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1. What is Business Policy? Describe its importance, scope and functions?

A. INTRODUCTION:-

Business may be defined as the organized effort by individuals to produce goods

and services to sell these goods in a market place and to get some reward for this effort.

Policy does not tell a person exactly what to do but it does point out the direction

in which to go.

Business policy is nothing more than a well developed statement of directions and

goals. Goals involve the definite of precisely (exactly) what the business is or should be,

and the particular kind of company it should be. Direction guides the action of the firm to

accomplish (achieve) these goals.

DEFINITION:-

According to Filpps, A business policy is a man made or pre-determined course

of action that is established to guide the performance of work towards the organizationsobjectives.

EVOLVING OF BUSINESS POLICY & STRATEGIC MANAGEMENT AS A FIELD

OF STUDY:-

An integrated course in Business management was first introduced by Harward

Business School in 1911 to create general management skill and abilities. However the

course of Business policy & Strategic management took a clear shape after the Ford

foundation and the Carnegie Corporation sponsored research, was incorporated into the

curriculum at Business Schools in USA in 1950s.

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Thus a course on Business Policy & Strategic management, will give students an

opportunity to pull together what they have learned in the separate business fields and

utilize the knowledge in the analysis of complex business problems.

Almost all the business schools in USA included the course on Business Policy in

their curriculum. The course on Business Policy considers the total organization and is

environment as a social system.

Business Schools in India have include the course on Business Policy as a

capstone course in their MBA curriculum. However , different nomenclature I used to

denote this course. They are Business Policy, Strategic Management, Corporate Planning,

Strategic Planning, Management Policy and Strategy, Business Policy and StrategicManagement etc.

CHIEF FEATURES OF BUSINESS POLICY:-

1. Policies are general statement of principles for the attainment of objectives.

2. Policies have an hierarchy.

3. Policies in general are meant for mutual application by subordinates.

4. Policies lend to pre-decide issues avoid repeated analysis and give a unified

structure to other types of plans.

5. Policies serve an extremely useful purpose they avoid confusion and provide clear

cut guidelines at all levels to sub-ordinates.

PURPOSE:-

1. To clarity objectives.

2. Help subordinates in reaching operating decisions

3. Facilitate an overall co-ordination and control.

4. Act as a yardstick for evaluating the quality of executive decision making and

action.

5. Build up employee enthusiasm and loyalty.

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IMPORTANCE:-

1. Policies provide stability in the organization.

2. Policies aid in co-ordination.

3. Clear policies encourage definite individual decisions.

4. Policies serve as a standard or measuring yard for evaluating performance.

5. Sound policies help built up employee enthusiasm and loyalty for the

organization.

6. Policies are control guides of delegated decision making.

7. Policies with clarity, relevance and reasonableness enable a firm to make the

optimum utilization of scarce resources.

FUNCTIONS OF BUSINESS POLICY:-

1. Objectives of the company are defined and classified.

2. The planning function is done systematically

3. Business Policy clearly takes the amount of authority that the subordinates have.

4. It also helps the managerial personnel to perform h=the functions of control and

coordination successfully.

5. Policy acts as the main foundation for evaluation and determining.

ESSENTIALS OF AN EFFECTIVE BUSINESS POLICY:-

1. It should be based on organizations objectives.

2. It is capable of relating objectives to functions, physical factors and company

personnel.

3. In conformity with the accepted ethical standard of business.

4. Stated in definite, understandable terms, preferably in writing.

5. Stable and flexible.

6. Sufficiently comprehensive in scope.

7. Supplementary to superior policies.

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EFFECTS OF INADEQUATE POLICIES:-

1. They cause unprofitable operation and subsequent failure.

2. It leads to insufficient capital, poor location, overbuying and competition in many

instances actually result from the adoption of improper/faulty policies for a

particular business/situation or due ti lack if definite policy.

SCOPE OF BUSINESS POLICY:-

The policies cover such a wide variety of subjects and are so broad used that

every possible matter that effects the interests of any one is the organization, the

community and the government are included in term. Infact, business policy covers allthe functional areas of business, production, marketing, personnel and finance. These

functional areas are generally covered by what may be terms as major policies & minor

policies.

Major policies are related to the overall objectives, procedure & control which

affect the organization as a whole. They cover minor policies on the other hand cover

relationship in a segment of an organization with considerable emphasis.

