Charting an

Organization’s
Directon
Session Extracts

MBO
Vs.
MBO
1
 Management by
objectives works if
you first think
through your
objectives. Ninety
percent of the time
you haven't.
Peter Drucker

Review of Strategic Management

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Strategy-Making, Strategy-Executing Process

Strategic Vision
A strategic vision
describes
management’s
aspirations for the
future and delineates
the company’s
strategic course and
long-term direction. Thompson et al (2013)

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 Strategic Vision
A Five F Checklist
1.Focused
2.Flexible
3.Feasible
4.Fathomable
5.Friendly

♦Our vision serves as the framework for our Roadmap and guides
every aspect of our business by describing what we need to
accomplish in order to continue achieving sustainable, quality
growth.
♦People: Be a great place to work where people are inspired to
be the best they can be.
♦Portfolio: Bring to the world a portfolio of quality beverage
brands that anticipate and satisfy people’s desires and needs.
♦Partners: Nurture a winning network of customers and suppliers;
together we create mutual, enduring value.
♦Planet: Be a responsible citizen that makes a difference by
helping build and support sustainable communities.
♦Profit: Maximize long-term return to shareowners while being
mindful of our overall responsibilities.
♦Productivity: Be a highly effective, lean and fast-moving
organization.

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 Saving People
Money So They
Can Live Better

Vision
To be Sri Lanka’s
corporate inspiration at all
times.

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 To inspire,
innovate, create
value and
respect humanity

Mission
♦Defines the core purpose of the
organization – why it exists.
♦In brief:
● Why you do what you do
● Organization's reason for being, its
purpose.
● Says what, in the end, you want to
be remembered for

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 Ideal Mission Statement
1. Identifies the firm’s product or services.
2. Specifies the buyer needs it seeks to
satisfy.
3. Identifies the customer groups or markets it
is endeavoring to serve.
4. Specifies its approach to pleasing
customers.
5. Sets the firm apart from its rivals.
6. Clarifies the firm’s business to stakeholders.

Mission
A Five C Checklist
1.Clear
2.Comprehensive
3.Connected
4.Cherished
5.Concise

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To experience the joy of
advancing and
applying technology for
the benefit of the
public.

To achieve objectives in an
environment of fairness,
honesty, and courtesy
towards our clients,
employees, vendors, and
society at large.

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Our mission is to add
vitality to life. We
meet everyday needs
for nutrition; hygiene
and personal care
with brands that help
people look good, feel
good and get more
out of life.

Providing reliable, innovative, customer

friendly financial services, utilizing
cutting edge technology and focusing
continuously on productivity
improvement whilst developing our staff
and acquiring necessary expertise to
expand locally and regionally

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 Values
1. Timeless principles that guide an
organization.
2. Represent deeply held beliefs within
the organization.
3. An open proclamation about how it
expects everyone to behave.
4. Acts like “banks of a river” in setting
boundaries of action.

Core Values
A firm’s core values are the
beliefs, traits, and behavioral
norms that the firm’s
personnel are expected to
display in conducting the
firm’s business and pursuing
its strategic vision and
mission.
Thompson et al (2013)

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 Creativity, dreams and imagination.
No cynicism.
Fanatical attention to consistency and
detail.
Preservation and control of the Disney
magic.

Core Values
WOW Philosophy: 10 Core Values
♦ Deliver WOW through ♦ Build Open and Honest
Service Relationships With
Communication
♦ Embrace and Drive
Change ♦ Build a Positive Team and Family
Spirit
♦ Create Fun and a Little
Weirdness ♦ Do More with Less
♦ Be Adventurous, ♦ Be Passionate and Determined
Creative, and Open
♦ Be Humble.
Minded
♦ Pursue Growth and
Learning

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 Core Values
Core Values for Amazon
♦ Customer We start with the customer and work backward.
Obsession
♦ Innovation If you don’t listen to your customers you will fail. But if you only
listen to your customers you will also fail.
♦ Bias for We live in a time of unheralded revolution and instrumental
Action opportunity–provided we make every minute count.
♦ Ownership Ownership matters when you’re building a great company.
Owners think long – term, please passionately for their projects
and ideas, and are empowered to respectfully challenge
decisions.
♦ High-Hiring When making a hiring decision we ask ourselves: “Will I admire
Bar this person? Will I learn from this person? Is this person a
superstar?”
♦ Frugality We spend money on the things that really matter and believe
that frugality breeds resourcefulness, self-sufficiency and
intention.

Strategic Intent
An organization shows strategic
intent when it relentlessly
pursues an ambitious set of
strategic objectives,
concentrating the full force of its
resources and competitive
actions on achieving those
objectives.

