Learning Unit 2 The Micro Environment
Outcomes • Describe vision statement • Characteristics of a vision statement • Vision translated to mission statement • Describe mission statement • Core components of the mission statement • Additional components of the mission statement • Explain organisational values • Construct a Balanced Scorecard • Explain: Growth, decline and corporate combinations
Strengths Weaknesses Internal Environment
Managers control the internal environment • Vision • Mission • Values • Goals • Strategies Align with the market and macro environment Survive over the long run!
Internal environment • Organisation resources • Vision and Mission • Organisational Values • Strategic Objectives • Strategies
The Vision Statement • “Dream” of the perfect future • Mental picture • Criteria: • Depict the perfect future • Attainable • Inspiring • Buy-in of managers and workers • Acceptable for stakeholders
Mission Statement Core Components Questions Additional Components
The Mission Statement Reality Dream • Answer the following questions: • What should we provide? • Who is our market? • How will we get the products to the market? • Which resources? • When is the best time to do it?
The Mission Statement • ADDITIONAL components workers will know what top managements’ intent is: • Profitability, growth and survival • Productivity • Stakeholders • Philosophy of the organisation • Public image • Clients • Safety, health and environment
The Nando’s Mission StatementOur mission at Nando’s is to always deliver the ‘Nando’s experience’ to our customers.The Nando’s ExperienceWe will take you on a journey, your own voyage of discovery. You will come to discover how special it is to belong to the Nando’s family. You will experience our traditional hospitality, warmth and fun. Your senses will be fired with the unique products and tastes of Portugal, all prepared with pride and passion, and here, you will be touched by the magic that is the Nando’s Way.
We, as passionate committed retailers, understand and lead our customers through excellence and a deep knowledge of our products and services and the world we live in. We live the Woolworths difference through our values: quality and style – deliver the bestvalue – a simple and fair deal service – think customerinnovation – discover the differenceintegrity – do what you say you will doenergy – be passionate and deliver sustainability– build for a better future
Organisational Values • Often referred to in mission statement. • Core components • Additional components • Statement of values • Statement of values = Company Creed = Company Philosophy = State acceptable behaviour and what is not.
Type of values Personal Organisational Societal Motivational
Personal Values • Employees with own set of values. • Personal values not in conflict with organisation values. • Personal values from cultural background.
Societal Values • Direct society business operate in • Take into consideration..
Foundational values • Organisation built on these values. • Guide behaviour of everyone on every level. • Values could be: • Integrity • Respect • Accountability • Fairness • Caring
Motivational Values • Give organisation ‘unique personality. • State expected behaviour. • Behaviour Goals achieved. • Examples: • Make it happen High Productivity • Do it together Teamwork • Let’s do it Taking action • Do it better every time Continuous improvement
Organisational Values • Different interpretations • What is integrity? • Values linked to specific behaviour
The Balanced Scorecard • Mission statements gives direction. • Not specific or measureable! • Mission clarity Translate Measurable Organisational goals • BALANCED SCORECARD!
The Balanced Scorecard • BSC Mission statement Measureable goals Financial and non-financial dimension
Strategies • Organisations compete Attain strategic objective. • Strategy: • Game plan • Outwit competitors • Attain goals • Same industry Often same goals • But different approach! • Pep vs. Woolworths
Strategies: 3 Possible Game plans • Low-cost leadership strategy • All decisions focus on cost • Differentiation strategy • Can’t compete on low cost • Distinguish yourself from the competitor • Woolworths: Quality of products • Focus strategy • Limited resources Small segment of market • Thus, game plan on specific market Focus • Then low-cost or differentiation strategy
Strategies • Each strategy Risk • Low-cost leadership strategy = Imitations • Differentiation strategy = Not able to differentiate • Focus strategy = Choose to small market segment • Choose a strategy Be more SPECIFICon competing in industry Grand Strategy
Grand Strategies: Growth Strategy • Game plan for the organisation to grow. • Introduce new products to existing customers • Enter a new market • Create a new, innovative product for existing market • Take over supplier of raw materials • Risk Low Sound knowledge of: • Product • Market • How to serve the market
Grand Strategy: Decline Strategy • Organisation unable to grow • Many new competitors enter the market • Solution: Cut costs • Medium risk
Grand Strategy: Corporation Combination Strategy • Strategic alliances • High risk • Companies work together People problems • Managers fighting for turf • Different systems