Company direction consists of the vision, mission, strategy and performance objectives of the company. It defines where the company is in and where the company wants to reach and how the company management wants to drive it to build its competitive advantage.
Establishing company direction is a function of chief executive. For this purpose, CEO has to identify company's resource, intent and scope. Following three actions are to be taken into consideration while establishing company direction.
- Developing a Strategic Vision and Mission,
- Communicating strategic vision and mission,
- Setting Performance Standard or objective.
Developing strategic vision and business mission
Meaning and concept of Strategic Vision
Vision refers to the aspirations of the business. It includes an image of the future that an institution aspires to create. It focuses on what the institution intended to be. It may include statements about the target of the company. It acts as a motivating factor for employees and also as a means of strategy selection. A good vision is both inspiration and a sense of what needs to be done. Vision statement clearly defines the firm’s “reason” for being in business. It should significantly stretch the resources and capabilities of the firm, inspire people in the organization to achieve things they never thought possible, and should unite people in the organization toward the pursuit of one common goal.
Establishing and maintaining a consistent strategic direction for the company begins with setting a clear vision for the company. Developing a vision is a primary responsibility of top management. The role of a corporate leader is to have a vision, articulate that vision, and then give the people the resources and direction to fulfill that vision.
A strategic vision provides multiple benefits to a company. First, it presents a broadly shared sense of organizational direction and purpose. Direction is needed because few organizations have achieved greatness by being all things to all consumers. To instill a purpose, most successful companies achieved their leadership position by adopting a vision far greater than their resource base and competencies would allow (de Kluyver & Pearce, 2002; Hamel & Prahalad, 1989).
Vision statement explains following three elements or issues in the organization,
Type of organization
The needs we fill
In strategic management a vision refers to the goals that are broadcast, most general and all-inclusive. A vision describes the aspirations for the future, without specifying the means necessary to achieve those desired needs. The most effective visions are those that inspire; and this inspiration often takes the form of asking for the best, the most, or the greatest.
In conclusion Vision consists of;
- Picture of what the firm wants to be and ultimately achieve,
- Reflects a firm’s values and aspirations,
- “Big Picture” thinking with passion that helps people feel what they are supposed to be doing,
- Should be tied to the conditions in the firm’s external and internal environments.
Examples of Vision Statements
Ben & Jerry’s
Product: To make, distribute, and sell the finest quality all natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products.
Economic: To operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders and creating career opportunities and financial rewards for our employees.
Social: To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community: local, national, and international.
"We must be a great company with great people” (LG Electronics)
“Our vision is to be the world’s best quick service restaurant” (McDonald’s)
“To make the automobile accessible to every American” (Ford Motor Company’s vision from Henry Ford)
“We want to become the Harvard of the West Coast” (Stanford University)
The benefits of having vision:
- Good visions are inspiring and exhilarating
- Good visions are competitive, original and unique. They make secure in the market place as they are practical.
- Good visions foster risk taking and experimentation.
- Good visions foster long term thinking.
- Good visions represent integrity; they are truly genuine and can be used for benefit of people.
- Good visions help in the creation of a common identity and a shared sense of purpose.
- Characteristics of an Effectively Worded Vision Statement
- Graphic- a well stated vision paints a picture of the kind of the company that management is trying to create and the market position the company is striving to stake out.
Directional – says something about company’s journey or destination and signals.
- Focused- is specific enough to provide managers with guidance in making decisions and allocating resources.
- Flexible- need to change as events unfold and circumstances change.
- Feasible- is within the realm of what the company can reasonably expect to achieve in due time.
- Easy to communicate- is explainable in less than 10 minutes, memorable slogan. Henry Ford’s famous vision of “a car in every garage”.