CONCLUSION:-

It is through policies that are organizations objectives are achieved better use of

resources is ensured. Social responsibility is fulfilled in an increasing manner, personal

satisfaction is obtained by the employees and the management is enabled to take useful

decisions.

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STRATEGIC MANAGEMENT

STRATEGY:-

It is an unified comprehensive and integrated plan that relates to the strategic

advantages of the firm to the challenges of the environment.

In the above statement

Unified means it lies all the parts of enterprise together.

Comprehensive means it covers all major aspects of enterprise.

Integrated means all the parts of the plan are compatible with each other & fit together

well.

Strategy as the determination of the basic long term goals and objectives of an

enterprise and the adoption of the course of action and the allocation of resources

necessary for carrying out these goals.

DEFINITION:-

According to James Brain Quinn defines strategy as the pattern of plan that

integrates an organizations major goal, policies and activity sequences into a whole.

INTRODUCTION:-

Strategic management is a stream/group of decisions and actions which lead to the

development of an effective strategy or strategies to help to achieve corporate objectives.

Strategic management is different from that of management .managers deal with

day to day issues and problems of operational control which include raw materials,

scheduling, production, inventory control, producing goods, getting finance, investing,

creating demand, advertisement, sales promotion etc.

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DEFINITIONS OF STRATEGIC MANAGEMENT:-

Strategic management is concerned as the continuous process of effectively

relating the organizations objectives and resources to the opportunities in the

environment.

Strategic management as the continuous process of effectively relating the

organizations objectives and resources to the opportunities in the environment.

NEED FOR STRATEGIC MANAGEMENT:-

1. Due to change:-

Change makes planning difficult. Strategic management encourages the topexecutives to forecast change and provide direction control. It allows the firm to take the

advantage of opportunity provide by change and avoid threat and to reduce the risk.

2. To provide guidelines:-

It provide guidelines to employer about the expectations of organization from

them. It provides incentives for employees and helps to probability of success than those

which dont have.

3. Probability for better performance:-

It leads to higher performance. Because the business which plan strategically have

a higher probability of success than those which dont have.

4. Systematic business decisions:-

It provides data and information about different business transactions to managers

and helps them to make decisions systematically.

5. Improves communication:-

It provides effective communication from lower to middle and to top managers.

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6. Improves coordination:-

Improves coordination not only among functional areas of management, but also

among individual projects.

7. Improves allocation of resources:-

Strategic planning helps in deciding upon most flexible & viable projects and

improves the allocation of resources the viable projects.

BENEFITS:-

1. It helps organizations to make effective strategies through the use of a more

systematic, logical and rational approach to strategic choice.2. It encourages the organizations to decentralize the management process involving

lower level managers & employees.

3. Organizations foresee the environment market place & actions of competitors.

4. It encourages favorable attitude towards change.

5. It provides cooperative, integrated and enthusiastic approach to tackle problems

and opportunities.

6. It gives encouragement to forward thinking.

7. It minimizes the effects of adverse conditions and changes.

8. It provides clear objectives and directions for employees.

DISADVANTAGES:-

1. Conditions change is so fast, managers cant do any planning, especially long-

term planning.

2. Objectives must often be vague and general.

3. Managers play little attention to research and many firms are effective without

formal planning.

4. There are many reasons for success and many firms are effective without formal

planning.

5. Environmental dynamism cant be assessed.

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EVOLUTION OF STRATEGIC MANAGEMENT:-

Introduction:-

The evolution of strategic management has passed through 5 stages. They are

A. Budgeting and financial control

B. Long range planning

C. Business strategic planning

D. Corporate strategic planning or Corporate planning

E. Strategic management

A. Budgeting and financial control:- Budgeting may be classified broadly under two

heads.1. Capital Budget: - This budget is concerned with the investment in fixed assets and

equipment whether new projects are existing assets. It is the long term investment

designed to achieve the long term goals & objectives of the organization.

2. Operational Budget: - This is concerned with achieving short term goals of the

organization such as sale, production, profit etc.

Classification of Budgets:-

Budgets may be classified according to

I. Functions involved: - Under this head the budgets are sales budget, production

budget, direct Labour budget, overhead budget, administrative expenses

budget.

II. Nature of transactions:-

a) Operating Budgets: - Budgets relating to current operations such as income

and expenses budget, budgeted profit and loss statements, budgeted balance

sheet, monthly cash budget.

b) Capital Budgets: - These are relating ti the capital structure with liquidity of

enterprise. They include working capital budget, annum cash budget,

budgeted equity capital, budgeted investment in fixed assets.

