Topic 2 Mission & Objective Large

14/07/2016 Redeemer Krah.
Kramanakus ICA Family/2015 1
TOPIC 2
ORGANISATIONAL
MISSION & OBJECTIVES
Redeemer Krah (CA)
Kramankus ICA Family
14/07/2016 Redeemer Krah.Kramanakus ICA Family/2015 2
LESSON OUTCOMES
Upon covering the topic you should be able to:
Explain the mission, vision and objective of an organisation
Design a good mission statement for a given organisation and also

critique an organisation’s mission
Establish the linkage between organisation mission and objectives
 distinguish between a good objective and bad objective using the

SMART
Describe the hierarchy of objectives and manage multiple
objectives using balance score card
Develop key performance indicators using the critical success
factor.
Mission & Vision - defined

 What is an organisational mission?
 Mission is the fundamental objective (s) of an entity expressed in
general terms.
Mission is the basic purpose of the organisation and tries to identify
the reason it exists
Mission says why you do what you do (what are you for? What
business are you in?).
What is vision?
Vision is refers to the desired future state of an organisation.
It gives the general sense of direction to an organisation
It answer the question where are we going in say 20 years?
It is the long term aspiration of the organisation.
Mission & Vision - Element

 Four (4) elements of comprehensive mission
Purpose
Mission should indicate why the business exist and for who
Values
Mission should contain the beliefs and morals principles of the
organisation culture
 Strategy
Mission indicates the what is business of the organisation is or
should be. Mission begot strategy.
Policies and standards of behaviour
Mission should say something about the policies and standards
of behaviour of the company.
Mission & Vision - importance

 Importance of developing Mission (why mission)
 Value consideration is an integral element of consumer's buying

decision therefore mission codify the values of the organisation.
 employees are motivated if they know the significance of what they

are doing and mission gives them idea about why the organisation
exist
 Mission influences values and values influence profitability,
researchers say!
Support strategic planning
Mission & Vision - Importance

 Role of Mission in Strategic Planning process
Mission inspires and inform planning in setting strategic

objectives.
 Mission facilitate screening plans for strategic options
Mission affects implementation of planned strategy in

terms of:
 Developing corporate culture through communication of
core values
Establishing an ethics framework.
Mission & Vision - statement

 Mission Statement
A published statement of the entity’s fundamental objective(s).
A mission statement describes an organisation’s basic purpose and
what it is trying to achieve.
Mission statements are not only vital for strategic planning but also
for PR (often is it over generalised, theoretical and obsolete).
 Characteristics of a good mission statement?

Specific enough to affect behaviour in the organisation
Reflect the distinctive advantage in domain of strength and
weakness
Attainable or realistic
 Flexible ( mission – environment fit)
Mission & Vision - statement

 Argument against mission statement
 PR gimmick rather than actual intended mission
Over-generalisation of mission which lowest its strategic planning
relevance
 Strategist of the organisation may overlook it in the formulation
and implementation
 Employees are usually unaware of the mission and therefore fails
to affect behaviour
 Susceptible to obsolesce in a rapidly changing business
environment
Mission & Vision – Statement

 Examples Mission Statements
Coca-Cola : Our Mission is to
“To refresh the world in mind, body and spirit. To inspire moments of
optimism and happiness through our brands and actions. To create
value and make difference everywhere we engaged”.
Google
“Google’s mission is to organise the world’s information and make it
universally accessible and useful”.
ICAG
“To produce professional accountants of the highest quality, ready to
provide cutting edge services to their clients at all times and upholding
the ethical values of the accountancy profession”
Mission & Vision – Statement

 Example of vision statement
 Mitsui & Co
“ Aim to become a global business enabler that can meet the needs of
our customers through out the world”.
Ford motor Company

“To become the world’s leading consumer company for automotive
products and services”
Mission & Vision - Statement

