good vision
• It should be idealistic( should be realistic)
• Good vision clarifies the direction
• Good vision encourages the org. members
commitment from them
• Good vision reflects uniqueness of org. ,its
distinct competence, what it stands for and what
it is able to achieve.
• Good vision is consistent with org values and
culture
• Good vision is easily understood by those who
are responsible to convert it into reality
7. Examples of vision
• Infosys- To be globally respected company that
provides best of breed software solutions by
best-in-class people
• Tata tea- to be India’s foremost tea based
beverage company
8. Developing a vision
Its like converting dream into reality
Conducting vision audit-To asses current direction
Targeting the vision- What are the boundaries and
constraints to the vision? What vision must
accomplish?
Setting vision context: how org. should look in
future
Developing future scenarios
Generating the alternative visions
Choosing the final vision
9. Mission
• Is defined a fundamental unique purpose that
sets a business apart from other firms of its type
and identifies its scope of its operations in
product and market terms. Its is a statement
which defines the role that org. plays in society
Difference b/w Vision and mission
• Vision is forward looking and mission states what
org. is and why it exists
• Vision emphasis on long term concept with very
high level of achievement and mission deals with
products , services offers, way these are offered.
10. Mission Statement
• Is the description of org. mission. Explicit mission
statement is desirable as it serves the purpose of
communicating to the organization’s members
about the corporate philosophy , character and
image of the org. which govern their behavior in
org.
Following pints should be kept in mind while
formulating mission statement:
• It should be feasible
• It should be precise
• It should be clear
11. • It should be motivating
• It should be distinctive
• It should include major components
of strategy
• It should indicate how objectives are to be
accomplished
12. Examples of mission statement
• Infosys: To achieve our objectives in a
environment of fairness, honesty and courtesy
towards our clients, employess, vendors and
society at large
• Tata tea:
o Achieve market and thought leadership for
branded tea in india
o Drive long term profitable growth
o Co create enhanced value for stakeholders
o Make tata tea a great place for work
13. Business Definition
• Is clear cut statement of the business or a set of
business, the org. engages in presently or wishes
to pursue in future. Then it prescribes the area in
which the org will play compete
• Business can defined along three dimensions–
product, customer and technology.
• Business must reflect two features : Focus and
Differentiation
• Example: HUL business definition: “To meet
everyday needs of people everywhere with
branded products”
14. Goals and Objectives
• Goals denote what an organization hopes to
accomplish in a future period of time. They represent
the future state or outcome of effort put in now.
• Objectives are the ends that state specifically how the
goals shall be achieved. They are concrete and specific
in contrast to goals that are generalized
• Goals and objectives are the end results which an
organization strives for
• There may be different ways in expressing end result
like market leadership , a certain percentage increase
in sales in particular year
15. Features of goals and objectives
• SMART DUMB
• S- Specific D-Doable(within powers)
• M- Measurable U-Understandable
• A- Attainable M-Manageable
• R- Relevant B-Beneficial
• T- Time bound
16. Role of objectives
• Directions for decision making
• Objectives work as motivating force
• Performance standards
• Defines relationship with environment
17. Characteristics of objectives
• Objectives should be understandable
• Objectives should be concrete and specific
• Objectives should be related to a timeframe
• Objectives should be measurable and
controllable
• Objectives should be challenging
• Different objectives should correlate with each
other
• Objectives should be set within constraints
19. Balanced Scorecard
The Balanced Scorecard is a strategic planning and
management system used to align business activities
to the vision and strategy of the organization by
monitoring performance against strategic goals.
20. Balanced Scorecard Concept
• Was first published in 1992 by Kaplan and Norton, a
book followed in 1996.
• Traditional performance measurement that only
focus on external accounting data are obsolete.
• The approach is to provide 'balance' to the financial
perspective.
21. Why Use a Balanced Scorecard?
• Improve organizational performance by measuring
what matters
• Increase focus on strategy and results
• Align organization strategy with workers on a day-to-
day basis
• Focus on the drivers key to future performance
• Improve communication of the organization’s Vision
and Strategy
• Prioritize Projects / Initiatives
22. Original Business Perspectives
Adapted from The Balanced Scorecard by Kaplan & Norton
The Balanced
Scorecard model
suggests that we
view the
organization from 4
perspectives.
Then Develop
metrics, collect data
and analyze it
relative to each of
these perspectives
23. Business Perspectives Questions
• Financial
– What must we do to create sustainable economic value?
• Internal Business Process
– To satisfy our stakeholders, what must be our levels of
productivity, efficiency, and quality?
• Learning and Growth
– How does our employee performance management system,
including feedback to employees, support high performance?
• Customer
– What do our customers require from us and how are we doing
according to those requirements?
25. Key Implementation Success Factors
• Obtaining executive sponsorship and commitment
• Involving a broad base of leaders, managers and
employees in scorecard development
• Choose the right Scorecard Champion
• Beginning interactive (two-way) communication first
• Viewing the scorecard as a long-term journey rather
than a short-term project
• Getting outside help if needed
27. Scorecard Criticisms
• Lack of a well Defined Strategy
– The balanced scorecard relies on a well defined strategy and
understanding of linkages between strategic objections and metrics.
Without this foundation the implementation could fail.
• Too much focus on the lagging measures
– Focusing on only the lagging measures may cause a lack of priority or
opportunity for the leading measures.
• Use of Generic Metrics
– Don’t just copy metrics from another firm. Identify the measures that
apply to your strategy and competitive position .
• Self-serving managers
– Managers whose goal is to achieve a desired result in order to obtain a
bonus or other self reward.
28. Balanced Scorecard Benefits
• Helps align key performance measures with strategy at all levels of an
organization
• The methodology facilitates communication and understanding of
business goals and strategies at all levels of an organization
• Strategic initiatives that follow "best practices" methodologies that
cascade through the entire organization
• Transforms an organization’s mission statement and strategic plan from a
passive document into the "marching orders" for the organization on a
daily basis.
• It enables executives to truly execute their strategies by identifying what
should be done and measured.
To date, some form of a Balanced Scorecard is used by nearly 60% of Fortune
500 companies
