Strategy Formulation

• 1.Establishing strategic intent: since organization are deliberate creations, they have some
specific intent , that is what they will achieve in future and why they will achieve it.
Strategic intent consist of three elements; VISION, MISSION AND OBJECTIVES
• Formulating Vision:
• Is a mental image of what the future will or could be like
• Vision represents what the organization would be in future
An organization should create projections about where it should go in future and what major
challenges lie ahead

Contents of vision
Realistic-a vision must be abased on reality to be meaningful for an organization, it should
not be merely day-dream but a dream to be converted into reality
Credible: a vision must be believable to be relevant to members of the
organization concerned.
If the members of organization do not find the vision credible, it will not be
meaningful or serve useful purpose
One of purpose of a vision is to aspire those in the organization to achieve a level
of excellence and provide direction of their actions
Attractive: a vision must be attractive so as to inspire and motivation organization
members. People must want to be part of the future that envisioned direction for
their action
Future: a vision is not for present , it is for future.
Vision is about where the organization will be in future
Vision should describe a set of ideals and priorities, a picture of the future, a
sense of what makes company special and unique, a core set of principle that
the company stand for and a broad set of compelling criteria that will help an
organizational success.
Vision Is mental perception of environment an organization aspires to create
within a broad time and underlying conditions for actualization of this
perception.
Features of good vision
Features of vision are as follows
• A good vision is idealistic
• A good vision clarifies direction of the organization concerned .it should
provide answers to the question “where will the organization go in future”
• A good vision inspires organization members and encourage
commitment from them. The inspiration and commitment is the key
to achieving what the vision envisages
• A good vision reflect the uniqueness of the organization, its
distinctiveness competence, what it stands for and what is able to
achieve
• A good vision is appropriate for the organization and for the time
• A good vision is well articulated and easily understood by those who
are responsible to convert into reality
Role of vision in strategy formulation
• Vision provides clue about where the organization is heading for in
future. since various strategies try to ensure that the organization
reached the organization it destination, these should be in accordance
with the vision.
• Vision of an organization tries to place it in a unique position which
requires unique actions. These actions are defined by various
strategies
• since vision is source of inspiration to organization members and
encourages them for commitment, they tend to give their full
contribution in strategy formulation and implementation
Developing a vision
Developing a vision is like having a dream to be covered into reality in future.
Therefore a question is who formulate vision for an organization? There may be a
clear-cut answer of this question because of differences in organizational practices.
The following steps are relevant for developing a vision
1. Conducting a vision audit- first step in developing a vision is to assess the
current direction of the organization.
- At this stage key questions that should be answered are: does the organization
have a clearly stated vision?
- -What is the organizations current direction?
- -Do the organizational leaders know where the organization is headed and degree
of the direction?
2. Targeting the vision. This step involves starting to narrowing on a
vision .a t this step key questions are:
-what are the boundaries and constraints to the vision?
What must the vision accomplish?
-what critical issues must be addressed in the vision?
3. Setting the vision context. Since vision is the desirable future for the
organization, there is need for identifying what the organization’s
future environment might look like. Vision has a very long-term
orientation and therefore only broad direction of future environment
should be identified
4. Developing the future scenarios> developing future scenarios follows
directly from setting vision context. Scenarios are the likely future
behavior of the environment. Alternative scenarios are developed for
different environmental behaviors organization operates in the best
scenarios. when the environment does not behave according to this
alternatives scenarios are used.
5. Generating the alternatives visions, at this stage possible vision are
developed for environment. The purpose of this step is to generate
visions reflecting different directions in which the organization may go
6. Choosing the final vision: alternative vision are evaluated in the light of
environmental variable as well as organizational variable. That vision is
selected which is most likely to meet the demands of these variable
GOOD VISION STATEMENT ARE:
• Concrete and specific
• Challenging and exciting
• Positive and inspiring
• Simple
• credible
MISSION
• Mission is broadly defines why an organization exist
• Mission is essentially purpose of an organization , concerning particular
why it is in existence, the nature of the business it is in and customers it
seeks t serve and satisfy
• The mission of the organization is the purpose that sets it apart from
other organization of its type and identifies the scope of operations in
terms of product, market , technology terms.
• It answers the question “ what is our business and what will it be
• Mission statement is an indication of what the organization is intending
to do, it is used to reflect the culture of the organization.it is also trying
to change the organization culture.it emphasize the philosophy of the
organization
• It depicts the organization character, image and scope of activities in ways
that are detailed enough to distinguish the organization from other types
of organization in short it defines the “ business of the organization .
Importance
• The purpose of mission statement is to communicate to those making the
strategic decisions the broad ground rules that the organization has set for
itself in conducting its business
• Defining the business as it is now and how will it be later is a necessary
first step in establishing meaningful direction and development path for
the organization
• A good mission statement and visions are exciting and inspiring
• Well crafted statement that is understood and believed can be powerful
force for change
Role of mission in strategy formulation
• It helps in deciding the direction in which the organization proceeds
• It helps the organization to clarify its aspirations and those of various stakeholders.
The strategic actions can be aligned to these aspirations
• It serves as a reference point in dealing with various stakeholders within and
outside the organization .
