Page 31 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 2: Strategy Formulation and Defining Vision

Thus vision statements serve as: Notes
1. A basis for performance: A vision creates a mental picture of an organisation’s path and
direction in the minds of people in the organisation and motivates them for high
performance.
2. Reflects core values: A vision is generally built around core values of an organisation, and
channelises the group’s energies towards such values and serves as a guide to action.
3. Way to communicate: A vision statement is an exercise in communication. A well-
communicated vision statement will bring the employees together and galvanize them
into action.
4. A desirable challenge: A vision provides a desirable challenge for both senior and junior
managers.
While providing a sense of direction, strategic vision also serves as a kind of “emotional
commitment”. Thompson and Strickland point out the significance of “vision” which is broadly
as follows:

1. It crystallizes top management’s own view about firm’s long-term direction.
2. It reduces the risk of rudderless decision-making.
3. It serves as a tool for maximizing the support of organisation members for internal
changes.
4. It serves as a “beacon” to guide managers in decision-making.
5. It helps the organisation to prepare for the future.

Vision poses a challenge and addresses the human need for something to strive for. It can depict
an image of the future that is both attractive and worthwhile.
Indeed, developing a strategic vision may be regarded as a managerial imperative in the strategic
management process. This is because strategic management presupposes the necessity to look
beyond today, to anticipate the impact of new technology, changes in customer needs and
market opportunities. Creating a well-conceived vision illuminates an organisation’s direction
and purpose, and then using it repeatedly as a reminder of “where we are headed and why”
helps keep organisation members on the chosen path.

!

Caution Although the idea of vision is widely accepted as a useful backdrop for the
development of purpose and strategy, there is a problem. Vision has little meaning unless
it can be successfully communicated to those working in the organisation, since these are
the people who will have to realize it.

2.2.5 Advantages of Vision

Several advantages accrue to an organisation having a vision. Parikh and Neubauer point out
the following advantages:
1. Good vision fosters long-term thinking.
2. It creates a common identity and a shared sense of purpose.
3. It is inspiring and exhilarating.
4. It represents a discontinuity, a step function and a jump ahead so that the company knows
what it is to be.

LOVELY PROFESSIONAL UNIVERSITY 25