Ella
CHAPTER 2
CHARTING A COMPANY’S DIRECTION: VISION AND MISSION, OBJECTIVES, AND STRATEGY
The vision we have . . . determines what we do and the opportunities we see or don’t see.
—Charles G. Koch CEO of Koch Industries, the second-largest privately held company in the U.S.
A good goal is like a strenuous exercise—it makes you stretch.
—Mary Kay Ash Founder of Mary Kay Cosmetics
If you don’t know where you are going, any road will take you there.
—Cheshire Cat to Alice Lewis Carroll, Alice in Wonderland
LEARNING OBJECTIVES
LO 1. Grasp why it is critical for company managers to have a clear strategic vision of where a company needs to head and why. LO 4. Become aware of what a company must do to achieve operating excellence and to execute its strategy proficiently. LO 5. Become aware of the role and responsibility of a company’s board of directors in overseeing the strategic management process.
LO 2. Understand the importance of setting both strategic and financial objectives. LO 3. Understand why the strategic initiatives taken at various organizational levels must be tightly coordinated to achieve companywide performance targets.
C
rafting and executing strategy are the heart and soul of managing a business enterprise. But exactly what is involved in developing a strategy and executing it proficiently? What are the various components of the strategymaking, strategy-executing process and to what extent are company personnel—aside from senior management—involved in the process? In this chapter we present an overview of the ins and outs of crafting and executing company strategies. Special attention will be given to management’s direction-setting responsibilities—charting a
strategic course, setting performance targets, and choosing a strategy capable of producing the desired outcomes. We will also explain why strategy making is a task for a company’s entire management team and discuss which kinds of strategic decisions tend to be made at
CHARTING A COMPANY’S DIRECTION: VISION AND MISSION, OBJECTIVES, AND STRATEGY
The vision we have . . . determines what we do and the opportunities we see or don’t see.
—Charles G. Koch CEO of Koch Industries, the second-largest privately held company in the U.S.
A good goal is like a strenuous exercise—it makes you stretch.
—Mary Kay Ash Founder of Mary Kay Cosmetics
If you don’t know where you are going, any road will take you there.
—Cheshire Cat to Alice Lewis Carroll, Alice in Wonderland
LEARNING OBJECTIVES
LO 1. Grasp why it is critical for company managers to have a clear strategic vision of where a company needs to head and why. LO 4. Become aware of what a company must do to achieve operating excellence and to execute its strategy proficiently. LO 5. Become aware of the role and responsibility of a company’s board of directors in overseeing the strategic management process.
LO 2. Understand the importance of setting both strategic and financial objectives. LO 3. Understand why the strategic initiatives taken at various organizational levels must be tightly coordinated to achieve companywide performance targets.
C
rafting and executing strategy are the heart and soul of managing a business enterprise. But exactly what is involved in developing a strategy and executing it proficiently? What are the various components of the strategymaking, strategy-executing process and to what extent are company personnel—aside from senior management—involved in the process? In this chapter we present an overview of the ins and outs of crafting and executing company strategies. Special attention will be given to management’s direction-setting responsibilities—charting a
strategic course, setting performance targets, and choosing a strategy capable of producing the desired outcomes. We will also explain why strategy making is a task for a company’s entire management team and discuss which kinds of strategic decisions tend to be made at