Author: indiafreenotes

A mission statement defines what an organization is, why it exists, its reason for being. At a minimum, your mission statement should define who your primary customers are, identify the products and services you produce, and describe the geographical location in which you operate.

If you don’t have a mission statement, create one by writing down in one sentence what the purpose of your business is. Ask two or three of the key people in your company to do the same thing. Then discuss the statements and come up with one sentence everyone agrees with. Once you have finalized your mission statement, communicate it to everyone in the company.

It’s more important to communicate the mission statement to employees than to customers. Your mission statement doesn’t have to be clever or catchy just accurate.

If you already have a mission statement, you will need to periodically review and possibly revise it to make sure it accurately reflects your goals as your company and the business and economic climates evolve. To do this, simply ask yourself if the statement still correctly describes what you’re doing.

If your review results in a revision of the statement, be sure everyone in the company is aware of the change. Make a big deal out of it. After all, a change in your mission probably means your company is growing-and that’s a big deal.

Once you have designed a niche for your business, you’re ready to create a mission statement. A key tool that can be as important as your business plan, a mission statement captures, in a few succinct sentences, the essence of your business’s goals and the philosophies underlying them. Equally important, the mission statement signals what your business is all about to your customers, employees, suppliers and the community.

The mission statement reflects every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community.

In the context of management, a vision is an expression of what the organization wants to become, what it wants to be, to be known as or to be known for. It is the long-term objective of the organization.

The vision comes from the leaders it is how they express the future for the organization or its strategic direction. However, it must be practical and feasible while representing a challenge for the organization. The vision must also be shared by the members of the organization so that everyone clearly understands what the organization is striving to become. To create a vision for the organization top management should identify the key potential influences on the organization over the next ten years in terms of the economic, political, social and technological influences.

A vision statement describes what a company desires to achieve in the long-run, generally in a time frame of five to ten years, or sometimes even longer. It depicts a vision of what the company will look like in the future and sets a defined direction for the planning and execution of corporate-level strategies.

Key Elements of a Good Vision Statement

While companies should not be too ambitious in defining their long-term goals, it is critical to set a bigger and further target in a vision statement that communicates its aspiration and motivates the audience. Below are the main elements of an effective vision statement:

• Forward-looking
• Motivating and inspirational
• Reflective of a company’s culture and core values
• Aimed at bringing benefits and improvements to the organization in the future
• Defines a company’s reason for existence and where it is heading

Objectives describe something that has to be accomplished. Objectives or goals define what organizations, functions, departments and individuals are expected to achieve over a period of time. Objective setting those results in an agreement on what the role holder has to achieve is an important part of the performance management processes of defining and managing expectations and forms the point of reference for performance reviews.

Types of Objectives

Let us now understand the different types of objectives and how they are set. The following are the different types of objectives:

Ongoing Role or Work Objectives

All roles have built-in objectives, which may be expressed as key result areas in a role profile. A key result area shows us what the role holder is expected to achieve in this particular aspect of the role.

For example: ‘Identify database requirements for all projects that require data management in order to meet the needs of internal customers’ or ‘Deal quickly with customer queries in order to create and maintain high levels of satisfaction.’

A key result area statement should contain an indication of not only what has to be done but also why it has to be done. The ‘why’ part clarifies the ongoing objective but it may be necessary to expand that by reaching agreement on a performance standard that describes what good performance will look like.

A performance standard definition should take the form of a statement that performance will be up to standard if a desirable, specified and observable result happens. It should preferably be quantified in terms, for example, of level of service or speed of response.

Targets

Targets are objectives that define the quantifiable results to be attained as measured in terms such as output, throughput, income, sales, and levels of service delivery, cost reduction and reduction of reject rates. Thus, a customer service target could be to respond to 90 per cent of queries within two working days.

Tasks/projects

Objectives can be set for the completion of tasks or projects by a specified date or to achieve an interim result. A target for a database administrator could be to develop a new database to meet the need of the HR department by the end of the year.

Behavioral Expectations

Behavioral expectations are often set out generally in competency frameworks but they may also be defined individually under the framework headings. Competency frameworks may deal with areas of behavior associated with core values, for example, teamwork, but they often convert the aspirations contained in value statements into more specific examples of desirable and undesirable behavior, which can help in planning and reviewing performance.

Values

Expectations can be defined for upholding the core values of the organization. The aim would be to ensure that espoused values become values in use.

Performance Improvement

Performance improvement objectives define what needs to be done to achieve better results. They may be expressed in a performance improvement plan, which specifies what actions need to be taken by role holders and their managers.

Developmental/learning

Developmental or learning objectives specify areas for personal development and learning in the shape of enhanced knowledge and skills (abilities and competences).

Integrating the Objectives

A defining characteristic of performance management is the importance attached to the integration or alignment of individual objectives with organizational objectives. The aim is to focus people on doing the right things in order to achieve a shared understanding of performance requirements throughout the organization.

The integration of organizational and individual and team objectives is often referred to as a process of ‘cascading objectives’. However, cascading should not be regarded as just a top-down process.

