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Two broad types of objectives are required
Financial objectives and strategic objectives.
Which one of the following are integral part of the managerial process of crafting and executing strategy
Developing a strategic vision, mission and values
Executing the strategy
Monitoring developments, evaluating performance, and initiating corrective adjustments.
A strategic vision for a company
describes management's aspirations for the business, providing a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense for the company—a strategic vision thus points an organization in a particular direction and charts a strategic path for it to follow in preparing for the future.
Company Values are
A company's values are the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and strategy
B)In companies with long-standing values that are deeply entrenched in the corporate culture, senior managers are careful to craft a vision, mission, and strategy that match established values, and they reiterate how the value-based behavioral norms contribute to the company's business success. If the company changes to a different vision or strategy, executives take care to explain how and why the core values continue to be relevant.
C)A company's core values can relate to such things as fair treatment, integrity, ethical behavior, the emphasis the company will place on innovativeness or top-notch quality or superior customer service, and the company's beliefs in high ethical standards, socially responsible behavior, and giving back to the community.
D)At companies whose executives take the stated values very seriously, the values are widely adopted by company personnel, are ingrained in the corporate culture, and are mirrored in how company personnel conduct themselves and the company's business on a daily basis.
A company's objectives or performance targets
represent a managerial commitment to achieving specified outcomes and results; they function as yardsticks for tracking the company's progress and performance—well-stated objectives are quantifiable, or measurable, and contain a deadline for achievement
Which of the following represents the best example of a well-stated strategic objective (as opposed to a well-stated financial objective)
Increase market share from 17% to 22% and achieve the lowest overall costs of any producer in the industry, both within three years
A balanced scorecard for measuring company performance
entails setting both financial and strategic objectives and putting balanced emphasis on their achievement
The task of crafting a strategy is
a job for a company's whole management team—senior executives plus the managers of business units, operating divisions, functional departments, manufacturing plants, and sales districts
The strategy-making hierarchy in a single business company consists o
business strategy, functional strategies, and operating strategies, whereas in a diversified company it consists of corporate strategy, business strategies (one for each business the diversified company is in), functional strategies, and operating strategies.
WHAT DOES THE STRATEGY-MAKING, STRATEGY-EXECUTING PROCESS ENTAIL
1.Developing a strategic vision, a mission, and a set of values.
Developing a Strategic Vision
●Delineates management’s future aspirations for the business to its stakeholders.
●Provides direction—“where we are going.”
●Sets out the compelling rationale (strategic soundness) for the firm’s direction.
●Uses distinctive and specific language to set the firm apart from its rivals.
The Mission Statement:
●Uses specific language to give the firm its own unique identity.
●Describes the firm’s current business and purpose—“who we are, what we do, and why we are here.”
- Should focus on describing the company’s business, not on “making a profit”—earning a profit is an objective
- not a mission
- ●Are the beliefs, traits, and behavioral norms that employees are expected to
- display in conducting the firm’s business and in pursuing its strategic vision
- and mission.
- ●Become an integral part of the firm’s culture and what makes it tick when strongly
- espoused and supported by top management.
- Matched with the firm’s vision, mission, and strategy contribute to the firm’s business
Purposes of Setting Objectives
- ●To convert the vision and mission into specific, measurable, timely performance
●To focus efforts and align actions throughout the organization.
●To serve as yardsticks for tracking a firm’s performance and progress.
To provide motivation and inspire employees to greater levels of effort
A balanced scorecard measures a firm’s optimal performance by
- uPlacing a balanced emphasis on achieving
- both financial and strategic objectives.
- uAvoiding tracking only financial performance and overlooking the importance of measuring
- whether a firm is strengthening its competitiveness and market position.
- Focus attention on quarterly and annual performance improvements to satisfy near-term
- shareholder expectations
- ●Force consideration of what to do now to achieve optimal long-term
●Stand as a barrier to an undue focus on short-term results.
THE NEED FOR OBJECTIVES AT ALL ORGANIZATIONAL LEVELS
- ♦Breaks down performance targets
- for each of the organization’s separate units.
- ♦Fosters setting performance
- targets that support achievement of firm-wide strategic and financial
Extends the top-down objective-setting process to all organizational levels
Crafting Strategy - Strategy Making
●Addresses a series of strategic how’s.
●Requires choosing among strategic alternatives.
- ●Promotes actions to do things differently from competitors rather than running with the
- ●Is a collaborative team effort
- that involves managers in various positions at all organizational levels.
Who Is Involved in Strategy Making
- ♦Chief Executive Officer (CEO)
- -Has ultimate responsibility for leading the strategy-making process as strategic
- visionary and as chief architect of strategy.
- ♦Senior Executives
- -Fashion the major strategy components involving their areas of responsibility.
- ♦Managers of subsidiaries, divisions, geographic regions, plants, and other operating units (and key employees with specialized expertise)
- -Utilize on-the-scene familiarity with their business units to orchestrate their
- specific pieces of the strategy.
An organization exhibits strategic intent when it
- relentlessly pursues an ambitious strategic objective, concentrating the full force of
- its resources and competitive actions on
- achieving that objective!
What Is a Strategic Plan?
Elements of a Firm’s Strategic Plan
- -Its strategic vision, business
- mission, and core values
- -Its strategic and financial
-Its chosen strategy