Learning Unit 2

Learning Unit 2

The Micro EnvironmentOutcomesDescribe vision statementCharacteristics of a vision statementVision translated to mission statementDescribe mission statementCore components of the mission statementAdditional components of the mission statementExplain organisational valuesConstruct a Balanced ScorecardExplain: Growth, decline and corporate combinations

StrengthsWeaknessesInternal Environment

Managers control the internal environment VisionMissionValuesGoalsStrategiesAlign with the market and macro environmentSurvive over the long run!

Internal environmentOrganisation resourcesVision and MissionOrganisational ValuesStrategic ObjectivesStrategies

Organisational Resources

The Vision StatementDream of the perfect futureMental pictureCriteria:Depict the perfect futureAttainableInspiringBuy-in of managers and workersAcceptable for stakeholders

MissionStatementAdditional ComponentsCore ComponentsQuestionsThe Mission StatementAnswer 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?DreamReality

The Mission Statement:Core Components

The Mission StatementADDITIONAL components workers will know what top managements intent is:Profitability, growth and survivalProductivityStakeholdersPhilosophy of the organisationPublic imageClientsSafety, health and environment

The Nandos Mission StatementOur mission at Nandos is to always deliver the Nandos experience to our customers.

The Nandos ExperienceWe will take you on a journey, your own voyage of discovery. You will come to discover how special it is to belong to the Nandos 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 Nandos Way.

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 bestvalue a simple and fair deal service think customerinnovation discover the differenceintegrity do what you say you will doenergy be passionate and deliver sustainability build for a better future

Organisational ValuesOften referred to in mission statement.Core componentsAdditional componentsStatement of valuesStatement of values = Company Creed = Company Philosophy = State acceptable behaviour and what is not.

Type of valuesPersonalOrganisationalMotivationalSocietalPersonal ValuesEmployees with own set of values.Personal values not in conflict with organisation values.Personal values from cultural background.

Societal ValuesDirect society business operate inTake into consideration..

Foundational valuesOrganisation built on these values.Guide behaviour of everyone on every level.Values could be:IntegrityRespectAccountabilityFairnessCaringMotivational Values

Give organisation unique personality.State expected behaviour.Behaviour Goals achieved.Examples:Make it happen High ProductivityDo it together TeamworkLets do it Taking actionDo it better every time Continuous improvement

Organisational ValuesDifferent interpretationsWhat is integrity?Values linked to specific behaviour

The Balanced ScorecardMission statements gives direction.Not specific or measureable!Mission clarity Translate Measurable Organisational goalsBALANCED SCORECARD!The Balanced ScorecardBSC Mission statement Measureable goals Financial and non-financial dimension

DepartmentAreasFinanceReturn On Investment Cash Flow Return on Capital Employed Financial Results (Quarterly/Yearly)Internal Business ProcessesNumber of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automationLearning & GrowthIs there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunitiesCustomerDelivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rateBalanced Scorecard: Factors examplesThe Balanced Scorecard

StrategiesOrganisations compete Attain strategic objective.Strategy: Game planOutwit competitorsAttain goalsSame industry Often same goalsBut different approach!

Pep vs. Woolworths

Strategies: 3 Possible Game plansLow-cost leadership strategyAll decisions focus on costDifferentiation strategyCant compete on low costDistinguish yourself from the competitorWoolworths: Quality of productsFocus strategyLimited resources Small segment of marketThus, game plan on specific market FocusThen low-cost or differentiation strategyStrategiesEach strategy RiskLow-cost leadership strategy = ImitationsDifferentiation strategy = Not able to differentiateFocus strategy = Choose to small market segment Choose a strategy Be more SPECIFIC on competing in industry

Grand StrategyGrand Strategies: Growth StrategyGame plan for the organisation to grow.Introduce new products to existing customersEnter a new marketCreate a new, innovative product for existing marketTake over supplier of raw materials

Risk Low Sound knowledge of:ProductMarketHow to serve the market

Grand Strategy: Decline StrategyOrganisation unable to growMany new competitors enter the marketSolution: Cut costsMedium risk

Grand Strategy: Corporation Combination StrategyStrategic alliancesHigh riskCompanies work together People problemsManagers fighting for turfDifferent systems