Q:Critique the ICAG vision
statement.
ICAG
• “To be premier institute of Chartered Accountants in Africa by:
• Having a technically competent and appropriate membership;
• Providing services of the highest professional standards to industry, commerce
and government;
• Being recognised for highest standards of competencies, integrity and excellence;
• Providing the best services to members and students; and
• Being accepted as an authoritative body in accountancy and financial matters”.
Objectives- Defined
 What is an objective?
 It is a specific milestones and targets to be achieved
Objectives are things to be achieved by various departments,
functions, and individuals of an organisation.
Strategic objectives translate the mission into more specific
milestones and targets for the business strategy to follow and

achieve.
Objective- Defined
 Goals, Objectives and Targets
These three mean milestones but at different levels and may be
used interchangeably
Goals
It is often a long-term overall aspirations. Intention behind
decisions and actions, a state of mind driver of an organisation
Objectives
These are quite specific and well defined milestones
Targets
Are specific measures of progress toward attainment of
objectives or performance. It is generally expressed in concrete
numerical terms.
Objectives – characteristics
 A strategic objective should be SMART
Specific – clarity, understandable.
Measurable - deliverables, output etc
Achievable - attainable, not wishful thinking
Relevance - relates to mission (mission-objective fit)
Time-bound - validity period of objective.

Objectives - Functions
Role of Objective in Strategic Planning
 It defines what plan involved.
It defines responsibilities across the organisation.
It integrates the efforts and actions of different departments,
functions and business within the organisation.
 It motivate managers and employees to successful achieve the
mission of the organisation.
Its powerful tool in evaluating and assessing performance.

Objectives - Types
 Strategic, tactical and operational objective
Strategic (corporate) objective – top management
 Overall long term objectives for the company as a whole.
Tactical objective – middle management

 Middle tier objective of a company designed to plan and control
individual functions within the organisation.
Functional objectives.
Operational objective- lower management

 Day to day performance targets that ensure that the organisation’s
operations are carried out efficiently and effectively.
Objectives - Types
Financial Objectives
 Financial objectives are towards delivering value to the shareholders,
which is usually a primary objective
Financial objectives include:
 Profitability ( ROI, ROCE etc)
 Market share
 Growth
 Asset base
Non-financial objectives
They are usually regarded as secondary or subsidiary objectives.
They may include
 Customer satisfaction
 Product quality
 Competent human resource
 Product innovation
 Social responsibility
Objectives – Type
 Non financial objectives (cont)
 Market objectives include:
 Market leadership
 Product range (coverage)
 Positioning (low cost for mass market? High cost for specialist products?)
 Market expansion
Product/service objectives include
 Labour productivity
 Capital productivity
 Quality
Objectives- Type
 Short term objectives
Short term objective may be attainable in 1 -3/5 years.
Examples of short term objectives include
To increase earning per share (primary objective) 60% in the next five
years.
To increase manpower productivity by 10% within twelve month
To increase customer service to double sales in the next three years
To increase product range from 1 to 4 for the existing market within five
years
Long term objective
It covers a period usually exceeding five years
It may include financial objectives like to become most profitable
company in Ghana in the next 10 years
To become a market leader with 60% market share in the next 15
years.
To build strong an international brand of our product in 20 years.
Objectives- Type
 S/L Trade Off
 Sometimes a company has to strategically trade off short term
objectives.
 S/L trade off situations may including
Postponing or abandoning capital projects for short term cash flow and
profit
 Cutting down R&D cost to save operational cost (cost leadership)
 reducing quality control cost to save operational cost
 Cutting down customer services to save operational cost
 Reducing training and recruitment cost
Short-termism
 Is a term used to describe the concentration on immediate or short
term objectives for immediate profit at the expense of long term
security
Management by Objective (MBO)

 Hierarchy of objectives
There is a hierarchy of objectives where mission statement is
translated into detailed strategic, tactical and operational
objectives and targets.
 Key issue in MBO is how to achieve GOAL CONGRUENCE.
Goal congruence means that goal that are related should be
mutually supportive, absence of which creates conflict of actions.
Prioritization of objectives
 In hierarchy of objectives, there is also primary objective and
secondary objective which combines to achieve overall corporate
objective.
 For example, primary objective may be to make ROI of 25%. Then
the secondary objective may be to sale growth, innovation,
customer service, quality etc.
Management by Objective - cont

 Ranking of Objectives and trade offs
 Ranking of objective becomes necessary when there are multiple
objectives.
All objectives could not be achieve due to resource constraints and
therefore there is a need for trade-offs. Some objectives need to be

achieved at the expense of the others.
Long term objectives may also be traded for short term objectives
and this is termed short termism.
Stakeholders also have different priorities that need to be ranked
and traded off.