There will be overarching corporate goals, but people at each level should be given the opportunity to indicate how they believe they can contribute to the attainment of team and departmental objectives. The views of employees towards organization about what they believe they can achieve and they should also take account of them.

There will be times when the overriding challenge has to be accepted, but there will also be many occasions when the opinions of those who have to do the work will be well worth listening to.

Integration of objectives is achieved by ensuring that everyone is aware of corporate, functional and team goals and that the objectives they agree for themselves are consistent with those goals and will contribute in specified ways to their achievement. This process is illustrated in the following figure.

The main reason to why people want to start up a business is for the money. It is to be said that you will make more money when you are working for yourself rather than for somebody else. Over the LT, you will most likely earn much more money that runs through the business of your own.

Secondly, there are just some people who simply hate working for somebody else a.k.a under them. There may be people who hate the idea of having a boss above them and must obey the rules according to them. Therefore, these people may be best suitable to run their own business and having a job that they exactly know what to do. You will get to work towards something that belongs to you entirely.

A business plan is straight up, a guide for your business that outlines the needed expectations and details on how to achieve them. It helps you allocate resources properly and make the right decisions. A business plan is crucial because it provides specific and organised information about your company, also on “how you will repay borrowed money” because any type of loan package is considered important in a good business plan.

Those who wants to see a business plan may be sales personnel or suppliers as it informs them about your operations and goal. An investor may also search for a good business plan for consideration for investment. They might expect

a) An experienced team

b) Believable exits (whether the money coming out of the company invested will go back into the bank account)

c) Real growth prospects

d) Real planning

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:

1. 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.

2. 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

1. Mission must be feasible and attainable. It should be possible to achieve it.
2. Mission should be clear enough so that any action can be taken.
3. It should be inspiring for the management, staff and society at large.
4. It should be precise enough, i.e., it should be neither too broad nor too narrow.
5. It should be unique and distinctive to leave an impact in everyone’s mind.
6. It should be analyticale., it should analyze the key components of the strategy.
7. It should be credible, i.e., all stakeholders should be able to believe it.

3. 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:

1. It must be unambiguous.
2. It must be clear.
3. It must harmonize with organization’s culture and values.
4. The dreams and aspirations must be rational/realistic.
5. 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.

4. 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-

1. These are precise and measurable.
2. These look after critical and significant
3. These are realistic and challenging.
4. These must be achieved within a specific time
5. 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-

1. These are not single for an organization, but multiple.
2. Objectives should be both short-term as well as long-term.
3. Objectives must respond and react to changes in environment, i.e., they must be flexible.
4. These must be feasible, realistic and operational.

A learning and development strategy outlines how an organisation develops its workforce’s capabilities, skills and competencies to remain successful. It’s an important part of an organization’s overall business strategy.

Organizational training has seen a significant shift in the past few years. From mere classroom training to new channels like online and mobile, from static training content to more responsive and interactive content like gaming, the changes have been in tune with changing times. Today, training is not a siloed function, but closely linked to HR processes like performance management and also to business outcomes like revenue generation. An effective training strategy is one that delivers on both the fronts–employee learning outcomes and organizational goals. Here is what HR professionals must keep in mind while creating a training strategy.

1. Employees have time constraints: L&D professionals must understand that training is an activity over and above the regular job, and employees are already stretched to achieve more with less. Hence, aim to add real value to the learner by designing effective training content that meets the specific learning needs. Learning modules, both classroom and online or mobile should be precise and yet reinforce the skills and attitudes they aim to inculcate in the learner. Managers too must respect the time of employees and allocate them training needs that they truly need to propel their careers in the right direction. Hence, training needs identification must be done carefully, considering the time and effort ROI of the employee. Only then will employees be receptive to receiving training and upgrading their skills.
2. Group size and type matters: This applies especially to classroom programs, where one-on-one interactions and personalized attention can make all the difference between a day wasted and real learning. A smaller group compels participants to actively involve, and gets everyone’s’ voices heard. It is also important to choose the group according to job role. Some trainings like conflict management or leadership skills may benefit by having a diverse group from various functions it helps provide diverse views and a pan-organizational perspective on the topic. Others like specialized subject modules will require a focused group from a function, or even a sub-function. Be sure to design the group size and type to align with the training objectives.
3. Specialize to add value: Maximise the time spent by employees by making training content relevant to their desired outcome. Specialized content that is curated to the group at hand, especially for people from a niche function, will fuel better learning retention as well as engagement. Work outcomes are becoming more niche, especially in technology domains where a number of emerging technologies are making it big. Decide which skills you must build from within the organization and focus on those specific skills. Specialization is important to work towards goal achievement.
4. Engage the learner: A learner who is engaged in the learning process is more likely to gain significant takeaways from the process. Engaging the learner means understanding individual learning styles and preferences, and determining the right content and delivery channels to generate a “learning pull”. For example, the younger generation may be more interested in mobile learning than in a traditional classroom approach. A mobile workforce may prefer mobile learning to be able to access learning anytime-anywhere. New joinee induction can be done through online courses to make it location agnostic so that every new joinee gets involved with the organization irrespective of joining location. Putting a thought to what engages the learner goes a long way in making learning stick. Some of the latest in learning engagement are gaming, simulations, e-courses, video courses, and group exercises.
5. Assess training outcomes: It is not only important to deliver training, but to know whether it meets its objectives. Measuring training effectiveness from time to time is critical to help stay on the organizational track. A popular traditional model to evaluate training effectiveness is the Kirk Patrick model, with its four grades of training measurement reaction, learning, behavior and results. Very few organization are able to link training outcomes with business outcomes in terms of tangible results i.e., how training correlates with revenue, profits, and other financial and business metrics. This is important to ensure a leadership buy-in for training initiatives.

