Module-1A-Strategic-Thinking.pdf

Strategic Thinking Module 1A - Strategic Thinking Learning Objectives: At the end of this Module the student will be able to: 1. Discuss strategic thinking and its importance to business organization. 2. Define...

Strategic Thinking Module 1A - Strategic Thinking Learning Objectives: At the end of this Module the student will be able to: 1. Discuss strategic thinking and its importance to business organization. 2. Define Mission, Vision, and Values and their respective roles in the organization. 3. Explain the importance of Goals, Strategies, Objectives And Tactics. 4. Describe Corporate strategy and identify the different types of corporate strategy. 5. Explain Strategic Planning and discuss its processes and benefits. What is Strategic Thinking? Strategic thinking is simply an intentional and rational thought process that focuses on the analysis of critical factors and variables that will influence the long-term success of a business, a team, or an individual. Strategic thinking includes careful and deliberate anticipation of threats and vulnerabilities to guard against and opportunities to pursue. Ultimately strategic thinking and analysis lead to a clear set of goals, plans, and new ideas required to survive and thrive in a competitive, changing environment. This sort of thinking must account for economic realities, market forces, and available resources. Strategic thinking requires research, analytical thinking, innovation, problem-solving skills, communication and leadership skills, and decisiveness. Why is Strategic Thinking Important? The competitive landscape can change quickly for any organization. New trends may emerge quickly and require you to take advantage of them or fall behind. By incorporating everyday strategic thinking into your work and life routines, you will become more skilled at anticipating, forecasting, and capitalizing on opportunities. On an individual level, thinking strategically allows you to make a greater contribution in your role, become more essential to your organization, and prove that you’re ready to control greater resources. What is Strategic Thinking in Business? During an organization’s annual strategic planning process, leaders often compile, analyze, and synthesize external and internal data and ideas to develop its strategic intent and build a strategic narrative. This document will guide the company into the future for a defined period of time. Leaders then choose and plan specific actions that will accomplish these strategic initiatives. Businesses also need to schedule a time for strategic thinking and reviews throughout the year. Leadership teams should periodically examine their strategic initiatives to ensure execution is taking place, review, and sustain the effort across the organization. What is Strategic Thinking in Leadership? Business leaders and stakeholders use strategic thinking and analysis to decide what product mix they’ll offer, what competitive landscape to compete in (or not compete in), and how limited resources will be allocated such as time, employees, and capital. They must decide how to best structure, enroll others to achieve important objectives and to avoid putting resources at unnecessary risk of loss. What are the Components of Strategic Thinking? If you’re working on your company’s strategy, you’ll need to engage in analysis, problem-solving, decision making, and leading through change. As you create a strategic direction or plan, you’ll analyze: Business opportunities and vulnerabilities Feasible of each idea or risk The costs associated with each move you are considering  The likelihood that various tactics will be effective Methods of aligning objectives with the overall plan The effects of competitors, suppliers, customers, and new substitutes might have on your strategic plans As you discover obstacles during the planning process, you’ll problem-solve by: Gathering relevant information about the problem Clearly defining the problem from a strategic point of view Brainstorming possible solutions Imagining further challenges and how to overcome them Delegating assignments of various parts of this strategy to key associates Strategic thinking requires agility and decisiveness in choosing a plan and sticking with it. However, you have to be aware of new, more promising opportunities. It is a balancing act between consistency and flexibility. You and your team will: Make sure decisions are well-informed by thorough research Choose objectives and accompanying metrics Prioritize objectives Follow a standard decision-making process Build consensus, when necessary During strategic planning, you will need to communicate ideas to your staff and gather feedback from them. You’ll then utilize effective channels to communicate a compelling vision of the completed plan to all employees and keep them focused on their contribution to the plan. How to Improve Strategic Thinking Skills There are five steps to improving your strategic thinking skills: 1) Set aside time to reflect and plan for the future, identify trends, prioritize tasks, and determine where to allocate resources 2) Uncover your own biases so you can think more clearly about strategy 3) Listen to subject matter experts and opinion leaders in your organization to obtain higher quality information you can use in your strategic thinking 4) Learn to ask good questions to uncover better options and plans—questions such as “Is this idea from a credible source?” and “Is this idea logical?” 