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III. Activity Level: - The budgets here are fixed budgets, flexible budgets,

functional budgets already indicated master budget.

IV. Time interval:- Under this they are classified into

a) Continuous Budgeting: - This budget results in a rolling budget, constantly

causing a time interval of the same length.

Example: - A semi-annual budget is constantly revised by grouping the month just

ended & adding the forth coming one, thus making a period of 6 months.

b) Periodic Budgeting: - It refers to a specified period. The most common is

annual budgeting.

V. Future Operations: - These are again of two types.a) Project budgeting: - This budget relates to a particular project with regard to

the time factor.

b) Appropriation budgeting: - Appropriate type of budgeting involves allocation

of a certain amount of funds in each budget for a specified activity such as

research, advertising etc.

VI. Others: - Among other budgets we may put comprehensive budgeting

responsibility budgeting, program budgeting and state and flexible budgeting.

B. Long Range Planning:-

The concept of long range planning was introduced in 1950s as an attempt

towards comprehensive planning. The need for long range planning was felt to

comprehension organizational goals and objectives in the perspective of

environmental changes likely to occur in years to come. Hence long range planning-

that the organization shall define its objectives, goals, programme and budgets in a

spectrum of say two to five years.

Long term planning starts with multi years forecast of sales which is followed

by functional plans pertaining to manufacturing, marketing, personnel etc. These

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forecasts indicate growth commitment of the firm over the years. The final step in this

regard is the presentation of a compact view in the form of the financial plan. It

contains most of the characteristics of budgeting and financial control.

Long range planning is an appropriate strategic process which may be stated

as a first step towards improving managerial competence. No organization can of ford

to stop this exercise because it provides fund of historical data which is necessary in

future.

C. Business Strategic Planning :-

Business strategic planning emerged as the 3 rd phase in strategic management

which started with the new wave of conglomeration via aggregate acquisitions in1960s and completed by 1980s.

The concept of B strategic planning was preceded by the concept of B

segmentation in 1970. The concept of B segmentation or independent profit centre

was introduced by Fred Borch the chairman of general elective who the system of

autonomous units in difference to the recommendations made by Mickinsey And Co.

Components of Formal Business Planning:-

Components of formal B planning may be summarized under the following heads.

Elements:-

1. The mission of the B.

2. Environment scanning and internal scruting.

3. Formation of B strategy & evolution of action programme.

4. Sources allocation and performance measurement for management for

management control.

In addition to the above elements offer important components of B. planning are:-

1. B strategic process

2. Contribution of B strategic planning

3. Limitations of B strategic planning

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The Business Strategic Planning Process:-

Process of strategic B planning has the following 6 elements which has been

discussed earlier also

1. The mission of B.

2. Formulation of B strategy and broad action planning.

3. Formulation of evaluation of specific action programme.

4. Resource allocation and definition of performance measurement for management

control.

5. Budgeting at the B level.

6. Budgeting considerations and approval of strategic operational fund.

D. Corporate planning:-

Planning has assumed great importance in all types of organizations B, non B,

private, public sector, small or large in developed countries or developing countries. This

interaction can better be maintained through efficient planning. In fact in todays contest,

the difference between successful and unsuccessful organization is because of planning

activities under taken by these. The organization which thinks much head about what it

can do in future is likely to succeed as compared to one which fails to do so.

Example:- Infosys or Satyam computers has achieved phenomenal growth with a short

period of time because of its ability to plan to take up new projects.

E. Strategic Management:-

Strategic management is a stream/group of decisions and actions which lead to the

development of an effective strategy or strategies to help to achieve corporate objectives.

Strategic management is different from that of management. Managers deal with

day to day issues & problems of operational control which include procuring raw

materials, scheduling production, inventory control, producing goods, getting finance,

investing creating demand, advertisement, sales promotion etc.

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7s FRAME WORK

Mc Kenseys frame work. He was a consultant.

Introduction:-

This is a framework for strategic management which has received considerable

attain of management consultants and strategist. This frame work has been developed in

the late 70s by Makensey (Co) considering which has a wide reputation through the

world.

This framework rests on the preposition that effective organizational change is

best understood in terms of complex relationship between the 7s. They are

1. Strategy 5. Shared value/Super ordinated goals

2. Structure 6. Staff

3. Skills 7. Style4. System

Stated in general terms the preposition of 7s framework suggested that they are

multiple factors which influence the organizations ability to change & the proper mode of

change. Since the variables are inter connected. Significant process cannot be developed

in one area unless corresponding developments are made in other areas too.