Management by Objective -conflict

 Approaches to dealing with Conflicting Objectives
Use rational evaluation ( NPV or IRR etc)
Bargaining – consensus building among managers
Satisficing – pursue and accept satisfactory result if conflict exist.
Sequential attention- one by one approach
Priority setting-
Exercise power- CEO says so, period.

Critical Success Factor (CSF)

 What are CSFs?
CSFs are few key performance areas in which satisfactory results
will derive successful competitive performance overall.
CSFs are those components of strategy which are particularly
valued by customers for which organisation must excel to
outperform its competitors.
CSFs are therefore underpinned by core competences which will
lead to an organisation’s success.
CSFs are those factors on which the strategy is fundamentally
dependent for its success and at which an organisation must excel
to outperform its competitors.b
 Key performance indicators (KPIs) are developed to measure how
well the organisation is performing against its CSFs
CSFs- stages
 The four stages of using CSFs:
Identify the CSFs for the process under review (few CSFs)
Identify the underlying competences required to gain a competitive
advantage in each of the CSFs
Develop performance standards – KPIs that are SMART and can
beat competitors standards.
Monitor competitors and assess the impact on the CSFs of any
response competitors may make.

CSFs- Strategic planning

 Missions/objective, CSFs and KPIs
 In strategic planning the mission provides the fundamental
objective of the organisation.
The attainment of the fundamental objective will depend largely on
the CFS.
The CSFs become the building blocks which will enable an
organisation to implement its mission and thereby achieve the

fundamental objective (success.)
KPIs are the measures which indicate whether or not the CSFs are
being achieved.
CSFs- Illustration
 Illustration
 Kramankus has two fundamental objectives
 To achieve professional students royalty for the brand
 To provide highest quality of tuition at the lowest cost in the industry.
 CSFs
 Making teaching and learning an enjoyable experience
 Providing professional guidance and counselling to students to enable them
pass
 To ensure cost effectiveness in the administration.
 Providing quality tuition in a practical way
KPIs
 Excellent feedback from students
 Range of student services
 Percentage of students that pass the exams
 Number of referrals from previous students
 Side attractions to the class
 Calibre of the tutors
Measuring Performance
 Approaches to measuring attainment
How would you know if the objective of KPIs have been achieved?
 The kind of objective set determines the tools available
Financial objective such as Profit target may be measured by
ROI
ROCE
EPS
Etc
Non-financial objectives such as market share will be measured by
the customer based.
Balance score card
BSC is an integrative measure of performance that links financial
and operating performance.
– Balance Score Card
 BSC defined
 “It is an approach to the provision of information to management to
assist strategic policy formulation and achievement.
It emphasises the need to provide the user with a set of information
which addresses all relevant areas of performance in an objective
and unbiased fashion.
The information provided may include both financial and non-financial
elements, and cover areas such as profitability, customer satisfaction,
internal efficiency and innovation”
The balance score card is developed by Kaplan and Norton (1996).
Balance score card - Features and Uses

 Features of BSC
It considers both external and internal matters of the organisation
It relates to key elements or aspects of the company’s strategy
It links financial and non-financial measures
Uses of Balance score card

It is used to identify and align strategic initiatives
Links budgets with strategy
It is used to align the organizational structure and processes to
strategy
It used to conduct periodic strategic performance reviews
– Balance Score Card
 Perspectives of Measurement
The BSC measures performance in objective and
unbiased manner from four perspective:
Financial Perspective
Customer perspective
Innovation and Learning perspective
Internal business process perspective
Balance Score Card - Perspective

Assess Financial Perspective
internal  Shareholder value creation
process  Growth
 Profitability
Internal Process
Perspective Vision Customer Perspective
 Improvement in and  Customer satisfaction
business Strategy  Cost?
process  Quality?
 Reliability?
Innovation and Learning
Perspective
 Improvement and Change
 Acquisition of new skills
 Development of new
products
Balance score card - Development

