The vision statement is a statement of business which reveals the meaning and purpose of business to the stakeholders especially for employees. A vision statement will be short and simple. A vision statement should clearly specify the business. It also helps for a future declaration.
FACTORS TO BE CONSIDERED WHILE CREATING VISION STATEMENT
History of the organization:
The history of the organization plays as an important factor for creating organizational vision. It can determine the past of the organization and to think about the future. It also helps to evaluate the past and present strategies. The history of organization also plays as in evidence for the growth of the organization. It also helps to pick important elements which helps for the derivation of vision statements.
External and Internal business environment:
There are two factors which affect the vision of the organization : internal and external environment.
Internal environment consists of the factors within the organization. Such as:
- Organizational culture
- Organization’s goodwill
- Resources of organization
An individual or a group of people who were invested in the organization is known to be owners. They always have the right to claim and right to change the company policy at any time.
Employees are considered as an important internal factor. Employees are committed to complete the tasks of the administration. Employees should be managed positively or it may result in the change for the organizational policy.
Organizational culture consists of the values, beliefs, and habits which collectively habitat in an organization. Organizational culture is also mainly considered as a major factor in shaping a vision statement. Because it determines how the organization performs.
Organization’s goodwill is considered as an valuable intangible asset. An organization with a high reputation will have a favorable aspect on the organization. Which also should be considered in the derivation of the vision statement.
Resources of organization
Resources of organization includes physical resources, financial resources and human resources. Resources or managing of resources also considered to be a major factor of a clear vision statement.
External environment consists of factors outside the organization. External environment divides into two general and task/industry environments.
General external environment
To determine the general external environment, the organization uses PESTEL model .In general external environment consist the elements like:
- Economic factors
- Socio-cultural factors
- Political factors
- Technological factors
- Demographic factors
- Legal factors
The economic factors are considered to be the overall economic status of the organization. The factors like interest rate, unemployment and inflation are included in economic factors.
The factors resulting for the changes in the society such as values, mores, customs, lifestyle changes, beliefs and social mobility are the major factors included in socio-cultural factors.
In political factors it consists of the relation between the government and business and also the overall political situation in the country. And how the organization treats the government rules and regulation such as paying factor tax, import and export tax etc…
In technological factors it includes the internet, information technology, and also the technology used for global transfer. The managers should be well bothered about the technology used for the process of converting resources to the finished product. The decisions that took on the technology should be accurate in adopting the new technology.
In demographic factor it considers the total country population. It specially looks towards the factors like age structure, ethic mix, income and geographic distribution. On the basis of demographic factors the organization determines their product, quality and quantity of product, targeting the market, plans the marketing strategies and pricing policies.
In the legal environment it consists of the country’s rules and regulations that come over the business. It mainly consists of company law, employee contract laws and also factory laws.
In task/industry environment consists the elements like:
- New entrants
- Substitute products
- Bargaining power of Suppliers
- Bargaining power of buyer
- Competitive rivalry
Strategies of an organization are influenced by the competitors. In the current trend the entry of new competitors are increasing day by day. In a market the organization always looks to stay with their competitors and go further ahead of their competitors.
The marketers of substitute products are considered as indirect competitors. These substitute products can meet the needs and wants of consumers. It gives the consumer an opportunity to switch to another product. The level of the substitute products should be considered while driving decisions.
Bargaining power of suppliers
Suppliers of rare products become a difficult task to deal with. The suppliers derive their own price, quality, and terms and conditions. The organization also faces difficulties to maximize profit due to the exert power of suppliers.
Bargaining power of buyer
The stronger power of bargaining of consumers or buyers results in the reduction of profit due to the forced reduction of price. If there are many products which act as a substitute then the bargaining power of consumers gradually increases.
Competitive rivalry refers to two industries which have the same products and both target the same segment of customers. The demand of product, the industry growth etc.. Such factors determine the power competitive rivalry of the firm.
- Should consider or determine the position and purpose: While preparing a vision statement the manager should analyze the objective, scope and advantages of the organization.
