lOMoARcPSD|6479235

Graduate School of Business and Law

Strategy

Topic 5 – Creating Future Direction

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

Disclaimer

This subject material is issued by RMIT on the understanding that:

1. RMIT, its directors, author(s), or any other persons involved in the preparation of this
publication expressly disclaim all and any contractual, tortious, or other form of liability
to any person (purchaser of this publication or not) in respect of the publication and any
consequences arising from its use, including any omission made, by any person in reliance
upon the whole or any part of the contents of this publication.
2. RMIT expressly disclaims all and any liability to any person in respect of anything and of
the consequences of anything done or omitted to be done by any such person in reliance,
whether whole or partial, upon the whole or any part of the contents of this subject
material.
3. No person should act on the basis of the material contained in the publication without
considering and taking professional advice.
4. No correspondence will be entered into in relation to this publication by the distributors,
publisher, editor(s) or author(s) or any other person on their behalf or otherwise.

All details were accurate at the time of printing.

August 2016

Topic 5 – Creating Future Direction i

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

Contents

Introduction 1
Learning objectives 1

Student activities 3

Summary 4

References 5

ii Strategy

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

Introduction
In Unit 5 we look at the aspirational aspects of strategic management and
consider how the organisation can most effectively go about Creating Future
Direction.
The practice of strategic management continues to evolve from the 1960s
focus on the chief executive officer and top management team as the key
organisation decision-makers to the modern flatter organisation where there
is considerably more delegation to middle line managers. Related to this
evolution of the organisation Mintzberg (1994) discusses the evolving ‘softer’
role of strategic planners in organisations as catalysts, co-ordinators and
communicators; strategy often develops inside the businesses and internal
strategists help to communicate that strategy to stakeholders and monitor
and control implantation (Grant, 2003).
In this unit we will build understanding of the aspirational elements of
strategic management – mission, vision, values and objectives. We also build
understanding of the role and value of strategy workshops (Hodgkinson,
Whittington, Johnson and Schwarz, 2008).
Mission is defined as a statement in relation to the domain of the firm, how
and where it chooses to compete, firm activities and operations. The mission
helps to define what the firm does and does not do.
Vision is defined as the future state of the firm, where the firm wants to be in
the future. It is important that the vision is credible, realistic, achievable and
appealing to stakeholders.
Values provide guidelines for the behaviour of employees and gives insight
into the way things are done in the firm. Values can be a challenge for the
leadership of the firm to manage as these can vary across the organisation,
especially in the functional areas (e.g. finance, marketing, human resources)
and this is termed organisation differentiation.
Objectives are quantifiable targets that can be set at the network, corporate,
individual business or functional level of the firm. Objectives set for the firm
can be financial (e.g. return on assets) or non-financial (e.g. .
The challenges of getting mission, vision, values and objectives right for the
firm will be discussed.

Learning objectives
By the end of this topic you should be able to:
1. Formulate a strategy which includes an understanding of what that
strategy is designed to achieve.
2. Utilize the concepts of vision, values, mission and objectives.
3. Apply the concepts of vision, values, mission and objectives at
corporate and business unit levels.
4. Give examples of both non-financial and financial objectives
To assist in achieving these learning objectives the following readings are set:

Topic 5 – Creating Future Direction iii

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

Reading 1

Fitzroy, P., Hulbert, J. and O’Shannassy, T. 2016. Strategic

Management: The Challenge of Creating Value, 3rd Edition,
(Chapter 6) Routledge Publishing, London, UK.

All firm stakeholders appreciate the leadership of the firm having a clear sense of
the future direction of the organisation, a clear and strong sense of purpose and
an understanding of what employees are expected to achieve. When the firm has
clear sense of future direction this encourages the commitment and passion of
employees, and the sense of engagement of key stakeholders (e.g.
shareholders, suppliers, local government). Developing this clear sense of future
direction and then communicating it well is an important aspect of strategic
management, however not all firms are good at doing this. We will discuss why.
The concepts of mission, vision, objectives and values are explained and
examples in practice are discussed.

Reading 2
Breene, T., Nunes, P. and Shill, W. 2007 ‘The Chief Strategy
Officer’, Harvard Business Review, October, pp. 84-93.

Breene, Nunes and Shill (2007) studied the need for and role of the chief strategy
officer (CSO) in organisations. They found the CSO was able to more objectively
look at strategy issues than say a Chief Operating Officer or a Chief Financial
Officer who may get caught up in the conflict between quick, easier wins and the
right strategy choice. There is great diversity of titles for a ‘CSO’ in organisations
– over 90 titles in this research project.
So who is the typical CSO? The research found they were experienced
executives with a strong track record running businesses and also a strong
strategy orientation. They often had substantial experience in management
consulting firms or many years of strategy work in corporations but this was not
the dominant aspect of their career profile. Often the CSO entered the firm in a
planning, line management or functional role and then later were recruited to the
CSO type post.
The role of the CSO included instructor, mentor, adviser, doer and influencer with
a view for both the short and long term plus the ability to work through ambiguity.