1. Strategy:-

1. It is organization response to the external environment.

2. It is a long term planning.

3. It means to get organization success.

2. Structure:-

a. It is an additional tool to the organizations kit.

b. It can be comparable with the super structure of an organization which indicates

to what extent the activities are specialized and in the ways in which the

organizations task are integrated and coordinated.

c. This relationship between strategy & structure does not field structural solutions

to the organizations problems the key focus.

d. The structure is to execute the strategy

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3. Skills:-

Skill refers to the distinctive competency which reflects the dominant skills of

an organization and may have the competency areas such as engineering skill, managerial

skills, customerial skills, quality, commitment, market power, new products development

arranging long term bonds etc.

4. System:-

Rules, regulations, procedures constitute system in the 7s framework which

complement the organizations structure. The systems may be called the infrastructure and

it includes sub systems relating to (PPC) production, planning and control, cost-

accounting, capital budgeting, recruitment & training, performance evaluation, planning

& budgeting etc.

5. Shared values / Super ordinated goals:-

These are also called as super ordinated goals. In mekinseys Model it refers to a

set of values and aspirations that goes beyond the formal statement of corporate

objectives. This means they are some fundamental ideas around which a business has

been built.

6. Staff:-

Staff is an integral part of a 7s framework which carries a specific meaning. It

refers to the way in which the organizations indulge new and young recruits into the

organization for the main stream activities. It also relates how to manage the carries of

the young recruits as they were groomed as future managers.

7. Style:-

Style is another variable which may determine the effectiveness of organizations

change.

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IMPORTANCE OF 7s FRAMEWORK IN STRATEGIC PLAN:-

1. It is essentially a multi viride model of organizational change.

2. It is recognized as a powerful tool as it highlights several inter

organizational statements and also connects them.

3. It underlines the critically of action plans in the 7s are well poised and

there is no difficulty in implementation and execution of strategy.

4. The effective implementation of 7s framework depends on ability of

management to bring all the s into harmony.

5. When the 7s are in good alignment all the 7,s are well poised and

there is no difficulty in implementation and execution of strategy.

6. During the progress of implementation if the strategy is failed then 7sframeworks provide the pitfall of down trend strategy and provides remedies for the

same.

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ROLE OF TOP MANAGEMENT

Introduction:-

The success of accompany depends very largely on the quality caliber,

competence, specialization, attitude and character of BODs in large companies. The top

management consists of the BODs, the president and everyone reporting directly to the

president.

The role of CEO cannot be considerer in its isolation. He says that in many large

companies BOD is dominated and even controlled by family management, shareholders

who do not claim competence & professional education due to historical circumstances.

Professional managers who dont own stock capital in the company they manage.

The shareholders dont control the management. In theory, the owners are represented

bh a BODs which guides the actions of the executives, but in practice the influence of

the salaried executives is very great. Most shareholders are interested only in a fair return

on their investment.

Vice President Vice President Vice President Vice President

Production Marketing Finance Personnel

Role of Top Management:-

Role of Directors:-

BOD,s has authority to manage a company, subject to the limitations imposed by

the memorandum association and articles of association of the company concerned as

well as the provisions of the companies act 1956.

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The board really participate in the major decision making. Total view of the role

of BOD,s may be presented as follows.

1. Trusteeship:-

The relationship between the board and the company is a judiciary one. It is a

relationship of trust and confidence in which the shareholders entrust the welfare of the

company for the long-term gain of the company and not for their own personal benefits.

2. Determination of basic objectives & policies:-

This is a basic and import function of effective board. The board must provide the

long term planning and establish the overall goals of the company within the overall legalframework and the companys documents. The policy decisions are the board through

which it can direct.

3. Selection of top executive and determination of organization of structure:-

It is the function of the board to decide the organization structure of the company

and to fill the various key positions, particularly at high level. It appoints the chief

executive and other top level managers.

4. Approval of financial matters:-

The board approves financial matters, particularly the approval of budgets and

distribution of corporate earnings. Approval of corporate budget is an important function

through which the board maintains control over the management of the company.

5. Checks & Control:-

Since, the board is ultimately responsible for the successful affairs of the

company. It is interested in maintaining adequate check and control over the functioning

of the company through the chief executive.

