Strategic Management and human resource management

Strategic Management

1. The Business MissionThe Business Mission

2. Comprehensive Strategic Management Comprehensive Strategic Management
ModelModel
Vision
&
Mission
Statements
Chapter 2
External
Audit
Chapter 3
Internal
Audit
Chapter 4
Long-Term
Objectives
Chapter 5
Generate,
Evaluate,
Select
Strategies
Chapter 6
Implement
Strategies:
Mgmt Issues
Chapter 7
Implement
Strategies:
Marketing,
Fin/Acct,
R&D, CIS
Chapter 8
Measure &
Evaluate
Performance
Chapter 9

3. Dollar GeneralDollar General
“ “ Serving Others. For customer a better life , for shareholders Serving Others. For customer a better life , for shareholders
a superior return, for employees respect and opportunity “a superior return, for employees respect and opportunity “
A rivalry ….A rivalry ….
“ “For our customers a compelling place to shop…. by For our customers a compelling place to shop…. by
providing convenience and low price . For our associates –providing convenience and low price . For our associates –
A compelling place to work…by providing exceptional A compelling place to work…by providing exceptional
opportunity and rewards for achievement . For our opportunity and rewards for achievement . For our
investors –A compelling place to invest….by providing investors –A compelling place to invest….by providing
outstanding returns “outstanding returns “

4. Dollar GeneralDollar General
““Dollar General excellent mass retailing Dollar General excellent mass retailing
strategy of building small stores in small strategy of building small stores in small
communities has even mighty Wal-Mart communities has even mighty Wal-Mart
doing the same thing with their new, doing the same thing with their new,
smaller Wal-Mart Express storessmaller Wal-Mart Express stores….….
In 2011….625 new stores…..6000 new employees …in 35 In 2011….625 new stores…..6000 new employees …in 35
states, Profit increase….214% to $339 million dollar in states, Profit increase….214% to $339 million dollar in
2010….revenue increased 13% to $11.8 bn.2010….revenue increased 13% to $11.8 bn.
With out vision and mission statement a firms short terms With out vision and mission statement a firms short terms
actions can be counterproduction for long term actions actions can be counterproduction for long term actions

5. Vision & MissionVision & Mission
Well-known management thinker (Peter Well-known management thinker (Peter
Drucker ----Father of modern management )Drucker ----Father of modern management )
That business mission is so rarely given That business mission is so rarely given
adequate thought is perhaps the most adequate thought is perhaps the most
important single cause of business important single cause of business
frustrationfrustration. .
Asking question what is our Asking question what is our
business….means what is your mission.business….means what is your mission.
——Peter Drucker—Peter Drucker—

6. Vision & MissionVision & Mission

Vision (Bank Alfalah )
►To inspire and empower people to do things
differently and shape their own path in life and
business.
Mission (Bank Alfalah)
►We look at the market with fresh eyes to find
new opportunities, and seek new ways of
enabling our customers to succeed and
advance the world of finance.

7. Vision & Mission Vision & Mission (Cont’d)(Cont’d)
Vision statement answers the question:Vision statement answers the question:
““What do we want to become?”What do we want to become?”

8. Vision & Mission (Cont’d)Vision & Mission (Cont’d)
Mission statement answers the Mission statement answers the
question:question:
““What is our business?”What is our business?”

9. Vision & Mission Vision & Mission (Cont’d)(Cont’d)
►Many companies develop bothMany companies develop both
►Shared vision can motivate Shared vision can motivate
employeesemployees
►Develops a commonality of interestsDevelops a commonality of interests
►Helps focus on opportunity & Helps focus on opportunity &
challengechallenge

10. Developing Vision & MissionDeveloping Vision & Mission
►Clear mission is needed before Clear mission is needed before
alternative strategies can be formulated alternative strategies can be formulated
and implemented.and implemented.
►A clear mission statement is necessary for A clear mission statement is necessary for
effectively establishing objectives and effectively establishing objectives and
formulating strategies.formulating strategies.
►Important to have as broad range of Important to have as broad range of
participation as possible among participation as possible among
managers in developing the mission.managers in developing the mission.

11. ►It is a statement of purpose, statement of It is a statement of purpose, statement of
philosophy, a statement of beliefs, a philosophy, a statement of beliefs, a
statement of business principles, or a statement of business principles, or a
statement defining our business.statement defining our business.
11

12. ExamplesExamples
Vision StatementVision Statement
““The Bellevue Hospital is the LEADER in The Bellevue Hospital is the LEADER in
providing resources necessary to providing resources necessary to
realize the community’s highest level realize the community’s highest level
of HEALTH throughout life.”of HEALTH throughout life.”

