Strategic Management – Developing Vision Statements

The managers, employees and other stakeholders of an organization might be interested to understand where the organization is going and what it aspires to be. In order to express an organization’s aspirations for the future, different organizations use different terms such as vision, purpose, intent, philosophy, and credo. It must be recognized that some kind of statement about future direction is needed to motivate and guide the efforts of employees in the organization. An organization is thought to be just like a ship without a rudder – aimlessly moving around with no clear-cut direction ahead. Usually to management needs to consider various direction-shaping factors while deciding about the future direction of the organization. However, there is described characteristics, a necessity of vision in Strategic Management.

Vision is a future-oriented concept of the business (Strategic Management). It provides a company the sense of ‘where it is headed’ or ‘where we are going’, forming a strategic vision is an exercise in thinking about where a company needs to head to be successful. A vision describes some ideal future state of the organization. It describes management’s aspirations for the future – a destination for the organization. We can say that a vision is a dream – a distant, long-term dream. However, a vision is ‘distinctive and specific to a particular organization’. Therefore, it helps a company create a distinctive identify and focus on future regarding its products, customers, and technology.

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An organization’s vision is designed to express the fundamental reason for the organization’s existence. An analysis of vision statements of various organizations reveals that, usually, most organizations describe their visions in few sentences in the form of a statement – called vision statement. The vision statement is used to refer to an understanding of why the organization exists. It provides direction for the organization. However, the vision must be shared and believed by all in the organization. If not, it will be counterproductive and may be degenerated into a buzzword among the employees.

Link: Definition of Hierarchy and Types of Organization

Characteristics of an Effective Vision:

InStrategic Management, vision statements of many companies show that most of them are vague, not complete to clearly communicate the intent of the management, not forward-looking, not inspiring, not distinctive, too broad and sometimes full of nicely worded abstracts. These visions statements fail to say anything specific and really meaningful. Some vision statements are conspicuous by a lack of distinctive identity. An organization’s management thus needs to be careful in developing a vision statement – all stakeholders should be involved in developing an organization’s vision to ensure an effectively worded statement. An effective vision should have the following characteristics so that it can serve as a management tool for providing the company a sense of direction.

The vision should draw a picture that can reveal where the company is heading and can also indicate clearly the market position.

It is able to provide clear direction to the managers and employees as well as describe a forward-looking picture of the company.

It can specifically guide managers in decision making and be allocating resources of the company for ensuring the strategic management process.

It must be flexible enough so that with changes in products or technology or market, the vision itself can also be changed to keep pace with the changing situations.

It should portray an expectation for the future that is achievable – not just spelling out an expectation for the sake of telling about an expectation.

It should be able to indicate ‘why the chosen path makes good business sense’.

Easy to Communicate:
The vision must be worded in such a way that it can be communicated easily to the stakeholders, especially the shareholders, employees, and customers.

Link: Strategic Management Prelude

Necessity of Vision in Strategic Management:

A vision statement is important to an organization for a variety of reasons:

  • It provides a clear direction about where the organization is heading.
  • It has a strategy-making value in the sense that it indicates the type of strategy the organization should follow to reach the dreamed destination.
  • The vision statement is helped managers to think advantageously about such matters as the advent of new technology, available marketing opportunities, changes in the client expectations and needs and other environmental factors.
  • Managers get insight into drawing reasoned conclusions concerning winds of change and then selecting appropriate paths to deal with change.

Link: Importance of POSDCORB

The vision of an Organization is no Rhetoric:

Some people wish to call vision a rhetoric. Their view is that vision says nothing, it changes nothing, and it is mostly seen hanging in the foyer of corporate offices. Some people go further to say that all visions look the same and ‘could have all been taken from the same book of corporate vision statements’. However, we believe that vision is something really essential. As a man cannot live without a dream, an organization cannot live without its own dream – a vision.

If you are an executive of an organization, just imagine how good your organization’s future could look. Imagine about your organization’s activities p production, customer service, problem-solving, follow of raw materials, accounting systems, measurement systems, blah, blah. Imagine production is taking place just in time, imagine lean manufacturing system is working well to reduce all wastes, imagine components are flowing from process to process with no waiting in piles of inventory, and imagine your accounting and measurement systems are in tune with your organization system. This really your vision for your organization. This vision is where your organization is going. The destination that you have set by involving everybody in the organization must be an attractive destination – it must be emotionally acceptable to all of your people. What is important to you as a leader of your organization is that you must be able to create a climate where there will be passionate sharing of the vision. You have to make it clear that the future is not somewhere we are going, it’s somewhere we are all making. For the realization of the vision, we may consider following what Japanese say “hoshin kanri” – that is, coordinating the hearts, minds, and actions of all people of an organization.

Link: Difference between Management & Administration

Changing Vision in Strategic Management:

Stability in the vision is highly desirable. Since a vision is created as a dream that might take a long time to realize, it should have a high degree of stability. However, it does not necessarily mean that vision cannot be changed. Especially, in the today’s volatile world where the environment is changing very fast, it may be necessary for a firm to ‘redefine’ its future. In fact, in strategic management, nothing is static. We can give an example of the evolving nature of business vision that happened to the IT giant Microsoft Corporation.

Link: Types of Stratetic Management


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