• It helps in integrating the organization with its relevant environment by taking
suitable actions the way these have been specified in the mission
• It helps in integrating the various subsystem of the organization as these subsystem
look at their objectives and operations in the light of organizational mission
• To coveys clear message about the organization to those outsiders who come in
contact with it. They develop positive altitudes towards organization if they are well
aware about its mission
Content of mission
• Mission should include the beliefs, assumptions and desires of the following types:-
• Entrepreneur’s self-concept of the business can be communicated and adopted by
employees and stakeholders
• The organization will be able to satisfy the entrepreneur's needs and aspirations
which he seeks to satisfy through the organization.
• The organization can grow and profitable than just survive in the long run with the
support of various constituents
• The products or service offered by the organization can provide benefits at least
equal to its price
• The product or service can satisfy the needs of the customers not adequately served
by other presently
• Technology used in producing product or service will be cost and quality competitive
• Examples of mission statement OF some Tanzanian organizations
• CBE Mission statement 
• To provide demand-driven and competence based education, and to
offer quality public services through applied research and consultancies
• IFM-Mission Statement The Institute of Finance Management will
endeavor to provide quality academic and professional training that
nurture creativity and innovation through integrated training, research
and consultancy in financial studies and related disciplines.
• Mission Statement 
• (OUT) To provide relevantly, quality, flexible, accessible, and affordable
open online education, research, and services to the community for the
social economic development of Tanzania and the rest of the world
Distinction between mission and vision statement
• Mission define HOW the organization intends to achieve that vision
or to get to where they want to be in the future
• Mission statement should define what it takes to realize the vision
• A vision statement express
Your ideal position in the future or best possible outcome
What you want to become
Core element of your strategy
Change you want to see in the community/country you serve
• A Mission Statement States Your Objectives, Method And Plans,
Highlighting Your Journey As An Individual and a Brand. A Vision
Statement Explains Your Destination—What You Hope To Accomplish
At The end of your journey.
• Another Difference Between Mission And Vision Statement Is The
Purpose they Serve. Your Mission Statement Explains Your Values and
Your Vision Statement Gives those values a direction.
• A Mission Statement Clarifies Your Reason For Being While Your Vision
Statement Is Meant To Motivate, Inspire and encourage. Your Vision
Will Remain Constant throughout. You Can Tweak Your Mission, But
Your over arching aspirations Or vision are what drive You every day.
• Objectives
• Are the end results and organization strives for
• Role of objectives
• Directions for decision making; objectives provides directions for decision
making in various areas of organization operations. the objectives set the limits
and prescribe the areas in which managers can make decisions
- A clearly definition of objectives encourage unified planning-objectives embody
the basic idea and fundamental theories as to what the organization is trying to
achieve
- -objectives work as motivating force by providing direction to organizational
members
- Voluntary coordination, an essential feature of the organizational objectives, is
achieved easily if the objectives are clearly specified and mutually agreed upon
• Performance standards: objectives provides standard against which
performance of the organization ,its units ,sub unit and individual can
be measured. without performance standard which are derived from
objectives there cannot be any meaningful control activities in the
organization.
• Basis for decentralization: decentralization includes assigning decision
making authority to lower-level people thereby a subordinate is given.
Decentralization is necessary for large size organization.
• Integrating organization, group and individual: if objectives are clear ,
these will communicate the relationship between the organization and
various groups and individual therefore groups and individual can better
be integrated because they clear basis for dealing with the organization
Characteristics of effective objectives
Objective must meet the SMART principle
Specific: Well defined, clear, and unambiguous
• Measurable: With specific criteria that measure your progress toward
the accomplishment of the goal
• Achievable: Attainable and not impossible to achieve
• Realistic: Within reach, realistic, and relevant to your life purpose
• Time-bound: With a clearly defined timeline, including a starting date
and a target date. The purpose is to create urgency
• Environmental Analysis
• To understand environment and environmental factor and how they
affect organization.
• To analyze industry and competitive force operating in it
• To understand various techniques that can be used in environmental
analysis
• Environmental analysis is a pre-request for strategy formulation
• This analysis is known as SWOT analysis
• SWOT being acronym of strengths, weakness, opportunities and threats
• Opportunities and threats are external to the organization, strength and
weakness are internal to it.
• Environmental Analysis
• To understand environment and environmental factor and how they
affect organization.
• To analyze industry and competitive force operating in it
• To understand various techniques that can be used in environmental
analysis
• Environmental analysis is a pre-request for strategy formulation
• This analysis is known as SWOT analysis
• SWOT being acronym of strengths, weakness, opportunities and threats
• Opportunities and threats are external to the organization, strength and
weakness are internal to it.
• Opportunities: is a favorable condition in the organization’s
environment which enable it to strengthen position
• Threat: is an unfavorable condition in the organization’s environment
which cause risk for or damage to the organization which it can use to
gain competitive advantage over its competitors
• Strength: is a competence of an organization which it can use to gain
competitive advantage over competitors
• Weakness: is a limitations or constraints of the organization which
creates competitive disadvantage to it
• ENVIRONMENTAL ANALYSIS also known as external analysis, environmental
scanning or appraisal
• Is the process through which an organization monitor and comprehends
various environmental factors and determines opportunities and threats
that provided by these factors.
• There are two aspects involved in environmental analysis
Monitoring environment
Identifying opportunities and threats based on environment monitoring
Features of environmental analysis
• Environment analysis is exploratory process-explore unknown terrain, the
dimension of possible futures.the analysis emphasize what could happen
and not necessary what will happen