5) Explore all the consequences of different strategies and directions https://cmoe.com/glossary/strategic-thinking/ The Roles of Mission, Vision, and Values Learning Objectives 1. Be able to define mission and vision. 2. See how values are important for mission and vision. 3. Understand the roles of vision, mission, and values in the P-O-L-C framework. Mission, Vision, and Values Mission and vision both relate to an organization’s purpose and are typically communicated in some written form. Mission and vision are statements from the organization that answer questions about who we are, what do we value, and where we’re going. A study by the consulting firm Bain and Company reports that 90% of the 500 firms surveyed issue some form of mission and vision statements (Bart & Baetz, 1998). Moreover, firms with clearly communicated, widely understood, and collectively shared mission and vision have been shown to perform better than those without them, with the caveat that they related to effectiveness only when strategy and goals and objectives were aligned with them as well (Bart, et. al., 2001). A mission statement communicates the organization’s reason for being, and how it aims to serve its key stakeholders. Customers, employees, and investors are the stakeholders most often emphasized, but other stakeholders like government or communities (i.e., in the form of social or environmental impact) can also be discussed. Mission statements are often longer than vision statements. Sometimes mission statements also include a summation of the firm’s values. Values are the beliefs of an individual or group, and in this case the organization, in which they are emotionally invested. The Starbucks mission statement describes six guiding principles that, as you can see, also communicate the organization’s values: 1. Provide a great work environment and treat each other with respect and dignity. 2. Embrace diversity as an essential component in the way we do business. 3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. 4. Develop enthusiastically satisfied customers all of the time. 5. Contribute positively to our communities and our environment. 6. Recognize that profitability is essential to our future success (Starbucks, 2008). Similarly, Toyota declares its global corporate principles to be: ❖ Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world. ❖ Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities. ❖ Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities. ❖ Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. ❖ Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management. ❖ Pursue growth in harmony with the global community through innovative management. ❖ Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships (Toyota, 2008). A vision statement, in contrast, is a future-oriented declaration of the organization’s purpose and aspirations. In many ways, you can say that the mission statement lays out the organization’s “purpose for being,” and the vision statement then says, “based on that purpose, this is what we want to become.” The strategy should flow directly from the vision, since the strategy is intended to achieve the vision and thus satisfy the organization’s mission. Typically, vision statements are relatively brief, as in the case of Starbuck’s vision statement, which reads: “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow (Starbucks, 2008).” Or ad firm Ogilvy & Mather, which states their vision as “an agency defined by its devotion to brands (Ogilvy, 2008).” Sometimes the vision statement is also captured in a short tag line, such as Toyota’s “moving forward” statement that appears in most communications to customers, suppliers, and employees (Toyota, 2008). Similarly, Wal-Mart’s tag-line version of its vision statement is “Save money. Live better (Walmart, 2008).” Any casual tour of business or organization Web sites will expose you to the range of forms that mission and vision statements can take. To reiterate, mission statements are longer than vision statements, often because they convey the organizations core values. Mission statements answer the questions of “Who are we?” and “What does our organization value?” Vision statements typically take the form of relatively brief, future-oriented statements—vision statements answer the question “Where is this organization going?” Increasingly, organizations also add a values statement which either reaffirms or states outright the organization’s values that might not be evident in the mission or vision statements. Vision A University committed to Exemplary Christian Education for Life (EXCEL) and responsive to the needs of the total person and the world. Mission The mission of Central Philippine University is to carry out a program of spiritual , intellectual, moral, scientific, technological, and cultural training, and allied studies under influences which strengthen Christian faith, build up character and promote scholarship, research and community service. Core Values FAITH. The act of believing the things God has revealed about himself