- Identification of potential barriers of organization like lack of communication, cultural barriers and lack of consistency.
- Should ensure the core values of organization like commitment, ethics, ownership, innovation and integrity.
- Should understand or determine the internal and external environment like employees, shareholders, general environment etc..
Ideology refers to the shared beliefs and values among the organization. It is also considered as the undergoing character of the organization. If the organization expands, grows and diversifies too the ideology holds the organization together. Core ideology identifies what the organization does and why it exists. The organization’s core ideology should remain fixed though the practices and strategies evolve globally and marketplace. The vision of the organization should consider the core ideology. The core ideology should be meaningful and personnel inspiring.
Core values are a set of principles which shows or establishes the perspectives of organization. Core values do not need an external justification and intrinsic values. The core value is mainly used to guide personnel, management and also to achieve the vision. It also motivates the stakeholders to be on the track, though there is any despite situation.
Core purpose mainly describes the reason why the organization is being. The core purpose mainly expressed in the mission statement. It also helps to motivate the employees and to show the soul of the organization. The core purpose will not change according to the change in the strategies or objectives. If the mission or vision statement changes though the core purpose stays constant.
ASSESS THE DIFFERENT APPROACHES TO DEVELOPING VISION
All the stakeholders should be informed clearly about the vision of the organization.
- The selected objectives or goals should be clear and understandable: The selected objectives or goals should be understandable for the employees for the faster achievement.
- Organizations should make a large meeting format which can include more number of people: The vision statement should be informed to a large group in order to get more feedback and to explain to more numbers which can consume
- Should conduct an analysis or survey inside the organization to get inputs on the company’s vision: For better derivation of vision statement should conduct an internal analysis which helps to get better knowledge on employees, and the operations of organization.
- Organization should provide all the information to the stakeholders at time to avoid confusion and also help for easy guidance: The information should be passed to stakeholders at time to avoid confusion and also may cause delay in achieving objectives.
- Should be focused on short-term objectives and should not consider realization, the vision should be derived from imagination. Should develop buy-in and support to complete organization. Should focus company’s efforts and also should facilitate to provide core competencies.
- Should include the factors like:
Timing and clarity:
Time management should be stuck when ever setting targets or deadlines. If there comes any delays on time it affects overall organization performance. It also helps in achieving competitive advantages. The unnecessary delays also result in the low productivity of the firm. The goals and objectives derived by the organization should be clear and transparent to avoid repetition and confusion.
There should be two-way communication between employees and managers, which results in positive feedback sessions and to get better ideas for developing vision. It also helps to improve productivity and to build relationships between the manager and employees. It also reduces the conflicts and doubts came over the tasks.
Top down or bottom up:
It is the deciding of the level from where the decisions related to the organizational goals should be made. In some of the stages the decisions have to be taken by the employees and have to remind the manager, and in some cases the manager tools the decisions and transfers them to employees. The manager and employees should need a clear idea or have clearly recognised the situations.
The feedback from employees and customers help to create better products and also it helps for creating vision statements. The organization can utilize the feedback from the employees and customers for improving the quality of product, the pricing policy and the developments that have to be made in the workplace.
EVALUATE THE KEY FACTORS WHICH IMPACT ON THE COMMUNICATION OF VISION TO EXTERNAL STAKEHOLDERS
External stakeholders can be defined as the members or groups who are outside the business, but they are somehow affected in the decision making and actions of the firm. In the external stakeholder there includes the government, the local community, customers, creditors and suppliers. The external stakeholders mainly influence the
long-term objectives of the firm. Also the external stakeholders will not have a direct financial stake in the firm. They will not have profitability stake or a financial risk, they act for the government to get tax, customer to get better product and employees to get salary. The external stakeholders are main sources of feedback.
Dissemination and cascading processes:
The process of passing the information from CEO to the senior manager and then it passed to the subordinates, this process is known as cascading. The purpose of dissemination and cascading process is to raise awareness, inform, engage and promote the stakeholders. It also helps to create supporting strategies to value the entire activity chain.
