Strategy formulation is the process of determining appropriate courses of action for achieving organizational objectives and thereaccomplishing organizational purpose.
Strategy Formulation is the process of developing the strategy. And the process which an organization chooses the most appropriate courses of action to achieve its defined goals.
This process is essential to an organization’s success, because it provides a framework for the actions that lead to the anticipated results.
A mission statement is an organisation general purpose
- What is the purpose of organization?
- What is unique about the organization?
- What are its principal products and markets?
- What are its values?
- Where is it hoping to be in five or ten years’ time?
A good mission statement should show the firms:
(i) Major customer: It must indicate who the firm targets its products at.
(iii) Technology (mode of production) – must show whether technology is of major concern to the organization.
- iv) It must also show the firm’s major concerns or philosophiesg.
- Commitment to quality
- Concern for growth
- Self concept
- Concern for public image
- Concern for employees
EXAMPLE: To provide customers with as near perfect protection as is humanly possible at an affordable cost.
The mission statement clearly defines the following:
- The overall company
- A key value which managers must adhere to that is it defines the organizational culture.
- Key goals and objectives, which must be attained.
- Customers to serve and boundaries of operations.
- Customers’ needs to be satisfied.
- Product and service benefits to satisfy customers.
- Technologies which needs can be satisfied.
- Specification on how the company intends to incorporate its stakeholders’ rights and claims into its strategic decision making for maximization of the stakeholders’ wealth. The stakeholders include customers, shareholders, suppliers and employees.
Vision is a short, succinct, and inspiring statement of what the organization intends to become and to achieve at some point in the future, often stated in competitive terms.
- The key qualities of a good corporate vision:
The corporate success depends on the vision articulated the chief executive or the top management. For a corporate vision to have any impact on the employees of an organization:
- It should be conveyed in a dramatic and enduring way.
- It should inspire, usually asking employees for the best, the most or the greatest.
- It should keep organizational stretch in itself
- It should be communicated constantly, and
- It should keep linking the events of today to its stipulations, underscoring the relationship between the two.
These are the few key principles that the organization seeks to uphold as it carries on its business. These guide the organization’s vision. They are considered as being fundamental to the success of the entity’s operations and stimulate relations with outsiderse.g integrity, honesty
An objective is the target that must be reached if the organization is to achieve its goals. Objectives are the translations of the mission into specific concrete terms against which results can be achieved. Corporate objectives specify what the organization is meant to accomplish. Each objective should answer 3 questions:
(i) What is to be accomplished?
(ii) How much is to be accomplished?
(iii) When is it to be accomplished?
Many organizations use the ‘SMART’ mnemonic to summarize the characteristics of good objectives.
S = specific: clear, unambiguous, understandable and challenging.e,h 10% ,50 units
M = Measurable: quantity, time, money, verifiable.
A = Achievable: challenging, but within the reach of competent and committed person.
R = relevant: relevant to objectives of the organization
T = Time-framed: to be completed within an agreed timetable