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Pioneering Experiences
of a Premier Enterprise

Vision
To become a
Centre for
Management
Excellence
in South Asia

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 Theme

Human
Imagination

Centre for
Management Excellence
in South Asia
Sustainability

Governance
Partnership
Research
Teaching

Five Pillars of Excellence

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 Mission
We ignite human imagination by
developing leaders with global
presence and local pulse.
In this endavour, we pursue
innovative teaching, cutting-edge
research, enriching partnerships,
inspiring sustainability and
exemplary governance.

Values
Passion
Integrity
Mindfulness
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 Passion
Enthusiasm and eagerness towards
results in showing professionalism in
actions.
Key Behavioural Indicators (KBIs)
1. Is clear about the tasks associated with the job.
2. Is enthusiastic in handling tasks.
3. Thinks innovatively in finding new solutions.
4. Is conscious about one’s contribution to the
institutional success.
5. Willing to put extra effort to achieve objectives.

Integrity
Acting in an ethical manner with the best
interest of the institution in mind
Key Behavioural Indicators (KBIs)
1. Is honest in conducting oneself
2. Can be trusted in handling confidential matters.
3. Conducts oneself fully within the rules and
regulations of the institution
4. Can not be manipulated for unethical actions
5. Keeps the institution’s needs ahead of one’s
interests.

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 Mindfulness
Paying attention to purpose and actions in
doing things with self-awareness
Key Behavioural Indicators (KBIs)
1. Pays attention to detail.
2. Is aware of the needed actions in any given moment
3. Looks at situations unbiased with an open mind.
4. Has complete focus on tasks at hand.
5. Is efficient in utilizing time.

Five
Goals
Twenty
Objectives
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 A goal
properly
set is
halfway
reached.
Abraham Lincoln

SMART Objectives

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 Two Broad Types
♦ Financial Objectives ♦ Strategic Objectives
● Communicate top ● Firm's aims related to
management’s aims for marketing standing
financial performance. and competitive
● Are focused internally position.
on the firm’s operations ● Are focused externally
and activities. on competition vis-à-
vis the firm’s rivals.

Setting Financial
Objectives
Examples of Financial Objectives
♦ An x percent increase in annual revenues
♦ Annual increases in after-tax profits of x percent
♦ Annual increases in earnings per share of x percent
♦ Annual dividend increases of x percent
♦ Profit margins of x percent
♦ An x percent return on capital employed (ROCE) or return on
shareholders’ equity investment (ROE)
♦ Increased shareholder value—in the form of an upward-trending stock
price
♦ Bond and credit ratings of x
♦ Internal cash flows of x dollars to fund new capital investment

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 Setting Strategic
Objectives
Examples of Strategic Objectives
♦ Winning an x percent market share
♦ Achieving lower overall costs than rivals
♦ Overtaking key competitors on product performance or quality
or customer service
♦ Deriving x percent of revenues from the sale of new products
introduced within the next five years
♦ Having broader or deeper technological capabilities than rivals
♦ Having a wider product line than rivals
♦ Having a better-known or more powerful brand name than rivals
♦ Having stronger national or global sales and distribution capabilities
than rivals
♦ Consistently getting new or improved products and services
to market ahead of rivals

Time Horizons
 Short-Term Objectives:
● Focus attention on quarterly and annual
performance improvements to satisfy near-
term shareholder expectations.
 Long-Term Objectives:
● Force consideration of what to do now to
achieve optimal long-term performance.
● Stand as a barrier to an undue focus on
short-term results.

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 Need For A Balanced Approach
A balanced scorecard measures
a firm’s optimal performance by:
 Placing a balanced emphasis on
achieving both financial and
strategic objectives.
 Tracking both measures of
financial performance and
measures of whether a firm is
strengthening its competitiveness
and market position.

A Firm’s Strategy-making Hierarchy

Corporate Multibusiness Strategy—how to gain synergies from managing a

Strategy portfolio of businesses together rather than as separate businesses

Two-Way Influence

• How to strengthen market position and gain competitive advantage

Business
• Actions to build competitive capabilities of single businesses
Strategy
• Monitoring and aligning lower-level strategies

Two-Way Influence

• Add relevant detail to the how’s of the business strategy

Functional Area
• Provide a game plan for managing a particular activity in ways that
Strategies
support the business strategy

Two-Way Influence

• Add detail and completeness to business and functional strategies

Operating
• Provide a game plan for managing specific operating activities with
Strategies
strategic significance

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 Corporate Strategy
is strategy at the multi-business level,
concerning how to improve company
performance or gain competitive
advantage by managing a set of
businesses simultaneously.

Business Strategy
is strategy at the single-business level,
concerning how to improve the
performance or gain a competitive
advantage in a particular line of business.

Uniting the Strategy-making

Hierarchy

Corporate-level

Business-level

Functional-level

Operational-level

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A STRATEGIC VISION + OBJECTIVES +
STRATEGY = A STRATEGIC PLAN

Elements of a Firm’s
Strategic Plan

Its strategic vision, business

mission, and core values

Its strategic and financial

objectives

Its chosen strategy

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