CHAPTER 3

PERFORMANCE
MANAGEMENT AND
STRATEGIC
PLANNING
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 Strategic Planning
Steps in Creating a Successful Strategic Plan

1. The conduct of an environmental analysis identification of the internal and external

parameters of the environment in which the organization operates ,ex: SWOT

2. Creation of the mission ( a statement of what the organization is all about )

3. Creation of an organizational vision ( where the organization is intended to be in

the long term 10 years )

4. Setting goals ( what the organization intended to do in the short term 1-3 years )

5. Creation of strategies to enable the company to fulfill its mission and vision and
achieve its goals

They affect and inform each other on an ongoing basis

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 Environmental Analysis

Understanding the internal and external

environment related to the industry in which
the organization operates

SWOT Analysis

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 External Environment
 Opportunities
 Characteristic of an environment that can help the

organization to succeed .

 threats
 Characteristic of and external environment that can

prevent the organization from being successful

 External trends are important for all organizations,

especially those organizations operating on a
global level
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 External Environment
 External Factors:
 Economic

 Is there an economic collapse on the horizon ? Or these economic recession is going to end in the near future ? How

would this economic trends affect our business ?

 Political/legal

 How will political changes domestically or in the international market will affect our entry strategy .

 Social

 What is the impact of an aging workforce on our organization ?

 Technological

 What technological changing we are anticipating in our industry and how will these changes affect how we do business ?

 Competitors

 How do the strategies and products of our competitors affect our own strategies and products can we anticipate their next

move .

 Customers

 What do our customers want now , and what will want and need in the next five years or so ? Can we anticipate such

needs .

 Suppliers

 What is the relationship with our supplier now and is it likely to change and in what way in the near future .

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 Internal Environment
 Strengths
Internal characteristic that the organization can use to its

advantage .( what are the organization assets and the staff

key skills?)

 Weaknesses
Internal characteristic that likely hinder success or the

organization ( an obsolete organizational structure that

does not allow for effective organizational communication
across units .

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 Internal Environment
 Internal factors:
 Organizational structure

 Is the current structure encouraging a fast and effective communication .

 Organizational culture

 The un-written norms and values espoused by the members of the organization

 Politics

 Are the various units competing for resources in such a way that any type of cross unit collaboration

is virtually impossible or they are likely to open and collaborate in cross unit projects .

 Processes

 Is the supply chain working properly , can customers reach us when they need to and receive a

satisfying response when they do .

 Size

 Is the organization too small or too large are we growing too fast will we be able to manage growth

or downsizing effectively

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Information from the SWOT analysis can be
used to conduct a gap analysis
Which analyze the external environment in
relation to the internal environment
The pairing of external opportunities and
threats with internal strength and weakness

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 Situations in a SOWT Analysis
(From most competitive to least competitive)

1. Opportunity + Strength = Leverage

2. Opportunity + Weakness = Constraint

3. Threat + Strength = Vulnerability

4. Threat + Weakness = Problem

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 Process of Linking PM to the Strategic
Plan
The presence of a strategic plan doesn’t guarantee that this
information will be used effectively !!

 Countless organizations spend thousands of hours creating strategic

plans that lead to no tangible actions .
 Many organization spend too much time and effort crafting their mission
and vision statement without undertaking any concrete action and follow
up
 The process ends up being a huge waste of time and source of
frustration
 To ensure that strategy cascades down the organization and leads to
concrete actions a conscious effort much be made to link the strategic
plan with individuals performance .

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Process of Linking PM to the Strategic
Plan

Strategic plans would be useless and a

waste of time if they do not lead to any
follow-up actions and are not linked to
individual and department efforts
throughout the organization

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 Organization’s Strategic Plan
Mission, Vision, Goals Strategies

Unit’s Strategic Plan

Mission, Vision, Goals, Strategies
Important to
ensure that
everyone is
involved in this
process
Job Description
Tasks, Knowledge, Skills, Abilities

Individual and Team Performance

Results, Behaviors, Developmental Plans

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 Performance management has a critical
role in translating strategy into action .

 Performance management is the third

most important factor affecting the
success of strategic plan ( for large
organization and the one which are
operating in a rapidly changing
environment )

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 Mission
 After the environmental has been completed and the
gap analysis reveals an organizational leverage,
constraints , vulnerabilities and problems .the member
of the organization must determine who they are and
what they do , the information will then be
incorporated into the organization’s mission statement
 This mission statement will provide information on the
purpose of the organization and its scope

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 Mission
 Good mission statement provide
answers to the following questions:
 Why does the organization exist?

