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WEEK3
CHARTING A COMPANYS DIRECTION:
VISION AND MISSION, OBJECTIVES,
AND STRATEGY
McGraw-Hill/Irwin
Copyright 2012 The McGraw-Hill Companies, Inc.
22
How can you lead if you dont know where you
are going?
If you dont know where you are going, any
road will take you there.

STRATEGY-WHERE ARE YOU GOING? HOW
ARE YOU GOING?
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WHAT DOES THE STRATEGY-MAKING,
STRATEGY-EXECUTING PROCESS ENTAIL?
STAGE#1: Developing a strategic vision, a mission, and a set
of values.
STAGE#2: Setting objectives for measuring performance and
progress.
STAGE#3: Crafting a strategy to achieve those objectives.
STAGE#4: Executing the chosen strategy efficiently and
effectively.
STAGE#5: Monitoring strategic developments, evaluating
execution, and making adjustments in the vision
and mission, objectives, strategy, or execution as
necessary.
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2.1 The Strategy-Making, Strategy-Executing Process
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STAGE 1: DEVELOPING A STRATEGIC
VISION, A MISSION, AND A SET OF
CORE VALUES
Developing a Strategic Vision:
Delineates managements future aspirations
for the business to its stakeholders.
Provides directionwhere we are going.
Sets out the compelling rationale (strategic
soundness) for the firms direction.
Uses distinctive and specific
language to set the firm
apart from its rivals.
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Developing a Strategic Vision
Involves thinking strategically about
Firms future business plans
Where to go
Tasks include
Creating a roadmap of the future
Deciding future business position
to stake out
Providing long-term direction
Giving firm a strong identity
27
Characteristics of a Strategic Vision
Charts a companys future
strategic course
Defines the business makeup for
5 years (or more)
Specifies future technology-
product-customer focus
Indicates capabilities to be
developed
Requires managers to exercise
foresight
28
Vision
Mission
Goals
Objectives
Measures
Why we exist
What we want to be
Indicators and
Monitors of success
Desired level of
performance and timelines
Planned Actions to
Achieve Objectives
O1
O2
AI1
AI2 AI3
M1 M2 M3
T1 T1 T1
Specific outcomes expressed in
measurable terms (NOT activities)
Strategic Plan
Action Plans
Evaluate Progress
Targets
Initiatives
What we must achieve to be successful
VISION & MISSION IN STRATEGY
29
Crafting a Mission Statement
The Mission Statement:
Uses specific language to give the firm its
own unique identity.
Describes the firms current business and
purposewho we are, what we do, and
why we are here.
Should focus on describing the companys
business, not on making a profitearning
a profit is an objective not a mission.
210
Missions vs. Strategic Visions
A mission statement
focuses on current
business activities --
who we are and what
we do
Current product and
service offerings
Customer needs
being served
Technological and
business capabilities


A strategic vision
concerns a firms future
business path -- where
we are going
Markets to be pursued
Future technology-
product-customer
focus
Kind of company that
management is
trying to create
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Vision vs. Mission
VISION
Future-oriented
Inspirational

MISSION
Present-oriented
Informational
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Characteristics of a Mission Statement
Defines current business activities
Highlights boundaries of current business
Conveys
Who we are,
What we do, and
Where we are now
Company specific, not generic
so as to give a company its own identity
A companys mission is not to make a profit !
The real mission is alwaysWhat will we do to make a
profit?
213
MISSION : Broad vs Narrow
Narrow Broad
Railway Transportation
Insurance Financial service
Computer Office equipment
Phone Telecommunication
Maternal hospital Health Service
Broad : Several segments not focus but ample room for business expansion
Narrow: Specific segment focus but limited business expansion boundary
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Linking Vision and Mission with Core Values
Core Values
Are the beliefs, traits, and behavioral norms that
employees are expected to display in conducting
the firms business and in pursuing its strategic
vision and mission.
Become an integral part of the firms culture and
what makes it tick when strongly espoused and
supported by top management.
Matched with the firms vision, mission, and
strategy contribute to the firms business success.
Sample of corporate Value
1. Accountability- Responsibility of our actions that influence the lives of our customers and fellow workers.
2. Balance- Maintaining Healthy life and work balance for workers.

3. Collaboration-Collaborating within and outside the company to give the best..

4. Commitment-Commitment to roll great product, service and other initiatives that impact lives both within and outside the organization.
5. Community- A sense of responsibility and contribution to society that define our existence.
6. Consistency-Be consistent in offering the best for wonderful experience..

7. Diversity- Respecting the diversity and giving the best of the composition..

8. Efficiency- Being efficient and effective in our approach to give best solution each time..

9. Empowerment- Empowering the employees to take initiative and give the best..

10. Fun- Having fun and celebrating small successes in our journey to achieve big.
11. Innovation- To come out with new creative ideas that have the potential to change the world.
12. Integrity-To act with honesty and integrity without compromising the truth. Read more on Integrity.

