Vision Mission And Objectives Of Businesses Commerce Essay
The leveraging of a firms internal resources, capabilities and core competencies to accomplish the firms 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.
Organization, whether it is a business or a social organization, or university or government organization, takes resources from the environment and converts the resources into goods and/or services. It supplies the goods and services to the environment at an acceptable price. The organizations which make a net contribution to the society are called ‘legitimate.' The organizations should protect this legitimacy over the long-run. Thus, every organization comes into being and exists to accomplish something in the larger environment, and that purpose or mission is clear that start. As time passes, technology, consumer preferences and other environmental factors change, the firm's produces new products or renders new services and the interest of the management and employees change. This results in significant change in the firm. The original mission or purpose may become irrelevant in the long-run due to changes in internal environment of the organization and/or appropriate external environment. When these changes take place, management must search for new purpose or new state the mission or restate the original mission.
Organizations relate their existence to satisfying a particular need of the society. They do this in terms of their mission. Mission is a statement which defines the role that an organization plays in a society. It refers to the particular needs of that society for instance, its information needs. A book publisher and a magazine editor are both engaged in satisfying the information needs of society but they do it through different means. A book publisher may aim at producing excellent reading material while a magazine editor may strive to present news analysis in a balanced and unbiased manner. Both have different objectives but an identical mission.
A mission was earlier considered as the scope of the business activities a firm pursues. The definition of mission has gradually expanded to represent a concept that embodies the purpose behind the existence of an organization.
Whether developing a new business or reformulating direction for an ongoing company, the basic goals, characteristics and philosophies that will shape a firm's strategic posture must be determined. Thus, company mission will guide future executive action.
Company mission can be defined as the fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of its operations in product and market term. It embodies the business philosophy of strategic decision-makers; implies the image the company seeks to project; reflects the firm's self-concept; indicates the principal product or service areas and primary customer needs the company will attempt to satisfy. In short, the mission describes the product, market and technological areas of emphasis for the business.
Thompson defines mission as the "essential purpose of the organization, concerning particularly why it is in existence, the nature of the business it is in, and the customers it seeks to serve and satisfy."
Hunger and Wheelen say that mission is the "purpose or reason for the organization's existence".
According to John Pearce "mission is an enduring statement of purpose that distinguishes one firm from other similar firms".
CHARACTERISTICS OF A MISSION:
A mission statement incorporates the basic business purpose and the reason for its existence by rendering some valuable functions for the society. An effective mission statement should possess the following characterstics.
Feasible: The mission should be realistic and achievable. For instance, UTI declared its mission as "to encourage saving and investment habits among common man". By providing tax relief under Sec 88c, the investment upto 1lakh in UTI is exampled from income tax. Hereby common man's savings habit is encouraged by UTI.
Precise: A mission statement should not be narrow or too broad.
Clear: A mission statement should lead to action. BSNL'S mission of ‘connecting India' leads it to a variety of service with varied tariff structure so as to cater to the preferences of mobile phone users.
Motivating: The mission should be motivating for the employees to be inspired for action. For example India Post's mission is to expectations of the customer' with dedication, devotion and enthusiasm. So customer service has become a value and it is inspiring and motivating the postal employees.
Distinctive: A mission statement will indicate the major components of the strategy to be adopted. The mission should be unique. When HCL defines its mission as ‘to be a world class competitor' it creates a unique place in the minds of Indian personal computer users who across personal computers of MNCs on most of the occasions.
Indicates major components of strategy: "The mission statement of IOC emphasizes petroleum refining, marketing and transportation with international standards and modern technology. It indicates that IOC is going to adopt diversification strategy in future.
The mission provides direction to insiders and outsiders on what the firm stands for. It is the guiding star for any firm.
NEED FOR AN EXPLICIT MISSION:
The mission contains few specific directives, only broadly outlines or implied objectives and strategies. It is a statement of attitude, outlook and orientation rather than of details and measurable targets.
To ensure unanimity of purpose within the organisation;
To provide a basis for motivating the use of the organisations resources;
To develop a basis, or standard, for allocating organisational resources;
To establish a general tone or organisational climate;
To serve as a focal point for those who can identify with the organisation's purpose and direction;
To facilitate the translation of objectives and goals into a work structure involving the assignment of tasks; and
To specify organisational purposes and the translation of these purposes into goals.
The accomplishment of purpose or mission of an organization requires the formulation of a number of objectives. Achievement of the organizational objectives, in turn, requires the formulation and fulfillment of departmental and unit goals. Long-range objectives specify the results that are desired in pursuing the organisation's mission and normally extended beyond the current financial year of the organization. Lon-range objectives are notably speculative for distant years. short-range objective are performance targets, normally of less than one-year duration, that are used by management to achieve the organisation's long-range objectives. The selections of short-range objectives are from an evaluation of priorities relating to long-range objectives. Departmental objectives, both long-range and short-range are formulated based on the respective long-range and short-range objectives of the organization. Unit objectives are generally specific and are draw from the departmental objectives.
