Organisation Structure

Organisation Structure

In the 1960s and 1970s strategic planning consisted of complex and bureaucratic processes which culminated in a comprehensive strategic plan. Over time it was realised that this type of strategic plan was of little use, as changes in conditions and unexpected events made the plan obsolete. The main benefit of this type of planning was the process itself, which increased understanding of the organisation and its situation. Modern planning systems tend to be more flexible and informal. The plans produced focus on general principles and trends, rather than detailed actions.

Strategy is a set of principles which guides the future actions and decisions of the organisation, with the intention of achieving specified goals. Strategy consists of several elements:

A picture of how the organisation should look at some time in the future, which is the vision -> A clear statement about the essential nature of the organisation, which is the mission -> A set of measurable objectives which are the means of reaching the vision -> Broad strategic plans which define the resources and methods of attaining the objectives.

The usual way strategy is developed is through a process of strategic planning, which results in the vision statement, mission, objectives and plans. In the past this was often a yearly event, with senior management getting together for several days to do 'The Strategic Plan'. Now strategic planning is a much more flexible process. Members of the organisation scan the environment continuously, alert to any new opportunities or threats that may arise. They monitor changes in technology, the market and global economics. If there is a development or an event which might affect the organisation, they come together to discuss the implications and look at how they might deal with it.

An effective form of a vision statement is a picture of what the organisation should look like in three to five years from now. This statement should be specific, verifiable and able to excite and inspire staff. A good vision statement should be: clear, verifiable, focused, and understandable to all employees, inspirational (Brown 1998).

Like the vision statement, the mission statement can all too often be a collection of platitudes and bland motherhood statements. Unless the document says something meaningful, positive and exciting, it is better not to have one. Vision statements and mission statements are flexible terms and some organisations use them interchangeably. 'Values statements' are also sometimes added. However, a sensible view is that the vision says where the organisation is heading and the mission says what the organisation is.

The vision and the mission statements establish the framework for the strategic objectives of the organisation. The aim is to find ways of reaching the state defined in the vision statement, using the principles and constraints outlined in the mission statement. The objectives should be a mix of quantifiable and qualitative goals. Hitt et al. (page 194) suggest that the following could be included in strategic objectives: revenue growth, profitability, customer satisfaction, market share, financial returns, technological leadership, cash flow, operating ...