 What is the scope of the organization’s

activities?
 Who are the customers served?

 What are the products or services offered?

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Coca cola company’s mission
 Everything we do is inspired by our
enduring mission .
To refresh the world .. In body , mind and
sprit.
To inspire moments of optimism …through
our brands and our actions
To create value and make difference ..
Everywhere we engage.

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Coca cola company’s mission
 The mission provides some information regarding the four questions
noted earlier .

 Based on this mission statement we have information why the

company is exits
( to refresh the world )

 The scope of the organizational activities

(to create value and make a difference .

 The mission statement doesn’t include information about who are the
customers served and what the are the products and services offered .

 Also there is no information about specific products

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 Mission Statements
Can also include information on organization’s
values and beliefs:
 Managerial philosophy of the organization
 Public image required by the organization
 Self-concept of business adopted by employees
and stockholders

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 CBA Vision & Mission

 CBA Vision
○ To be the pre-eminent business school that develops market
needed skills and competencies of future leaders.

 CBA Mission
○ Our Mission is threefold
○ To provide state of the art of specialized business education;
○ To contribute to closing of the gap between business
education, job opportunities and the required competencies by
private and public sector organizations;
○ To equip our students with requisite knowledge, skills and
attributes for outstanding leadership in the challenging local
and global business environment.
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 Mission statement analysis
 Basic four questions :-
 Why does organization exist ?
 What is the scope of the organization’s activities ?
 Who are the customers served ?
 What are the products or service offered ?

 More specific detailed information's :-

 Basic product or service to be offered (does what?).
 Primary markets or customers groups to be served ( to whom ?).
 Unique benefits and advantages of products or services ( with what benefits ?).
 Technology to be used in production or delivery ?).
 Fundamental concern for survival through growth and profitability .

 Some mission statement include information about organizational

values and believes .
 Managerial philosophy of the organization
 Public image sought by the organization
 Self concept of business adopted by employees and stockholders

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 Vision
 A statement of future aspirations – what the organization
would like to become in the future ( about 10 years ) in the
future.
 Vision statement is usually written after mission statement is
completed . Why ?
 because the organization needs to know who they are and what their

purpose before they figure out who they will be in the future .

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 Characteristics of Good Vision Statements

Brief
Bound by a timeline

Current
Focused
Understandable
Inspiring
A stretch

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Brief
○ A vision statement should be brief so that employees can remember it
Bounded by a timeline
○ Specifies a timeline for the fulfillment of various aspirations
Current :
○ Outdated vision statements are not useful , vision statements should be
updated on an ongoing basis ideally as soon as the old vision is fulfilled
Focused
○ It shouldn’t be a laundry list of aspirations but rather focused on just a few (not
more than 4 ) aspects of an organization’s performance that are important to
future success.
Understandable:
○ Need to be clear written in a clear and straightforward manner so its can be
understood by employees .
Inspiring
○ Should make employees feel good about their organization's direction and
motivate them to help achieve their vision
Stretch :
○ IBM MS-DOS 1980 ( PUTTING A COMPUTER ON EVERY DESK AND IN
EVERY HOME )
○ IBM NOW( PUTTING A COMPUTER IN EVERY CAN AND EVERY POCKET )

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 Mission Vision

 Emphasize on the  Included description of

present future aspirations
 Emphasize on the future.

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Examples

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 Read and analysis the following statements

 Spectrum Brands is a rapidly growing, global, diversified, market-driven

consumer products company.
 We will continue to grow our company through a combination of
strategic acquisitions and organic growth.
 We will strengthen our brands and generate growth through emphasis
on brand strategy/marketing and innovative product technology, design
and packaging.
 We will leverage IT infrastructure, distribution channels, purchasing
power and operational structure globally to continue to drive efficiencies
and reduce costs.

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 Joining the mission and the vision in one paragraph

 Spectrum Brands is a rapidly growing, global, diversified, market-driven consumer

products company. Mission statement
 We will continue to grow our company through a combination of strategic
acquisitions and organic growth.
 We will strengthen our brands and generate growth through emphasis on brand
strategy/marketing and innovative product technology, design and packaging. This
two statement combines the present with the future who the company is what it does
with the future aspirations
 We will leverage IT infrastructure, distribution channels, purchasing power and
operational structure globally to continue to drive efficiencies and reduce costs.
 Some other companies make it more explicit to differentiate between the mission and
vision statement .

