Defining Future Directions of the Organization

HCAD 5390

Strategies

Defining Future Direction

At what levels is future direction defined? Who is responsible for defining future direction? How is future direction expressed? Where can it

be seen?

Strategy-Making Levels in an Organization

Corporate Center↓↑

Individual SBUs↓↑

Functional Areas↓↑

Departments↓↑

Teams and Task Forces↓↑

Individual Employees

Responsibility for Defining Future Direction

Board of Directors CEO Top Executive Team Strategic Planning Unit Middle Level Managers All Employees Suppliers and Customers

Future Direction Documents

Mission Vision Values Objectives

Mission Statement

Current purpose of the organization What it is, what it does, and what it does not do The “business” of the firm, its domain The areas in which it operates and the means by

which it competes in those areas The current activities and operations of the firm

Mission Statement - Spheres of Operation and Competition

Industry Industry value chain Products or services Technologies and competencies Customers and market segments Distribution channels Geographic areas

Reasons for a Mission Statement

Fosters organization-wide unanimity of purpose Point of identification for employees and

stakeholders Steers operations and activities in certain

directions and away from others Basis for allocating resources Projects coherent, positive image to external

stakeholders

Characteristics of a Good Mission Statement

Succinct: one page, 200-300 words Memorable and recitable Broad enough to allow management creativity Narrow enough to limit management

recklessness Distinguishes firm from its competitors Reconciles differences among stakeholders Arouses positive feelings about the organization

Characteristics of a Good Mission Statement

Tells managers where to look and where to avoid in seeking strategic opportunities

Conveys image of a successful, well managed, self-aware organization worthy of investment and support

Understood and embraced by all organization members

More immediate and pragmatic than a vision statement

Vision Statement

Describes an ideal, desirable future state for the organization

A future that the organization will work actively to create for itself

Antithesis of allowing the future to shape the organization, or adapting the organization to the future

Vision Statement

Empowers and motivates employees to higher levels of achievement

Value of creating “shared vision” Can be prepared at all organizational levels Join all stakeholders in a “future search” for a

vision

Characteristics of a Good Vision Statement

A kind of “dream” that inspires and drives Different from what is being done now Improvement over what is being done now A “stretch” for the organization with uncertainty

about the chances of achievement Grounded in reality and possible of achievement

Characteristics of a Good Vision Statement

Reflects understanding of resources and competencies, as well as external opportunities and threats

A challenge for employees to accomplish, requiring new abilities and performance at the highest levels

All stakeholders see an aspect of the vision that serves their interests

Values Statement

Guidelines for employee behavior on the job Address beliefs and attitudes of all

organization members Implicit (organizational culture) vs. … Explicit (code of ethics)

Values

Johnson & Johnson’s credosets its responsibilities to:

1. J&J product users.2. J&J employees.3. Communities in which J&J

employees live and work.4. J&J stockholders.

Source: Courtesy of Johnson & Johnson.

Texas Health Resources Mission, Vision and Values Mission

To improve the health of the people in the communities we serve. Vision

Texas Health Resources, a faith-based organization joining with physicians, will be the health care system of choice.

Values Respect

Respecting the dignity of all persons, fostering a corporate culture characterized by teamwork, diversity and empowerment.

IntegrityConduct our corporate and personal lives with integrity; Relationships based on loyalty, fairness, truthfulness and trustworthiness.

CompassionSensitivity to the whole person, reflective of God's compassion and love, with particular concern for the poor.

ExcellenceContinuously improving the quality of our service through education, research, competent and innovative personnel, effective leadership and responsible stewardship of resources

Arlington Memorial Hospital

Arlington Memorial Hospital (AMH) is a full-service acute-care medical center with 417 beds, serving Arlington and its surrounding communities. Since opening its doors in 1958, AMH has contributed to the medical and health education needs of area residents, who pooled their resources to help build the original 75-bed hospital.

Today, with more than 550 physicians on the medical staff, 1,900 employees and 300 volunteers, AMH is larger and more advanced than the founders could have imagined.

But its community-oriented focus, established more than five decades ago, has not changed. AMH remains a not-for-profit, community hospital dedicated to providing quality, compassionate health care.

Parkland

Mandate To furnish medical aid and hospital care to indigent

and needy persons residing in the hospital district. Vision By our actions, we will define the standards of

excellence for public academic health systems. Mission Dedicated to the health and well-being of individuals

and communities entrusted to our care.

Values Issues

Violations of the law Integrity, honesty, and ethics Attitude toward and treatment of coworkers,

customers, and suppliers Acceptance of risk taking and failure Attitude toward innovation and the future Tolerance for change within the organization Balance of profit-making and patient welfare

Complications in Values

How to communicate How to enforce Differences among organizational units Differences among professions and

specialties Effect on implementation of strategies

Strategic Objectives

Long-term strategic thrusts Designed to realize the organizational vision Explicit and workable Provide guidelines for specific strategies Set at both the corporate and SBU levels

Criteria for Strategic Objectives

Based on measurable attributes Specific unit of measurement for each

attribute Specific attribute level to be achieved Time deadline for reaching the level Delegate responsibility to a named person

for reaching the level by the deadline

Typical Corporate Strategic Objectives

Improve market price of common stock Increase economic profit of SBU portfolio Increase total annual revenues of SBU portfolio Increase portfolio cash flow to support rapid-

growth SBUs Diversify portfolio into new industries Divest no longer related SBUs Increasing resource sharing among SBUs

Typical SBU Strategic Objectives

Conduct a “turnaround” of the business Improve the business’s market share Increase the business’s revenues or profits Improve the quality of products and services Acquire or develop specific new technologies Acquire or develop new employee competencies

Tips on Setting Strategic Objectives

“Stretch” the abilities of employees assigned to achieve them

Support them with appropriate resources Tolerate risk-taking and innovation Watch for objectives and incentives that

motivate undesirable behavior Employees assigned to achieve objectives

participate in setting them

Challenges in Documents Defining Future Direction

Confusing mission and vision statements with each other

Defining visions distinguished from the competition

Overly long vision statements and too many strategic objectives

Vision and values that inspire employees Creating documents useful in strategic

management process