Steps in developing a score card
Identify key outcomes
 Identify key processes that lead to those outcome
Develop Key performance indicators for the processes
Capture data to facilitate measurement
Reporting the indicating to staff in a useable form
Develop performance improvement programme to ensure
progress.
Balance score card

– Implementation issues
 Four Iterative stage approach to implementing BSC
Translating the vision

 Operationalized Mission/Vision
Communicating and linking

 Link mission/vision to strategy at all levels
Business planning
 Prioritize objectives and allocate resources
Feedback and learning

 Generate feedback and improve progress
Balance Score Card

– Other considerations
 Other consideration in the use of BSC
 it does not provide a single aggregate summary performance
measure compare to financial measures line ROI
 It therefore requires flexibility in use and holistic view of all
performance areas
 BSC does not provide any direct link between the measure and
shareholder value (unlike other measures like Economic value
added)
 BSC considers the organisation as set of processes rather than
departments (called for change in culture)
BSC discourages short-termism. It focuses on long term strategic
measures (strategic level planning) and ignores tactical and
operational strategies
BSC is not intended to replace other performance measure
Balance Score Card- Problems

 Problems with using the Score Card
 Conflicting measures, for example cost reduction (finance
perspective) usually conflict with funding of research (innovation
and learning perspective)
 Difficulty in selecting measures that actually add value to an
organisation.
 Expertise to develop measures that initiate appropriate action is
important but usually missing in an organisation
Interpretation of result of BSC can be difficult since it does not
provide summary performance measure
Management commitment is required to make BSC successful tool
but not always the case due to management concern of cost of the
BSC.
End of Topic 2
“Throw your body over the bar

And
Your HEART will follow”

Topic 2 Mission &amp; Objective Large

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14/07/2016 Redeemer Krah.

Kramanakus ICA Family/2015 1

Design a good mission statement for a given organisation and also

 distinguish between a good objective and bad objective using the

Mission & Vision - defined

Mission & Vision - Element

Mission & Vision - importance

 Value consideration is an integral element of consumer's buying

 employees are motivated if they know the significance of what they

Mission & Vision - Importance

Mission inspires and inform planning in setting strategic

Mission affects implementation of planned strategy in

Mission & Vision - statement

 Characteristics of a good mission statement?

Mission & Vision - statement

Mission & Vision – Statement

Mission & Vision – Statement

Ford motor Company

Mission & Vision - Statement

 It is a specific milestones and targets to be achieved

Objectives are things to be achieved by various departments,

functions, and individuals of an organisation.

Strategic objectives translate the mission into more specific

milestones and targets for the business strategy to follow and

Specific – clarity, understandable.

Measurable - deliverables, output etc

Achievable - attainable, not wishful thinking

Relevance - relates to mission (mission-objective fit)

Time-bound - validity period of objective.

It defines responsibilities across the organisation.

It integrates the efforts and actions of different departments,

functions and business within the organisation.

 It motivate managers and employees to successful achieve the

mission of the organisation.

Its powerful tool in evaluating and assessing performance.

Tactical objective – middle management

Operational objective- lower management

 Market objectives include:

 Product range (coverage)

Product/service objectives include

Management by Objective (MBO)

Management by Objective - cont

All objectives could not be achieve due to resource constraints and

therefore there is a need for trade-offs. Some objectives need to be

and this is termed short termism.

Stakeholders also have different priorities that need to be ranked

and traded off.

Management by Objective -conflict

Bargaining – consensus building among managers

Satisficing – pursue and accept satisfactory result if conflict exist.

Sequential attention- one by one approach

Exercise power- CEO says so, period.

Critical Success Factor (CSF)

Identify the underlying competences required to gain a competitive

advantage in each of the CSFs

Develop performance standards – KPIs that are SMART and can

beat competitors standards.

Monitor competitors and assess the impact on the CSFs of any

response competitors may make.

CSFs- Strategic planning

objective of the organisation.

The attainment of the fundamental objective will depend largely on

The CSFs become the building blocks which will enable an

organisation to implement its mission and thereby achieve the

Topic 2 Mission & Objective Large

Topic 2 Mission & Objective Large