13. Leadership- The courage to lead from front and shape future..

14. Ownership- Taking ownership of the company and customer success.
15. Passion-Putting the heart and mind in the work to get the best.
16. Quality-Giving the best and unmatched results for all round satisfaction.
17. Respect-Giving due respect to self and others and maintain the environment of team work and growth.

18. Risk Taking- Encouraging self and others to take risk for a bright future
19. Safety- Ensuring the safety of people and making sure to give them trouble free experience.
20. Service Excellence- Giving the best and world class service and achieving excellence each passing day.
216
Example Vision & Mission Statement
217
Example Vision & Mission Statement
218
Example Vision & Mission Statement
219
Example Vision & Mission Statement
220
Example Vision & Mission Statement
221
Perusahaan

Visi
Menjadikan warisan tradisi keluarga leluhur sebagai basis industri
perawatan kesehatan/kebugaran dan kecantikan/penampilan
paripurna (holistic wellness) melalui proses modernisasi teknologi
berkelanjutan, namun secara hakiki tetap mengandalkan tumbuh-
tumbuhan yang berasal dari alam.
Bank pilihan utama andalan masyarakat, yang berperan sebagai
pilar penting perekonomian Indonesia
Menjadi perusahaan industri makanan dan minuman yang terbaik
dan terbesar di Indonesia, dengan senantiasa mengutamakan
kepuasan konsumen, serta menjunjung ti8nggi kepercayaan, para
pemegang saham dan mitra kerja perusahaan
Menjadi perusahaan yang unggul dalam penyelenggaraan
Telecommunication, Information, Media dan Edutainment (TIME) di
kawasan regional
Menjadi program studi yang memiliki keunggulan akademis dan
memberikan inspirasi bagi para profesional di bidang pengelolaan
bisnis yang konvergen (berbasis information and communication
technology /ICT), serta menjadi pilihan di Indonesia pada tahun 2017
dan di Asia pada tahun 2021
ADMINISTRASI BISNIS
222

Perusahaan

Misi
Falsafah kesehatan/kebugaran dan kecantikan/penampilan paripurna (holistic wellness) yang
telah lama ditinggalkan masyarakat luas, digali kembali oleh seorang Puteri Keraton sebagai
royal heritage untuk dibagikan kepada dunia sebagai karunia Tuhan dalam bentuk ilmu
pengetahuan yang harus dipertahankan dan dilestarikan.
Membangun institusi yang unggul di bidang penyelesaian pembayaran dan solusi
keuangan bagi nasabah bisnis dan perseorangan
Memahami beragam kebutuhan nasabah dan memberikan layanan finansial yang
tepat demi tercapainya kepuasan optimal bagi nasabah
Meningkatkan nilai francais dan nilai stakeholder BCA
Menjalankan usaha yang dilandasi dengan kepekaan yang tinggi untuk senantiasa
berorientasi kepada pasar atau konsumen, dan kepekaan serta kepedulian untuk
senantiasa memperhatikan lingkungan, yang dilakukan secara optimal agar dapat
memberikan nilai tambah sebagai wujud pertanggungjawaban kepada pemegang
saham.
1. Menyediakan layanan TIME yang berkualitas tinggi dengan harga yang kompetitif
2. Menjaga model pengelolaan korporasi terbaik di Indonesia
Menyelenggarakan pendidikan yang mengacu pada nilai-nilai Integrity,
Entrepreneurship dan Best for Excellence,
Melaksanakan kegiatan penelitian, untuk memperkuat dan memperkaya bidang
keilmuan,
Melaksanakan kegiatan pengabdian pada masyarakat dalam bentuk konsultasi,
pelatihan dan bimbingan untuk memecahkan masalah-masalah keniagaan (bisnis),
Mengelola pendidikan akademis secara transparan dan bertanggung jawab.
ADMINISTRASI BISNIS
223
STAGE 2: SETTING OBJECTIVES
The Purposes of Setting Objectives:
To convert the vision and mission into specific,
measurable, timely performance targets.
To focus efforts and align actions throughout
the organization.
To serve as yardsticks for tracking a firms
performance and progress.
To provide motivation and inspire employees
to greater levels of effort.
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Objectives should be:
Relevant - directly supports the goal
Compels the organization into action
Specific enough so we can quantify and measure the
results
Simple and easy to understand
Realistic and attainable
Conveys responsibility and ownership
Acceptable to those who must execute
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Examples of Objectives
Develop a customer intelligence database system to capture and analyze patterns in
purchasing behavior across our product line.
Launch at least three value stream pilot projects to kick-off our transformation to a leaner
organization.
Centralize the procurement process for improvements in enterprise-wide purchasing power.
Consolidate payable processing through a P-Card System over the next two years.
Monitor and address employee morale issues through an annual employee satisfaction
survey across all business functions.
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EXAMPLE UNILEVER:
Objectives of Path to Growth
Expectations

