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Key Terms of Strategic Management

Key Terms of Strategic Management
The following is a list of “Key Terms of #Strategic Management” which find their use often when trying to explain the concepts. #Mission An important undertaking that an organization believes it is its duty to do. A specific task or duty assigned to a person or group of people. Missions tend to be long-term and laid out in broad terms, without attempts being made to quantify them precisely. #MISSION STATEMENT Mission statement An open statement of the aims and #objectives of a business or an organization – providing employees with an indication of what they are attempting to achieve through their collective deeds. Mission statements are intended to give substance to the perceived purposes of the organization. Vision Statement A Vision Statement defines what your business will do and why it will exist tomorrow and it has defined #goals to be accomplished by a set date. A Vision Statement takes into account the current status of the organization, and serves to point the direction of where the organization wishes to go. Objective Something which an organization intends to do or achieve; a result that the organization intends to make happen. Long-term or short-term objective, which you hope to achieve within a few years or a few months. Objectives and aims tend to be medium-term and more specific in terms of what is intended to be achieved. SMART OBJECTIVES #Strategy A #plan of future action, usually long-term, in the pursuit of objectives.  (e.g.) business strategy; company strategy; financial strategy. The formulation of long-term plans and policies by a firm which inter-connects its various production and marketing activities in order to achieve its business objectives. STRATEGY GENERATION #Aim A result that an organization’s plans or actions are intended to achieve. (e.g.) To try to do something: we aim to be No. 1 in the market in three years’ time. Goal An organization’s aim, objective or purpose. Goals and targets tend to be medium-term or short-term and may be expressed in terms of specific levels of achievements and tend to involve more specific quantification and deadlines. (e.g.) our goal is to break even within twelve months. GOALS VS. OBJECTIVES #Target A level or situation which an organization intends to achieve or aim at. An object or area aimed at the object of an attack or takeover bid. A fixed goal or objective, etc. #Tactics The plans followed to achieve a particular short-term aim. (a) The science and art of disposing and maneuvering forces in combat. (b) The art or skill of employing available means to accomplish an end. (c) A system or mode of procedure TACTICS OR STRATEGY? Plan A set of decisions about how an organization intends to do something, or to ensure that an event or result should happen in the future. Organized way of doing something: contingency plan, government’s economic plans. Plans tend to be quite specific (the shorter-term they are, the more specific they tend to be) and are usually quantified in some detail. They will, in order to ensure that they are complied with, lay out specific deadlines for each key stage. They may also involve the consideration or analysis of priorities and constraints. STRATEGIC PLANNING #Budget A #financial plan, which may be short-term or longer-term, showing probable (planned) #income and #expenditure. Budgets tend to be expressed mainly in monetary terms, although they may focus on the amounts of physical resources (materials, labor time) required. An estimate of income and expenditure for a future period, as opposed to an account, which records financial transactions after the event. BUDGET...
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Mission Statement

Mission Statement
MISSION STATEMENT Why mission statements are important? Before going into that, let me first briefly tell you what a mission statement is. Firms in corporate business arena perform different business activities to earn profit as well as to retain their market share and stand. How does the general public know what they are up to? Is it really necessary for the firms to expose the nature of their activities to outsiders! Well, by explicitly defining the mission of your company, you stand a chance to gain identity, character and image and there is nothing to lose. A mission statement defines the basic reason for the existence of the organization and it clearly reflects your corporate philosophy. The management’s actions also might reflect their mission, in which case the mission statement is not explicitly defined and sometimes it could be deduced from the press statements released by the CEO. Whether defined or not defined, each and every organization has a definite mission that is clearly communicated to all the employees for action. When defined, it also serves as a means to highlight the firm’s social responsibility.  Following are the distinct characteristics that a mission statement should possess: It should be precise: The mission should neither be narrow as to restrict the activities of an organization nor too broad to make the situation pointless. It should be crystal clear: It should be clear enough to lead to action and not high-sounding and adhere to cheap publicity. It should be feasible: The actions mentioned must be well within the reach of the company and should not be impossible. It should be realistic and achievable. As, credibility is involved, firms must exercise caution when they release their mission statements. Feasibility mainly depends on the resources available that facilitate the firm to work towards the mission. It should be motivating: Motivating both for the employees and the society. Employees must identify themselves with the organization and feel proud that it is worth working for the firm and customers should take pride in associating themselves with that firm. It should be distinctive: It should project your distinctive competence to sustain competitive advantage. Say, if you own a garment shop, you should talk about the range of clothes that you can offer for different sections of the society and you can name yours a “Family Shoppe”, so that people will understand the nature of your business. It should indicate major components of strategy: If the aim of your company is stability, growth, diversification or concentration, all those can be included in your mission statement. It should also indicate how objectives are to be accomplished: The time period, production target, product specialization, product or process differentiation, everything can find their place in mission statements for the benefit of the society and self. Strategic management involves intelligent and timely decision making and mission statements are nothing but components of strategic planning that help the managers to lead the firm with some distinct “ideology” in the form of mission statements. Some Interesting Mission Statements: Google’s mission is to organize the world’s information and make it universally accessible and useful.  Nike-“Crush Reebok.” Wal-Mart-“To give ordinary folk the chance to buy the same thing as rich people.” Walt Disney-“To make people happy.” Infographic on 24 Most Inspirational Company Mission...
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