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!
Business Environment
Internal
Micro
External
Market
Macro
Internal environment
 Organisation resources
 Vision and Mission
 Organisational Values
 Strategic Objectives
 Strategies
Organisational Resources
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
Questions
Core
Components
Additional
Components
The Mission Statement
Dream
Reality
 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:
Core Components
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 Statement
Our mission at Nando’s is to always
deliver the ‘Nando’s experience’ to our
customers.
The Nando’s Experience
We 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’sWay.
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 best
value – a simple and fair deal
service – think customer
innovation – discover the difference
integrity – do what you say you will do
energy – 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
Balanced Scorecard: Factors examples
Department
Finance
Areas
Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business Processes
Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the right
department?)
Process bottlenecks
Process automation
Is there the correct level of expertise for the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Learning & Growth
Customer
Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate
The Balanced Scorecard
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 SPECIFIC on competing in
industry
Grand Strategy
Growth
Grand
Strategies
Decline
Corporate
Combinations
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