Achieve double-digit EPS
growth
Secure a better
competitive position in
global food and
household
Build brand value to gain
pricing power



Top-line sales growth
of 5-6% annually
Increase operating profit
margins 11% to over
16%
Plan to be
accomplished by year
end 2011
Strategic Targets
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Corporate Objectives & Goals
An objective is a long-range purpose
Not quantified and not limited to a time period
E.g. increasing the return on shareholders equity
A goal is a measurable objective of the
business
Attainable at some specific future date through
planned actions
E.g. 10% growth in the next two years
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EMPLOYING A BALANCED SCORECARD
A balanced scorecard measures a firms
optimal performance by:
Placing a balanced emphasis on achieving
both financial and strategic objectives.
Avoiding tracking only financial performance and
overlooking the importance of measuring whether
a firm is strengthening its competitiveness and
market position.
The surest path to sustained future profitability year after year is to
relentlessly pursue strategic outcomes that strengthen a firms business
position and give it a growing competitive advantage over rivals!
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THE NEED FOR SHORT-TERM AND
LONG-TERM OBJECTIVES
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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THE NEED FOR OBJECTIVES AT ALL
ORGANIZATIONAL LEVELS
Breaks down performance targets for
each of the organizations separate units.
Fosters setting performance targets that
support achievement of firm-wide
strategic and financial objectives.
Extends the top-down objective-setting
process to all organizational levels.
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STAGE 3: CRAFTING A STRATEGY
Strategy Making:
Addresses a series of strategic hows.
Requires choosing among strategic alternatives.
Promotes actions to do things differently from
competitors rather than running with the herd.
Is a collaborative team effort that involves
managers in various positions at all
organizational levels.
232 Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Who Is Involved in Strategy Making?
Chief Executive Officer (CEO)
Has ultimate responsibility for leading the strategy-making
process as strategic visionary and as chief architect of
strategy.
Senior Executives
Fashion the major strategy components involving their areas
of responsibility.
Managers of subsidiaries, divisions, geographic
regions, plants, and other operating units (and key
employees with specialized expertise)
Utilize on-the-scene familiarity with their business units to
orchestrate their specific pieces of the strategy.
233 Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
The Concept of Strategic Intent
An organization exhibits strategic intent when it
relentlessly pursues an ambitious strategic
objective, concentrating the full force of its
resources and competitive actions on
achieving that objective!
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2.2
A Companys Strategy-
Making Hierarchy
235 Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
What Is a Strategic Plan?
Its strategic vision, business
mission, and core values
Its strategic and financial
objectives
Its chosen strategy
Elements of a Firms
Strategic Plan
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STAGE 4: EXECUTING THE STRATEGY
Converting strategic plans into actions
requires:
Directing organizational action.
Motivating people.
Building and strengthening the firms
competencies and competitive capabilities.
Creating and nurturing a strategy-supportive
work climate.
Meeting or beating performance targets.
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Managing the Strategy Execution Process
Staffing the firm with the needed skills and expertise.
Building and strengthening strategy-supporting
resources and competitive capabilities.
Organizing work effort along the lines of best practice.
Allocating ample resources to the activities critical to
strategic success.
Ensuring that policies and procedures facilitate rather
than impede effective strategy execution.
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Managing the Strategy Execution Process
Installing information and operating systems that enable
effective and efficient performance.
Motivating people and tying rewards and incentives
directly to the achievement of performance objectives.
Creating a company culture and work climate conducive
to successful strategy execution.
Exerting the internal leadership needed to propel
implementation forward and drive continuous
improvement of the strategy execution processes.
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STAGE 5: EVALUATING PERFORMANCE
AND INITIATING CORRECTIVE
ADJUSTMENTS
Evaluating Performance:
Deciding whether the enterprise is passing the
three tests of a winning strategygood fit,
competitive advantage, strong performance.
Initiating Corrective Adjustments:
Deciding whether to continue or change the
firms vision and mission, objectives, strategy,
and/or strategy execution methods.
Based on organizational learning.
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THE ROLE OF THE BOARD OF DIRECTORS
IN CORPORATE GOVERNANCE
Obligations of the Board of Directors:
Critically appraise the firms direction, strategy, and
business approaches.
Evaluate the caliber of senior executives strategic
leadership skills.
Institute a compensation plan that rewards top
executives for actions and results that serve
stakeholder interestsespecially shareholders.
Oversee the firms financial accounting and reporting
practices compliance with the Sarbanes-Oxley Act.