Vision of The Company: Vision of a company is rather a permanent statement articulated by the CEO of the company who may be Managing Director, President, Chairman, etc. The purpose of a vision statement is to:
- Communicate with the people of the organization and to those who are in some way connected or concerned with the organization about its very existence in terms of corporate purpose, business scope, and the competitive leadership.
- Cast a framework that would lead to development of interrelationships between firm and stakeholders viz. employees, shareholders, suppliers, customers, and various communities that may be directly or indirectly involved with the firm.
- Define broad objective regarding performance of the firm and its growth in various fields vital to the firm.
Vision is a theme which gives a focused view of a company. It is a unifying statement and a vital challenge to all different units of an organization that may be busy pursuing their independent objectives. It consists of a sense of achievable ideals and is a fountain of inspiration for performing the daily activities. It motivates people of an organization to behave in a way which would be congruent with the corporate ethics and values.
Many firms do not have clear vision statements. An indirect method of knowing whether a firm has reached the stage of corporate strategic management is emergence of a vision statement. Vision of a firm cannot be high jacked from a company; however, a firm may definitely get inspired by the vision statement of another firm. It has to be evolved after a lot of deliberations, brain storming, and thinking.
It is pertinent that you as an individual working in a firm should become an active participant and collaborator in accomplishing corporate objectives. You must understand and share the vision of the firm because you would have to contribute in transformation of vision into a reality through his or her actions. Total behavior of people of an organization should get conditioned by the basic framework of vision. Personal objectives of individuals are very important to them and only to fulfill these objectives people join organizations. Vision of a company when translated into action programme must be able to meet personal needs of people. This includes the need of achievement also. Vision of a firm thus encompasses personal objectives of people which they try to achieve
Step 1: Name of the company
Step 2: Practices that have made the company successful
The primary purpose of the strategic management process is to enable companies to achieve strategic competitiveness and earn above average returns. Research has indicated that companies that engage in strategic management generally outperform those that do not. The attainment of an appropriate match or fit between a company’s environment and its strategy, structure, and processes has positive effects on the company’s performance. Bruce Henderson, founder of the Boston Consulting Group, pointed out that a company cannot afford to follow intuitive strategies once it becomes large, has layers of management, or its environment changes substantially. As the world’s environment becomes increasingly complex and changing, today’s companies, as one way to make the environment more manageable, use strategic management.
Strategic competitiveness is achieved when a company successfully formulates and implements a value creating strategy. By implementing a value creating strategy that current and potential competitors are not simultaneously implementing and that competitors are unable to duplicate, a company achieves a sustained or sustainable competitive advantage.
So long as a company can sustain (or maintain) a competitive advantage, investors will earn above average returns. Above average returns represent returns that exceed returns that investors expect to earn from other investments with similar
Levels of risk (investor uncertainty about the economic gains or losses that will result from a particular investment) In other words, above average returns exceed investors’ expected levels of return for given levels of risk.
In the long run, companies must earn at least average returns and provide investors with average returns if they are to survive. If a company earns below average returns and provides investors with below average returns, investors will withdraw their funds and place them in investments that earn at least average returns. Internationally these types of companies are prime takeover targets, a concept that is picking up in India.
A framework that can assist companies in their quest for strategic competitiveness is the strategic management process, the full set of commitments, decisions and actions required for a company to systematically achieve strategic competitiveness and earn above average returns. This process is illustrated in Figure below.
