Page 27 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 2: Strategy Formulation and Defining Vision

2.2 Business Vision Notes

The first task in the process of strategic management is to formulate the organisation’s vision
and mission statements. These statements define the organisational purpose of a firm. Together
with objectives, they form a “hierarchy of goals.”
Figure 2.1: Hierarchy of Goals

Vision
Mission
Goals
Objectives
Plans

A clear vision helps in developing a mission statement, which in turn facilitates setting of
objectives of the firm after analyzing external and internal environment. Though vision, mission
and objectives together reflect the “strategic intent” of the firm, they have their distinctive
characteristics and play important roles in strategic management.
Vision can be defined as “a mental image of a possible and desirable future state of the
organisation” (Bennis and Nanus). It is “a vividly descriptive image of what a company wants to
become in future”. Vision represents top management’s aspirations about the company’s
direction and focus. Every organisation needs to develop a vision of the future. A clearly
articulated vision moulds organisational identity, stimulates managers in a positive way and
prepares the company for the future.
“The critical point is that a vision articulates a view of a realistic, credible, attractive future for
the organisation, a condition that is better in some important ways than what now exists.”
Vision, therefore, not only serves as a backdrop for the development of the purpose and strategy
of a firm, but also motivates the firm’s employees to achieve it.
According to Collins and Porras, a well-conceived vision consists of two major components:

1. Core ideology
2. Envisioned future
Core ideology is based on the enduring values of the organisation (“what we stand for and why
we exists”), which remain unaffected by environmental changes. Envisioned future consists of a
long-term goal (what we aspire to become, to achieve, to create”) which demands significant
change and progress.

2.2.1 Defining Vision

Vision has been defined in several different ways. Richard Lynch defines vision as “ a challenging
and imaginative picture of the future role and objectives of an organisation, significantly going
beyond its current environment and competitive position.” E1-Namaki defines it as “a mental
perception of the kind of environment that an organisation aspires to create within a broad time
horizon and the underlying conditions for the actualization of this perception”. Kotter defines
it as “a description of something (an organisation, corporate culture, a business , a technology,
an activity) in the future.”

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