and acting on those beliefs. This includes commitment, cooperation, trust, and confidence. CHARACTER. The aggregate feature and traits that form the individual’s nature of a person, moral quality, and good report. This includes honesty, integrity, humility, and loyalty. JUSTICE. Righteousness or lawfulness and fairness. It is observing due process in administrating the deserved punishment or reward. This includes fairness, equality, morality, and peace. STEWARDSHIP. The proper and responsible management of life, position, possession, and other resources entrusted by God to man. This includes service, accountability, culture, and outreach. EXCELLENCE. The highly commendable quality or feature of a person’s worth and/or deeds/ this includes competence, technology, scholarship and research. Roles Played by Mission and Vision Mission and vision statements play three critical roles: (1) communicate the purpose of the organization to stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives by which to gauge the success of the organization’s strategy. These interdependent, cascading roles, and the relationships among them, are summarized in the figure. Figure 4.5 Key Roles of Mission and Vision First, mission and vision provide a vehicle for communicating an organization’s purpose and values to all key stakeholders. Stakeholders are those key parties who have some influence over the organization or stake in its future. You will learn more about stakeholders and stakeholder analysis later in this chapter; however, for now, suffice it to say that some key stakeholders are employees, customers, investors, suppliers, and institutions such as governments. Typically, these statements would be widely circulated and discussed often so that their meaning is widely understood, shared, and internalized. The better employees understand an organization’s purpose, through its mission and vision, the better able they will be to understand the strategy and its implementation. Second, mission and vision create a target for strategy development. That is, one criterion of a good strategy is how well it helps the firm achieve its mission and vision. To better understand the relationship among mission, vision, and strategy, it is sometimes helpful to visualize them collectively as a funnel. At the broadest part of the funnel, you find the inputs into the mission statement. Toward the narrower part of the funnel, you find the vision statement, which has distilled down the mission in a way that it can guide the development of the strategy. In the narrowest part of the funnel you find the strategy —it is clear and explicit about what the firm will do, and not do, to achieve the vision. Vision statements also provide a bridge between the mission and the strategy. In that sense the best vision statements create a tension and restlessness with regard to the status quo—that is, they should foster a spirit of continuous innovation and improvement. For instance, in the case of Toyota, its “moving forward” vision urges managers to find newer and more environmentally friendly ways of delighting the purchaser of their cars. London Business School professors Gary Hamel and C. K. Prahalad describe this tense relationship between vision and strategy as stretch and ambition. Indeed, in a study of such able competitors as CNN, British Airways, and Sony, they found that these firms displaced competitors with stronger reputations and deeper pockets through their ambition to stretch their organizations in more innovative ways (Hamel & Prahalad, 1993). Third, mission and vision provide a high-level guide, and the strategy provides a specific guide, to the goals and objectives showing success or failure of the strategy and satisfaction of the larger set of objectives stated in the mission. In the cases of both Starbucks and Toyota, you would expect to see profitability goals, in addition to metrics on customer and employee satisfaction, and social and environmental responsibility. Key Takeaway Mission and vision both relate to an organization’s purpose and aspirations, and are typically communicated in some form of brief written statements. A mission statement communicates the organization’s reason for being and how it aspires to serve its key stakeholders. The vision statement is a narrower, future-oriented declaration of the organization’s purpose and aspirations. Together, mission and vision guide strategy development, help communicate the organization’s purpose to stakeholders, and inform the goals and objectives set to determine whether the strategy is on track. https://open.lib.umn.edu/principlesmanagement/chapter/4-3-the-roles-of-mission-vision-and-values Understanding Goals, Strategy, Objectives And Tactics In The Age Of Social Mikal E. Belicove Contributor/Entrepreneurs I help you make sense of the news that matters to you & your business. There’s an old adage about the weather that’s gospel for mountaineers and meteorologists alike: There’s no such thing as good or bad weather. All we have is weather, and you have to be prepared for it — good and bad. Same goes for media and marketing. There’s no such thing as traditional or new media, just as there’s no such thing as traditional or social media marketing. All there is media and marketing, and both have always been