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6. Legal functions:-

There are certain legal functions of every board of director as provided in the

companies Act 1956. the companies act prescribes the responsibility of the directions

towards outsiders, towards the company and companies liabilities.

Responsibilities of BODs:-

1. Overall control and delegation of authority and responsibility:-

Board of directors control and formulate the objectives, frame the poicy,

predetermination of objective, preparation of budget.

2. Management of corporate income:-BOD manages the corporate income to gave security to the dividend and

corporate growth is ensure the problem of the future.

3. Organizational structure:-

The structure of the organization is also one of the responsibilities. They decide

the structure and division of work among the workers.

4. Research and Development:-

Research & Development to improve the corporate image, corporate profile.

5. Product line direction & control:-

Improve the company position, profit of the company, creating team spirits.

6. Merger & Acquisition:-

A firm which is running in losers merge with profitability unit.

7. International operation:-

Corporate activities enter into foreign market.

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8. Selection & development of executives:-

The major shareholder is the president.

Functions of BODs:-

1. He has to approve objectives, policies.

2. Selection of top level executives, promotion of key person.

3. Giving personnel suggestions.

4. Analyze the results.

Role of BODs in Long Range Planning(LRP):-

1. How many people we need.

2. Where the meeting too be conducted.3. How reliable L.R.P.

4. CEO explains about LRP to the staff.

BODs are concerned with:-

Long range forecasting.

Social & Political issues.

Its present & future needs. Overall resources of company.

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VISION

Introduction:-

Strategy formulation policy helps to obtain information from the environment

deciding and re-deciding on organizations vision, mission, objectives and goals.

Vision and mission statements are powerful, shapers of effective corporate

cultures, for many organizations. These statements present the values, philosophies and

aspirations that guide organizations action. They motivate and inspire the current and

future employees of the organization.

Example: - Some of they would like to believe that you will be an entrepreneur in 0-15years owning your own company dealing with IT services and employing cutting-edge

technology to serve a global climate.

Example: - Witness what TATA Steel says about its vision. TATA Steel enters the new

millennium with the confidence of a learning knowledge based & happy organization, we

will establish ourselves as a supplier of choice by delighting our customers with our

service and our products. In the coming decade we will become the most cost competitive

steel plant and so serve the community and the nations.

What is organizational vision?

The corporate vision has the potential power to focus the collective energy of

insiders are to give outsiders a better idea of what an organization really is

Defining vision:-

According to Kotler (1980) defines it is a description of something (an

organization, corporate, culture, a business, a technology, an activity) in the future.

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Characteristics of vision:-

1. Vision is developed through sharing across an organization:-

Vision has been widely shared across entire organization. An individual leader, a

founder has a powerful impact on the others.

2. Method of convincing the others about vision:-

The leaders by working hard along with others convince the others in the

organization rather than simply by delivering speeches.

3. Change Agents:-

Leaders must recognize the complexity of changing an outmoded vision to reflect

new realities. Organizations must redefine themselves through updates visions of thefuture through new objectives and strategies.

Benefits:-

1. Good visions are inspiring.

2. Good visions faster long-term thinking.

3. If fasters risk taking and experimentation.

4. It represents integrity they are truly genuine and can be used for the benefit of the

people.

5. It helps in creation of common identity and a share sense.

6. Good visions are competitive, original& unique.

Importance:-

Vision represents the challenging role of what the organizations would be in

future. It implies that the organization should create positions about where it should go

and what major challenges it has to face. Sometimes vision and mission are used inter

changeably with the result, but importance is not put on organization vision. Vision

represents the imagination of future events & prepares the organization for the same.

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On the basis of six years study by colline & porrs, they have concluded that

companies may be grouped into 2 categories judged on the basis of success of long

lasting high performance. These are:-

1. Visionary companies.

2. Comparison companies.

Features:-

1. Distinctive set of values:-

A visionary company holds a distinctive set of values from which it does not

deviate.

2. Course purpose:-The company expresses its core purpose in enlightened terms which provides

challenges for action.

3. Clarity:-

The core purpose should not be confused with companies business purpose or

strategy and should not be simply a description of companies product lines.

4. Decides action:-

The company develops a visionary scenario of its future, decides action

accordingly and implement these.

Collins & Porras have provided to develop a visionary company which proceed according

to the following steps.

1. Honesty:-

It pushes with honesty to define what values are truly central.