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 Environmental Statement
 Our Corporate Philosophy
 Maintaining a clean environment and conserving our natural resources are issues that concern us all.
 Spectrum Brands has a mission to create and maintain a working environment that is safe for our
employees, the communities in which we work, and the earth on which we live.
 The individual parts we play in our neighborhoods and on our jobs are critical to preserving these
resources for our future and that of our children. It is the responsibility of every employee to
incorporate the practices of informed stewardship in daily life. Waste, whether produced in the
manufacturing plant, office, or home, represents environmental and economic inefficiency. Accordingly,
we should reduce our consumption of resources to levels reasonably needed, and we should reuse those
assets where practicable. Finally, we should dispose of resources intelligently, recycling those that can
be utilized economically in a different form. We must recognize, however, that recycling is not without
costs, and that some recycling processes consume more resources than they save.
 We all deserve to have clean air, safe water and adequate resources. As environmental stewards, we
support this mission.
 Spectrum Brands
Madison, Wisconsin

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 Diversity Statement
 October 2008
 The Executive Management of Spectrum Brands, Inc. is committed to the principles of Equal
Employment Opportunity and Affirmative Action as set forth in Spectrum Brands’ policy.
 It is the responsibility of all managers and supervisors to ensure that all personnel actions, including
recruiting, employment, work assignments, advancement opportunities, promotions, training,
compensation, benefits, leaves of absence, educational refunds, social and recreational programs, etc. are
administered in accordance with Spectrum Brands’ Equal Employment Opportunity Policy and
Affirmative Action Plans and without regard to race, ethnicity, color, religion, national origin, gender,
disability, age, citizenship or veteran status.
 In support of our policy, Spectrum Brands has developed affirmative action plans and procedures for
minorities and women, for individuals with disabilities, and special disabled veterans and veterans of
the Vietnam Era. The Equal Opportunity Officer for Spectrum Brands is Joseph Wickham, Vice
President, Corporate HR. He is responsible for coordinating and monitoring the effectiveness of the
Equal Employment Opportunity and Affirmative Action Programs. These plans are available for review
during normal business hours in local Human Resources departments.

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 A fundamental element of Spectrum Brands’ policy is to ensure that all employees work
together in an atmosphere fostering mutual respect and promoting a harmonious, productive
workplace free of harassment, intimidation or any form of discrimination based on race,
ethnicity, color, religion, national origin, gender, disability, age, citizenship or veteran status.
All employees are encouraged to bring any question or concern related to this matter to their
immediate supervisor, local manager or Human Resources representative.
 Any employee filing a complaint can expect Spectrum Brands to conduct a complete,
confidential investigation and to be informed of the results. Spectrum Brands will not permit
or tolerate any form of retaliation against an employee filing a complaint. If the investigation
reveals reasonable evidence that Spectrum Brands’ equal employment opportunity Policy or
Affirmative action Plans have been violated, appropriate action to eliminate future violations
will be taken.
 All Spectrum Brands employees are expected to support our Equal Employment Opportunity
Policy and Affirmative Action Programs both to ensure legal compliance and to provide a
work environment consistent with Spectrum Brands’ values.
 Dave Lumley, CEO

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Example

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 Read and analysis the following statements

 The mission :
We provide the packaging that gives ultimate
value toe our customers.

Vision
○ We will be the best packaging company in the
world . Working in true partnership with our
customers our suppliers and among ourselves .

https://www.youtube.com/watch?v=hghBxcLlPWE#t=155

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 Our Core Values.
 Our people are our past, present and future.
 We will honor The Greif Way, building upon our rich history as a special place to work. We will operate within a
culture of integrity, character and respect. We will maintain a safe working environment. We will attract and
cultivate a responsible, competent, efficient and empowered workforce. We will provide opportunities to excel. We
will communicate. We will listen.
 Our customers are our reason for being.
 We will keep our promises to our customers. We will be synonymous with quality and service. We will solve their
packaging challenges. We will prove the value of our relationship by being the best at what we do.
 Our products are our livelihood.
 We will be a low-cost manufacturer and the high-value supplier in our business segments. We will innovate, using
our ingenuity and creativity to provide better solutions. We will maintain our focus on where we can be the best
and apply our expertise to do it better.
 Our shareholders are our support.
 We will conduct our business ethically and with transparency. We will establish rigorous financial goals that will
drive our business decisions and measure our progress. We will strive to attain a superior rate of return and
maintain trust with our investors.
 Our stage is the world. Our communities and the environment are our backdrop.
 We will be a conscientious global citizen, a responsive community neighbor and a responsible steward of the earth’s
natural resources
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