and always will be in a constant state of tactical evolvement. In fact, when people talk or write about “social media marketing” being a discipline unto itself – one requiring a unique skills set and understanding to master – all they’re really talking about is the last item in what I like to call the G’SOT. And unless you understand the difference between Goals, Strategies, Objectives and Tactics (the G'SOT), you’re likely to dismiss anything else there is to say on the subject. So, for the uninitiated: A goal is a broad primary outcome. A strategy is the approach you take to achieve a goal. An objective is a measurable step you take to achieve a strategy. A tactic is a tool you use in pursuing an objective associated with a strategy. Countless example of G’SOT in action exist, including this one I’ve just riffed for Intel’s line of Core processors: Goal: Make our Core PC microprocessors a category leader in sales revenue by year X. Strategy: Persuade buyers that our Core processors are the best on the market by associating with large, well-established PC manufacturers. Objective: Retain 70 percent or more of the active worldwide PC microprocessor market, according to Passmark's CPU benchmark report. Tactic: Through creative that underlies our messaging, leverage hardware partner brand awareness to include key messages about the Intel Inside program. In this example, the suggested SOTs are among many that Intel could choose when pursuing the goal of making its PC microprocessors a category leader. Nowhere do you see anything about media, let alone social media. But if you did – and that would be because of the creation and pursuit of a sub- strategy – it would be nothing other than a tactic. So why does any of this matter? Reggie Bradford, Oracle’s senior vice president of product development discusses this to some degree in Avi Savar’s brilliant new book, Content to Commerce: Engaging Consumers Across Paid, Owned, and Earned Channels. Bradford says there’s a mandate within corporate America for organizational change, particularly within the halls of marketing. In the book, Bradford discusses how he would approach building a marketing organization from the ground up, taking into consideration to necessity for social media play a more pervasive role at the tactical level: Wire Image I would make social the fulcrum of my communications strategy: Social is how the modern consumer has grown accustomed to communicating. The social platforms are where they turn for discovery, research, peer-to-peer recommendation (a force far stronger than other influencers like advertising), and for follow-up customer service. I would use paid and other media to buttress the core social strategy: Paid offers a way to amplify qualified, relevant content that is desired and welcomed with open arms by the consumer. Paid media strategies would be informed by what we learn about the brand’s audience through our consistent interaction with them on social, thereby maximizing the effect of every spend. I would leverage owned channels first, then earned, then paid, followed by events and PR: As the foundation of my marketing strategy, I would put whatever financial and personnel resources were necessary toward fielding and operating world-class Facebook pages, Twitter feeds, Pinterest boards…whatever platforms are most appropriate for the brand. (Excerpted with permission of the publisher, Wiley, Content to Commerce: Engaging Consumers Across Paid, Owned and Earned Channels by Avi Savar. Copyright 2013 by Avi Savar.) Bradford, who serves on the board of directors of the Social Media Advertising Consortium and previously founded software-as-a-service (SaaS) play Vitrue – which he sold to Oracle for $300 million – will be the first to tell you that in many marketing departments today, social is the enemy of “but this is the way we’ve always done it.” He writes that “comfort zones are being challenged,” and indicates that the ability to pivot and stay in sync with the way today’s consumers want to interact and conduct business “will be a significant determining factor in which enterprises survive and thrive.” Hear, hear to that! Taking Bradford’s thoughts a step further, those organizations that understand the G’SOT and social media’s place on it will be the ones best positioned to evolve at the same pace as the appearance of new and compelling tactics. Mikal E. Belicove I am a magazine columnist, book author, blogger and ghost writer who writes about entrepreneurship, marketing, business planning and corporate communications, emerging… https://www.forbes.com/sites/mikalbelicove/2013/09/27/understanding-goals-strategies-objectives-and- tactics-in-the-age-of-social/ Objectives of Business Article Shared by Riya B Everything you need to know about the objectives of business. The business is an economic institution operating in a socio-economic system. Therefore, objectives of business should be defined keeping in view its prevailing environment and its needs for survival and growth. Like any other institution business has several rather than a single objective. Objectives of business are multi-dimensional in nature. Business is established and it exists to achieve multiple objectives. People enter into business and stay in business because they want to earn money, social