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2. Avoids confusion:-

If company comes with five or six visions then chances are a confusing care value

(which does not change) with operational practices, business strategies and cultural

norms (all open to change).

3. Guides to handle market change:-

If market change, company should not change values to match markets, rather

they should change markets.

MISSION

Introduction:-

Mission is what an organization is and why it exists.

Meaning:-

Mission is a statement which defines the role that an organization plays in a

society. It refers to the particular needs of the society.

Definition:-

According to Thompson mission is Essential purpose of the organization,

concerning particularly why it is in existence, the nature of business it is in and the

customer it seeks to serve and satisfy.

According to hunger and wheeler mission is the purpose pr reasons for the

organizations existence.

Characteristics:-

A mission should always aim high. It should be feasible. But it should not be an

impossible statement. It should be realistic and achievable, its, followers must find it to

be credible.

Example: - In 1960s the U.S Natural Aeronautics & Space Administration (NASA) had

a mission to land on moon. It was a feasible mission that was ultimately realized.

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2. It should be precise:-

A mission statement should not be so narrow as to restrict the organization

activities nor should it be too broad to make itself meaningless.

3. It should be clear:-

A mission should be clear enough to lead to action.

4. It should be motivating:-

A mission statement should be motivating for members of the organization and of

society any they should feel it worth while working for such an organization or being its

customers.

5. It should be distinctive:-

If all scooter manufactures defined their mission in a similar fashion, there would

not be much of a difference among them. But if one defines it as providing scooters that

would provide value for money for years it will create an important distinction in the

public mind.

6. It should indicate major components of strategy:-

A mission statement along with the organization purpose should indicate the

major components of the strategy to be adopt. This statement indicate that the company is

likely to follow a combination of stability, growth & diversification strategies in future.

7. It should indicate how objectives are to be accomplished:-

Recides indicating the broad strategies to be adopted a mission should also

provide clues regarding the manner in which the objectives are to be accomplished.

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Key elements in developing a mission statement:-

Three key elements are there

1. History of the organization:-

Every organization manufacturing/service oriented profit or non-profit, large or

small has a history of objectives, policies, accomplishments and mistakes. The capital

characteristics and events of past must be considered in formulating and developing a

mission statement.

2. Distinctive competencies in the organization:-

Through an organization can do many things it should seek to so what it can so do

best. Distinctive competencies are the activities that an organization does effectively so

effectively. The organization must have the competencies to capitalize the opportunitiesoffered by the markets. An opportunity without the competence is not really an

opportunity and infact is an illusion for that organization.

3. Organizations environment:-

The management should identify the opportunities provided and

threats/challenges posed by the environment before formulating a mission statement.

Elements of a mission statement:-

The elements of the mission statement are

1. The mission statement should specify the products to be produced/services to be

rendered, market/customer groups to be served.

2. The primary concern for survival & development through profitability.

3. The organization philosophy in terms of basic beliefs, values, attitudes and

aspirations.

4. Management style to be practiced.

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System Inputs Activities & Process Goods & Services

Desired & Produced

(Finance, HR, Machinery, (Automation, Technology, (Profit, Market share,

Material, mgt methods) Reliability, Culture) Price)

Functions of a mission statement:-

1. Should define what the organization is and what the organization wants to be.

2. Should distinguished a given organization from all others.

3. Should serve as frame work for evaluating both current and prospectiveactivities.

4. It should be stated in clear which should be understood throughout the

organization.

Need for a written mission statement:-

King & Cleand recommended that organization carefully develop a written

mission statement for the fall reasons.

1. To ensure clarity of purpose with in the organization.

2. To provide a basis for motivating the use of organizational resources.

3. To develop a basis or standard for allocating organizational resources.

4. To establish organizational climate.

5. To facilitate the translation of objectives and goals into a work structure

involving the assigment of tasks of responsible elements within the

organization.

6. To specify organizational purpose and the translation of these purposes into

goals in such a way that cost, time and performance parameters can be

assessed and controlled.

Input orientedmeasures

Process orientedmeasures

Goal orientedmeasures

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Contents of mission statement:-

1. Company product or service: -

It identifies the goods/services produced by the organization what the company

offers to its customers.

2. Markets:-

Gives information about markets & customers and where they are located.

3. Technology:-

It indicated the techniques and process by which the company produces goals &

services.

4. Organizational objectives:-

Mission statement refers to organizational objectives which include the general

ways for dealing with key shareholders like shareholders customers and employees.