A training strategy is a must to ensure effective implementation at each stage, right from needs identification to training delivery to training assessment. A dedicated Learning and Development team with expertise and experience in the latest organizational training norms and a knack to customize these to the internal needs, is a must.

To identify and evaluate whether its resources have got any strategic value or not firms generally use various approaches. Possessing valuable resources as indicated previously does not guarantee profits unless they are deployed in an effective and efficient manner. The various approaches that follow now aim at achieving this purpose.

VRIO Analysis is an analytical technique briliant for the evaluation of company’s resources and thus the competitive advantage. VRIO is an acronym from the initials of the names of the evaluation dimensions: Value, Rareness, Imitability, Organization.

The VRIO Analysis was developed by Jay B. Barney as a way of evaluating the resources of an organization (company’s micro-environment) which are as follows:

• Financial resources
• Human resources
• Material resources

Non-material resources (information, knowledge) Question of Value. Resources are valuable if they help organizations to increase the value offered to the customers. This is done by increasing differentiation or/and decreasing the costs of the production. The resources that cannot meet this condition, lead to competitive disadvantage.

Question of Rarity. Resources that can only be acquired by one or few companies are considered rare. When more than few companies have the same resource or capability, it results in competitive parity.

Question of Imitability. A company that has valuable and rare resource can achieve at least temporary competitive advantage. However, the resource must also be costly to imitate or to substitute for a rival, if a company wants to achieve sustained competitive advantage.

Question of Organization. The resources itself do not confer any advantage for a company if it’s not organized to capture the value from them. Only the firm that is capable to exploit the valuable, rare and imitable resources can achieve sustained competitive advantage.

SWOT Analysis:

SWOT is an acronym for the internal strengths and weaknesses of a firm and the external opportunities and threats facing that firm. SWOT analysis helps managers to have a quick overview of the firm’s strategic situation and assess whether there is a sound fit between internal resources, values and external environment (E-V-R Congruence).

A good fit maximizes a firm’s strengths and opportunities and minimizes its weakness and threats. The external analysis provides useful information required to identify opportunities and threats in a firm’s environment. Let’s see how internal analysis helps a firm find its feet in a competitive environment focusing attention on its strengths and weaknesses.

Terminology:

The word Strength implies competitive advantage and other distinct competencies which a firm enjoys in the market place. Having an ability to deliver against the placement of an order within 2 hours is strength to a firm if customers require delivery within a day and its major competitors are not able to fulfill these requirements. A strength is only a strength if it is something that is of value to customers and is also something which a firm does better than its competitors. The term weakness refers to an inherent limitation that creates a strategic disadvantage for a firm. It could come from an inappropriate location, uneconomical operation, outdated plants worn out machinery or militant labor class etc.

Opportunities and threats refer to external issues and are identified after environmental and competitive analysis. Generally speaking opportunities result from external market changes or existing needs which are poorly served. It is often difficult to identify relevant opportunities and threats. Academically speaking a firm is faced with limitless opportunities and myriads of threats. These can range from the opportunities in new markets, new products or the likelihood of increased market share, to the threats of nuclear war, earth quakes and competitive battles. What makes an opportunity or a threat relevant is its importance to the firm and its likelihood of occurring. In order to carry out a good SWOT, the firm should look into certain key issues.

Key Issues in SWOT Analysis:

Strengths

1) A distinctive competence?
2) Adequate financial resources?
3) Well thought of by buyers?
4) An acknowledged market leaders?
5) Well conceived functional area strategies?
6) Access to economies of scale?
7) Insulated (at least somewhat) from strong competitive pressures?
8) Proprietary technology
9) Cost advantages?

Weaknesses

1) No clear strategic direction ?
2) Deteriorating competitive positions?
3) Obsolete facilities?
4) Sub par profitability because …?
5) Lack of managerial depth and talent?
6) Missing any key skills or competencies?
7) Poor track record implementing strategy?
8) Plagued with internal operating problems?
9) Vulnerable to competitive pressures?
10) Falling behind in R&D?

Carrying out SWOT

Corporate success is usually linked to certain critical success factors (CSFs). These relate to the factors which suppliers in a market must meet if they are to compete successfully. While carrying out SWOT, the main CSFs in a market segment need to be identified clearly and each factor should be weighted out of 100 according to its importance to customers. Total weighting should add up to 100. It is the possible to score out each major competitor out of 10 on their performance against each CSF. Multi playing each score by its weights will offer a quantitative assessment of the relative strengths of each competitor within a segment.