An objective indicates the result that the organization expects to achieve in the long run. It is an end result, the end point, something that you aim for and try to reach. It is a desired result towards which behaviour is directed in an organization. The organization may or may not reach the desired state, but the chances of doing so are greater if the objectives are framed and understood properly. Objectives are the products of specific concrete thinking. They commit persons and organizations to verifiable accomplishments. Again, objectives determine the scope of future events. They provide the spotlight on the routes over which activities are organized. They serve as reference points to concentrate resources and efforts. They determine what action to take today to obtain results tomorrow. Goals and targets are more precise and expressed in specific terms. In this section we will refer to only objectives assuming that these include the goals as well.
They are stated in precisae terms as quantitatively as possible. The emphasis in goals is on measurement of progress toward the attainment of objectives. Goals have the following features they: 1. are derived from objectives, 2. offer a standard for measuring performance, 3. are expressed in concrete terms, 4. are time-bound and work-oriented.
IMPORTANCE OF OBJECTIVES:
Why do organizations formulate objectives? And what is their importance? The following four factors explain the need for and importance of objectives.
Objectives help to define the organization in its environment: The organizations justify their existence to their stakeholders in the environment like customers, government, creditors and society at large.
Objectives help in coordinating decisions and decision-maker: Stated objectives impose some constraints on the employees and modify it towards the desirable direction. It coordinates decision-making process by different employees.
Objectives help in formulating strategies: Mission statements are translated into objectives and objectives are the basis for formulating strategies.
Objectives provide standards for assessing organizational performance: Objectives provide not only the direction to move to the organization but also provide the ultimate goals and targets that the organization is expected to achieve. These targets and goals become the standards to judge the organizational performance. Organizations, without clear objectives will not have basis for evaluating their performance or success.
Mission is an enduring statement of purpose that distinguishes one organization from other similar organization. Organization do exist to satisfy a particular need of the society or to fulfill a particular deficiency in the society. A mission statement is a declaration of an organization's reason of being. Management must take into account three key elements in developing mission statements viz., history of the organization, organization's distinctive competencies and the organization's environment.
The accomplishment of purpose or mission of an organization requires the formulation of objectives. These objectives are classified into overall organizational objectives, departmental objectives as well as unit level objectives. Based on the time objectives are classified into long-range objectives and short-range objectives. Long-range objectives are notably speculative for distant years. Short-range objectives are performance targets, normally of less than one-year's duration. Objectives represent a managerial commitment to achieve specified results in a specified period of time.
An economic system is a process that involves the production, distribution and consumption of goods and services by organizing labor, capital and natural resources between the entities in a particular society. It is the method used by society to produce and distribute goods and services.
In general, there are three major types of economic systems prevailing
around the world.
1. Planned Economy
A planned economy is also sometimes called a command economy. The most important aspect of this type of economy is that all major decisions related to the production, distribution, commodity and service prices, are all made by the government.
It is government directed, and market forces have very little say in such an economy. The government is the final authority to take decisions regarding production, utilization of the finished industrial products and the allocation of the revenues earned from their distribution.
A planned economy aims at using all available resources for developing
production instead of allotting the resources for advertising or marketing.
Capitalism is a social system based on the principle of individual rights. An economic system based on the private ownership of the means of production, distribution, and exchange, characterized by the freedom of capitalists to operate or manage their property for profit in competitive conditions. In capitalism governments play a minor role.
In this type of economic system private enterprise can produce almost every thing and they have freedom to produce and distribute goods and services according to public demands.
The absence of central planning is one of the major features of this economic system. Market decisions are mainly dominated by supply and demand. The role of the government in a market economy is to simply make sure that the market is stable enough to carry out its economic activities properly.
3. Mixed Economy
Mixed economy is a term used to describe an economic system, where some important production is undertaken by the state, directly or through its nationalized industries, and some is left for private enterprise. In a mixed type economy, both the private ownership as well as the government takes part in the process of production, distribution and other types of economic activities.
The mixed economy allows private participation in the field of production in an environment of competition with an objective of attaining profit. On the contrary following to the socialism features it includes public ownership in production for maximizing social welfare.
In a mixed economy there is flexibility in some areas and government control in others. Mixed economies include both capitalist and socialist economic policies and often arise in societies that seek to balance a wide range of political and economic views.
Characteristics of economic system
By nature, Planned Economy is more stable, guaranteeing constant exploitation of the existing resources.
The steady nature of Planned Economy encourages investments in long-standing project-related infrastructures without any possibility of financial recessions.
Individual is free to make his own economic decisions. Consumers, workers, savers, producers, etc., all are free to make the economic choices that will impact their lives
The desires of buyers and sellers are communicated in the market place through a price system. Buyers communicate the quantities of a good, service, or resource they are willing and able to purchase at various prices, and suppliers communicate the quantities of those items they are willing and able to sell at various prices.
Consumers are given choices about the products they buy.
Business owners can sell their products and keep the profits.
Government provides services for people in remote areas.
Individuals are free to use their money or resources as they choose.
Government provides service of defense, roads, education, pension and some medical care.
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