5. Organizational philosophy or core values:-

Organizational philosophy commonly appears as part of the mission statement

which includes the basic beliefs and values that guide organizational members in

concluding organizational business.

6. Organizational self concept:-

Organizational self concept is the companys own view or impression of itself.

The company arrives at this self concept by assessing its strengths and weaknesses,

competition and ability to survive in the market place.

7. Public image:-

Mission statements normally contain some reference, to the type of impression

that the organization wants to leave with its public. However, public forms the opinion of

the company based on its activities and performance.

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Inputs for the company mission:-

Stakeholders can be divided into insiders and outsiders. These people provide

inputs for the formulation and reformulation of organizational mission.

Steps to define mission statement:-

1. Identification of stakeholders.

2. Understanding stakeholders specific demands vis--vis the company.

3. Reconciliation and prioritization of the stakeholders.

4. Co-ordination of claims/stakeholders with other elements of the mission.

Conclusion:-

Mission play an important role in every organization without mission we cannot

run an organization because for every organization there is some purpose for its

existence. Mission statement guides the organization in achievement of its objectives and

goals.

CompanyMission

Insiders

Executive officersBODsShareholdersEmployees

Outsiders

CustomersSuppliersGovernmentEmployee unionsCompetitorsLocal committeesTrade associationsGeneral public

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OBJECTIVES

Introduction:-

Objectives are needed in every area where performance and results directly and

vitally affect the survival and prosperity of the business. To manage a business is first

determine the objectives which will focus and guide the activities of the company.

Objectives give purpose and direction to the work of all employees and they

indicate the broad limits within which action is to be taken.

Definition:-

According to Drucker, the objectives should enable us to things.

1. To organize and explain the whole range of business.

2. To list these statements in actual experience.3. To predict behaviour.

4. To appraise the soundness of decisions.

Criteria for effective objectives:-

1. Top managers who set overall objectives have a responsibility for lower level

objectives.

2. The objectives should be realize in the light of internal and external

environmental problems as well as future trends.

3. The objectives should be reasonable, i.e., with in the reach of the organization

and should represent a challenge to organizational members.

4. Objectives of companys functional areas should be examined to see if they

are mutually consistent.

5. Management must update and revise objectives once a year.

6. Key objectives should be stated simply.

Guidelines for formulating objectives:-

1. Involve all those employees responsible for carryout:-

The management should identify and involve all those employees responsible for

implementing the objectives.

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2. All objectives within an organization should support the overall objective:-

The organization overall objective of different departments like finance, human

resource, marketing, production and research and development.

3. Objectives should be realistic:-

Objectives should provide not only challenging job but also be realistic from the

view point of both internal and external environmental opportunities and threats.

4. Objectives should be contemporary as well as innovative:-

The management should view the organization periodically based on the changes

in the organization priorities and changes in external and make revision if necessary.

5. The no.of objectives for each manager should not be too many:-Too many factors cause confusion and neglected and too few permit waste &

inefficiency.

Importance of objectives:-

1. Objectives help to define the organization in its environment:-

The organizations justify their existence to their shareholders in the environment

like customers, government creditors and society.

2. Objectives help in coordinating decision and decision makers:-

It coordinates decision making process by different employees.

3. Objectives help in formulating strategies:-

Mission statements are translated into objectives and objectives are the basis for

formulating strategies.

4. Objectives helps to reflect the changes in the environment:-

Objectives are revised to reflect the changes in the internal & external

environment form time to time presents the change in objectives.

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Nature of objectives:-

These objectives include profit making, efficiency, employee satisfaction,

employee development, quality of products services for customers, good corporate

citizenship and the like

1. All but the simplest organizations pursue multiple objectives.

2. The objectives perused are given a time weighing by strategist.

3. Strategists should establish priorities for each objective among all the

objectives at corporate and strategic business unit level.

4. There are many ways to measure and define the achievements of each

objective.

5. There may be limits ti the attainment of some goals.

6. Objectives are not strategies.

Hierarchy of objectives

Diagram:-

Long range objectives specify the results that are desired in pursuing the

organizations mission and normally extend beyond the current financial year of the

organization.

Short range objectives are performance targets, normally of less, than one years

duration, that are used by management to achieve the organizations long range objectives.

Departmental objectives are formulated based on long and short range objectives

of organizations.

Unit level objectives are generally specific and are drawn from developmental

objectives.