Financial Perspective: Improving The Financial Outlook In Terms Of Cash Flows And Operating Income, Improvising Return On Equity Reports Example
De Kluyver and Pearce in their book have defined strategy as a way of achieving the desired or required objectives for a given entity. It is more like a blueprint or the way through which such objectives can be achieved. Strategy provides the roadmap to the top-level management so that they can plan regarding how the given objectives of the organization will be achieved. For example, the authors quote the example of improving the bottom-line of the organization.
For this purpose, the management proposed the strategy of incorporating the technologies so that the efficiency of the work can be improved. In addition, employees will be benefited and they will be producing more outputs, which in turn will improve the sales for the organization. This finally will lead to improving bottom-line of the organization.
Strategic management is also useful for formulating the strategies for various departments across the organization. The different departments of the organization can collaborate with each other with a view to formulate strategies that will help them to achieve the desired objectives of the organization. However, modifications can be made in between as well keeping in mind the internal and external parameters of the organization.
Today, the organizations are required to work upon the strategies for all the departments, whether it is finance, marketing, human resource or operations. The objectives are formulated, but it is necessary to prepare the roadmap as well so that it can be achieved in the way it is required. Further, the roadmap itself involves strategic formulation, and this is where even the vision and mission of the organization can be achieved.
Strategies also help in monitoring the progress of the daily operations and thereby, can even recommend the top-level management the necessary changes as and when required. Hence, in one way it will also act as a guide to the top-level management in achieving the desired objectives for the organization.
Strategies help each and every employee of the organization, irrespective of their scales and levels inside the organization. And, due to this reason, we find that, the Middle-level Managers involve the ground level staff as well so that even they can contribute their opinions and views in such strategic formulation.
Strategies even suggest the future plans for all the departments of the organization. And, hence, the different departments will find it easy to achieve their tasks and activities on a daily basis. There are different ways through which strategies can be formulated and hence, it will depend again on the requirements of the respective organization.
Vision statement highlights where the organization wants to be placed in the future. It communicates the value and the purpose of the business (De Kluyver & Pearce 2011). The key aim of the existence of the organization is defined by the vision of the organization. On the other hand, mission statement mentions about how the organization will reach the place where it wants to be in the future. The primary objectives and the purpose are defined by the vision statement. It also highlights the key points of differentiation as compared to the other organization.
Balance Scorecard is a system utilized by strategists for aligning the business operations to the vision and mission of a given organization (De Kluyver & Pearce 2011). The four components include - financial perspective, customer perspective, internal business process perspective and learning and growth perspective. The examples to pertaining to each of them are as follows:
Customer perspective: how to improve the products so that sales can be increased, improving time delivery and other services
Internal business process perspective: Improving the issues of unit cost, cycle time, and even introducing new products and services
Learning and Growth perspective: improving the motivation levels of the employees and even providing them with necessary training on periodic basis so that factors such as product life cycle, beating the competition can be improved
Thus, the management can work upon all these factors in order to improve the performance as well as achieve the desired objectives of the organization.
De Kluyver, C.A., & Pearce J.A. (2011). Strategy: A View From The Top (3rd edition). Upper Saddle River, New Jersey: Prentice Hall.