13. Examples Examples (Cont’d)(Cont’d)
Mission StatementMission Statement
““The Bellevue Hospital, with The Bellevue Hospital, with respectrespect, ,
compassioncompassion, , integrity,integrity, and and couragecourage, honors , honors
the individuality and confidentiality of our the individuality and confidentiality of our
patients, employees, and community, and patients, employees, and community, and
is progressive in anticipating and providing is progressive in anticipating and providing
future health care services.”future health care services.”

14. Examples Examples (Cont’d)(Cont’d)
Vision StatementVision Statement
““The Vision of USGS is to be a world The Vision of USGS is to be a world
leader in the natural sciences leader in the natural sciences
through our scientific excellence and through our scientific excellence and
responsiveness to society’s needs.”responsiveness to society’s needs.”
-U.S. Geological Survey (USGS)--U.S. Geological Survey (USGS)-

15. Examples Examples (Cont’d)(Cont’d)
Mission StatementMission Statement
““The Mission of USGS is to serve the Nation by The Mission of USGS is to serve the Nation by
providing reliable scientific information toproviding reliable scientific information to
►Describe and understand the Earth;Describe and understand the Earth;
►Minimize loss of life and property from Minimize loss of life and property from
natural disasters;natural disasters;
►Manage water, biological, energy, and Manage water, biological, energy, and
mineral resources; and enhance and protect mineral resources; and enhance and protect
our quality of life.our quality of life.

16. Examples Examples (Cont’d)(Cont’d)
Vision StatementVision Statement
““It is the vision of the California Energy It is the vision of the California Energy
Commission for Californians to have Commission for Californians to have
energy choices that are affordable, energy choices that are affordable,
reliable, diverse, safe, and reliable, diverse, safe, and
environmentally acceptable.”environmentally acceptable.”

17. Examples Examples (Cont’d)(Cont’d)
Mission StatementMission Statement
““It is the California Energy Commission’s It is the California Energy Commission’s
mission to assess, advocate, and act mission to assess, advocate, and act
through public/private partnerships to through public/private partnerships to
improve energy systems that promote improve energy systems that promote
a strong economy and a healthy a strong economy and a healthy
environment.”environment.”

18. Characteristics of a MissionCharacteristics of a Mission
According to Vern McGinnis, mission should:According to Vern McGinnis, mission should:
►Define what the organization isDefine what the organization is
►Define what the organization aspires to beDefine what the organization aspires to be
►Limited to exclude some venturesLimited to exclude some ventures
►Broad enough to allow for creative growthBroad enough to allow for creative growth
►Distinguish the firm from all othersDistinguish the firm from all others
►Serve as framework to evaluate current activitiesServe as framework to evaluate current activities
►Stated clearly so that it is understood by allStated clearly so that it is understood by all

19. Characteristics of a Mission Characteristics of a Mission
(Cont’d)(Cont’d)
Effective mission statements:Effective mission statements:
•Broad in scopeBroad in scope
•Generate range of feasible strategic alternativesGenerate range of feasible strategic alternatives
•Not excessively specificNot excessively specific
•Reconcile interests among diverse stakeholdersReconcile interests among diverse stakeholders
•Finely balanced between specificity & generalityFinely balanced between specificity & generality

20. Characteristics of a Mission Characteristics of a Mission
(Cont’d)(Cont’d)
Effective mission statements:Effective mission statements:
•Arouse positive feelings and emotionsArouse positive feelings and emotions
•Motivate readers to actionMotivate readers to action
•Generate the impression that firm is Generate the impression that firm is
successful, has direction, and is worthy of successful, has direction, and is worthy of
time, support, and investmenttime, support, and investment

21. Characteristics of a Mission Characteristics of a Mission
(Cont’d)(Cont’d)
Effective mission statements:Effective mission statements:
•Reflect judgments re: future growthReflect judgments re: future growth
•Provide criteria for selecting strategiesProvide criteria for selecting strategies
•Basis for generating & screening Basis for generating & screening
strategic optionsstrategic options
•Are dynamic in orientationAre dynamic in orientation

22. Customer OrientationCustomer Orientation
A good mission statement reflects the A good mission statement reflects the
anticipations of customers.anticipations of customers.
►Identify customer needsIdentify customer needs
►Provide product/service to satisfy needsProvide product/service to satisfy needs

AT&T’s mission focuses on communications, not AT&T’s mission focuses on communications, not
telephonestelephones

