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Organization Theory
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Understanding of “Vision”
Mental picture of what an organization wants to achieve over time
– How things will look if the group is successful.
Provides guidance and inspiration as to what an organization is
focused on achieving in five, ten, or more years – a guiding force
– Where the group is headed.
It is what all employees understand their work every day
ultimately contributes towards accomplishing over the long term
– Total engagement with utmost commitment.
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Why should we have a “Vision”
What is the advantage?
- Forces peers & subordinates to think and demands the top
executives to do the same for the entire company
Who are involved in its formulation?
- Employees from all levels
“DIRECTION to an ORGANIZATION”
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The Known “FACTS” of Vision
One of the things leaders struggle with the most is communicating an
image of the future that draws others in - that speaks to what
others see and feel.
Leaders may change, but a clearly established vision encourages
people to focus on what's important.
Being forward-looking – envisioning/predicting exciting possibilities
and enlisting/engaging others in a shared view of the future – is
the attribute that most distinguishes leaders from non-leaders.
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Vision Statement
Is written concisely in an inspirational manner that makes it
easy for all employees to repeat it at any given time.
A vision statement should answer the basic question, “What
do we want to become?”
“MEANINGFUL”
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Vision Statements – Example(s)
They should be;
Compelling – forceful, convincing
Exciting – thrilling, stimulating
Focus attention – noticeable, interesting
Clear concepts – understandable, organized
Inspirational – encouraging, motivating
Gut-grabbing – appealing, recommending
Eg.:
Alzheimer Association: "Our Vision is a world without Alzheimer disease.”
Microsoft: "Empower people through great software anytime, anyplace, and on any device."
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Mission
Mission statement defines the present state or purpose of an
organization; purpose is a motivating factor and not a
differentiating factor – implications for companies
Explains why the organization exists ; What the group is
supposed to do (3 questions to be answered)
WHAT they do;
WHO they do it for; and
HOW they do what they do.
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Mission Statement
Mission statement defines the present state or
purpose of an organization;
Is in the form of a sentence or two, but for a shorter
timeframe (one to three years) than a Vision statement.
Is something that all employees should be able to articulate
upon request.
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Visionary Company – Example(s)
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Industry Company
Airplane Manufacturing Boeing
Automobile Manufacturing Ford
Computer/Electronic Apple, IBM, Compaq
Electric General Electric (GE)
Entertainment Walt Disney
Pharmaceuticals Merck, Johnson & Johnson
Retail Wal-Mart
The Vision Framework
Vision consists of 2 major components: –
1. Guiding Philosophy
2. Tangible Image
“They are related to each other yet distinct.”
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Organizational Vision“Guiding Philosophy and Tangible Image”
PURPOSE
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CoreBeliefs and
Values
Environment
VividDescription
Mission
Guiding Philosophy Tangible Image
The Indian way - Example
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Who are the clients/customers?
What product/ services do we provide?
What do we do the best?
What else do we do that no one else can do?
What values govern our work?
What is our purpose ?
Guiding philosophy, core values…..?
…………
Guiding Philosophy
‘Philosophy of life’
Originates from early leaders; must transcend thefounder
Important to know ‘who you are’ than ‘where youare going’
It is the ‘glue’ that holds the organization
“Do we really need that” – TATA NANO ( cost consciousand price conscious)
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Guiding Philosophy …
1. Core Values and Beliefs
Perception about what is important in
both business and life
Requires to no external justification/
have intrinsic value
Core values are independent of
environment
Companies can have 3-5 core values
E.g.:
Integrity, Respect, Concern, Fairness
Visionary Leaders
Thomas J. Watson (CEO, IBM,) :
Faithful adherence to sound set of
beliefs important in order to
survive and achieve success;
Change everything of an
organization as it moves through
corporate life except its beliefs.
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Examples
1. Quality will be a prime aspect of our product offering
2. Strive to reduce costs to offer reasonable priced drugs
3. Customers’ orders to be serviced promptly and accurately
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Guiding Philosophy …
2. Purpose
Purpose is “how the organization
fills its basic / fundamental
human needs.”
Purpose is the ‘reason for being’ ;
Should be able to guide for
100 years
Understanding
• “Purpose is a motivating factor, not a
differentiating factor” - implication
for Companies ?
• Purpose is an outgrowth of the
organization’s core values and beliefs
• “Maximize shareholder’s wealth” –
can it be a purpose ?
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Examples
Merck’s Purpose (1989)
Statement of Corporate Purpose:
We are in the business of
preserving and improving
human life. All of our actions
must be measured by our
success in achieving this.
Merck’s Purpose (1935)
Statement of Corporate Purpose (Fundamental enduring purpose; George Merck II):
[We] are workers in industry who
are genuinely inspired by the
ideals of advancement of
medical science, and of
service to humanity.
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Tangible Image…
What is it!
It clearly focuses on the
efforts of the organization.
It helps focusing people’s
attention on a specific goal.
It is bold, exciting, and
emotionally charged.
Convey
A sense of concreteness –
something vivid and real
A picture of future – dreams,
hopes, and aspirations.
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Tangible Image…
1. Mission
Mission statement is a clear and compelling goal unifying organization’s efforts.
Has a finish line and specific time frame for its achievement.
It engages people
Organizations may have mission at various level.
Mission is intuitive; need not be a sure bet .
FOUR - Approaches to setting a Mission
1. Targeting
2. Common Enemy
3. Role Model
4. Internal Transformation
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Approaches to Mission …
1. Targeting – setting a clear, definable target and aiming for it.
E.g.: Wal-Mart – setting a precise target of being $1 billion
company in 4 years (1997).
2. Common Enemy – to create a goal focused on defeating a
common enemy. Not to survive but to win E.g.: Pepsi’s
mission at one time to beat Coke.
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Approaches to Mission …
3. Role Model – these are set by small to mid-sized companies with
bright prospects in their industries. E.g.: GIRO Sport Design
Bicycling Products Co. used both targeting and role models in
setting its mission (of Nike Sports Shoes and Apple)
4. Internal Transformation – tend to be effective in old organizations
that need to dramatically change themselves in order to remain
competitive and healthy. E.g.: Standford University in 1990 with a
mission to create a new blend of teaching and research by the
year 2010.
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2. Vivid Description
What will be like to achieve the mission:
“The Tata Group will undoubtedly play an important role in
the continued development of our country, providing
leadership in various industrial segments in which they
operate and living by the value systems and ethical standards
on which our Group was founded……”
Mr. Ratan Tata’s last letter to employees as chairman of the TATA Group
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Why to have a Vision and Mission?
Vision:
- To bring a sense of collective identity
Mission:
- To make a profit doing what and for whom
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Formulation of Vision & Mission Statement
E.g. MDC(I), Merck Group KGaA, Germany
Collection of Shared Views - Everyone’s contribution and
understanding was taken into consideration
Formulated over a period of time without any hurry with a clear
understanding of every individuals’ role-play in the organization
“To develop intrinsically safe, environment friendly and cost-effective
innovative processes for the manufacture of APIs/Drug substances
adhering to total regulatory compliances and company’s code of
conduct”
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