Chap2_SMBP_Kazmi

STRATEGIC MANAGEMENT AND BUSINESS POLICYTHIRD EDITIONChapter 2 Hierarchy of strategic intentAZHAR KAZMI

(c) Dr. Azhar Kazmi 2008

(c) Dr. Azhar Kazmi 2008*Learning objectivesExplain the concepts of strategic intent, stretch, leverage, and fitDescribe and exemplify the concept of visionDescribe and exemplify the concept of missionExplain the three dimensions of business definitionEvaluate quality of vision, mission statements, and business definitionsDescribe business model and their relationship with strategyDescribe the role and characteristics of objectivesExplain the process of objective settingDistinguish between well-formulated and badly-stated objectivesDiscuss the role of critical success factors in setting objectives


(c) Dr. Azhar Kazmi 2008*Strategic intentStrategic intent is an obsession with an organisation: an obsession by having ambitions that may even be out of proportion to their resources and capabilities. This obsession is to win at all levels of the organisation while sustaining that obsession in the quest for global leadership.


(c) Dr. Azhar Kazmi 2008*Concept of stretch, leverage and fitStretch is "a misfit between resources and aspirations"Leverage refers to concentrating, accumulating, complementing, conserving, and recovering resources in such a manner that meagre resource base is stretched to meet the aspirations that an organisation dares to have. Fit means positioning the firm by matching its organisational resources to its environment. G. Hamel and C. K. Prahalad: "Strategy as Stretch and Leverage" Harvard Business Review, Mar - April 1993, pp. 75 - 84.


(c) Dr. Azhar Kazmi 2008*VisionKotter (1990) defines it as a "description of something (an organization, a corporate culture, a business, a technology, an activity) in the future".El-Namaki (1992) considers it as a "mental perception of the kind of environment an individual, or an organization, aspires to create within a broad time horizon and the underlying conditions for the actualization of this perception".Miller and Dess (1996) view it simply as the "category of intentions that are broad, all-inclusive, and forward thinking". J. Kotter, A Force for Change: How Leadership Differs from Management (London: Free Press, 1990); M. S. S. El-Namaki, "Creating a corporate vision" Long Range Planning, Vol. 25, No. 6, (1992), pp. 25 29; A. Miller and G. G. Dess, Strategic Management (2nd. ed.) (New York: McGraw-Hill, 1996), p. 6.


(c) Dr. Azhar Kazmi 2008*Core ideology and envisioned futureThe core ideology defines the enduring character of an organisation that remains unchangeable as it passes through the vicissitudes of vectors such as technology, competition or management fads.The envisioned future too consists of two components: a 10 - to - 30 years audacious goal and vivid description of what it will be like to achieve that goal.


(c) Dr. Azhar Kazmi 2008*MissionThompson (1997) defines mission as the "essential purpose of the organization, concerning particularly why it is in existence, the nature of the business(es) it is in, and the customers it seeks to serve and satisfy".Hunger and Wheelen (1999) say that mission is the "purpose or reason for the organization's existence".J. L. Thompson: Strategic Management: Awareness and Change, (3rd ed.) (London: International Thomson Business Press) 1997, p.6; J. D. Hunger & T. L. Wheelen: Strategic Management, (Reading, Mass.: Addison Wesley Longman), 1999, p. 10.


(c) Dr. Azhar Kazmi 2008*Characteristics of mission statementsIt should be feasibleIt should be preciseIt should be clearIt should be motivatingIt should be distinctiveIt should include major components of strategyIt should indicate how objectives are to be accomplished


(c) Dr. Azhar Kazmi 2008*Abells three dimensions for defining a business of a watch company Based on: D.F. Abell: Defining the Business: The Starting Point of Strategic Planning Englewood Cliffs, N.J. Prentice-Hall, 1980


(c) Dr. Azhar Kazmi 2008*Business modelBusiness model could be defined as a representation of a firm's underlying core logic and strategic choices for creating and capturing value within a value network.

Shafer, Scott M. & Smith, H. Jeff & Linder, Jane C., 2005. "The power of business models," Business Horizons, Elsevier, vol. 48(3), pages 199-207


(c) Dr. Azhar Kazmi 2008*Goals and objectivesGoals denote what an organisation hopes to accomplish in a future period of time. They represent the future state or outcome of effort put in now. Objectives are the ends that state specifically how the goals shall be achieved. They are concrete and specific in contrast to goals that are generalised.


(c) Dr. Azhar Kazmi 2008*Role of objectivesObjectives define the organisation's relationship with its environment Objectives help an organisation pursue its vision and mission Objectives provide the basis for strategic decision-making Objectives provide the standards for performance appraisal


(c) Dr. Azhar Kazmi 2008*Characteristics of objectivesObjectives should be understandable Objectives should be concrete and specific Objectives should be related to a time frame Objectives should be measurable and controllable Objectives should be challengingDifferent objectives should correlate with each other Objectives should be set within constraints


(c) Dr. Azhar Kazmi 2008*Issues in objective settingSpecificityMultiplicityPeriodicityVerifiabilityRealityQuality


(c) Dr. Azhar Kazmi 2008*Factors for objective settingThe forces in the environment Realities of enterprise' resources and internal power relationships The value system of the top executive Awareness by the management


(c) Dr. Azhar Kazmi 2008*The balanced scorecard modelBased on R.S. Kaplan & D.P. Norton: The Strategy-focused orientation: How Balanced Scorecard Companies Thrive in the New Business Environment Boston: Harvard Business School Publishing, 2000 and R.S. Kaplan & D. P. Norton: The Balanced Scorecard: Translating Strategies into Action Boston: Harvard Business School Press, 1996.


(c) Dr. Azhar Kazmi 2008*Critical success factors and key performance indicatorsCritical success factors are crucial for organisational success. When strategists consciously look for such factors and take them into consideration for strategic management, they are likely to be more successful, putting in relatively less efforts.Key performance indicators are the metrics or measures in terms of which the critical success factors are evaluated.


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