Exxon’s mission focuses on energy, not on oil Exxon’s mission focuses on energy, not on oil
and gasand gas

23. Social Policy & MissionSocial Policy & Mission
Managerial philosophy and thinking at the Managerial philosophy and thinking at the
highest levels in the organization highest levels in the organization
reflect social policy.reflect social policy.
►Affects development of vision & Affects development of vision &
missionmission
►Responsibilities to consumers, Responsibilities to consumers,
environmentalists, minorities, environmentalists, minorities,
communities, & other groupscommunities, & other groups

24. Social Policy & Mission Social Policy & Mission (Cont’d)(Cont’d)
Social policy should be integrated in all Social policy should be integrated in all
strategic-management activities.strategic-management activities.
Mission statement is an effective Mission statement is an effective
instrument for conveying the social instrument for conveying the social
responsibility of the firm.responsibility of the firm.

25. Components of MissionComponents of Mission
Mission statements vary in…Mission statements vary in…
 LengthLength
 ContentContent
 FormatFormat
 SpecificitySpecificity
Must include the 9 elements, as the mission Must include the 9 elements, as the mission
statement is the most public and visible statement is the most public and visible
part of the strategic-management process.part of the strategic-management process.

26. Components of Mission Components of Mission
(Cont’d)(Cont’d)
►CustomersCustomers
►Products or servicesProducts or services
►MarketsMarkets
►TechnologyTechnology
►Survival, growth, and profitabilitySurvival, growth, and profitability
►PhilosophyPhilosophy
►Self-conceptSelf-concept
►Concern for public imageConcern for public image
►Concern for employeesConcern for employees

27. Components of Mission Components of Mission
(Cont’d)(Cont’d)
Components of mission and corresponding Components of mission and corresponding
questions to be answered:questions to be answered:
►Customers: Customers:
““Who are the firm’s customers?”Who are the firm’s customers?”
►Products or services:Products or services:
““What are the firm's major products or What are the firm's major products or
services?”services?”

28. Components of Mission Components of Mission
(Cont’d)(Cont’d)
►Markets:Markets:
““Geographically, where does the firm Geographically, where does the firm
compete?”compete?”
►Technology:Technology:
““Is the firm technologically current?”Is the firm technologically current?”

29. Components of Mission Components of Mission
(Cont’d)(Cont’d)
►Concern for survival, growth, and Concern for survival, growth, and
profitability: profitability:
““Is the firm committed to growth and Is the firm committed to growth and
financial soundness?”financial soundness?”
►Philosophy:Philosophy:
““What are the basic beliefs, values, What are the basic beliefs, values,
aspirations, and ethical priorities of the aspirations, and ethical priorities of the
firm?”firm?”

30. Components of Mission Components of Mission
(Cont’d)(Cont’d)
►Self-concept: Self-concept:
““What is the firm’s distinctive competence or What is the firm’s distinctive competence or
major competitive advantage?”major competitive advantage?”
►Concern for public image:Concern for public image:
““Is the firm responsive to social, community, and Is the firm responsive to social, community, and
environmental concerns?”environmental concerns?”
►Concern for employees:Concern for employees:
““Are employees a valuable asset of the firm?”Are employees a valuable asset of the firm?”

31. Importance of Vision & Importance of Vision &
MissionMission
Although research results are mixed, firms with Although research results are mixed, firms with
formal mission statements…formal mission statements…
•2X average return on shareholder’s equity2X average return on shareholder’s equity
•Positive relationship to organizational performancePositive relationship to organizational performance
•30% higher return on certain financial measures30% higher return on certain financial measures

32. Global PerspectiveGlobal Perspective
Major Challenges in 2000Major Challenges in 2000
31%39%24%Incr. flexibility & speed
3%9%26%Competing for talent
38%32%28%Engaging emp. in mission
41%32%29%Reducing costs
16%42%30%Managing M&As, alliances
3%28%44%Customer loyalty
JapanEuropeUSA

33. Key Terms & ConceptsKey Terms & Concepts
►Concern for Concern for
employeesemployees
►Concern for public Concern for public
imageimage
►Concern for survival, Concern for survival,
growth, and growth, and
profitabilityprofitability
►Creed statementCreed statement
►CustomersCustomers
►MarketsMarkets
►Mission statementMission statement
►Mission statement Mission statement
componentscomponents
►PhilosophyPhilosophy
►Products or servicesProducts or services
►Self-conceptSelf-concept
►Social policySocial policy
►StakeholdersStakeholders
►TechnologyTechnology
►Vision statementVision statement