Reading 3
Hodgkinson, G., Whittington, R., Johnson, G. and Schwarz, M.
2006 ‘The role of strategy workshops in strategy development
processes: Formality, communication, co-ordination and inclusion’,
Long Range Planning, 39, pp. 479-496.

Strategy workshops take place when company directors, top managers, middle

iv Strategy

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

line managers and sometimes external consultants take time out from their ‘day-
to-day’ roles and engage in one or two days of deliberation and discussion on
firm strategy. Strategy workshops are an important formal work activity that
assists strategy design for the firm including the socialisation of the strategy
among internal stakeholders.
Hodgkinson et al. (2008) surveyed 1300 strategy workshop participants with 30.7
per cent being directors and 45.7 per cent in senior management roles.
Remaining respondents were drawn from a range of roles and organisational
levels.
The results indicate strategy workshops provide an opportunity for discussion and
debate particularly among senior executives. The workshop provides a timely
break from ‘day-to-day’ work patterns where strategy development ideas and
insights can be disentangled and some sense made, allowing reconciliation of
different points of view. They are a forum for management debate, discussion
and discourse. They also assist in better understanding of firm values, business
processes, employee development and training, and employee motivation. The
results show typically low levels of preparation for the workshops.

Websites
National Aeronautical and Space Administration (NASA)

Please visit the following link to the NASA web site:

https://history.nasa.gov/orgcharts/orgchartNovember2015.pdf
We will discuss the position of strategy in the NASA organisation in class.

Student activities

Reflection on Creating Business Strategies

Unit 05 Creating Future Direction
The Concept of Strategic Intent

O’Shannassy (2016) distinguishes the difference between strategic intent, mission and
vision.
Strategic intent is a term explained by Hamel and Prahalad (1989) as being
associated with ‘soft’ Eastern people-oriented management practices in
Japanese industry as distinct from more rational, ‘hard’, planning oriented
Western practices. Hamel and Prahalad (1989: 64) define strategic intent for a
firm as:
…ambitions…way out of proportion to…resources and
capabilities…an obsession with winning at all levels of the
Topic 5 – Creating Future Direction v

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

organization and then (sustaining) that obsession over the 10-20

year quest for global leadership…strategic intent envisions…
strategic intent is more than unfettered ambition.
So strategic intent is more than a mission or vision, strategic intent gives insight
into ideology, intentions and beliefs and has three elements – shared vision,
resource focus and foresight.
Does your organisation have a mission? Vision? And/or statement of strategic
intent?

Class Discussion and Assessment Activity

Creating Business Strategies Harvard Business School Case Studies
Louis Vuitton

In this case study for Unit 05 look for the challenges confronted by the Louis Vuitton
directors and executive team in creating future direction for this elite brand.

Great Companies, Great Products and/or Services, and Great

Strategists
Samsung Group
Discussion Board Activity

Samsung are noted for their impact on consumer electronics and the mobile telephone
industry.

We now look at the professional background and role of Young Sohn the
President and Chief Strategy Officer at Samsung Electronics and Chairman of
the Board at HARMAN International Inductries. Please go to:

http://www.samsung.com/us/ssic/about/

What are Mr Sohn’s responsibilities?

What is the industry clockspeed for mobile telephones?

Summary
In this Unit 05 Creating Future Direction we have looked at the aspirational
aspects of strategy development including mission, vision, values and
objective setting. We have also spent some time looking at strategy
workshops and the role of the chief strategy officer. The concept of
strategic intent has been explored and strong connections to practice made
in discussion and the Louis Vuitton case.

vi Strategy

Downloaded by Allahvirdi Taghavi ([email protected])

 lOMoARcPSD|6479235

References and Bibliography

Breene, T., Nunes, P. and Shill, W. 2007 ‘The Chief Strategy Officer’, Harvard
Business Review, October, pp. 84-93.

Fitzroy, P., Hulbert, J. and O’Shannassy, T. 2016. Strategic Management: The

Challenge of Creating Value, 3rd Edition, Routledge Publishing, London, UK.

Grant, R. 2003. ‘Strategic planning in a turbulent environment: evidence from oil

majors’, Strategic Management Journal, 24: 491-517.
Hamel, G. & Prahalad, C.K. 1989. Strategic intent. Harvard Business Review,
May-June, 63-78.
Hodgkinson, G., Whittington, R., Johnson, G. and Schwarz, M. 2006 ‘The role of
strategy workshops in strategy development processes: Formality,
communication, co-ordination and inclusion’, Long Range Planning, 39, pp. 479-
496.
Mintzberg, H 1994, ‘The fall and rise of strategic planning’, Harvard Business
Review, 72 (1): 107-114.
Mintzberg, H and Lampel, J 1999, ‘Reflecting on the strategy process’, Sloan
Management Review, 20 (3): 2-30.

Topic 5 – Creating Future Direction vii

Downloaded by Allahvirdi Taghavi ([email protected])