Essentially this is a description of the organisation; its size, its basic structure, its sphere of influence. Rather than describing the organisation as it currently exists, the statement presents a picture of the desirable future.
A vision statement is something which is not achievable rather it is just a broad statement of desired future. A vision statement is set for an organization just to motivate its employees.
Example of VISION STATEMENT:
Lets suppose there is a new foot wear company, its VISION STATEMENT would be:
'WE WANT TO SUCESSFULLY COMPETE WITH THE TOP DESIGNER FOOT WEAR COMAPNIES IN THE WORLD'
If we analyse this statement, we can clearly see that it is very vague and is virtually impossible for a new foot wear company to do so, but it can act as a motivator to the company's workers and employees.
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* WHAT IS A MISSION STATEMENT:
A mission statement is a brief summary, approximately one or two sentences, that sums up the background, purposes and benefits of a business organization.
It is very important for an organization to come up with a mission statement. Each and every organization in the world has a mission statement in order to tell it's stakeholders the importance and purpose of its being. A mission statement is meant to be clear, easy to understand and should tell every one the purpose of the organization and its brief background.
Example of MISSION STATEMENT:
Lets take the example of UNILEVER's mission statement;
'We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life'
Now if we analyze this, it clearly gives us a picture of the purpose of the entire organization. It describes the types of products it produces; which include food items (nutrition), health and personal care etc. It also indicates that UNILEVER's product helps its customers to look good, feel good and enjoy life to its fullest, which can again act as a motivator for its customers to opt for its products more often.
* WHAT ARE THE OBJECTIVES OF A COMPANY:
Objectives can be defined as the end towards which activities are aimed. Many times people mix up the concept of objectives and goal with each other but objectives are more specific, measurable, achievable, realistic and timetabled. In short we can say that goals which are (S-M-A-R-T) are called objectives.
Example of a business OBJECTIVE:
We will take an example of a newly formed company, who's goal would be to gain market share.
'By 2011 we will increase our market share from 5% to 25%'
This is a very common and simple example of a business objective. Mostly all organizations think of growth in order to increase it's profits.
An organization without an objective would not know the purpose for its workings. With out an objective the workers would not know what they have to achieve and till when, this can be a very crucial factor in de-motivating the workers and thus affecting the efficiency of the company.
In conclusion there must be an objective set by the company, so that the employees know what they have to do and how they have to, other wise without clear objectives an organization is bound to fail.
Business strategy can be defined as the long term plans designed for achieving the mission and objectives of an organization.
Strategy can be split up into three major categories:
a) Corporate level strategy: It involves the top management and it is aimed to address that concern the entire business organization. E.g. which industry to produce in, and what product range to produce.
b) Business level strategy: These are usually formulated buy the middle-level managers and are intended to help achieve the corporate strategies of the organization.
c) Functional level strategy: These strategies address the problems faced by lower- level managers and are meant to deal with the issues arising in the functional departments of an organization. E.g. marketing dept, research and development dept and human resource dept.
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When deciding to make a strategy for an organization the senior managers have to take into account three major questions;
1. Where are we now?
2. Where do we want to go?
3. How are we going to get there?
IMPORTANCE OF STRATEGY:
The fact strategy is a plan to achieve an organization's objectives is enough to tell us the importance of business strategy.
With out a proper plan (strategic planning) an organization cannot achieve it's objectives and if a business cannot achieve it's objectives then such an organization is considered to be a failure.
Besides this a strategic plan when efficiently communicated to all the employees of a company, it provides them with a clear picture of what the purpose of the organization is and how to achieve it. When employees are made part of such things they feel more empowered and delegated, they feel to be a part of the business and thus get motivated (a motivated work force always turn out be more effective and efficient)which in turn adds to the success of the business.
Strategies also help the managers to forecast future changes in the market conditions and to come up with the solutions to the problems even before they have to face them.
On the other hand a company without a clear strategic plan is not aware of the problems that it can face in the future and so obviously has not thought of the possible solutions either, this can get the company into extreme problems.
In conclusion I would say that in such a fierce competition that the markets are facing today, an organization without clear objectives and strategies to meet those objectives cannot survive for long and are therefore bound to fail.
* BUSINESS STAKE-HOLDERS:
Stake holders are all those entities who are either directly or in-directly related to a business organization.
Generally we can categorize stake holders into three main groups:
1. Internal stake holders:
Internal stake holders are all those who have a direct interest in the business.
a. Managers: They play a key role in all the decision manking and risk taking involved in a businesss.
b. Employees: They have a major effect on the success of a business as it is they who are responsible for all aspects of work carried out in an organization.
2. Connected stake holders:
Connected sake holders are all those who have have a role in a business but are not directly connected.
a. Shareholders: They are the one who have invested their money into the business. Their prime interest is to get a high return on their investments. Their money gives them the power to even influence some business decisions.
b. Bankers: They are the ones giving the business a Loan, if required. So they can also influence a business with its polices to repay a loan for instance.
c. Suppliers: They are the ones supplying us with raw materials. They also are an important part of the whole cycle because if the raw materials are not delivered at the required time a business may loose a fortune.
d. Customers: A customer is a person who has the power to buy. One of the most important goal of a business is to satisfy its customers, with out them the business cannot survive as they are producing for the customer only.
3. External stake holders:
External stake holder is all those entities who are indirectly connected to the business. They don't have any personal interests but are concerned about the society as a whole.
a. Government: A government plays an important role in the success or failure of a business by implementing laws and policies which may either benefit or harm an organization.
b. Society: The general public can also interfere in an organization's decision. For instance they may boycott a company's products because according to them the company is not considering ethical issues.
c. Pressure groups: These are organized groups that seek to influence an organization's policy by either protesting or advancing a particular cause or interest. For example pursuing an organization to change its production techniques to keep the environment green.
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As defined that the stake holders are all those who have an interest in the business, so it is important to identify their interest and to satisfy them as much as a business can in order to get successful.
MAPPING DIFFERENT STAKE HOLDERS:
Above listed are all the stake holders who have an interest but a business needs to identify the key stake holders and giving them preference accordingly. It also helps s identify the following:
a. Different Stake holders' interests.
b. Important stake holders (to be informed about certain confidential data).
c. Negative stakeholders and their effects on the organization.
d. Potential risk from certain stake holders.
There are many ways of identifying and categorizing the stake holders according to their influence over the management process of the organization. For example:
Stake holder's map:
This figure is a general example of stake holder's map, here you plot your stake holders after identifying them and then you inform them according to the influence they have on the success of the business and also the strength of their interest.
The technique can be altered slightly for different organizations depending on the type of industry it operates in, for example instead of influence on success and strength of interest an organization can judge its stake holders on the bases of power and interest or support and influence etc.
In conclusion, I would say that it is very important for any organization to first of all identify its stake holders and then to split them up into different categories, so that they have an absolute idea about what information to share with which stake holder and what information to hide from which.
For example a manager should be well informed about the corporate, business and functional strategies of the business where as mostly the share holders do not have any interest in the strategy of the business, all they want is a return on their investment.
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