Defining Future Directions of the
Organization
HCAD 5390
Strategies
Defining Future Direction
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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
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Individual SBUs
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Functional Areas
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Departments
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Teams and Task Forces
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Individual Employees
Responsibility for Defining
Future Direction
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Board of Directors
CEO
Top Executive Team
Strategic Planning Unit
Middle Level Managers
All Employees
Suppliers and Customers
Future Direction Documents
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Mission
Vision
Values
Objectives
Mission Statement
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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
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Industry
Industry value chain
Products or services
Technologies and competencies
Customers and market segments
Distribution channels
Geographic areas
Reasons for a Mission Statement
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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
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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
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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
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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
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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
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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
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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
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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 credo
sets its responsibilities to:
1.
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3.
4.
J&J product users.
J&J employees.
Communities in which J&J
employees live and work.
J&J stockholders.
Source: Courtesy of Johnson & Johnson.
Texas Health Resources
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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.
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Integrity
Conduct our corporate and personal lives with integrity; Relationships based on loyalty, fairness,
truthfulness and trustworthiness.
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Compassion
Sensitivity to the whole person, reflective of God's compassion and love, with particular concern
for the poor.
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Excellence
Continuously improving the quality of our service through education, research, competent and
innovative personnel, effective leadership and responsible stewardship of resources
Arlington Memorial Hospital
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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
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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
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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
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How to communicate
How to enforce
Differences among organizational units
Differences among professions and
specialties
Effect on implementation of strategies
Strategic Objectives
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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
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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
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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 rapidgrowth SBUs
Diversify portfolio into new industries
Divest no longer related SBUs
Increasing resource sharing among SBUs
Typical SBU Strategic Objectives
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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
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“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
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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