power and prestige, joy of achievement and other goals. Generally, profit motive is considered to be the primary objective of business. But profit-making is not the sole or only objectives of a business. Every business enterprise has to lay down its multiple objectives to justify its existence. The objectives of business can be studied under the following heads:- 1. Economic Objectives 2. Social Objectives 3. Human or Individual Objectives 4. Multiple Objectives 5. Organic Objectives 6. Micro Level Objectives 7. National Level Objectives 8. Global Objectives. Classification of Business Objectives Objectives of Business – Profitability, Growth, Stability, Efficiency and Survival Business means busy in some activities. Business means conducting activities such as – sale, purchase and manufacturing etc for profit and growth. Business is also referred to a particular company, enterprise or corporation. A business always has some purpose and no doubt the most important purpose of business is achieving profitability and growth. Followings are the some important objectives of business: 1. Profitability – This is one of the most important objectives of business. We normally setup business to achieve profits for its owner or shareholders. But, does it mean that business should somehow, by hook or crook, earn the profit? Our answer is no; it should earn profit by working under rules and regulations or by following ethical practices. 2. Growth – Another important objective of business is to achieve growth. The growth should be in terms of increase in profit, revenue, capacity, number of employees and employee prosperity, etc. 3. Stability – Stability means continuity of business. An enterprise or business should achieve stability in terms of customer satisfaction, creditworthiness, employee satisfaction etc. A stable organization can easily handle changing dynamics of markets. 4. Efficiency – An efficient or aggressive working environment. A business should always try to achieve the best in its field. Efficiency is considered in terms of labor productivity, energy consumption, quality control etc. 5. Survival – A business should have the capability to survive markets jolts or shocks. A business should be there with a vision of long-term existence. Objectives of Business – Economic, Social, Human or Individual and Multiple Objectives Every business is directed to the achievement of certain objectives. Objectives refer to the end points towards which all business activities are directed: Objectives lay down the guidelines for various activities and decide the direction and amount of efforts needed for these activities. Objectives should be feasible and must be expressed in specific terms with a time limit for achievement. For example, the objective of a mobile company can be to increase the mobile users by 10% in 2 years. Business Objectives may be broadly classified into three categories: 1. Economic Objectives 2. Social Objectives 3. Human or Individual Objectives 1. Economic Objectives: Business is an economic activity and its objectives are mainly economic in nature. The main economic objectives are: : a) Profit Earning – Every entrepreneur undertakes business activities primarily to earn profits. No business can survive for long without earning sufficient profits. A business needs profits not only for its existence but also for expansion and diversification. Profits provide a means of livelihood for the entrepreneur and a reward for bearing the risk. b) Survival – Every business aims to ensure that it continues to survive and exist in the future. Survival is possible only when organisation is able to earn enough revenue to cover its costs. c) Growth – A business needs to add to its prospects in the long run. For this, the business must grow and expand to survive in the long rim. Growth of a business indicates how well it is able to exploit its potential opportunities. Growth is measured in terms of sales volume, increase in number of employees, market share, number of products, etc. 2. Other Economic Objectives of Business: a. Creation of Customers – Creation of customers or demand is essential in order to earn profits. Customers are the focus of all business activities. A business enterprise can exist and grow only when it is able to capture a big market share, i.e. there are enough people to buy the products and services offered by an enterprise. b. Innovation – Innovation refers to introduction of new ideas or new methods of production. Innovation plays a crucial role in increasing the competitive strength and improving the image of business enterprise in the mind of customers. c. Optimum Utilisation of Resources – Resources available with the business are generally limited. So, every business enterprise aims to make best possible use of physical, financial and human resources. This objective can be achieved through – (a) Employing efficient and competent work force; (b) Making full use of installed machinery; (c) Minimizing wastage of materials. 