Size of the organization:
According to the size of organization, the communication and other interactions change with the external stakeholders. If the organization is small, then the communication with the external stakeholders like customers will be direct and frequent. But in case of large businesses the interactions will be with the use of emails or advertisement or it can simply say that the communication will be in a formal way.
The vision of the organization should be broken into terms which will help the external stakeholders to catch up faster without any confusions. Also it helps the stakeholders to stand aware of the organization’s vision and also to achieve its objectives. It also helps to derive standard operations to achieve the objectives. The complexity also depends on the organizations which have large groups of people, different projects, rules and strategies.
It is a structuring of passing information on the bases of high ranked positions to the lower end employee. In this structure, there should need a clear channel of communication to ensure that the information is passed correctly and on time. The main channel of communication that all the organization takes is up to down channel means leader or manager to the employees. But in some situations there needs an opposite channel as down to up that means employee to manager. The channel of
communication helps to express ideas in a clear and transparent way which can avoid confusions. So it can help for a derivation of perfect and suitable vision and its successful achievement.
Culture and diversity:
While communicating the vision of the organization to the external stakeholders especially to the customers, the organization should be well bothered about their expectations and needs. The organization should give more attention towards cultural diversity and also have to express their vision in the way which the customers are attracted to. If the organization does not consider the culture and diversity the business cannot fulfill the needs of their customers with their product.
The organization changes their operations and processes according to the development of the organization. Sometimes the material or products may change, but all the changes should be communicated with the external stakeholders. It can help the stakeholders to recognize changes and to work more productively towards the change.
There are several types of communication methods such as Image and Silent communication, Telephone, Paper-based communication, Electronic media and Oral media.
Image and Silent media:
Image and silent media involves the communication with use of pictures, presentation etc.. It is not an obvious way of communication, though it is used for communication. The pictorial representation helps to give more important aspects about the business. In silent form of communication involves things like smell, touch, body language and also with the help of color.
- It is more effective for the people who are
- It helps for quick decision making.
- It is not boring while compared to others.
- All topics or subjects like rules, plans, policies cannot be presented.
- Complete and detailed information cannot be displayed.
- There needs to be special efficiency and knowledge.
Telephone communication includes the transfer of information with use of landline and mobile phone. It helps to pass the information instantly to the stakeholders and also they can clarify if any doubts. Although the landline is an outdated way of communication too for a business it plays a major communication role. It also helps to bring out more flexibility and improves efficiency and productivity.
- It is quick and easy to use.
- Less expensive and less time consuming.
- It does not matter the distance.
- It reduces the acceptance of the
- It reduces face to face communication.
- Sometimes comes network issues, which results in the passing of wrong information.
As the increased use of computers the use of paper reduced. But paper-based communication is still an important method of communication. To communicate with a large number of people it’s suitable to use paper-based communication. A paper can contain all the necessary information on two sides. Nowadays formal letters are also used to send information to customers, suppliers, employees and also to shareholders .
- It does not need any other gadgets like phones or computers to read out
- It can be stored for a long time without any damage.(can use as evidence)
- It simplifies the explanation on complex data.
- It consumes much more time for preparation.
- It is more expensive.
- It cannot be used in front of illustrated people.
Electronic media like email, social media, telephone, fax and websites are used to pass information to the stakeholders. The main advantage of electronic media is faster when compared to paper-based communication. It also helps to get faster replies from the customers and suppliers, which purposefully helps for the purchase and sales of the business.
- It does not consume time.
- Its low cost.
- It is easy to access and store.
- There occurs security threats.
- May be delayed due to network issues.
- It needs a high cost for development.
Oral media is a way of communication by mouth or a face to face communication. Oral media is considered the most common way of communication in the business, which is more effective when compared to others. It helps for a face to face interaction and can clear all the doubts on time. It has a benefit to explain a decision or vision clearly and transparently. It can also be used while presenting according to the size of the audience.
- It is a cost saving process.
- Helps to increase relationships.
- It is more
- Sometimes it creates misunderstanding.
- It has a higher scope for occurring errors.
- It consumes much time.