2. Social Objectives: Social objectives refer to the objectives, which are desired to be achieved for the benefit of the society. Business makes use of scarce resources of the society. So, society expects something in return for its welfare. Social objective deals with fulfilling obligations towards the society. Some of the major social objectives are: a) Supply of Quality products at Fair Prices – The business should ensure that there is a regular supply of useful products with fair quality and at reasonable prices. Supply of adulterated goods, inferior quality goods, unusable or harmful products are detrimental to the survival of business. It must be noted that customer is now more educated and quality conscious and expects value for his money spent. b) Avoidance of Unfair Trade Practices – Business enterprise should not indulge in anti-social and unfair trade practices like black marketing, hoarding, adulteration, etc. Such practices are not only illegal but also hamper the image of business community. So, every business organization should aim to avoid such undesirable activities. c) Generation of Employment Opportunities – Every business enterprise should create sufficient employment opportunities without any discrimination as to caste, religion, sex, etc. In India, unemployment is a serious problem and the business community can play a dominant role in solving this problem. d) Protection of Environment – Business enterprise should take all reasonable steps to check and protect environment. It must make proper arrangement for disposal of effluents, smoke, wastes, etc. in order to avoid various types of pollution. e) Community Service – Many business organisations engage in various community services, like setting up schools, charitable dispensaries, donating money for social and religious  activities, etc. Fulfillment of this objective helps to improve the reputation and public image of business. f) Welfare of Employees – No business can succeed without the contribution of its employees. Thus, business should aim to provide fair wages and reasonable working and living conditions to workers. 3. Human or Individual Objectives: Human or individual objectives refer to the objectives related to the individual needs of the employees of an organisation. As employees are one of the most valuable resources for an organisation, satisfaction of their objectives is very important. Individual objectives include the following objectives: a) To provide healthy and safe working conditions. b) To pay fair and competitive salaries and perks. c) To provide opportunities for personal growth and development of employees. d) To provide reasonable security of service. e) To provide various financial and non-financial incentives in order to motivate the workers. f) To encourage employees to take initiative and participation in management. 4.Multiple Objectives of Business: In this competitive world, management of a business must set’ Multiple Objectives’ for its long-term survival and growth. Peter F Drucker has suggested eight key areas, where objectives of a business enterprise must be set. They are as follows: A. Market Standing: Market standing refers to the position of an enterprise in relation to its competitors. For example, position of ‘Airtel’ in relation to ‘Vodafone’. A business enterprise must aim to increase its market standing by offering good quality products at reasonable prices and serving them better than competitors. B. Innovation: In this competitive world, innovations are very important for a business enterprise to flourish. For example, Videocon introduced LED TV with inbuilt DTH facility. There are two kinds of innovation in every business – (a) Innovation in product or service; and (b) Innovation in various skills and activities needed to supply them. C. Productivity: Productivity is calculated by comparing the value of outputs with the value of inputs. It is used as a measure of efficiency. Every business enterprise must aim to achieve greater productivity through best possible use of available resources. D. Physical and Financial Resources: All business enterprises require physical resources (like plant, machinery, etc.) and financial resources (i.e. funds) in order to produce and supply goods and services to its customers. Every business enterprise must aim to acquire these resources according to its requirements and must use them efficiently. E. Earning Profits: Earning profits on the capital employed is the main objective of every business enterprise. Every business aims to earn a reasonable profit in order to survive and grow in this competing world. F. Manager Performance and Development: All business enterprises need managers to conduct and coordinate business activity. So, every business enterprise must actively work for development of manager’s performance. Therefore, manager performance and development is an important objective. G. Worker Performance and Attitude: Worker’s performance and attitudes directly influence the productivity and profitability of every enterprise. So, every business enterprise must aim to improve performance of the workers and to develop positive attitude among them. H. Social Responsibility: Every business is a part of society as it makes use of scarce resources of the society. So, it must meet the expectations of the society. Social responsibility refers to the  obligation of business firms to contribute resources for solving social problems and work in a socially desirable manner. Proverbs 3:5 Trust in the LORD with all your heart; and lean not to your own understanding.